We Have A Leadership Crisis – Identifying and Developing Talent

A February 2023 report from DDI, a leadership consulting firm revealed damning data.

The report called “2023 Global Leadership Forecast” is the largest and longest-running global study on the current and future state of leadership.

In 2023 DDI surveyed 1,827 human resource professionals and 13,695 leaders from 1,556 organisations around the world. The research spanned 50 countries and 24 major industry sectors.

Key points

The report contains a myriad of insights into the state of leadership. The top 3 concerns for CEOs are:

·       Attracting and retaining top talent

·       Developing the next generation of leaders

·       Maintaining an engaged workforce

There is a shortage of leaders to fill critical roles.

Leaders, especially at the senior level, struggle to build and maintain trust with their teams.

Confidence in leadership quality has taken a nosedive. Only 40% of leaders said their companies had high-quality leadership – “the biggest decline in a decade.”

The 17% drop from just two years ago and the biggest decline in a decade put current leadership quality ratings nearly on par with those in the wake of the 2007-2008 economic crisis.

Signs of burnout are growing among leaders with 72% reporting that they often feel used up at the end of the day, an increase from 60% in 2020. Additionally, leaders are deeply concerned about burnout on their teams, with only 15% feeling they are prepared to prevent employee burnout.

Remote leaders report the highest role satisfaction over their in-person and hybrid counterparts.

Less than half of leaders find their jobs to be purposeful. The purpose deficit is strongest in first- and second-line leaders, but even at the c-suite only 63% find their job full of meaning and purpose.

Fewer companies are focusing on coaching for development, but those that do see major benefits. Leaders want more meaningful, interactive learning experiences with their peers.

Retaining top talent is crucial in a lean economy. 3 years is the critical tipping point when valuable leaders consider whether they should look for their next opportunity.

Few leaders are getting the development they need to meet key challenges. This is the area I would like to explore in the rest of this newsletter.

Five skills leaders need for the future

The research found that a critical gap persists for skills leaders need to develop. The top five skills are:

·       Identifying / developing future talent

·       Strategic thinking

·       Managing successful change

·       Decision-making prioritisation

·       Influencing others

The following image illustrates the gap that exists across the five skills.

Source: Five Skills Leaders Need for the Future - Global Leadership Forecast 2023 | DDI (ddiworld.com) 

The research also revealed the benefits when leaders feel they are effective in all five skills.

·       3X more likely to say they can engage and retain top talent

·       2X more likely to feel prepared to prevent employee burnout

·       2X more likely to be comfortable operating in a highly ambiguous environment

·       3X more likely to feel confident operating in a digital business environment

·       2X more likely to feel energised about their work

·       4X more likely to seek out additional ways to contribute to the organisation

Furthermore, when companies develop these skills, they are also 1.4X more likely to be named as the best place to work, which improves the ability to attract and retain top talent.

Although the DDI report identified the skill gap it did not provide guidance for leaders on how to bridge the gap. Now I do not intend in this series of newsletters to give you a step-by-step guide on how to develop a talent strategy or manage a change successfully or how to influence others. Let’s be honest, you can ask ChatGPT for that.

What I want to focus on is adding value through my opinion on the subtle nuances in bridging these skills gaps given the context in which we are in today.

Identifying/developing talent

The research suggested that if companies can only focus on one of these skills, the biggest gap to address is this one. This skill is crucially tied to the CEO’s biggest concern for their organisation – attracting and retaining top talent.

Leaders must be able to identify talent and unleash human potential. This means not only finding the best person for a role but also the best role for a person.

I would add that leaders not only need to identify and develop talent, but they also need to put in place strategies to retain it.

Retaining talent

If you want to retain your talent, you need to ask them what it will take to make them stay with your organisation. It is that simple. Reach out to employees and ask them what they want and really listen to what they have to say.

What your employees want from you, for them to stay with you, should inform your Employee Value Proposition (EVP). Not only does this help in retaining your talent it should also help attract the talent you need to be a leading organisation.

Read more in this article from November 2021 – What’s Your EVP?

Reimagine

Organisations and their leaders also need to reimagine how they develop their people. As a recent McKinsey article stated:

“Organizations face a critical shortage of talent and skills. Investing in people can create a virtuous cycle that improves the ability to attract, advance, and retain talent.”

The article emphasises that organisations need to drastically change how they think about talent, from attraction to hiring for potential (rather than fit or experience) and, especially, the development of skills at the enterprise scale.

People development is often overlooked or underused. That can no longer be the case. It is critical to retaining talent, attracting talent and driving lasting market advantage.

Observation

Many organisations identify the skills that they need and then conduct surveys and assessments to determine the gap where the skills are met or where there is a gap.

The issue I have with surveys and assessments are they are a point in time. Ongoing observation can be a far better indicator of where the talent lies.

Leaders must decide what “top talent” looks like in their organisation. What are the characteristics and behaviours that indicate a person is a top performer? These will vary from organisation to organisation and from industry to industry and from year to year depending on the talent landscape, but there are some core characteristics and behaviours that would likely be on the list. These include:

·       Positive, can-do attitude

·       Entrepreneurial spirit

·       Integrity

·       Empathetic

·       Emotionally intelligent

·       Good communicator and listener

·       Demonstrated leadership

·       Strong work ethic

·       Decision-making skills

·       Trustworthy

·       Commitment to deliver

·       Innovative and creative

·       Team player

Having determined the characteristics and behaviours, leaders can observe and identify employees who demonstrate them. Finding them is not enough, you also need to harness their full potential. This is where a development plan kicks in.

Ask questions and practice active listening

I mentioned earlier that as well as finding the best person for a role, you must also find the best role for a person.

Leaders must ask questions and practice active listening. When leaders have regular one-on-one meetings with their team members, they should ask questions to uncover what the person is passionate about, which parts of their role they enjoy the most, where they naturally excel, what are their short-term and long-term career goals, what other roles or parts of the business are they interested in. 

When these questions are answered, the leader can suggest the next steps and options for them to explore.

In these discussions, leaders must practice active listening and come from a place of genuine curiosity. Active listening means you are fully present, paying attention, understanding what is being said, reflecting on what is being said, and responding with more questions where further clarity is required. You are focused on the intent and purpose of the discussion and refrain from judgement.

This then informs a development and progression plan not only aligned with organisational goals and objectives but aligned with individual goals and objectives.

Summary

Leaders must develop the skills to identify and develop talent. They need to challenge the old ways of thinking and find innovative ways to identify the needed talent. They must listen and respond with empathy and provide opportunities for employees to grow and develop.