Preparing for Leadership

(Originally written in 2007)

One of the biggest challenges facing Indian organizations as they grow to take on the world, is the severe shortage of skilled leaders who can actually lead them on their journey of globalization.

In fact a recent Business Today story quoted Shailesh Haribhakti, an independent director on the boards of several companies was quoted as saying: "There is now talk in boardrooms of sustainability and how to keep the companies going."

Another article in the Hindustan Times said “In the next two years, India needs to find around 500 to 750 CEOs and another 10,000 functional leaders.”

K Sudarshan, managing partner at EMA Partners, an international CEO search firm, (who also provided the above estimates), says: "There is a huge gap between demand and supply for chief financial officers (CFOs) and human resources professionals—both leaders and professionals down the line."

According to an EMA Partners’ five year study conducted across 100 companies during 2001-06, reveals that 66% of the companies have had a change of CEO’s in the last five years. The industry with the fastest growth has the highest churn in the CEOs understandably due to the tempting offers oozing in for the CEO’s. IT- ITeS leads in the category at 88% followed by Banking Sector at 70% not leaving Pharma much behind at 67%. As we can see, the demand for leadership cuts across sectors and industries. In Leading the Way (a study of the top twenty companies for developing leaders), Marc Effron and Bob Gandossy show that companies who are great at developing leaders tend to achieve higher long-term profitability.

Of course, there are short term measures to solve such issues. In the short term this would mean hiring expatriates to fill the vacant positions, and also escalate a price war for leadership talent. According to Hewitt Associates India has been consistently having among the highest increases of pay in the Asia Pacific region in the last few years.

However Indian organizations have to get their act together if they have to think long term.

What is leadership?

Leadership is defined in many different ways. Paul Hersey and Ken Blanchard have defined leadership as "working with and through others to achieve objectives". Some people link leadership to charisma. It is deemed to be individual specific Words like visionary, someone who articulates the path for the future etc crop up pretty often. A sales director in one of my previous organizations used to define it as the presence of three things in an individual – Ideas, Influence and Initiative. In my view it is a social process. Others have to accept you as a leader. No matter what your designation, if people do not accept you as a leader, you probably won’t last.

How is leadership different from management?

For Marcus Buckingham, leadership is defined as tapping into the universal feelings of the group as different from management which is tapping into the unique strength of each individual. Management is also defined as “transactional leadership”. Warren Buffet defined a manager as one who does things right as opposed to a leader who does the right things.

What they have got to do is the following:

1. Build the bench strength for leadership – A company can never have a surfeit of leadership. You can have too many engineers, too many researchers, too many managers, too many support staff. However, you can never have too many leaders. The more leaders you have the better it will be for the business. When I talk about leadership here, it is not the designation on the visiting card that I am referring to, but the ability to lead. The more leaders a firm has, the more opportunities it creates to compete and perform. So how can an organization build this bench strength

1. Look at competencies for leadership – Leadership like other roles is a type of role. Of course, there are different types of leadership. We shall take a look at them later. For each of these roles of leadership competencies should be mapped and validated by senior executives. Competency mapping methods like Assessment Centers as well as interview techniques should be used to arrive at these competencies.

2. Look the future competencies and business changes – Competencies need to be continually looked at in the context of the organization and the changes in business strategy and markets. The competencies of the past will not dictate the course of future successes. Hence these competencies need to be continually reassessed for relevance.

3. Decide how many would be hired externally and how many internally – An organization needs to also hire people externally in leadership positions, so as get fresh perspective on business and culture. However, these hires must always be assessed against the agreed competency models. Often, external leadership hires tend to concentrate on one achievement like being a ‘turnaround’ expert or a ‘growth leader’. However sharper thought on how this new person will fit into the culture of the organization and how it impact the prevailing climate of the firm.

2. Build leadership development into the fabric of talent management. As we will see below, talent management processes which exist for all employees in the organization need to be the same systems that integrate leadership development needs.

3. Leadership development is not a standalone activity – Some firms try and focus leadership development by putting up a separate group. However such an approach cannot really succeed until this is tied up with other HR initiatives in Talent Management. Development of leaders is not just about ‘teaching, training or learning’. Sport As Marshall Goldsmith and Howard Morgan wrote in Strategy+Business, September, 2004 issue “Leadership Is A Contact Sport” and cannot be taught in isolation. It needs engagement with live issues and people within the organization.

1. Companies need to always focus on leadership development, during the whole talent engagement employee life-cycle.

1. Attracting talent – Apart from assessing employees against the job competencies, they also have to be assessed for leadership positions and leadership competencies.

1. Does the person have qualities to influence a large number of people? How has he led people in the past? A proper due diligence by way of referral checks with past subordinates peers and supervisors needs to be taken to understand his/her strengths in the area of leadership.

