Leadership challenges on the horizon

by 06 Mar 2007

DEVELOPING AND retaining leaders will be a significant challenge for organisations over the next 10 to 15 years, a report found.

More than 90 per cent of the 249 survey respondents consisting of leaders, HR representatives and an executive forum of Australian and multinational organisations said the development and retention of leaders was the most significant challenge for the future. In particular, their ability to think strategically, lead change and deliver results will become paramount.

“Successful leadership is pivotal to Australia’s wellbeing. As the business context continues to change dramatically, leaders of the future will need to embrace these changes, leverage the strengths of the past and move forward with a new portfolio of skills and experiences”, said Mark Busine, general manager, DDI Australia, which released the report.

As businesses increasingly shifts to a more global focus and face the impacts of technological innovation, the report found executives of today are now faced with more complicated market and business conditions.

“The pace of change within which businesses will adjust or reset their strategies is much more dynamic,”said Bruce Watt, managing director of DDI Australia. “Those individuals who are able to navigate through that and constantly adjust and create strategy and vision are going to be more successful.”

With 80 per cent of a company’s assets tied up in intangibles such as people and brand, Watts claimed HR was in the best position ever in its profession to help influence the future prosperity of organisations. “HR professionals have become business advisors. There are a lot of boards and CEOs who see that that majority of their asset is intangible, with leadership as the key to ensuring those assets are well managed.”

As organisations realise the critical aspect in selecting the right leaders, HR was in a perfect position to provide good counsel, he added.

Several emerging trends within the business environment were identified as main drivers behind the leadership challenges to develop over the next 10 to 15 years.

With the ageing of the workforce placing continued pressure on knowledge retention and labour supply, the report highlighted the need for considered responses.

Survey respondents believed organisations would respond in various ways with 82 per cent having predicted the average age of retirement would increase along with the recruitment of older workers (74 per cent).

Traditional notions of employee loyalty are also set to change, due to an increasingly demanding and influential workforce. The report revealed 74 per cent of respondents believed employee loyalty and connection to a company would decrease, while a further 90 per cent believed employees would change organisations and career more often.

As the challenge of the war for talent and an ageing population sparks issues of supply not meeting demand, the role of HR in helping meet leadership requirements has become crucial. “Organisations are utilising the skills of HR to help select high potential leaders already within the organisation as early as possible in their careers as they are very hard to find outside,”Watts said.

In terms of the effects of globalisation, 94 per cent of respondents believed the trade of knowledge across countries would increase. A further 72 per cent said Australian organisations would find it more difficult to retain leaders attracted by overseas opportunities.

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