PRINESHA NAIDOO: Welcome to this Moneyweb webinar and today we are talking leadership with CEB, now Gartner. This topic has become increasingly relevant as around 50% of the South African workforce is currently looking for new jobs. Joining us to discuss how to develop, identify and retain a wide and diverse pool of future leaders, who are ready to take on evolving business needs, is Lauren Huntington, a management consultant at CEB, now Gartner.
Lauren, as mentioned in CEB Gartner’s latest global talent monitor, around half the workforce is currently looking for new jobs and that’s despite a backdrop of sluggish economic growth and fewer opportunities, tell us what are the motivating factors behind this?
LAUREN HUNTINGTON: To a point our South African workforce remains undeterred by some of the doom and gloom, which means that they are still very mobile and of those 50% who are actively looking for other opportunities 16% also say that if the right opportunity comes their way they are very ready to jump ship. There are a range of factors underpinning this, one of the most common we see is compensation, but some of the others are work/life balance and an important one coming to the fore is also development opportunities and opportunities to progress.
PRINESHA NAIDOO: When I was looking through some of this research what stood out to me was meritocracy and a number of employees seem to cite this as a major gripe, can you tell us a bit about that?
LAUREN HUNTINGTON: Absolutely, fairness is a big motivator when it comes to engagement for employees. So in meritocracies individuals are looking for recognition and reward for the effort that they put in.
PRINESHA NAIDOO: How should management and companies respond to some of these challenges that are, of course, driving their workers away?
LAUREN HUNTINGTON: There’s a range, there’s the more obvious, which is to address some of the meritocracy issues around compensation and reward, but there are a lot more indirect ways particularly in organisations where there are a lot of constraints around budget, so the obvious solution of paying individuals more is often not a reality. Those less obvious types of ways to engage individuals is really to ensure that they are invested in the longer-term career with your particular organisation, so they are willing to stay for the longer term and they believe that this is the organisation where they can attain their ultimate career goals.
PRINESHA NAIDOO: Now, having them there willing to stay for the longer term, making the organisation one where they believe they can attain their career goals is something that obviously leads to leadership. And, as you’ve said, we’re in an environment of business unusual in which leadership requirements are constantly evolving and they’re changing much faster than they used to. How are the leadership requirements of companies changing today and how have they changed?
LAUREN HUNTINGTON: The leaders of today are expected to do a lot more with a lot less, so during times of unprecedented uncertainty leaders need to be a lot more agile in terms of how they are responding, both from how they lead a business and how they lead their people. The types of teams that they are leading are also fundamentally different, so with teams you often have a much wider span of control, so more individuals in your time and you often have less face-to-face time with those individuals and your team is often more geographically dispersed. As a leader you are also often expected to work across multiple silos, so no longer can you just be a specialist within your particular domain, the best financial manager, but you actually need to understand a little bit about HR, about operations and about the rest of the business to be able to break down those silos within the organisation and execute with a lot of effectiveness against this backdrop of turbulence.
Identifying future leaders
PRINESHA NAIDOO: So what are some of the makings of a good leader?
LAUREN HUNTINGTON: So in the CEB, now Gartner, research we found that in order to identify some of your future leaders there are three key components that you want to look at. The first is around ability, so that’s the ability to be able to deal with complex and ambiguous information, still make effective decisions when you don’t have all the information at hand. These types of leaders are 11 times more likely to be effective in more senior roles, so that’s the first component.
The second component is about aspiration, so you want leaders who really want to be there, who are engaged with that position, where being a leader is what gets them up in the morning, it motivates them, they feel in flow with that type of work. These types of leaders are 12 times more likely as well to not only be engaged themselves but to engage their workforce.
Then the final aspect that’s really important for us as well is around engagement, so you want to make sure that your leaders are willing to put in the discretionary effort, that extra oomph every day to make things happen and, secondly, your leaders are likely to stay with you for the longer term. Leadership churn can have a lot of unintended negative consequences, so we want to make sure that our leaders are there for a particular period of time to be impactful within our organisations.
PRINESHA NAIDOO: When HR managers go about using some of these methods to identify potential leaders, how much weight should they put to considering what people have already done in the past and what they are capable of doing in the future?
LAUREN HUNTINGTON: That’s an interesting question because often through a lot of these selection processes when it comes to leadership we put a lot of emphasis on what people have already done or the CV, yet we find that that’s not the most predictive of individuals who are most likely to perform in the future; so what made you successful in the past will not necessarily make you as successful in the future.
Leadership roles are evolving significantly, in fact, the majority of HR departments, and leaders themselves, tell us that they don’t actually know what their future leadership positions are going to look like in three years’ time or in five years’ time. So a particular basket of experience doesn’t necessarily set you up for success, rather a particular set of preferences, of competency, of ways of working are more likely to be able to put you in a position where you can respond to those types of turbulent environments.
