Political leaders advocating measures in the short term to ensure a long-term solution to the global debt crisis is a concept with which we have all become familiar. But are business leaders following the mantra of short-term steps for long-term gain when it comes to their own leadership strategy?
On the second day of the Women’s Forum for the Economy and Society in Deauville this proved an interesting point for discussion. The conference theme of “What if? Challenge, imagination, commitment” was stimulus for a debate around what companies are doing to challenge the status quo of leadership, the vision for workforce diversity in the future, and what companies should action now to achieve those aims.
In the current recessionary climate, it is common for business leaders to take the decision to “hunker down” and postpone any innovative initiatives or plans for the company until the bad weather has passed. Echoing this point, a number of participants in today’s discussion commented that their organisation’s strategy is steered quarter by quarter rather than taking a longer-term view. The general consensus was that there are certain things that business leaders know they should be doing, but it is very difficult to focus on these when the mentality is to just get through the difficult period the best we can. However, this approach is flawed.
In a recent Boston Consulting Group study of 3,500 companies from around the world, 58 per cent of those companies said they were lacking leadership talent for critical roles. So, there is a gap. What are companies going to do in the short term to generate a long-term solution for this problem? How can we entrench more long-term thinking when it comes to leadership and succession issues?
First, make sure that you are growing leaders for today and for tomorrow – and not for yesterday. Second, be astute about how the profile of an effective leader has changed – this was discussed in yesterday’s View from Deauville: Leadership for the 21st-century. And third, be astute about how people who are very different from you might be the leaders you need going forward.
Managing talent is key. It is very important that once you have invested in nurturing these leaders that you retain them. The way people are going to be retained is not through the traditional financial incentives and handcuffs, it is about being inspired and wanting to bond with a company or organisation.
What does this mean in practice? It means, for example, that an employer has to work with a female employee to align her career progression with her lifetime plan. An individual’s progression is no longer a one-way decision-making process steered by the employer; continual conversations between employer and employee are necessary. Research has proven that women will be significantly more loyal to an organisation that has been flexible and accommodated personal life choices. In a similar way, leaders will need to establish partnerships with their ecosystem of different stakeholders to enable long-term value creation for all players, not just short-term profits.
Given that we now have a workforce that spans five generations this point is all the more relevant. The bespoke approach to people management described above means that companies must think strategically about an individual’s life cycle, and how functional or geographical moves can be used to make sure that an individual stays with an organisation throughout the different stages of their life, be it needing to be geographically closer to elderly parents to provide care, or more available for the needs of a young family.
The message from Deauville is: delays in addressing the leadership needs of an organisation will store up significant challenges for the future. Organisations must have the vision, courage and drive to make the “What if” of leadership a reality now.
Roselinde Torres and Jean-Michel Caye are senior partners at the Boston Consulting Group