Fifty-nine per cent of UK HR and business leaders say their organisations are not ready to meet their leadership needs. Only 13 per cent of respondents believe they are “excellent” at maintaining clear and current succession plans and programmes, and 18 per cent rate their current leadership programmes as having little to no value.
In particular, millennials (people born after 1982) are not being developed properly. Over half of businesses report having “weak” leadership programmes for this generation. That is particularly disturbing as millennials make up more than half of the workforce and, in less than 10 years, will make up three quarters.
Businesses are either threatening the quality of those who will lead their organisation in the future, or risk losing their most talented employees to a savvier competitor. A previous study of millennials revealed that 71 per cent of those likely to leave their current job in the next two years are unhappy with how their leadership skills are being developed.
Start to flip the pyramid
Clearly, then, the traditional leadership “pyramid” is not producing leaders fast enough, causing real concern in the medium and long term.
We know that business is changing at an unprecedented speed, driven by advancements in technology and increased globalisation. But with all of this change comes a need for a more diverse group of leaders, who can bring rigour, adaptability and new knowledge to the boardroom table. As organisations grow flatter and more complex, the demand for people who can lead at all levels will rise.
While some companies will have leadership shortages, there will be limited leadership opportunities for younger employees at others. An ageing population, with people continuing to work later into their lives, means this may increasingly be the case. But a changeover will need to happen at some stage.
In organisations where senior leaders are reluctant to give up their responsibilities, businesses must accelerate development among a diverse range of up and coming leaders in other ways. Offering leadership opportunities in new but equally important areas – like setting digital strategies – can help this group develop the experience they need.
Time for the City to listen
Research by Deloitte shows that London is currently the soft power capital of the world. But failing to address the future leadership pipeline could place London’s pre-eminent position under threat.
Quite often, it’s not just a case of spending more on leadership. Last year, companies spent nearly $31bn on leadership programmes globally. Instead, it’s about spending this cash in a more intelligent way. Organisations need to raise the bar in terms of more structured and scientific approaches to identifying, assessing, and developing leaders, and this process must start earlier in potential leaders’ careers.
Leaders in the City also need to ask themselves some difficult questions. Does your business tend to promote people who look and think like current leaders? Is the strategy, focus, and rigour of your company’s leadership programmes up to the needs, skills, and challenges of the future?
If UK companies don’t reverse the current trend and start paying more attention to leadership development now, they risk losing not only their most talented future executives – but could also jeopardise the future of their business.