Last year marked a period of uncertainty for many businesses, especially business largely focused in the UK and continental Europe and 2012 looks set to be an equally ambiguous year with low growth forecast and the threat of another recession.
Public sector job losses are well documented and continued uncertainty in the private sector looks set to mean new job growth will be slow at best. Business leaders will be fleet of foot when deciding the strategic direction of their company and the crucial question, whatever the strategy, is has the organisation's leaders the necessary skills to deliver the company strategy during a difficult year?
Leaders themselves tell us that the skills they need are changing. One area that is increasingly important is the need to foster creativity and innovation in organisations and this doesn't necessarily mean a focus on new products. To stay ahead of rivals, leaders need to lead teams of serial innovation, systematically developing breakthroughs in new products, services, processes and how their companies execute critical management processes. To do that involves a culture of innovation and the ability to drive change. It also requires employee engagement, which is not easy in an economy where outside influence affects decisions and engagement to a large degree.
Unfortunately evidence suggests that many leaders are not equipped with the skills they will need in the next year. In fact only 18% of HR professionals believe their organisation has the leadership bench strength it needs to meet future business challenges and only 38% of leaders rate the quality of leadership in their organisation as high. HR professionals have a key role to play in evaluating their organisational bench strength and to address inadequacies by putting in support mechanisms to help leaders acquire the skills they will need to manage a volatile year ahead.
The environment today is very different than it was even a few years ago when many competency frameworks were put in place. Many competency models were developed for a business environment when companies were looking at a totally different strategy, but if companies are making people decisions based on the criteria of a pre-crisis economy, then they may not have the competitive and innovative edge needed for today's economy. With the world having undergone such recent radical change, the wisdom of using competency frameworks created for a different era must be questioned.
With continued financial instability across Europe, strong growth in many Asia regions, and steady improvement in the US, many companies can look forward to a year of ambiguity, change and challenge. Whatever the year brings, leaders and HR professionals that support them have a critical role to play.
Here are three key areas for improving leadership quality in 2012:
- Rethink competency frameworks and question whether they are still current in today's business climate.
- Question whether the existing leadership and future talent pool have the necessary skills, including bringing about a culture of innovation and creativity.
- Ensure leaders understand their role in managing engagement and how to utilise current structures, process and systems to ensure engagement remains positive
Steve Newhall (pictured), MD, DDI (UK)
