Developing future leaders at a time of unprecedented change
Facing a range of strategic, geopolitical, environmental and societal challenges, the pressure on leaders has never been greater. Sharon Sands, a partner in Heidrick & Struggles, explains why leaders need to refine and develop their capabilities to meet today’s high demands, and invest to stay on top of their development game.
Straight off the back of a global pandemic, managers and executives alike are now facing an increasingly diverse set of challenges, including a ‘war for talent’ and soaring inflation.
Much of the world’s supply chain has been suffering a prolonged backlog thanks in part to a series of port closures. As a result, the task of rebuilding communities of employees, customers, and suppliers is more fraught than it would perhaps otherwise have been.
Leaders are also under pressure to deliver on ESG goals, which require them to drive changes in their workplace communities, for instance, switching suppliers or manufacturing operations to become more climate-friendly. However, ESG is a complex issue to tackle.
According to Heidrick & Struggles ‘Changing the Climate in the Boardroom Report’, 75% of board members understand that climate change is very or entirely important to the strategic success of their companies. Yet, knowledge in this area is not prioritised, with 83% of respondents surveyed saying that their board needs to increase its climate knowledge.
Walking the walk in ESG terms also requires transformation from a social sustainability perspective, addressing the diversity, equity and inclusion agenda through measures such as pay equity and access to opportunities.
All this, without compromising on profitability or strategic and operational excellence. This perfect storm of events creates an even more powerful imperative for ensuring that leaders are focusing on developing themselves and the generation who will succeed them.
The four capabilities to navigate today’s challenges
Over the past two years, Heidrick & Struggles has been conducting research among 3,000 executives and more than 30,000 of their colleagues to assess how they lead, their impact, and their potential.
Our analysis is based on characteristics proven to accelerate organisational performance: namely, mobilising, executing, and transforming with agility, or META. Organisations that succeed across all the aspects of META at a high level are more adaptive and resilient when making changes that add value.
Of 33 leadership capabilities that comprise the META framework, our research identified four that are the most critical for future-ready leaders during these uncertain times. Each comes from one of the four META areas, and they are:
- leading through influence (mobilise)
- driving execution (execute)
- creating possibilities from new thinking (transform)
- having an ownership mindset (agility).
Leading through influence rather than authority is a key competence in rebuilding communities, while driving execution is fundamental to delivering on strategic imperatives. Creating new thinking will support organisational transformation initiatives that have emerged as a result of the changing landscape.
Finally, the ownership mindset (agility) is central to a feeling of responsibility that empowers leaders to weather difficult times and take meaningful action to change course when needed. Supporting leaders in developing the right mindsets is key and should become part of an organisation’s everyday approach to development.
The changing face of the CEO
The latest ‘Route to the Top’ report by Heidrick & Struggles reveal that newly appointed CEOs over the past year in the UK differ significantly from CEOs they have replaced. The new breed of CEOs are more likely than their predecessors to be women, to be non-nationals, to have cross-border experience and to have advanced degrees.
While the absolute number of women CEOs both in the UK and around the world remains far too low at only 8%, the findings suggest progress has been made and a positive trend towards more progressive and inclusive appointments. It is vital that this progress being made at the top is reflected throughout the hierarchy of the business.
Overcoming negative bias
Much of the narrative around bias tends to focus on the diversity, equity and inclusion agenda; however, in this context, bias refers to the tendency to fixate on bad news. In a world where catastrophic events have dominated headlines for months on end, it can be difficult to maintain the positive mindset needed to lead through influence and create new thinking.
Addressing unconscious biases is one component of this, but there’s a broader need to ensure that leaders aren’t falling into the trappings of negative bias. This is not always an easy thing to do. Leaders should have an opportunity to confront their feelings of fear, insecurity, and uncertainty in a way that allows them to recognise it but ultimately free themselves from allowing it to influence their daily work.
Further reading: Bias is a major barrier for gender parity in leadership positions.
Role-modelling by current leaders
The ‘Route to the Top’ findings denote leadership capabilities such as agility, empathy, role modelling the organisational purpose, and fostering inclusion, matter just as much as specific areas of expertise. Creating an ownership mindset starts at the very top, so the onus is on existing leaders to ensure that they’re enacting the changes they want to see in their teams.
Dan Price, CEO of Gravity Payments, caused a collective intake of breath among business executives when he increased the company’s minimum wage to $70,000 six years ago, and the firm reported a tripling of revenues this year.
Many executives have followed the spirit of his example during the pandemic by taking a pay cut as staff were laid off or furloughed. In some cases, this pay cut was up to 100% of the previous year’s salary.
Leaders can role model an ownership mindset by being open about their own mistakes and celebrating wins. Role-modeling underscores leaders’ commitment to purpose and values. One important tactic is to commit to valuing people’s individual contributions, enabling them to bring their best selves to tasks and help the company deliver on its purpose
Individual and small-group coaching across boundaries
Coaching is one of the most effective ways for leaders to share perspectives, helping to promote the creating new thinking mindset and setting the stage for future development. Furthermore, by breaking down silos between business units and functions, leaders can recognise shared issues and reflect on their own ways of working.
The ‘Route to the Top’ report found more new CEOs have C-suite experience beyond the traditional CFO and COO roles, including roles such as chief risk officer, chief strategy officer, and chief technology officer, indicating that companies are returning to a more expansive view of CEO succession.
Closing remarks
Despite the unique set of challenges faced by the current generation of leaders, today’s environment also offers an unprecedented opportunity for leaders to continually refine and develop their capabilities. However, it is clear that organisations need to stay on top of their development game to avoid falling into a leadership gap.
