The biggest challenge facing today’s business leaders is not competition, or cybersecurity, or the threat of a global recession. In a recent survey of more than 1,000 C-suite executives from across the globe, one challenge was consistently the top barrier to growth: developing the next generation of leaders.
With this and talent recruitment/retention at the top of the agenda, it is clear that Australian business leaders must take action to foster growth in their existing employees.
The state of leadership development in business
EY’s research polled HR professionals on existing leadership programs, with the results indicating businesses are unable to fill critical leadership positions due to the lack of a strong talent pool. Specifically:
- 50 per cent of businesses’ leadership development systems had no integration with organisational goals.
- 48 per cent of businesses are not using simulations or other assessments when promoting or recruiting.
- 73 per cent are not holding leaders accountable for failing to develop the next generation.
Assessment, integration and ongoing monitoring of development are key themes that businesses around the world are not putting into practice. By adopting these principles across all levels of leadership, organisations can build a bench of talent that serves them well for years to come.
Planning for the next generation of leaders
A CEO Institute report gives us the following characteristics of a typical executive:
- 71 per cent are aged between 45 and 64.
- 61 per cent had a tenure of fewer than 10 years.
- Only 24 per cent had been in their role for more than 15 years.
Relatively short tenure, age gaps and disruptive markets mean that organisations must be prepared at all times for filling gaps at the highest level of their organisation. For current leaders, that means:
- Assessing and prioritising where your organisation needs to develop future leaders.
- Integrating long-term strategic goals with programs for the identification and development of this talent.
- Establishing ongoing monitoring of these programmes’ effectiveness.
- Building consequences (both positive and negative) for success and failure in talent development.
In the realm of talent building, a proactive company is a successful one. Bring together your ELT, people partners and talent pool to build a long-term leadership succession plan for decades to come.