PRINESHA NAIDOO: Welcome to this Moneyweb webinar, today we are talking leadership with David J. Edwards, who is head of talent solutions and principal consultant at CEB, now Gartner. This topic is increasingly relevant as a new study by CEB, now Gartner, shows that business leaders appear to be struggling to live up to expectations. Some 9 000 global leaders were polled and the study shows that almost half of all leaders who move into new roles don’t meet their objectives, with about two-thirds not adapting quickly enough to meet the needs and strategic goals of their businesses. David is joining us with more on how businesses can ensure that chosen leaders are on track to deliver. David, thank you so much for joining us.
DAVID EDWARDS: It’s a pleasure.
PRINESHA NAIDOO: David, your research shows that leaders are by and large failing to meet business expectations and objectives, why is leadership suffering?
DAVID EDWARDS: It’s a really interesting question and before I start going directly into that question I want to give it a bit of context because we have done a study about what we call the new work environment and basically what that study found was – and it sounds fairly obvious – the world of work is increasingly complex and increasingly dynamic. For instance, to quote some statistics here, 78% of leaders must work with increasing numbers of people just to get their own work accomplished, 70% of leaders now need to adjust to more frequent changes in the workplace, 63% of leaders have told us they depend more on others even to aid them in achieving their own objectives. So they can’t achieve their objectives without bringing other people into that. Sixty-one percent of leaders manage teams that are geographically dispersed, so they don’t often even get to see the people who they manage. So, as you can see, there’s a lot of change. So the one constant in the workplace is change but there’s also a clear need to have more collaboration in the workplace too, now when you turn the lens of that onto leadership, clearly those factors will affect leadership roles and especially the people because the roles will change. So from selection to development now a lot of companies are making the mistake of assuming that they understand what the leaders of the future need to do but, of course, that’s often based on current performance or their current leadership responsibilities and that simply isn’t true in the new work environment. So the world of work is changing and it’s continuing to change, a few organisations have enhanced their leadership strategies to reflect that, the leadership models they use tend to be static, they have leadership competencies and everyone assumes that will stay stable over time, which again can’t be true in the new work environment, so they have to use a one-size-fits-all approach and this is where performance is suffering because they are selecting and developing people based on maybe the wrong focus in terms of what leaders need in the new work environment.
PRINESHA NAIDOO: So what exactly do leaders need in a new work environment?
DAVID EDWARDS: That’s also an interesting question, when we looked at leadership in terms of traditional leadership competencies, it might be transactional leadership, transformational leadership, most leadership competencies have those sorts of models now and what we found was that although leaders are getting better at delivering their own targets and they’re also getting better at managing their teams in terms of delivering their targets too, possibly because there’s lots of money that’s gone into leadership development programmes over the last ten to 20 years. But what they are not so good at is working across the organisation with their peers effectively and making sure that their teams are facilitated and supported in being able to work across organisations effectively too. So we call that network leadership and what we’ve actually looked at is a new type of leadership model, which doesn’t throw away the traditional competencies, which are still needed but also adds network competencies to it and we call that enterprise leadership, being able to work across the entire enterprise for the benefit of the whole business.
PRINESHA NAIDOO: You mentioned that that is becoming one of the increasing competencies that leaderships require, especially required to work across large teams, different geographies, to what extent is this actually slowing down the execution processes and is this by any chance impacting the objectives that leaders are able to deliver on?
DAVID EDWARDS: That’s a very good question and I’m going back to the complexity of the new work environment, so following on from what I mentioned earlier about how things are constantly changing now, decision-making is becoming much more complex, leaders have to involve a lot more people now in making decisions, so they can’t just make autocratic decisions of their own, which affect people without involving them. That, of course, means that that will slow down because you need to involve people more in making that decision. In fact, execution processes are slowing down because of that too because decision-making is slower the execution of what you’re trying to achieve will become slower too and that’s before you even think about individual differences in effectiveness. So the context is affecting leaders but also their individual effectiveness in those situations, in those contextual challenges, is different. So the answer here is that there are two different things to think about and I’ll come back to context, it’s individual effectiveness based on how they deal with change, which doesn’t seem to be very good and a lot of companies are not confident that their leaders can deal with change very effectively but also the contextual challenges leaders face changing all the time and I will come back to that because that’s based on some of our newest research.
