The Road Ahead

The changing business environment and what it means for leadership development

The Road Ahead

As the decade approaches its mid-teens, it will face some major growing pains on the road ahead: the global recession, that great earthquake that dominated the first part of the decade, will continue to generate seismic waves in the form of volatility and uncertainty. A recent 2013 Forum analysis, Seven Leadership Development Trends reports that 72% of the 700 global leaders surveyed saw high increases in uncertainty in their companies; the baby boomer generation will reluctantly, though finally, retire en masse in the next 5 years leaving a chronic talent shortage (see the DDI Global Leadership Forecast 2014/2015; the Y generation with its distinctive values on making a difference and ‘attacking everything you hold sacred’ (quoted in Psychology Today) will finally get their hands on the controls and push the workplace out of the traditional; technology and globalisation will continue to drive competitiveness (developing countries will continue to move into traditional markets, the global middle class will reach 3.2 billion by 2020 (source Deloite’s Global Human Capital Trends 2014 and technological advance will drive a 24/7 global world consumer community – a UNUM 2014 survey, The Future Workplace, reports that 73% of UK workers (3.3 million) have “overload creep” syndrome, feeling that they need to be ‘always on’ and available for work which costs the UK economy over £101 billion in lost productivity. Organisations will need to stepoutside their core competency and change and innovate more frequently in the future (see Cognizant’s analysis The Fluid Core: how technology is creating a new hierarchy of need and how smart companies are responding).

The Deloite Global Human Capital Trends 2014 eloquently registers this seismic wave:

Future observers may look back at 2014 as a turning point: the time when the global recession ended and business put plans in place for a new wave of growth. But as this growth begins, companies are finding that they are dealing with a workforce with different demographics, different demands, and different expectations.

All of this will have a profound impact on the way we structure the workplace and develop our leaders in the years ahead. Here are some trends that have started to happen now but will intensify in the future:

The workplace will become more flexible and engaging. As employment, salaries and economic performance awkwardly return to pre-recession levels, leaders are finally able to leave the fire-smouldering platforms and re-focus on developing their people. Employee value propositions are already making a glossy comeback shunting out the harsh “more for less” messages that employees had to live with during the lean recession years. A 2013 Gallup report,The State of the Global Workplace,
produced a startling observation that only 13% of employees across 142 countries worldwide are engaged in their jobs. Forum’s Seven Leadership Development Trends reports it as 15%. Richard Branson’s new think tank initiative, Virgin Entrepreneur, hit the headlines recently with the publication of In Focus: The Rise of Flexible Working expressing some radical ideas on “unlimited leave”, remote working, employee choice and the demise of the office within 20 years. Future leaders will need to urgently address the concerns and needs of the post baby-boomer generation who aspire toward more flexibility and freedom in the work place.

Innovation will be needed and encouraged at all levels in the organisation. The 1000 CEOs surveyed in the DDI Global Leadership Forecast 2014/2015 “CEO challenge” placed innovation as “vitally important” for driving business growth. For this to become a reality, the next generation of leaders need to create more structural opportunities for creativity and innovation to flourish and to be more personally engaged and connected with people working in the organisation (the same survey found that 41% of leaders currently spend time managing and 25% interacting whereas it should be the inverse – they should be spending 22% managing and 40% interacting).

There will be more diversity in the workplace. As emerging economies move more into traditional markets, with the expansion of the middle classes in developing countries, as people are retiring later, as more women reach influential positions in the organisation (see, for example a recent study by Egon Zehnder, 2014 European Board Diversity Analysis with Global Perspective and with increasing global societal acceptance of same-sex lifestyles (see the 2013 Pew Research analysis, the workplace of the future will be more diverse in terms of culture, generation, gender and sexual orientation. Leaders will need to know how to manage. lead and capitalise on such a diverse workforce.

The emerging leader bench will be strengthened. The DDI Global Leadership Forecast 2014/2015 reports that under 50% of leaders are deemed “high quality” by employees. Major studies such as Deloite’s Global Human Capital Trends 2014 and DDI’s Global Leadership Forecast 2014/2015 positions retaining and developing talent as the number one priority for CEOs and in particular is identified as a top priority in growing economies. With the reluctant, though inevitable, retirement of the baby boomer generation, the x and y generation are moving into key leadership positions. The same DDI survey reports that 21% of future vacant leadership positions cannot be filled immediately and Forum’s Seven Leadership Development Trends talks of the need for organisations to grow their own leadership talent. This is reflected in the global leadership development spend across organisations that has been incrementally increasing (see research by Bersin by Deloitte reported in a recent 2014 Forbes article,
Spending on Corporate Training Soars: employee capabilities now a priority

The methodology to developing leaders will continue to change. Although global leadership development budgets have been increasing, there is dissatisfaction with the formal structured classroom “bootcamp” approach to developing leaders (source: Forum’s Seven Leadership Development Trends. In DDI’s Global Leadership Forecast 2014/2015, only 37% of leaders rated their organisation’s leadership development programmes as effective. Formal structured classroom learning will continue but will need to be more personalised, relevant and work-related to the learner’s real-time needs (see Forum’s Seven Leadership Development Trends) and will need to be blended with other approaches such as online and offline resource-based learning that is geared toward praxis and marrying theory and practice and social learning where emerging leaders learn through special projects, rotational placements, shadowing and learning from others. The use of coaching in organisations is on the rise – the annual Executive coaching survey 2014 has seen a quantum leap in coaching in 2014. Coaching is in the top five of current and future global publications on the theme of leadership. There will be more emphasis on in-house mentoring and coaching as the exiting baby boomers see a role for themselves as coaching and mentoring the next generation. This learning and educational need is less likely to be supported by the self-help industry, an industry that was once worth 10 billion dollars in the US alone but has seen its popularity and market share wane since its high point in 2007 (source: Marketdata Overview and Status of the US Self-improvement Market and The NewStatesman The Happiness Industry .

The workplace, leadership and the way we develop leaders is seismically shifting and leaders and LD practitioners need to work together to build the right strategy to attract and retain the best talent and future leadership to ensure growth and survival in the uncertain times ahead.

Richard Kelly PhD.
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