At the start of the year, DDI published their forecast on the leadership landscape for 2023. The expansive report highlighted critical challenges that C-suite executives and HR professionals will be facing for the next three years.
At the heart of the report, was a simple question: Is it enough?
Across 1,556 organizations around the world, leaders are questioning whether their efforts to engage and motivate their people are enough. From Covid, to the Great Resignation, to Quiet Quitting and the rising economic uncertainty, leaders have been exhaustively navigating the rough tides of modern leadership. Truth is, they’re getting restless. Consistent efforts in developing their people and growing the organization has left leaders feeling burnt out and wanting more for themselves.
Perhaps the most important point, is that leaders want to know they are making an impact. That the efforts they put in is not only seen but appreciated by those they lead. Meaningful growth is what they’re after.
What’s keeping them awake at night?
Spoiler, it isn’t the global recession, or business concerns surrounding the organization, it’s their people. Leaders are most concerned about the fragility of their talent, and how quickly top-performers and future leaders can change careers, quit due to burnout, or go work for a competitor that’s providing a better experience.
54% of companies had an increase in employee turnover rates, and what was the leading cause? Ineffective leaders. People who perceive the organization’s leadership as ineffective were 3.5 times more likely to leave within the year. A close second, flexible working conditions also contributed to an increase in employee attrition. Leadership culture is increasingly crucial to retaining top talent, and organizational culture such as flexible/hybrid work is required to retain all talent.
Developing Effective Leaders in 2023
Out of 1,556 organizations, only 45% of employees trust their manager to do what is right, and this drops down to 32% for senior management. Our Psych & Consulting Team see this phenomenon all the time, a discrepancy between management and the employees. To often it stems from a lack of communication, which eventually grows into distrust. It’s no secret that when employees trust their leaders, they perform better. Statistics show that those who trust senior leadership are 3x more likely to put in discretionary effort, more willing to try new ideas and are more resilient to failures.
Here are some behaviours that elicit high trust from employees:
- Recognizing individual successes
- Active listening and engagement in discussions
- Transparency in the thought process and rationale for decisions
- Invested in team members’ growth and development
You might not be proficient in all the listed behaviours, but by simply being self-aware of your development areas, and acknowledging them, you’re already 5.3 times more likely to have a team that trusts you highly.
- Confidence in themselves
At the start of this article, we mentioned leaders have been questioning their own impact. Statistics show that only 40% of leaders believe their organization has highly capable and competent leadership. In addition, leaders are showing increasingly concerning signs of burnout, with over 72% having feel completely “used up” after a workday. Not to mention only 15% of leaders feel prepared to deal with employee burnout.
Developing a leadership capability framework is crucial to high-quality leadership. This allows leaders to uphold themselves towards a standard, and to know where they need to develop. However, no two organizations are the same so it’s important to build an organization-specific framework.
- Identify and implement a leadership capability framework across the whole organization.
- Focus on each leader’s unique development journey.
- Include 360 feedback surveys as a tool for measuring ratings, and tracking improvements.
Organizations that have good leadership practices and culture on average produce 42% more high-quality leaders compared to those who don’t. Those organizations are also 3.4 times more likely to be rated a “best place to work”.
- Consistent & continuous leadership development
Leaders are asking to be developed. Whether it be professional executive coaching or feedback assessments, they want to learn more about what makes them a more effective leader, and practice to be one. They certainly don’t want self-driven learning materials such as online courses.
Organizations need to implement a continuous leadership development journey to reap the benefits. A pipeline that involves 360-degree assessments, on-going coaching, organization-specific leadership framework, are all factors that contribute to successful leadership development.
Critically, organizations must look to providing leadership development opportunities across all levels of management. Organizations get exponentially greater financial returns and success when their leadership development culture spans across the whole organization.
- Coaching for leadership development
Studies show that coaching for leadership development is at an all-time low. Regardless of the coach demographic (i.e., direct manager, internal HR professional, executive coach), effective coaching leads to more positive outcomes.
When establishing a coaching culture, it is important to keep note of a couple of things:
- Having an established leadership capability framework across the organization.
- Regularly obtain feedback about their leadership quality through 360-degree evaluations, which can set up meaningful coaching conversations and develop self-awareness.
- A need to develop FIVE critical skills
While it’s important to ensure each organization has a specific leadership capability framework, studies indicate five key skills leaders want to develop.
- Identifying/Developing Future Talent
- Strategic Thinking
- Managing Successful Change
- Decision-Making Prioritization
- Influencing Others
Of the five skills, only 12% of the surveyed leaders rate themselves as effective. Perhaps unsurprisingly, only 29% of organizations train and develop these skills. Leaders who rate themselves as effective in all five skills are four times more likely to provide discretionary effort – contributing to their organization beyond what’s written in the job description.
Time’s Ticking: How did your organization do in 2023?
Statistics show that three years is the critical point when leaders start to evaluate whether they should move on to their next opportunity. Reflect on the leaders within your organization, out of the five points above, how many has your organization been diligently and consistently working on? With the future of work forecasted to be more turbulent than ever, highly capable leaders are needed at the helm, guiding the organization and their people, through a sustainable and successful journey.
If you have any questions about the article, or want to have a chat with our Psych & Consulting Team to see how we can help, please contact firstname.lastname@example.org