With their sights set on rapid organizational growth, leaders aren’t sure they’re up to the task—and companies are struggling with developing the leadership bench strength they so desperately need, according to an international leadership survey conducted by Development Dimensions International (DDI), a global human resource consulting firm.

 

The Leadership Forecast 2005-2006 Best Practices for Tomorrow's Global Leaders examined critical leadership issues and assessed how successful leadership impacts the bottom line of business. The report concluded that strong leadership can increase the successful implementation of business strategies by 22 percent. Additionally, the report shows that organizations with strong leadership development and succession planning have higher returns on equity (ROE) and profit margins.

“While we have a long way to go, those organizations who are doing a better job in developing leaders are reaping tremendous benefits,” Rich Wellins, senior vice president, DDI, said. “Companies who are worried about their future profitability should be just as worried about the future of their leadership.”

DDI’s Leadership Forecast 2005-2006 Best Practices for Tomorrow's Global Leaders is a longitudinal, international study of 4,559 organizational leaders from nearly 1,000 organizations in 42 countries about leadership development, attitudes and ambitions. This is DDI’s fourth Leadership Forecast since 1999.

Some of the major findings include:

Leaders give themselves low grades Leaders rated themselves on 10 qualities that are strong indicators of leadership performance and potential. Some of the most critical qualities include passion for results, adaptability and bringing out the best in people, and leaders rated themselves low in these areas—leaders rated their proficiency on those qualities between 61 and 73 percent. “Leaders are barely giving themselves passing grades, and organizations are still graduating them to the next level and promoting them into leadership positions,” Wellins said.

Two-thirds of organizations believe it will only get harder to find senior leaders With fewer younger workers rising through the ranks to step into leadership positions, organizations haven’t identified the sources for the next group of leaders. “There is a lot of talent out there, but it’s how you find it and hold onto it,” Wellins said. “Organizations need to do a better job of identifying and nurturing those with the potential for leadership.”

The use of succession planning isn’t increasing
Only about half of organizations have a succession plan and there has been no increase in use over the past two years, and of those organizations that have them, they are not used for development. “Organizations 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 have considered bailing out of their leadership position
A quarter of the leaders surveyed said they would give up their leadership role to pursue other personal or career goals. “Increased scrutiny, increased spans of control and higher expectations have led many leaders to ask ‘is it worth it?’” Wellins explains. ”If these individuals all acted on this, organizations would be paralyzed from the loss of managers, supervisors and executives,” Organizations have to prevent an epidemic of leadership dropout to protect customer relationships, employee retention and shareholder confidence, especially when only half of current leaders are satisfied with their organization’s leadership opportunities.

Available for interviews: Rich Wellins, Senior Vice President, DDI