Interview with Rich Wellins, Development Dimensions International
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IFRA: What are some of the key findings of your recent research on leaders?
Wellins: Well, we are showing number 1, that confidence in leadership is at an all-time low. We survey close to 1000 organisations every other year. Our newest study, the Leadership Forecast 2008-2009, showed that confidence in leaders of our organisations, their ability to help our companies meet their current and future business goals are really at an all-time low, less than 40 percent of companies are expressing high confidence in the ability of their leaders.
A second finding was we are not doing a very good job of identifying and developing our future leaders. Leaders themselves, only about 40 percent, are satisfied with the development they’re receiving within their corporations. Less than 50 percent have a process in place to identify future high potential leaders. So, the confidence is low, but what we’re doing about it doesn’t seem to be very effective either. Corporations around the world spend billions of dollars developing their current and future leaders so that’s a bit disappointing.
Relative the economy specifically, we did some research to match leaders, very senior leaders, up with a profile of what it takes to manage in a crisis, so we came up with some competencies, some themes that we feel are essential for managing during the downturn, things like decisiveness, things like staying close emotionally to your workforce, things like agility and ability to change, and what we did was compare our assessment data of over 3000 leaders worldwide and found that less than 50 percent of them have the skills, competencies, personality disposition to manage through a crisis.
IFRA: What type and size of organisations do the leaders you studied work for?
Wellins: The 3000 leaders in that latter study came from all sorts of organisations around the world, including at least one newspaper company. The other data that I shared earlier comes from our Leadership Forecast and involved 1000 corporations – large, medium, small – in about 13 countries.
IFRA: What suggestions do you have for these companies for how they can change in this area?
Wellins: I think CEOs need to begin to take the management of talent in their companies far more seriously. Seventy-five percent of the CEOs we surveyed in another piece of research that we did with The Economist consider a lack of leadership talent to be a crucial challenge, a crucial barrier to their ability to grow their business. Yet, you look at all this data, and you don’t see a great deal of active leadership support.
So, what are some things companies need to do? Specifically we’re addressing what do CEOs need to do? I think the need to take the management of talent more seriously. Now, what does that mean? How does that translate? It means working with their HR professionals and talent management professionals to prepare long term talent plans, who are key-value creators in their corporations that become part of the business planning process. And that’s something that sits outside of business planning but is integrated into business planning.
There should be no business plan, no strategic plan, no consideration of a change in a business model that is not accompanied by “What talent do we need to execute? Do we have it? If we don’t have it, what are we going need to do to get it and develop it?”
In good companies, CEOs are actively involved, they may spend 50 to 60 percent of their time coaching and developing those below them. In companies that are not performing as well, CEOs and other senior leaders are spending less than 25 percent of their time developing talent.
I think we need to be much more careful about what I’ll call executive due diligence. CEO turnover over the past five to eight years has been at an all-time high. It has ranged up to 300 percent. 300 percent. That’s amazing. It led one magazine to call CEOs the most prominent temp job in the world. But it’s not just CEOs. We don’t take the decisions we make about leaders in our company to promote them, place them, deploy them. We don’t put one-tenth the effort, energy and science we put behind making those decisions as we put behind other business decisions we make.
A poor leader can cost an organisation billions and billions of dollars – especially if they are at the very top, and I don’t think many organisations are taking promotion selection decisions very seriously. They need to put their money where their mouth is, and that’s tough in a downturn.
In a downturn we’re finding perhaps less so than other recessions, but there’s still cuts of leadership development programs. We’re not talking about layoffs. To a certain extent you can’t run your business with the same number of people generally, although this differs from country to country, if your business is way down. So you need to cut your labour costs one way or another. But I’m talking about talent programs continuing to focus on development and talent so that companies are ready for the upturn, so I would also warn CEOs during the next 18 to 24 months to be a little bit cautious about what they cut in the way of developing their talent because that will come back to bite them in the future.
IFRA: What are some of the main characteristics of the leader profile that you have developed?
Wellins: The leader profile that we developed especially for a downturn, I think there are a number of key characteristics. Now, there are of course general leadership profiles, we have executive profiles from strategic decision-making and the ability to inform and engage people in a vision. Emotional intelligence, sound judgement and decision making, those are the standard things, but what we were looking for in a crisis leader were some special characteristics, that you really could call a combination of skills and personality attributes because with leaders it is often not necessarily the skills that derail them, it’s their personality that derails them, so you need to look at a combination of both.
We came up with a number of potential derailers.
One was indecisiveness. A large number of leaders are having trouble making tough decisions. In a crisis, if you’re delaying the decisions that need to be made, that can be fatal. If you’re growing, you may not see the impact of indecisiveness for a long period to come, but in a crisis if you don’t make sound decisions quickly, you’re afraid to make decisisons, that’s problematic.
A second is what I’ll call the derailer of arrogance or aloofness: they remove themselves, they distant themselves. It said that a good leader needs to lead from the balcony and needs to lead from the crowd. You need to do both, and I think during a downturn it’s more important to lead from the crowd, or at least spend more time leading from the crowd, so you need to be more emotionally in touch with what’s happening in your company. People are looking to you for communication. They are looking to you for assurance. They are looking to you for some peace of mind to the ability that you are able to give that.
Many leaders have a lot of trouble with what’s going on with the layoffs and the workforce is perceiving them as emotionally detached to what is happening to human beings and their lives in the workplace, so that’s probably a second major characteristic or derailer that a leader may have in today’s environment.
Another characteristic is “dug-in,” which is the opposite indecisiveness. That is the highest derailer. With 57 percent of the leaders we assessed having that tendency. Dug-in means that “what I have now isn’t going to change. It’s worked in the past, it’s going to work in the future. I’m not going to change.” We feel that’s a problem.
One-third of leaders are likely to be pessimistic in times of crisis, as opposed to optimistic. Another type is “rough rider.” Almost half the leaders are likely to not use emotional intelligence. It usually happens to senior leaders – the more stress, the more they show their bad sides. And so a rough rider is someone who’s not very emotionally intelligent, poor with people, rides them pretty hard, and sometimes when business gets bad, that seems to come out, and that’s a potential derailer. And then another one is what we’re calling “hit-or-miss.” Forty-three percent of leaders during a crisis are trying so many new, different things that they’re all over the place, and they don’t retain a sense of focus.
Interview by Brian Veseling, IFRA senior editor, Editorial, Advertising and General Management