2. It also needs to be understood that really good leadership is a function of both the leader and the market and his firm. Head hunting a leadership candidate without trying to figure out his/her actual contribution to the business’ success.

3. Reaching out to good leaders should also focus on what his real motivator is. Does the person have a life interest, as Waldroop and Butler call it, of enterprise influence? What is his/her career anchor (according to Edgar Schien)? What are his talents, according to Gallup?

2. Motivating talent – Depending on the leader’s motivational factors the role he or she would vary. How can the role be customized for capitalizing on the person’s natural talents as well as experience? Does the person get motivated by external goals like meeting targets or internal goals like creating intellectual property for the organization? How open is she/he to travel? What are the leader’s unique needs? How can the organization accommodate them? Has she/he been told what is specifically expected from her/him? How much support do such developing leaders have from the organization? These questions and their answers are not easy. However, only seeking such answers will lead to understanding what can motivate tomorrow’s leaders.

3. Promoting talent – How do you promote people is integral to developing leadership. Leaders always may not seek a management career. Specially in a specialized domain like technology, pharma or consulting. What are the ways you can expand and enrich their roles? If they love managing people can you pose them fresh challenges every year? How do you build T shaped skills? That refers to a deep level of expertise in one are and a broad knowledge of many other areas. What forms the basis for moving people from one level to another? Potential or past performance? Other data points can also be seen apart from traditional performance appraisal. A lot of firms use tools like Assessment Centres, 360 degrees, to help aspiring leaders to know other data about themselves that are more qualitative in nature, other than just performance data.

4. Compensating talent – How leadership is compensated should tie in both individual motivator factors as well as industry best practices. Future earnings and linkage to business results should be clearly shown for such people. If they are really the future of the business, compensation, both monetary as well as non-monetary rewards should be open. The chasm between their compensation and the actual leadership should not be too great.

4. Understand that leadership development is not the HR function’s responsibility

1. It needs to be the leadership’s mission – Unless the leadership of an organization wants to develop leaders really really badly, it will not come to fruition. In a lot of firms leadership is not groomed as present set of leaders are insecure about their roles and want to ‘hang on’ to their chairs for a long time. Such organizations never will succeed in growing leaders successfully. That is because the current leaders have to mentor and coach tomorrow’s leaders and yet leave them with enough freedom and autonomy to carve their own path.

2. Board members and function heads need to own leadership development in their domains. An organizational level leadership development program will not really succeed unless the various groups in the organization run their own leadership development programs.

3. To really be effective at identifying tomorrow’s leaders, the organization needs to define different kinds of leadership it needs. For example it could choose to identify the following kinds of leadership

1. Functional leadership – These are leaders who have a specifically designated role in the organization and might have to chart the future for their functions. They would need to have deep knowledge of their function, an overview of the whole business and be innovative enough to visualize the future.

2. Business leadership – Leaders with general management and innovative skills to help grow markets and products. A person who can think strategically as well as execute it. Someone who can satisfy both short term investors as well as build capabilities for the organization’s future.

3. Global leadership – Leaders with cross cultural sensitivity who can help the business expand in countries other than its place of origin.

5. A leader is not a superman. By reading about the competency requirements and expectations one can be forgiven to be mistaken that so is the case. However, a great leader is a normal human being, not an alien from the planet Krypton. What can make him or her successful is the support of the organization. An organization needs to help such a leader be self aware and help him with aspects of his/her personality which might come in the way of the success. It is specially the case if such an issue is with the aspiring leader’s personality, rather than with skills or knowledge. A shortfall in skills and knowledge can be solved by putting them through training or giving them specific assignments or projects. However an inability to deal with crises or a lack of focus on details are things that are not usually ‘trainable’. For such people taking away the leadership issue is not a solution. Specially since there is such a shortage of leadership talent. Organizations can do the following:

1. Backup leaders – They can create backup leaders, who are people with strengths to complement a leader’s shortcomings.

2. Two in a box – Two people together can share a leadership responsibility with a delineated responsibility.

So how would an ideal leadership development program look like?

Leaders who are to be developed would be chosen on the basis of the competencies of leadership. They would be then scrutinized to see what is trainable and what is not. For attitude issues, a backup person or a ‘2 in a box’ can be proposed.

Theoretical inputs would need to be alternated with real life projects where they would be assessed on how they are developing. Each person in this program would be attached to a board member as a mentee. The mentor’s jobs would be to guide them through the program and their performance would be a reflection of the performance of the board member themselves.

The program needs to also end with an assessment of how they have developed and for successful candidates it should result in an immediate change into a leadership role.

Any lip service to leadership development without it resulting in concrete action would be ignored.

About project managing, organizing and logistics

The leadership development needs to be project managed as it calls for a huge investment in matters of time from top management of the organization. They should keep their commitments sacrosanct and not pull out of them at the last minute. The person spearheading such a development effort also needs to be assertive with top management without being abrasive. He or she should be detail oriented and also understand human behaviour and learning to be successful in such a mammoth initiative. Having a network of supporters within the organization as well as outside would also help such a initiative.

