Research from U.S. Bureau of Labor Statistics, Aberdeen, and others show that organizations are facing the difficult challenge of replacing senior talent with qualified incumbent employees. UNC Leadership Survey 2014: How to Accelerate Leadership Development, conducted in partnership between the University of North Carolina Kenan-Flagler Business School and the Human Capital Institute, investigates ways organizations plan to develop the knowledge, skills, and experiences of their future leaders to overcome this deficit.
From a sample of HR professionals, we can understand the current climate of leadership development, including budgets, leadership competencies, and anticipated changes for the future. Bottom line: a bleak state of leadership was revealed.
More than one-quarter of organizations report that 20 percent or more of their employers will reach the retirement age within the next five years, and they are concerned about their leadership bench strength.
Indeed, 85 percent of respondents agree that there is an urgent need to accelerate the development of their leaders. And senior leaders are not satisfied with current bench strength and are concerned that their high-potentials are unable to meet future business needs. Only 40 percent report that their high-potentials can meet future business needs.
According to the research, balancing long-term and short-term business requirements, encouraging managers to develop their employees, and budget were rated as the top three challenges for leadership development. And the top five leadership competencies are: ethics and integrity, drive for results, effective communication, strategic thinking/insight and relationship management.
Unfortunately, only 23 percent of respondents agree that their learning and development budgets meet current needs. As a result, the majority of organizations plan to increase leadership development activities within the next five years, with formal mentoring slated for the most growth.
How can companies accelerate leadership development? UNC Leadership Survey 2014: How to Accelerate Leadership Development identifies assessing leadership readiness as a key factor for success.
Nearly one-third of the organizations surveyed indicate they have standardized criteria to determine leadership readiness. There is variety in how developmental readiness is measured, however, with 77 percent relying on managers’ subjective recommendations, 75 percent relying on performance reviews, and nearly 40 percent using observations by managers or mentors trained in assessing readiness.
The survey reveals that companies that use managers’ subjective recommendations to assess leadership readiness report that it takes longer to develop mid-level managers, compared to those that use observations by trained mentors or managers.
Likewise, organizations that effectively develop leaders faster and report more leadership-ready employees state they have development activities fully integrated with business strategies and hold employees accountable for the application of new skills and knowledge to the job. Development that is integrated with business initiatives also is more likely to occur at a faster pace.
When development activities are fully integrated with business strategies, survey respondents report that it takes 18 months to develop a mid-level leader, compared to 24 months when there is not full integration with business strategies.
To learn more, download UNC Leadership Survey 2014: How to Accelerate Leadership Development.