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CEO Challenges

Global Leadership Forecast 2018

For CEOs, It’s Still About Developing Leaders:

Strategy Is Nothing Without Effective Leaders to Execute

Rebecca L. Ray

More than 1,000 C-level executives worldwide identified the issues they expect to command their attention in the coming year. Of the 28 challenges from which they could choose, their biggest concerns weren’t headline-worthy global issues like political instability, climate change, terrorism, or a global recession. Rather, the top challenges vying for leaders’ action focused on their own leaders. Developing “Next Gen” leaders and failure to attract/retain top talent were rated in the top five by 64 percent and 60 percent of respondents, respectively. Leaders clearly indicated that top talent and effective leaders will be needed to address the myriad current challenges and to position their organization for future success. The Top 10 Challenges are shown below.

For CEOs, It’s Still About Developing Leaders

These findings are consistent with The Conference Board’s 2017 CEO Challenge* study, which asks the same question of global CEOs each year. In 2016 and 2017, these two challenges placed among the top five choices globally. Senior leaders are acutely aware of the importance of focusing on strengthening human—and, specifically, leadership—capital.
 
Of those leaders surveyed in Global Leadership Forecast 2018, only 41 percent believe their organization’s leadership development program to be of high or very high quality, with 35 percent assessing both “leadership assessment” and “leadership performance management programs” to be of high or very high quality. Average program quality translates into moderate confidence in leadership effectiveness. When asked to consider their own effectiveness in the critical leadership skill of identifying and developing future talent, 64 percent of respondents rated themselves highly effective or very highly effective, which leaves 36 percent of leaders (those who are only moderately effective, or even less skilled) to shape the next generation. And with 58 percent never having been mentored, how do we expect that they’ll know how to mentor others?

HR Paints a Bleak Picture

More than 2,500 HR professionals told us that identifying and developing future talent is the most critical skill leaders will need in three years. A significant gap exists between the criticality of this leadership skill and leaders’ own assessment of their ability to successfully master it. The net result would be a weakened leadership cadre. Only 35 percent of HR professionals rated their organization’s bench strength—the supply to fill critical leadership positions over the next three years—at any level of strength (slightly strong, strong, or very strong) and, on average, only 43 percent of positions could be filled by an internal candidate immediately. Thirty-seven percent believe their succession management system and processes to be of low or very low effectiveness.

In terms of quality, HR professionals’ assessments of their organization’s leadership development program were lower than the leaders’. Responses do not signal a bright future:
 

  • Thirty-one percent have a weak or nonexistent relationship between annual strategic plans and their own plans to grow leadership talent.
  • Fifty percent do not have well-integrated and strategically aligned leadership development programs or processes.
  • Seventy-eight percent see their leadership career planning/pathing systems as only moderately effective or worse.
  • Sixty-five percent do not believe their leaders have high-quality, effective development plans.
  • Forty-eight percent do not use information from assessments and simulations to make leadership hiring and promotion decisions.
  • Thirty-five percent do not have a program to develop high potentials, and 45 percent of those that do don’t measure the effectiveness of the programs.
  • Seventy-three percent do not exercise negative consequences when leaders fail to develop leaders on their team.
  • Fifty-two percent do not know the up-to-date status of leadership talent capability across the organization.

Mitchell, C., Ray, R.L., & van Ark, B. (2017, January), The Conference Board CEO Challenge® 2017: Leading Through Risk, Disruption and Transformation, New York, The Conference Board, https://www. conference-board.org

Where to Start
  • With all stakeholders, begin with a candid assessment of all leadership development programs and processes at all leader levels.
  • Create a plan to integrate all efforts with the twin goals of supporting leaders’ success now and building a solid pipeline of successful future leaders against the profile your organization will need.
  • Create or update a leadership capability model that is embraced by senior leadership and aligned with the organization’s strategic goals.
  • Ensure that leaders have the skills to identify and develop top talent.
  • Review and enhance other talent management systems to support the creation of a strong cadre of leaders.
How to Excel + Differentiate
  • Systematically monitor progress and gather data to determine the business impact leadership development processes have on advancing the organization’s strategic goals.
  • Articulate the impact in terms of the organization’s ability to execute the strategy and create a plan to address deficiencies.
  • Deepen the strength and quality of your leadership bench.
  • Partner with business leaders and the C-Suite to design, deliver, and assess the effectiveness of all leadership-related actions. Enlist these individuals as coaches, mentors, and champions.
  • Adapt performance management processes to hold leaders accountable for successfully developing their teams, particularly emerging leaders.
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