PRINESHA NAIDOO: You mentioned that some HR managers say that they don’t actually know what the leadership requirements are going to look like in three to five years’ time and that’s related to their specific companies. How then should they go about identifying their current needs and finding employees who can meet these current needs but also who are flexible enough to take on any other challenges that may come?
LAUREN HUNTINGTON: It’s a combination of two things, the first is we don’t necessarily want to reinvent the wheel, so we ask HR practitioners to look towards best practice and research to inform the types of decisions that they are making. So we know that certain factors are more predictive of leadership effectiveness, so take those into account, but at the same time this is not a one-size-fits-all model. We really encourage our HR leaders to be in touch with business, because business ultimately at the front line understands what their business needs, they understand how quickly their business is evolving. So really to be in touch with that and to make sure that however they are defining leadership is unique to that organisation, is tailored to that organisation and will be robust over the longer term.
Keeping employees motivated, aspirant and engaged
PRINESHA NAIDOO: Let’s say this organisation has found the ideal leaders for themselves, how do they then go about keeping these employees motivated, aspirant and engaged?
LAUREN HUNTINGTON: That’s an important question because it’s great to identify leaders, but if they don’t stay with you long enough to succeed into that particular position then a lot of that effort is wasted. So there are two parts to that answer, the first is promoting the individual into a particular position, but that’s obviously not the most immediate and that’s not always feasible where there are limited positions available. So the second important point is how do you keep them engaged while they are in-waiting for a particular position and for us that’s really having continued conversations with that individual around their aspiration, making them as ready as possible for when that position does become available.
So the types of things that you would want to make available for that individual would be a stretch assignments, for example, increased mentoring and coaching to make sure that that individual feels valued and to make sure that that individual is stretched so that when that position does become available they are ready now and not promoted just on the basis of that they were identified on a succession plan.
PRINESHA NAIDOO: You mentioned that sometimes organisations cannot provide employees with the opportunities that they want at the time that they want them, why do they struggle with this in some cases?
LAUREN HUNTINGTON: There are a couple of issues, I think when it comes to succession planning the first issue is around pipelines to nowhere, so often we are grooming particular successors for particular positions, so our next COO, our next CIO, yet, as I said earlier, these positions are evolving. So sometimes these positions are no longer relevant within a particular structure, meaning that those successors who we have groomed for a particular position mat no longer be relevant. So pipelines to nowhere is the first challenge.
I think the second challenge is really around clogged pipelines, where we are identifying many successes, yet we have very few relevant positions available, then the onus is really on the organisation to look at how can we enrich careers, not just vertically but also horizontally to keep those individuals engaged.
Some of the other challenges we see are on the opposite end of the extreme, which is narrow pipelines, where we simply don’t have enough successors for some of our positions and, in fact, when we look at some of the business results that show us that only one in four executives currently in seat was actually identified through a succession plan. That suggests that perhaps we are not actually casting the net wide enough within our own organisation to identify the talent that might be sitting right among us.
Then the final challenge is really around rusty pipelines and that’s where individuals are in the pipeline for succession but not necessarily ready. So they may have been identified through a really subjective process, for example, and when we transition them into that leadership role we find perhaps they would have been better off as a technical specialist and that evolution into the leadership role doesn’t set them up for success.
PRINESHA NAIDOO: You’ve just mentioned some of the challenges with the pipelines and there have been cases where HR managers have gone as far as saying pipelines are actually broken, how would we go about fixing them?
LAUREN HUNTINGTON: There are a couple of ways, the first is what we encourage our organisations to do from a best practice standpoint is to look at much broader strategies when it comes to succession pipelines. So rather than identifying particular successors for particular roles, casting that net more widely, to say in terms of aspiration, engagement and ability across our workforce over three to five years, who are those identified individuals and how do we develop them more broadly for a range of rolls at executive level, rather than for a particular position.
PRINESHA NAIDOO: What about organisations that have now developed people for a particular position, a position that may not be relevant going into the future, how do they reposition these individuals?
LAUREN HUNTINGTON: That’s where the quality of the relationship between the individual and the line manager is really key. We assume that an individual’s aspirations, so wanting to be in a more senior position is something static, but actually that can change by up to 23% over the course of their career, meaning that at some stage I can be far more engaged and at other times I may be less engaged, and one of the key factors can be exactly the point that you raised, which is the position that I’ve been grooming myself for over time is now no longer available or someone else has been promoted into it. That’s when it’s really important that the line manager is close to the team to understand how else can we enrich your role, possibly horizontally or look at readiness more broadly for the executive team so that that individual doesn’t become disengaged and either becomes a flight risk or their performance deteriorates as a result of that disengagement.
