WHILE THE majority of board directors want to spend more time developing the skills and capabilities of their executive and companies as a whole, a global consulting firm believes that many management teams and boards often fail to understand the importance of assessing them and spotting the gaps
WHILE A majority of board directors want to spend more time developing the skills and capabilities of their executive and companies as a whole, a global consulting firm believes many management teams and boards often fail to understand the importance of assessing skills and spotting the gaps.
“Early on, boards should recognise and discuss any new strategy’s ramifications for talent and skills,” according to McKinsey director Bob Felton and consultant Pam Keenan Fritz.
A global McKinsey survey of more than 1,000 public company directors found that over 60 per cent are keen to spend more time developing and evaluating top management while 78 per cent want to do the same developing the skills and capabilities of the company as a whole.
While directors had the best of intentions for their companies, Felton and Keenan Fritz said, talent and skill shortages could often result from poor planning.
Writing in The McKinsey Quarterly, Felton and Keenan Fritz gave the example of a large industrial company based in Asia.
The firm “identified a need for 670 managers, in addition to its current roster of 960, to meet the challenges resulting from the introduction of a new strategy,” they said.
“But when the company assessed its current managers, only 150 of them turned out to have the right skills. The resulting gap of 1,480 managers was significant enough to raise questions about the viability of the company’s new course.”
Felton and Keenan Fritz also said that directors appear to be taking a leading role in CEO successions, with 41 per cent stating that board members led the most recent CEO search.
This did not, however guarantee a favourable outcome with almost one-quarter of the directors confessing that the most recent CEO succession at their companies had failed.
“According to the directors, CEO successions that work well and those that don’t can be explained, in many cases, by the presence or absence of the same things: alignment between the board and the CEO on the company’s strategy and future direction; finding a CEO with sufficient drive, energy, and ambition; the CEO’s honesty and integrity; and a core skill set that includes investor relations and M&A,”Felton and Keenan Fritz said.
