When asked by organizations to benchmark their existing leadership selection and development practices, we often come across competency models that are focused on the leadership skills needed to drive results in the current business environment. These models often fail to explicitly include indicators of future potential: the skills that will be needed to succeed as the business changes, making it difficult to align on how to select and develop leaders for the future.
Given the speed of change in business – often described as operating in VUCA environments defined by increased volatility, uncertainty, complexity, and ambiguity – leadership competency models have shorter lifespans and can become irrelevant before they are fully implemented to foundational HR systems.
Competency models that fail to account for the leadership skills required to deal with tomorrow’s challenges risk placing recruiting functions in a perpetual state of catch up. That is, organizations are forced to go outside to purchase the skills needed to execute the changing strategy. This creates a dilemma: how do companies select leaders – and perhaps more importantly, develop up-and-comers to succeed – when they cannot articulate the skills needed to succeed in the future state?
As an illustration, one of our clients became sensitive to some of the tectonic shifts facing their business. Senior leadership was particularly concerned about their ability to adapt to a shifting consumer environment, marketplace, and workforce. Like many organizations, there was a sense that their old business model was under attack. New, unexpected competitors had surfaced as well as radically different ways for customers to communicate and do business, such as by web-enabled services and smartphones.
Vantage was asked to evaluate their current leadership competency model, and more importantly, identify indicators of potential that were likely to become increasingly critical in the ‘yet to be defined’ business environment. Working together, we designed a comprehensive way to objectively identify their likely leadership gaps.
What We Did
By casting a wide net to obtain unique and diverse perspectives of leaders from across this national organization, we identified three indicators of potential that were going to be critical to their business. We took a multimethod approach, using a combination of interviews, focus groups, and surveys. Further, we compared key themes across multiple sources, including senior level leaders, mid-level managers, and first-line leaders.
What We Learned
We interviewed over 50 leaders to hear their opinions regarding shifts in the industry and customer trends that were likely to have implications for leadership over the next 4-6 years. Three key themes emerged:
- Accelerating pace of change and advances in technology
- Increasingly diverse workforce
- Higher expectations for customer service
Given these challenges, leaders were then asked to comment on the skills and abilities needed to effectively navigate and lead through these challenges. Of the several leadership competencies that came to the surface, three in particular emerged as critical accelerators of leadership potential for this organization:
- Leads through complexity – Is able to see the future impact of decisions made now; demonstrates a high capacity to learn quickly; solves problems in new or creative ways
- Manages change – Provides focus and clear direction during challenging situations; uses influence to gain support; quickly adapts to change and keeps priorities moving forward
- Demonstrates passion and curiosity – Doesn’t hesitate to ask for help when he/she doesn’t know the answer; is open to constructive feedback; bounces back after setbacks
The next step is for the organization to embed these indicators into their leadership recruitment and selection strategies. Further, they are considering how to embed these into the next generation of leadership development practices for high potentials.
What It Means for Your Organization
Making assumptions about critical leadership ‘must haves,’ without first considering the relative importance of these capabilities and how they shift over time, is a common trap of leadership competency models. While there are certainly generic models of leadership potential that exist, our approach ties those factors back to the specific, future needs of a business. Without a careful and thorough look at how the business might change, companies are likely to find themselves missing important information and constantly playing catch-up in their leadership pipeline.
Is your organization’s business model under attack or experiencing changing workforce dynamics? How are you identifying and developing your future leaders to best manage in a VUCA environment?