BCG: Good leadership and talent management pays off

20 April 2015

Companies with strong leadership and talent management, ‘talent magnets’, outperform those with poor management ‘talent laggards’, and are expected to increase their revenue and profits much faster, research by BCG shows.  According to the consulting firm, companies that do well have actively involved leaders as they know that HR alone cannot create strong leaders.

The Boston Consulting Group (BCG) recently released its ‘Global Leadership and Talent Index’ (GLTI)*, which quantifies the business payoff that companies can expect from improving their leadership and talent management capabilities. To come to the index, the firm surveyed 1,263 CEOs and HR directors from 85 countries.

How Companies Score on Leadership and Talent

For the GLTI, BCG divided the talent management capabilities into six categories: strategy, leadership and talent model, talent sourcing, people development, engagement, and culture, after which it divided the companies surveyed into different groups, ranging from ‘talent magnets’ to ‘talent laggards’. The Index shows that the performance spread on leadership and talent management capabilities is wide, with talent magnets on average scoring of 2.5 (on a scale of -3 to 3) and talent laggards -2.2.

According to BCG, leadership and talent management capabilities have a strong correlation with financial performance, demonstrated by the fact that companies with strong capabilities in leadership and talent management outperform those with weaker capabilities. Talent magnets, on average, increase their revenues 2.2 times faster than talent laggards and their profits 1.5 times. The outperformance grows with companies moving across the ‘maturity level’ on the GLTI, from laggard to magnet.

GLTI scores correlate with financial performance

As a result of the GLTI, the consulting firm identified the 10 capabilities that correlate strongly with business performance, with the three capabilities with the greatest payoff all requiring the active participation of leaders. These top three are: the ability to translate leadership and leadership plans into clear and measurable initiatives, significant time devoted to leadership and talent management by leaders, and leadership accountability for talent development.

The ten capabilities that matter most

BCG concludes by saying that the strong performing companies have been able to involve their leaders, not just the HR team, in their people development. “Leaders at the strongest companies are actively involved in leadership and talent management development activities. They spend as many as 25 days a year on these activities,” explains Mukund Rajagopalan, Associate Director at BCG. “They also have strong HR departments but recognise that HR departments alone cannot create strong leaders and strong people.”

* The BCG Global Leadership and Talent Index (GLTI) is a tool that allows companies to assess their leadership and talent capabilities, lays out a specific roadmap to help them improve, and quantifies the revenue and profit gains that companies can expect from moving up the index.


Why leaders must balance technical expertise with soft skills

17 April 2019

Soft skills matter in the workplace just as much as technical expertise, writes Samantha Caine, Managing Director of Business Linked Teams.

For too long technical expertise has been seen as the marker of a strong candidate for development into a sales or leadership position. Sales and leadership candidates are tasked with demonstrating a diverse and wide-ranging set of technical skills, yet their aptitude in these technical skills or ‘hard skills’ cannot signify great leadership potential. This is why a healthy balance of soft skills and technical ability is required. 

So what exactly is the difference between technical skills and soft skills? In engineering, it’s crucial to demonstrate knowledge of physics as well as a strong grasp on mathematical equations. Yet, in any industry, it’s important for leaders to be able to interact with other people effectively with soft skills like communication, empathy and adaptability. 

Business Linked Team’s 2018 study into internal leadership development revealed that 69% of large organisations are prioritising the identification and development of future leaders from within the workforce. As more and more organisations begin to invest in sales or leadership development within their existing workforces, more focus needs to be placed on ensuring the right soft skills are in place. 

With those soft skills in place throughout the workforce, the business will benefit from a wider pool of potential leaders developing under their noses, and it should be the same where sales candidates are concerned. 

It’s not just about easier access to ideal candidates for these positions without the rigmarole of recruiting from outside of the organisation. The leadership development study also found that 89% of HR decision makers say succession planning has become a top priority. Those currently serving in leadership positions can’t lead forever and the same goes for those generating sales for the business.

Why leaders must balance technical expertise with soft skills

From people leaving for new opportunities or retirement, to people simply stepping aside to focus on other areas of the business, successful leaders and salespeople require experienced and capable successors that will be ready and able to confidently step into their shoes and pick up the mantle without the business experiencing any lapse in performance.

Soft skills make stronger candidates

When it comes to the soft skills required, a strong leader must be able to manage through clear communication and effective time management, coaching and goal setting. They must be able to demonstrate empathy and empower their teams to be successful, productive and fully engaged. And beyond simply giving direction, they must also be able to take direction from those above them and cascade the business strategy down through their teams. 

A strong sales candidate must possess the ability to communicate value to the customer, negotiate well and protect margin or the ability to increase the scope of a particular sales opportunity. 

With the relevant soft skills in place, the business will benefit from increased productivity, greater agility against changing market conditions and greater transparency. In turn, this will provide visibility on issues and inefficiencies while removing opportunity for miscommunication. All of this can transform the culture of a department, improving employee satisfaction and reducing staff turnover. 

Ultimately, developing leadership or sales candidates will require the business to strike the right balance between technical skills and soft skills, and this requires an effective and sustained learning journey.

A balanced learning journey

Facilitating and supporting the development of leadership and sales is best achieved by establishing training groups. By cultivating training groups, businesses are creating talent pools that will inspire and support each other on the learning journey. However, personal goals and learning objectives must be defined for each individual based on their own existing skillsets and the skills that each individual needs to develop. 

With the emergence of e-learning, businesses recognise the value of online-based learning activities, yet many make the mistake of opting for one-size-fits-all solutions which are solely focused on self-study. A development solution will only deliver true return on investment if it combines e-learning activities with group learning activities that provide opportunity for shared experiences and support.

A blended learning solution that combines self-study and face-to-face group learning activities will aid strong development of the talent pool through shared experiences. Through these shared experiences, those undergoing the training will organically develop a support network that supports the development of the group as much as it supports the development of each individual. 

The blended learning approach is supported by one of the seven principles of human learning that socially supported interactions aid the individual development of expertise, metacognitive skills, and formation of the learner’s sense of self. The strongest opportunities for development can be unlocked by blending workshops with online activities such as virtual sessions, peer coaching, self-study, online games and business simulations. But it’s crucial to provide a blend of one-to-one and group sessions too.

Beyond delivering a better learning outcome for the employee, the blended learning approach allows organisations to adapt their training quickly and easily to shifting business demands in an ever-changing landscape.