PRINESHA NAIDOO: Just touching on some of the research done, in my reading of it it also raises some big questions about the ability of leaders to actually lead. What you’ve noted there is that 77% of leaders are able to accomplish their own individual objectives but only 12% can effectively contribute to and leverage off the performance of their teams, what’s behind this disconnect?
DAVID EDWARDS: It’s related to what I’ve just mentioned but I’ll go through it again in more detail. Over the last ten to 20 years organisations have heavily invested in leadership development programmes, which look at those traditional competencies and the good news for L&D departments is that it seems to have a good effect. So a larger number of leaders now are able to effectively hit their own KPIs, 77%, as you’ve just mentioned. We’ve also found that more leaders are getting better at actually helping their teams hit their targets too, around 60% of leaders, based on our research, seem to be effective at that. But then when it comes to the network leadership competencies globally we found about only 12% of leaders right now would be effective network leaders. So it’s really about working across the entire network effectively, giving advice and help to your peers in different areas of business but be willing to take advice from your peers too, actually pushing that down to your team, giving your team a chance to work across different parts of the business and not using a silo approach. The downside is that most leaders are not comfortable with change, so when they come to these points where they have to do these sorts of things they tend to manage in their silos. So they hit their own targets but only 12% can effectively work across the organisation. So the key thing here is they need to refocus their development, not on the traditional competencies but the network competencies.
PRINESHA NAIDOO: Could this perhaps be one of the reasons why confidence in leaders is also on the wane, I believe that your study found that senior leaders say that only 75% of their business units don’t have leaders in place to meet the needs of the organisation.
DAVID EDWARDS: In the responses to the survey that we did with business leaders across the globe there were a range of factors involved in this that they believed would impact upon the leader’s ability to deal with future needs of the organisations. So they consider things like strategic agility, which is the ability to adapt significant change in business strategy, they weren’t confident that the leaders had these types of behaviours and capabilities. Also the fact that they didn’t see their leaders as having bench strength in terms of innovation, which is important when you’re trying to deal with changes within an organisation. Market responsiveness was also an area where they felt that senior leaders were concerned in terms of organisational strength, so they were concerned that leaders may not be able to adapt effectively to shifts in the market or economic environment. Also team enablement, they were not confident their leaders could remove the barriers to their team performance, which typically would be about working better across the organisation. So you’ll notice everything I have said there is about change again in the new work environment, which I keep talking about. But there does seem to be a lack of confidence that leaders are going to be able to deal with these new types of competencies and these new types of challenges within the workplace.
PRINESHA NAIDOO: These leaders were selected because they are probably the best of the bunch, so to what extent does this point to a failing in the hiring of potential leaders and also the training and development of them?
DAVID EDWARDS: I wouldn’t consider it a failing per se. I’d say, based on what I’ve just been pointing out, it may be that the focus on development was incorrect. So if you want to consider that organisations tend to assume that the world of work is stable and predictable, often companies use a one-size-fits-all approach to development and that’s not a good idea when you look at high potential employees or leaders you shouldn’t use a one-size-fits-all development approach. So there are some assumptions that leaders need to be a certain type and that these qualities of an effective leader are pretty much the same across the board, irrespective of where they are in an organisation, that’s not really been working out well for most organisations. CEB has conducted the largest leadership study in the last 25 years and one issue identified was that organisations have been telling us that up to 40% of leadership roles over the next five years will be new titles, so this stability of leadership capability is not going to occur, the things are going to change dramatically for them. We also think it’s unfair and unrealistic to expect all leaders to be good at all the same things, especially when they are in different parts of the organisation sometimes that may require them to do different things.
Brought to you by CEB, now Gartner.