Some $50 billion a year is being spent on developing leaders worldwide, but it’s not viewed by company leaders as being effective, according to a report released in July by global talent management consultancy Development Dimensions International and The Conference Board. The 56-page report titled “Global Leadership Forecast (GLF) 2014|2015, Ready-Now Leaders: Meeting Tomorrow’s Business Challenges,” the seventh in-depth report since DDI began this research in 1999, shows that, over the past five years, the percentage of leaders rating their organization’s overall leadership quality as high has increased only from 37 percent to 40 percent. The overwhelming majority of leaders — 63 percent — are also still saying their organization’s development offerings are less than high quality.
The study uncovered significant data about company leadership. One finding of this most recent study is, companies with a higher percentage of women in leadership roles perform better financially than those with a low percentage of female leaders. Of the participating organizations, those in the top 20 percent of financial performance have 37 percent of their leaders as women and 12 percent of their leaders as high-potential women, meaning they have been identified as having a more accelerated growth path.
The research also connects the percentage of Millennials in leadership roles with overall business success. Aggressive growth companies, such as those in high-tech industries claim a 30-percent higher proportion of Millennials in leadership positions. Surprisingly, however, Millennials’ preferences for using leadership development methods mirrored those of other generations. “Many organizations take a knee-jerk approach to align or realign to this age group when it comes to influencing development focus, retention and engagement,” says Evan Sinar, Ph.D., the study’s co-author, DDI chief scientist and the director of the Center for Analytics and Behavioral Research. “Companies need to focus on the commonalities of all generations first.”
One unexpected result for Dr. Sinar and his colleagues relates to how CEOs ranked the importance of human capital as a top challenge. “It ranked higher than global economic factors and sustainability, which was surprising,” Dr. Sinar says. “We also looked at the use of analytics and Big Data, and found that many HR professionals were doing basic, rear-view-mirror analytics when they need to produce more forward-facing and business-centric information about talent,” he explains, adding that C-level managers should challenge HR to step up to that role. “Not all talent programs are created equal and a lot of HR professionals are trying to do too much.”
To improve business outcomes, Dr. Sinar suggests bolstering current development programs so that all leaders, including women and Millennials, can improve their skills. “Development opportunities build confidence. Provide opportunities for stretch assignments, ensure formal practices are in place to facilitate those opportunities, and fully commit your support to mentoring programs to develop and prepare new leaders,” he says.
| Development Dimensions InternationalLeaders Not Prepared for Challenges | ||
| CEOs identify their top challenges, and how prepared they are to deal with them | ||
| Challenge | Ranking | Percent of CEOs who consider themselves very prepared |
| Human Capital | 1 | 27% |
| Customer Relationships | 2 | 45% |
| Innovation | 3 (tied) | 26% |
| Operational Excellence | 3 (tied) | 33% |
| Corporate Brand and Reputation | 5 | 41% |
| Global Political/Economic Risk | 6 | 11% |
| Government Regulation | 7 | 25% |
| Sustainability | 8 | 27% |
| Global/International Expansion | 9 | 17% |
| Trust in Business | 10 | 43% |
| Leaders Assess Effectiveness in Crucial Skills | |
| Many CEOs feel their organization does not provide appropriate leadership programs | |
| Skill | Percent of CEOs who consider themselves highly effective |
| Communicating and interacting with others | 74% |
| Building consensus and commitment | 67% |
| Coaching and developing others | 63% |
| Managing and successfully introducing change | 62% |
| Developing strong networks/partnerships | 61% |
| Inspiring others toward a challenging future vision | 58% |
| Fostering employee creativity and innovation | 56% |
| Leading across generations | 54% |
| Integrating oneself into foreign environments | 45% |
| Intercultural communication | 39% |
| Leading across countries and cultures | 34% |
| Gender Diversity Pays Off | ||
| Organizations with better financial performance have more women in leadership roles | ||
| Financial Performance | Top 20% | Bottom 20% |
| Percent of women leaders | 37% | 19% |
| Percent of high-potential women leaders | 12% | 8% |
Charts Source: Global Leadership Forecast 2014/2015
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