Leadership Special Report: Australia’s leadership succession challenge

by HRD01 Sep 2016
While the fundamental skills and requirements of leadership will remain relevant into the future, the business context, particularly in Australia, continues to change dramatically. Leaders over the next 10 to 15 years will face an environment considerably different to the one they entered and in which they honed their skills. The world as we know it, the workplace and the ‘worker’ will all change dramatically. Successful leaders will embrace these changes and recognise the adjustments (sometimes subtle) they must make to their own leadership style and approach.

Preparing leaders for this future must be a priority of all organisations. Leadership development and succession management must be systematic and comprehensive to ensure that talent has the required capability, experience, knowledge and self-understanding to deliver business outcomes. This issue will not remain static, nor will it go away.

Despite evidence that the investment in leadership development and succession management has increased, the question is whether it has done so at a pace consistent with the changing business environment. The overwhelming view is no. According to DDI’s Global Leadership Forecast 2014/2015, only 45% of leaders rated the quality of their organisation’s leadership development as high to very high, and while 66% of organisations had introduced high-potential programs, a staggering 74% of respondents rated their programs as not very effective.

The impact? According to DDI’s Global Leadership Forecast, in 2014/15 just 40% of leaders rated the overall quality of leadership in their organisation as high; and according to PWC’s Strategy&, the cost to Australian shareholders of unplanned and erratic turnover at the chief executive level was in the vicinity of $8bn in 2015.

So while there has been some positive progress on the development and succession front, it is time to confront the reality that things need to change. In the spirit of change, three key enablers will underpin a more effective approach to succession and leadership development moving forward.
  • Context: Leadership cannot be defined by a single set of attributes or situations. Nor will an organisation’s set of conditions and priorities necessitate the same approach to leadership development and succession. Don’t treat leadership development or succession as a ‘one size fits all’. Know your context and build your approach accordingly.
  • Insight: Too often we operate on longheld views and assumptions about organisations and leadership. As a field we need to constantly question our beliefs and assumptions. Don’t assume that what we have done in the past will necessarily be right for the future. The key is to use data and insight to guide more effective decisions and actions.
  • Energy: In our attempts to bring structure, order and discipline to development and succession, we have effectively drained the energy out of many activities. As a result, the users of our systems have passively or actively rejected them. Energy in an organisation is a tricky thing. It’s often hard to define, but we know when it exists and, more importantly, when it doesn’t. The key: Unpack existing leadership development and succession systems and processes and rebuild them with people at the centre. Australia is at an inflexion point. Our future economic and social prosperity will depend on our collective capacity to adjust to a life after mining, and underpinning this is our ability to identify, prepare and select the leaders who can leverage the opportunities of this new world.

Mark Busine is managing director, Australia, Development Dimensions International (DDI). DDI is a leading global HR consultancy, specialising in transforming leadership through assessment and development.