Leadership drain looms

by 10 Nov 2007

THE LEADERSHIP drain is the next stage in the war for talent as organisations find it increasingly difficult to find talented leaders.

Young potential leaders are leaving Australia in droves for Asian and European markets and Australian companies are faced with the challenge of devising incentives to keep them here.

“Australia is a small market with limited opportunities. We have a history of heading overseas with our backpacks on. These days we head overseas with our briefcases on,” said Mark Busine, general manager of DDI.

“In an increasingly global environment, skills such as global acumen and cultural interpersonal sensitivity will become fundamental to leadership success” he said.

According to Busine, Asian markets are particularly attractive to young emerging leaders.

“Our proximity and relative familiarity with the Asian region means we are well-placed to take on opportunities in the Asia region. We are also seeing a number of Australian organisations expanding operations into this rapidly growing market and using Australian talent to support the growth. In addition to this many Asia markets are facing a significant talent shortage, particularly in the leadership space,” he said. He said China in particular faced specific issues.

According to Peter Zarris, CEO of OPIC, the leadership drain is being fuelled by generation X and Y’s insatiable need for new experiences and to see the world.

“This is a transient group of people who rate life’s experiences ahead of the traditional boomer values of owning their own home and financial security”he said.

Zarris believed the drain is also being fuelled by a growing international recognition that Australia has a strong leadership culture.

“Australians make very good leaders thanks to our culture. We’re extroverted, prepared to have a go, easy-going, hard-working, down-to-earth, accessible, real, known and adaptable – qualities which are mandatory for leadership. These qualities are especially desirable in cultures – particularly Asian cultures –where they are not only in short supply but where they are viewed as a ‘must have’ in leaders,” he said.

HR managers have a challenge on their hands to identify young leaders and give them the right incentives to stay. According to the DDI Future of Work Survey, 94 per cent of respondents believe the ability of leaders to work across different cultures and countries will increase in importance. Also 72 per cent believe Australian organisations will find it more difficult to retain leaders attracted by overseas opportunities.

Zarris warned of heavy poaching over the next decade and the need for Australian companies to avoid the drain of talented leadership. He said the best avoidance mechanism is early leadership identification and significant investment in long-term leadership development programs.

“Identification needs to happen as early as 25 and certainly well before the age of 35. If companies leave it later than this they run the risk of losing these people. Good leadership plans need to include personal development opportunities such as overseas postings, think tanks and cross disciplinary experience such as working in sales, marketing, operations and other areas of business in order to have a broad understanding of the challenges across business,” he said.

However globalisation will cause Australia to lose many of its talented leaders anyway and, according to Zarris, all companies can do is try to keep leaders here for as long as possible.

“The leadership drain is an inevitability, but something companies can either manage or be a victim of. Managing it will mean retaining the commitment of gen X and Y and enjoying the expertise and drive they bring to the organisation, for that bit longer.”


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