New research shows that organizations are facing a significant gap when it comes to the leadership bench.
By Stephanie Neal and Rosey Rhyne
The pandemic has truly transformed how business and work gets done. As a result, leaders and teams must constantly adapt to meet not only business needs, but also individual needs such as safety, engagement, and balance.
DDI’s Global Leadership Forecast 2021, which surveyed more than 15,000 leaders and 2,000 HR professionals globally, found that CEOs anticipate the biggest change in the next decade will be the ongoing need for employee and leadership development and upskilling. Leaders have been directing their attention on helping their organizations survive the pandemic, which has led to a decline in other critical areas. In 2020, many ignored their succession and high potential programs, losing sight of future talent as they focused mainly on survival. As a result, organizations are facing a significant leadership quality gap. This has created a divide between leaders and HR: 48% of leaders rate their leadership quality as high, compared to 28% of HR professionals.
Sustaining success in the future is at risk as the strength of leadership pipelines hit an all-time low last year. In 2020, only 11% of HR professionals said they had a strong enough bench to fill leadership roles. This has dropped by 7% over the last 10 years, likely driven by the unpredictable and constantly changing challenges today’s leaders are facing.
So, what does that mean for HR professionals?
As priorities continue to shift, upskilling current leaders who are struggling so they don’t fall behind has become vital. Leaders and HR professionals must focus on developing their skills in key areas to quickly react to an almost constant stream of changes.
Getting Back to Basics
While employees need constant upskilling to be more resilient, CHROs predict that leaders also need to get back to the basics and focus on four key skills.
1. Managing change. New technology, constant innovation, and evolving market and employee demands mean one thing: Change is going to remain constant. Each challenge requires a shift in skill sets to remain effective. Unfortunately, the study found that only 35% of leaders said they are effective at managing change. Leaders need to develop internal champions who can adapt quickly.
2. Influencing others. Leaders must focus on their ability to influence their teams to continue adapting and innovating while facing transformation or uncertainty. A leader’s influence helps teams prioritize their work and remain energized to pursue a common goal. Without the ability to influence their teams, engagement will drop along with productivity and retention rates.
3. Building partnerships. Leaders are going to need to build partnerships with their teams by continually collaborating, partnering, and sharing success. They must focus on developing relationships with team members and leveraging those relationships to drive the business forward.
4. Developing leaders earlier. According to HR professionals, identifying and developing future talent continues to be a top skill they look for in leaders. It’s also the single most critical skill they’ll need in the next three years.
While these skills may not be new, each is essential to keeping teams engaged and moving forward while constantly adapting to demands.
Flexibility is a Must
Over the last year, the pandemic and mass quarantines forced workplaces to adapt by shifting to remote work. Home and work life have blended for a lot of employees, leaving them juggling work tasks with childcare and other demands at home. And CHROs are noticing, with 75% noting it is one of the top issues they will face over the next decade.
More and more, flexible work arrangements are no longer seen as a luxury. Instead, they are a must for a lot of employees moving forward. The Global Leadership Forecast 2021 study found that 72% of next-generation leaders and current leaders said flexible arrangements are common and supported. HR must work with leaders to adapt to accommodate these situations.
The Future Must be Diverse and Inclusive
The role of women and minorities in business is crucial, and 72% of CHROs cited having more diversity as a high priority. However, the goal is no longer just driving diversity—it is building a strategy to create a culture of inclusion and belonging, which will help sustain a diverse workforce.
DDI’s research shows diversity has a greater impact on financial performance than any other organizational demographic. Companies with a workforce of at least 30% women and 20% leaders from diverse racial and ethnic backgrounds were eight times more likely to be in the top 10% of organizations for financial performance.
Leaders are pivotal in maintaining an inclusive environment. While there’s no magic formula to building an inclusive workplace, some basic skills are essential. Leaders must actively work to build empathy, communicate inclusively, run inclusive meetings, delegate opportunities strategically, give honest feedback, provide equal coaching opportunities, and resolve conflict fairly.
HR professionals need to help with this development by providing training and upskilling opportunities while reinforcing a culture of inclusion.
Embracing Leadership Aspirations
With the leadership pipeline at an all-time low and such a high gap in leadership quality, HR needs to partner with executives to start grooming future leaders now. This can be done by providing young people with opportunities to move into leadership roles early. In addition, women and minorities must be embraced completely as leaders.
This is going to require HR professionals and executives to shift their way of thinking, especially when building a leadership bench. Instead of thinking in terms of one-to-one replacements, it’s important to create leadership teams with complementary strengths and cross-collaboration opportunities. This helps future leaders continually build an understanding of current and future business priorities, and better embrace change.
A Constant State of Flux
While the future of work is going to continually evolve with new technology, data, and demands for flexibility and mobility, leaders and HR professionals must work together to understand their organizations’ needs. Organizations should remain flexible and agile to order to achieve their goals while focusing on developing relevant and foundational skills to remain successful. Working together to become more dynamic will set up teams for success in the months and years ahead.
Stephanie Neal is director of the Center for Analytics and Behavioral Research (CABER), and is general manager and lead author of DDI’s Global Leadership Forecast. Rosey Rhyne is a senior research manager for CABER.