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Leadership Pipeline Shifts to New Locations

By Melissa J. Anderson

A new study by SHL has revealed that the geographic pipeline for leadership is changing. The Global Leadership study, which purports to provide “a worldwide view of leadership potential,” revealed changes ahead when it comes to potential leadership.

According to SHL, today Hong Kong, Germany, and the UK have more effective leaders than anywhere else. But in the future, we can expect that to change. According to the study, Mexico, Turkey, and Egypt have the greatest supply of tomorrow’s leaders. On the other hand, the UK fell 18 places when shifting to the future view of leadership.

Paul Levett, chief product officer at SHL, said UK employers should be concerned about the leadership pipeline shift. He said, “Despite having a strong supply of leaders for today, the UK has a leadership time bomb on its hands if it doesn’t invest in learning and development to cultivate its future leaders and remain competitive.”

SHL was careful to point out that leadership is a very specific quality, denoting, among other things, the ability to influence others. How can companies best prep individuals for leadership in both developed and emerging economies?

Identifying Leadership Potential

Levett said improvements in emerging economies has helped shape individuals for leadership. “Rising education standards and a culture of entrepreneurialism are some of the many environmental factors that are driving emerging economies such as Brazil, India, Mexico and Turkey up the rankings for future leadership potential. These nations have a huge growth opportunity if they can identify, nurture and develop this potential.”

One challenge that companies face is the ability to identify leadership potential in employees – which could be one reason countries like the UK, Canada, and Hong Kong may face a drop in leadership potential. Levett explained:

“Companies need to build greater intelligence about the leadership talent within their organisations and be aware of opportunities outside their domestic markets. Understanding the supply of leadership where organisations operate is crucial for adapting leadership development and talent mobility programmes so that companies remain competitive in the global economy.”

SHL recommends companies institute a benchmarking program around specific skills and characteristics that make a successful leader in within their organization. Companies should also build “development interventions” around good leadership traits and apply them throughout business lines. Finally, companies need to recognize that key leadership talent may no longer come from solely from their headquarters country. They should find ways to source talent from other places around the world.

What Makes a Good Leader?

The geographical portion of the study is based on over a million assessments from SHL’s Talent Analytics database, spanning the 2006 to 2011 timeframe. To determine what qualifies as “leadership,” the firm analyzed Occupational Personality Questionnaires from graduates, managers, professionals, and senior leaders.

According to SHL, leadership means “the ability to direct, influence, motivate, communicate and work harmoniously at peak performance to achieve an organisation’s goals.”

Current leaders possess the following:

  • The ability to build relationships
  • The ability to solve problems
  • The ability to communicate effectively
  • The ability to think laterally
  • The ability to influence
  • The ability to respond positively to change
  • The ability to organise
  • The ability to motivate and be motivated

The study revealed that while only one in fifteen (6.7%) of managers and professionals qualify as leaders today, one in three have leadership potential, if they receive the right coaching and investment on behalf of their companies. SHL adds, “The value of investing in these people is substantial because there are six times as many managers and professionals with this level of potential than leaders for today.”

Many companies are facing a challenge in that their leaders may come from different locations tomorrow than they have in the past. Indeed, they will have to work doubly as hard to identify and train tomorrows leaders in areas where they may not have a strong corporate foothold. That’s why careful, strategic talent management is necessary. As firms find it more difficult to achieve their goals because of talent shortcomings, they will have to expand their view of what a leader looks like, and where a leader comes from.

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