A Leadership Crisis Is Looming — Here’s How to Prepare

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Authored by

NLI Staff
With a leadership gap looming, organizations need to challenge assumptions about what makes a good leader.

A number of factors underlie the impending leadership gap. First, generational shifts are happening as the current generation of senior leaders retires, taking their skills and institutional knowledge with them. Meanwhile, the pandemic has weakened the pipeline of employees prepared to lead. During the worst years of lockdown, many companies focused on survival, neglecting their succession and high-potential programs to help train the next generation of managers. The result is a “lost generation” of leaders — employees promoted into leadership who received far less feedback, assessment, and mentoring than they normally would have.

Then there are changes to the nature of work itself. The shift to remote and hybrid work has meant less consistent talent visibility, making it more difficult to surface high-potential candidates. With less face-to-face contact, decision-makers may feel less confident in their ability to identify and develop talent virtually.

As a result of all these factors, the current leadership bench is virtually empty. According to Deloitte’s Global Human Capital Trends report, a majority of executives feel their organizations are unprepared to meet their leadership requirements. And DDI’s 2021 Global Leadership Forecast found that only 11% of surveyed HR leaders report having a “strong bench” to fill leadership positions, the lowest number in 10 years.

The good news is there’s no shortage of talented young employees with the potential to be superb leaders — if organizations are willing to invest in them. Here are a few ways organizations can build those pipelines.

Celebrate introverts

For decades, people believed introverts were at a natural disadvantage when it came to leadership — so much so that 65% of senior executives consider introversion a “barrier to leadership.”

But in reality, some of the world’s most successful leaders are introverted, analytical, or otherwise nontraditional. Although extroverts are 25% more likely to land high-earning jobs, studies show introverts often make better leaders, perhaps because they listen well, take more time to make decisions, and tend to be analytical, reflective, and cooperative in team settings. A 10-year study found that CEOs who exceeded expectations were more likely to be introverts, and a study of thousands of CEOs found companies led by introverts outperformed those led by extroverts by 2%.

Elevate female leaders

Despite decades of progress in breaking the glass ceiling for female leaders, numbers suggest that gender myths about leadership are still firmly entrenched in organizations. Of the nation’s top 500 CEOs, there are more men named James than there are women — even though men named James make up less than 3% of the population.

People may wrongly assume women make less effective leaders because men and women sometimes exhibit different leadership styles. Women may adopt a more nurturing and collaborative style, whereas men may be more likely to adopt a dominant, transactional, and hierarchical style. The continuing gender bias is troubling, not just because of equity, but because studies show women actually score higher than men in most leadership skills, including taking initiative, driving for results, and developing employees.

Organizations therefore need to fight those biases and give female leaders the opportunity to learn and advance. Currently, men are 13% more likely to receive leadership training than women. Men also receive more actionable feedback than women, who are more likely to receive less useful feedback — such as the advice to soften their delivery or get better at coping with office politics.

Develop employees over time

If there’s one thing organizations can focus on, it’s developing systems that ensure a pipeline of qualified candidates for top positions. This means relying more on objective measures such as skills tests and identifying potential leaders not based on their personality but by their ability to adapt, learn new skills, and take on new challenges.

Just as important, organizations must help high-potential employees grow and develop over time, providing them with the training and development opportunities they need to learn the skills required for leading a team. That may mean giving budding leaders more feedback and coaching or offering “developmental assignments” to help them learn skills beyond the ones they need for their current role. It’s also important to give aspiring leaders “stretch” assignments to expose them to the kinds of situations they’ll face as leaders.

As the economy contracts and layoffs continue, the leadership gap has temporarily become less visible. But once the economy starts growing again, companies will face a critical shortage of employees who are ready to lead. Now is the time for organizations to challenge their assumptions about who can make a good leader and ramp up their internal development processes to ensure a strong pipeline of qualified future leaders.

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