Are we prepared?
If these external challenges are daunting, it’s nothing compared to what organisations are up against internally. Over the last five years, Lear has seen a contraction of focus on leadership development within organisations. This, he notes, is a ripple effect of the GFC, which focused most CEOs on the bottom line rather than people development.
“The challenge we’ve got right now is getting the CEO’s eyes off the bottom line and onto their people. One of the problems is they don’t realise that their people are their organisation. They are creating a leadership capability gap which is going to be hard to fill,” he says.
Part of the problem is a failure to map out explicit career opportunities and paths to upcoming leaders. In the past, individuals could enter an organisation and conformably spend the next 20 years working their way through a relatively static and defined career path. In today’s VUCA world, this is tough.
Organisations are constantly changing and reshaping their structures. This can make it can be challenging to map about well-defined career paths over a long period of time.
However, research shows that career paths remain important and contribute to employee engagement and retention
. So what can organisations and leaders do to manage this need in a very different business context?
Dan Musson, chief executive of Australian Institute of Management, suggests some of this comes down to changes organisational hierarchies. Where once there were deep hierarchical structures, with a career path seemingly for each individual, this no longer applies in 2015. At the same time, career development has been handed over to the individuals themselves to manage. “Managers are out of practice in looking for and developing the capability within their company. They’re focused on their job and developing future leaders is kind of a secondary thing, or a HR thing,” he says.
This concept of the ‘free agent’ has taken flight amongst younger workers. Employees are free to move between companies and industries, and they have capabilities that extend across multiple areas. Yet this does not mean employers can take a hands-off stance. Employees still need clarity or direction, even in a flat organisation. “You can’t just say, ‘let us know what development you want to do and we’ll let you know if we’ll fund it’,” Musson says. “That’s too ad-hoc. People get lost in that. They will understand that lateral movements are just as valuable as moves up the hierarchy because there are fewer opportunities upwards – but they need a very deliberate direction.”
He suggests that managers must take an active role, either as a mentor or coach. “That has to be part of the leader’s job now. How much am I spending developing capability as part of my day?” he says.
“One of the first things leaders can do is to ensure that individuals (right across the leadership pipeline) have development plans in place,” suggests Mark Busine, managing director, DDI. “In the absence of clearly defined career paths, leaders need to work with their team members to ensure they are receiving the opportunities that facilitate growth and development. This includes looking out for the roles, experiences and opportunities that will facilitate growth and support engagement.”
Sadly, only 36% of a sample of more than 13,000 leaders reported having an up-to-date development plan.