Inexperienced employees in the deep end
PRINESHA NAIDOO: What about on the opposite end where people have not necessarily been identified or groomed and these positions open up and you are basically throwing somebody into the deep end, tell us how their interaction with the line manager ought to be to ensure that they succeed?
LAUREN HUNTINGTON: We do find this within organisations, particularly if the build or buy strategy is not very well thought out. So often it’s a case that a position may become vacant and either we discover that we actually can’t afford the type of talent that we need to bring into this particular role, so, therefore, let’s start looking internally. Yet, we don’t have people who are quite ready, so we’ll pick the readiest of the bunch. This has a range of negative unintended consequences both on the individual and the organisation more broadly because the individual being supported into the role requires a lot more on-boarding. This is something that is overlooked generally but is critically important when it comes to those individuals who may not be as ready.
That on-boarding process into those executive roles really can take anywhere from six months to a year realistically and it’s going to involve a lot of hands-on involvement both from whoever is managing that individual and from the supporting team to make sure that they are set up for success.
PRINESHA NAIDOO: You also said that it may have negative implications for the organisation itself, can you tell us a bit more about that?
LAUREN HUNTINGTON: If you are appointing individuals who are not yet ready for a particular position, firstly their performance may suffer in that particular role, so from an overall business standpoint there are issues. But we must also be aware that talent is very quick to benchmark itself and very quick to look to those more senior positions as a particular benchmark and if they feel that individuals are not living up to those particular standards they may feel that perhaps their own aspirations are dampened, perhaps they were overlooked or perhaps the organisation doesn’t take talent as seriously as they advocate through some of their HR processes.
PRINESHA NAIDOO: In cases like that how do you still go about instilling confidence in your workforce?
LAUREN HUNTINGTON: It’s certainly a challenge and when we engage with many organisations often they have had mixed results when it comes to how they’ve approached succession. So they’ve had some great successes, but they’ve also had some spectacular failures and it’s for an organisation to really be honest about what’s worked and what hasn’t, and give the workforce a legitimate plan on how it intends on addressing this in future.
So what is our philosophy when it comes to succession management, how do we support our individuals to be ready for the next position and how do we support them through that on-boarding process, and then be consistent in terms of how you apply that going forward, take the lessons, don’t shy away from them.
PRINESHA NAIDOO: I take it that most of these factors would be company and organisation specific, but are there any that would generally hold across industries, across organisations and what would those be?
LAUREN HUNTINGTON: Something we often talk about is future-proofing your succession strategy and some of the key themes that have come out there are around taking a broader-based approach when it comes to looking for your particular talent. The second is making sure that your line managers and your HR department really are up to speed and up to scratch when it comes to the type of hands-on involvement that’s going to be required of them to keep those individuals engaged over time because succession management is not an overnight type of thing, this is your long-term play, so you need to be committed to it for the longer term.
Implementing succession when the main strategist leaves
PRINESHA NAIDOO: You’re talking about being committed to it over the longer term and there are certain key individuals who are going to be identified within an organisation to manage these processes, what happens when this individual leaves, how do you manage an ongoing project like this?
LAUREN HUNTINGTON: It really depends on how that individual is chosen to undertake that portfolio, what we hope is that certainly any HR or professional business leader who is invested in succession is invested not in terms of individuals who they have identified, so through a subjective process, but that they have put an objective process in place, a legacy that can live on when they are removed from the system. So an objective set of metrics against which we define leaders, against which we develop leaders over time to make sure that that objectivity can really be maintained when an individual business sponsor leaves the system.
PRINESHA NAIDOO: Lauren, as you mentioned, this is an ever-changing environment, business unusual and in this environment what in terms of employee management processes will set apart organisations from their competitors?
LAUREN HUNTINGTON: What we’re finding is organisations that use best practice but that tailor it for the unique needs of the individual and that’s a really fine balance, making sure that you’re making talent decisions that are informed by data, by best practice, by what the research is saying, but at the same time making it for your own organisation and making sure that your line managers and your HR department are really equipped to see those processes through over the longer term.
PRINESHA NAIDOO: So there’s an element of agility that comes with this?
LAUREN HUNTINGTON: Absolutely and the agility is not necessarily within the individual, it’s also within the processes themselves. We can’t expect individuals within our organisation to be all things to all people. We need to make sure that the processes around are identifying and developing people for a range of roles and roles that are going to be the best fit for them over their longer-term career.
PRINESHA NAIDOO: There you have it, the most successful organisations are those that will be able to come up with agile processes, processes that will align ability, aspiration and engagement with some of the evolving needs of business in an ever-changing environment. Lauren Huntington, management consultant at CEB, now Gartner, thanks for sharing your insight with us.
LAUREN HUNTINGTON: Thank you very much.
Brought to you by CEB, now Gartner.