Most important, the project manager of this initiative should also be a leader in the organization preferably from the business and should be assessed for this as a part of the annual role.

The Voluntary Employee Exit Process: The often ignored part of building a relationship

It is a scene that plays out every day in many organizations across the world. An employee walks into his or her supervisor’s office (or emails him or her in the age of remote working) and lets them know that they are tendering their resignation after serving the notice period specified in the offer letter when they joined. 

How the supervisor responds then shapes the employee experience to a large extent.

And, how the supervisor responds is dependent on the relationship they shared and the conversations they have had until this point. 

It is often said when employees join they join organizations, but when they leave they leave managers. While that may not always be true, it cannot be denied that the immediate manager or supervisor plays an outsized role.

The importance of having an exit process that is empathetic and treats every employee as a human being is critical. When a person is heard and acknowledged on their way out they can act as ambassadors and share their positive stories with prospective candidates who reach out to them. When a person is treated with disrespect or when the supervisor or Human Resource representative lets the process take precedence over human factors it can lead to an irreparable damage to the relationship between parties

According to research by Everett Spain and Boris Groysberg, many companies don’t even conduct exit interviews. Some collect exit interview data but don’t analyze it. Some analyze it but don’t share it with the senior line leaders who can act on it. Only a few collect, analyze, and share the data and follow up with action. They suggest having interviews conducted by second- or third-line managers. Make exit interviews mandatory for at least some employees. And because standard interviews enable you to spot trends, but unstructured ones elicit unexpected insights, consider combining the two approaches in semistructured interviews.

A strategic Exit Interview program provides insight into what employees are thinking, reveals problems in the organization, and sheds light on the competitive landscape.

How should a manager behave when an employee resigns?

Don’ts

1. The first thing a manager should not try to do is make it about himself or herself. Resist the urge of saying “How could you do this to me?” Doing so makes the employees defensive and probably close up.

2. The manager should not, on the other hand suppress, their own emotions. Acknowledging it is important. Especially for first time manager it can lead to self-doubt. Talking to a coach (if available) or a senior professional could be a way to deal with it.  

3. Do not blame the employee for being ungrateful

4. Do not treat the employee as a traitor  out to share trade secrets with competitors., cutting them out of team meetings during the remainder of their notice period

Do’s 

1. Listen to the employee without judgement. Take their word at face value. In an example a startup entrepreneur shared with me, when he told his employer that he was leaving to pursue an idea to build a business, his manager did not believe him. They suspected that it was just an excuse and he was off to join some competitor. The entrepreneur shared that though his employment was okay enough, this lack of trust soured the relationship with his former employer

2. The manager should realise that every resignation is an opportunity - an opportunity to relook at root causes where it broke down and to truthfully share that with the organization so that such mistakes are minimised and reduced in the future. Often these will trigger a need for self-reflection and requires a degree of self awareness for a manager to reflect on his or her own behaviour that might have led to a breakdown in the relationship. This would give data for possible development needs for the manager. 

3. Listen to the employee’s needs during the notice period. Do they want to serve out the full notice period or adjust the remainder of their leaves against some portion of the notice period. Organizations in India specifically have long notice periods of two to three months, which in my opinion is not needed for a majority of roles in most organizations. However if the employee has a rare skill that is not readily available in the market then retaining such an employee should have been the first priority. If their new employer wants them to join early and is willing to buy out the notice period, then trying to not let that happen and forcing the employee to work is counterintuitive - and yet we come across so many cases of employers trying to do the same thing. It makes the exit process difficult and leaves a bad taste in the mouth of both parties

4. Managers and employers should look at it as the continuance of an existing relationship and not as the end of one. If organizations look at themselves as ‘learning academies’ where people come to learn and perform - they will look at their ex-employees as alumni and brand ambassadors. This shift of thinking should be driven by the very top of the organization. Treating alumni well can lead to tangible gains like business  (something that management consulting firms like McKinsey are famed for) as well as acting as referrers of great talent (hereby saving recruitment related costs) that the company needs. People tend to trust the opinion of ex-employees more than others as they are seen as more credible than other sources.

   

The bottom line is that managing the exits of employees is as important, if not more , as the entry of people into an organization.

One way organizations can do this is creating a cross functional team that looks at simplifying processes to make exits across the organization, and empowering managers to take decisions that are beneficial in the long term interests of the departing employee as well as the organization. It needs to comprise CXOs like the COO, the CTO, the CFO and the CHRO.

This team should also hold development sessions for managers on the dos and don'ts on dealing with their people when they submit their resignations. In fact, it should be a part of every new manager orientation and development. For that the leadership itself has to come up  with a philosophy on how they view departing employees and that then can percolate within the organization. 

Post courtesy Randstad Risesmart