We're not up to the job, worry U.S bosses

Nov 11 2005 by Nic Paton Print This Article

In a world of ever more challenging organisational change, today's business leaders do not rate themselves or even feel up to the job, raising serious questions about the future profitability of their businesses, a U.S study has warned.

The research by HR consultancy Development Dimensions International found, possibly unsurprisingly, that strong leadership can increase the successful implementation of business strategies by 22 per cent.

Organisations with strong leadership development and succession planning generally reported higher returns on equity and profit margins.

Leaders gave themselves low grades when looking at indicators of leadership performance and potential
Yet, worryingly, too often leaders gave themselves low grades when looking at indicators of leadership performance and potential.

Some of the most critical qualities include passion for results, adaptability and bringing out the best in people.

On all these leaders rated themselves low, said DDI, putting their proficiency at between 61 and 73 percent.

"Leaders are barely giving themselves passing grades, and organisations are still graduating them to the next level and promoting them into leadership positions," said Rich Wellins, senior vice president at DDI.

The research also found that two-thirds of organisations believed it will only get harder to find senior leaders.

With fewer younger workers rising through the ranks organisations have not yet identified where their next group of leaders is likely to come from.

"There is a lot of talent out there, but it's how you find it and hold onto it," said Wellins. "Organisations need to do a better job of identifying and nurturing those with the potential for leadership."

Just as worrying for future growth was the finding that the use of succession planning is not increasing.

Only about half of the 1,000 organisations polled had a succession plan and there had been no increase in use over the past two years.

Of those organisations that had them, they were not used for development, it added.

"Organisations are not preparing the next generation of leaders," Wellins said. "They should be growing leaders from within, but they're not tending to the garden."

One in four leaders had considered bailing out of their leadership position altogether, evidence of dissatisfaction with the leadership role, added DDI.

A quarter of the leaders surveyed said they would be happy give up their leadership role to pursue other personal or career goals.

"Increased scrutiny, reduced spans of control and higher expectations have led many leaders to ask 'is it worth it?'," explained Wellins.

"If these individuals all acted on this, organisations would be paralysed from the loss of managers, supervisors and executives."

Organisations, he urged, had to prevent an epidemic of leadership dropout to protect customer relationships, employee retention and shareholder confidence, especially when only half of current leaders were satisfied with their organisation's leadership opportunities.

"While we have a long way to go, those organisations who are doing a better job in developing leaders are reaping tremendous benefits," said Wellins.

"Companies who are worried about their future profitability should be just as worried about the future of their leadership," he added.