Many believe that business leaders have the requisite competencies to manage their companies capably. Ah, but do they? At the Bonar Institute for Purposeful Leadership we see many clients struggle, some stumble, as they move into new management positions.
In a recent issue of The Economist (October 10th, 2015), we read that “confidence in business leadership is at a record low”. Fewer than 50% of respondents in an opinion poll trust CEOs. (Endelman, 2014). And, according to academic literature, one in two leaders is deemed a disappointment, incompetent, mis-hire or a complete failure.
The current macro-economic situation, characterized by unusual uncertainty and volatility, is posing significant challenges to corporate executives. The world is becoming ever more turbulent and complex, and ingrained mental patterns which may have been successful yesterday, are no longer so. A strong track record of successes does not herald an executive’s success today, let alone tomorrow. The title of Marshall Goldsmith’s celebrated book: What Got you Here, Won’t Get You There (2010) comes to mind. The challenges facing leaders often outpace their cognitive abilities. It is difficult for them to be the innovative leaders that their companies desperately need them to be.
The situation is no better for executives new to their positions – either external hires or those who are newly promoted. Shockingly, according to a Corporate Executive Board Recruiting Round Table survey, 89% of new US executive hires indicated that they did not have the optimum level skills to do their jobs. And, from 40% to 64% of new executives leave their jobs (voluntarily or otherwise) within the first 18 months of being hired. Many more underperform. (M. Watkins, 2003, cited in Centerstone, 2014).
Is this due to some deficiency in the recruitment process? Are executive recruiters to blame? Typically, executive search firms do an excellent job in identifying and screening exceptional candidates for their clients. Often however the rigour, focus and attention given to the recruiting process don’t carry over to a commitment to successfully integrate new executives into their new roles, and to addressing the skill gap many invariably have. In the case of internal hires, they are promoted to executive ranks based on a record of past achievements and on senior management’s recognition of their potential to assume greater responsibilities. It is not the recruitment process that leads to so many new executive hires underperforming; rather, as noted above, it is that few hires possess all the required competencies to do their jobs at the highest level. Corporate orientation programs are not adequate for this purpose; and learning on the job, which is the fate of approximately half of the executives in at least one survey (Career Partners International, June 2014), is mostly insufficient.
The consequences for a company of not addressing purposefully the skills deficit of its executives can be dire:
- A leader who can’t see beyond the ordinary, to identify new possibilities and the potential for the extraordinary.
- A visionary who doesn’t pay careful attention to the bottom line
- A strategist who can’t deliver actionable plans
- A business or operations leader who can’t lead change
- An executive who lacks the emotional intelligence to manage effectively, losing key people.
In some cases, these deficiencies can be fatal.
The most successful companies have prospered over many generations through innovation; they are guided by strong, insightful and accomplished leaders. They understand that leadership development (of its current and new executives) is an essential investment to ensure their future. Today, executive coaching is recognized as a key component of leadership development. Corporations consider it as a vital investment in its senior management. By fostering excellence in their executive leaders, corporations understand that they are nurturing the success of their entire organization. Leadership development is one of the most important investments a company can make.
Is your company making the necessary investments in its leaders to compete and thrive in an uncertain and volatile economy?