Leaders Lacking ‘Dynamic’ Skills

Organizations are having a difficult time finding people with desired leadership skills, recent research suggests.

A survey by the nonprofit research and benchmarking firm American Productivity & Quality Center, or APQC, found that when business professionals were asked to rate their organizations’ leadership skills, most reported disconnects between the level of leadership skills needed for success and the actual skills employees possess.
The survey polled 547 business professionals in the summer of 2013, and the research is being rolled out over the course of 2014.

Employees are most likely to have so-called “hard” — or technical — skills, the survey showed. The smallest leadership skills gaps were delegating tasks, being a competitor and being authoritative. The largest leadership skills gaps, meanwhile, were soft skills such as strategic planning, change management, knowledge sharing, listening and emotional intelligence (Figure 1).

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The findings suggest the current business challenges are driving the skills gaps. According to the survey, nearly 80 percent of business professionals agreed that there is a broader need for a different corporate leadership style to deal with the gap, and a shift away from the traditional command and control way of leading is the popular sentiment.

Generational differences could complicate this line of thinking, as 70 percent of those surveyed agreed baby boomers, Generation X and millennials each have different leadership-style preferences. Additionally, 66 percent of respondents agreed with the statements “Organizations are underinvesting in leadership development” and “Leaders are resistant to changing their leadership styles.”

Few survey respondents (16 percent) agreed that employees are not interested in developing leadership skills, and half (50 percent) agreed innovation requires a more democratic leadership style (Figure 2).

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Overall, respondents in the APQC survey called for organizations to aim for a more dynamic leadership style. This style is characterized as a flat, community-centered organizational structure with shared goals, collaborative work processes and situation- and knowledge-based authority. The most important skills for new, dynamic leaders are those related to being able to successfully deal with change in areas like teamwork, listening, collaboration and knowledge-sharing, according to the survey.

By and large, the survey also showed that organizations using these dynamic leadership practices have narrower skills gaps (Figure 3), as employees at dynamic organizations possess more of the skills needed for success. For example, 82 percent of dynamic leadership organizations’ employees greatly possess the skill of teamwork, whereas only 16 percent of traditional organizations’ employees do, the survey showed.

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Despite a growing appetite for these preferences, the survey found that fewer than 20 percent of organizations use this dynamic leadership style. And only 26 percent of those surveyed said their organizations put a high priority on leadership development (Figure 4).

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Despite these barriers, there are a number of different areas that organizations can focus on to minimize their leadership shortages. The following is based off APQC interviews with best-practice organizations in leadership development, as determined by the research firm.

Develop all employees, not just the high potentials. When companies develop leadership skills in all of their employees, they increase the pool of potential leaders to backfill important positions, APQC’s research suggests. Therefore, organizations should aim to provide leadership development opportunities to all employees of different roles and job levels.

Create a culture of knowledge-sharing. Unlike the traditional, walled-off business environment, the case study research showed that organizations that excel when it comes to leadership development promote a work environment that is transparent, with tools and systems in place to enable employees to communicate with different departments more freely. Employee intranets and social platforms have helped companies promote this kind of communication and transparency, the research suggests.

Engage employees in collaborative work projects. Collaboration across the business sector is critical for success in today’s ever-changing and volatile business environment, APQC’s research shows. Companies with proven success in this area do so by socializing, collaborating and ensuring that a variety of stakeholders are included in the decision-making process.

Continuously develop leaders even in tough economic times. Best-practice organizations focus on continuously developing their employees no matter the broader economic landscape. Rather than cut back on leadership development during an economic recession, for instance, companies should continue developing leaders in times of crisis, APQC’s research suggests.