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Building Leadership Capability for the Future

How do we move beyond individual leadership capacity, to building organizational leadership capability that equips organizations for the future?

One of the biggest challenges that organizations face is the increased pace of change and complexity in the operating environment. The role of leadership has become critical in enabling organizations to execute strategy and navigate these challenges effectively and sustainably. This means that building leadership capability beyond individual leadership capacity is imperative to equip organizations for the future.

In this blog post, we will unpack leadership capability at the organizational level, and how it enables the organization to deal with challenges, complexity, and strategy delivery. We will also consider the fundamentals for building leadership capability across all levels, to sustain leadership effectiveness.

Why the hype around leadership?

Leadership is often seen as the “secret sauce” that makes organizations effective. Everyone is talking about leadership—academics, HR practitioners, and business leaders. And everyone battles to answer the same question—what does good leadership look like in the future world of work, that is upon us?

The hype around leadership is not unfounded. In fact, considering the important role that leadership plays in sustaining organizational success, this is a topic that requires our directed attention. Let’s look at some ways that leadership enables organizations:

  • Leadership sets the longer-term vision for the organization. There is no doubt that organizations without a compelling and executable vision are not able to compete.
  • Leadership connects people to the organizational purpose. Whether intentional or not, employees look to leaders to understand what the organization is trying to achieve and how they contribute to this.
  • Ultimately, leadership delivers on the strategic intent of the organization. As strategy gets cascaded, leaders are responsible for delivering their part of the strategy.
  • Leaders drive decision-making and find solutions for organizational challenges. The buck stops with leaders, who are held accountable for delivery.
  • Apart from delivering on strategic intent, leaders set the tone for the culture within the organization. They model the behaviors that are acceptable within the organization, and what is tolerated and celebrated in the organization.

It is therefore clear that leadership is one of the most important building blocks to creating a sustainable organization, that can adapt to challenges and rally people to its purpose.

The (harsh) global leadership reality

Despite the importance of leadership and the hype around defining what good leadership looks like, the state of leadership globally is still quite bleak. A research report published by DDI in 2021 provides a glimpse into the state of leadership globally:

  • Building leadership capability is one of the highest priorities on the business agenda (not just for HR).
  • There seems to be a growing gap between the leadership quality that is required by organizations vs. the quality of leadership pipelines. For most organizations, leadership development is not keeping up with the pace of change.
  • There is a lack of confidence that the current leadership within organizations will be able to transform the business in the future.
  • There are significant gaps in leadership pipelines and the availability of “ready leaders”.
  • Leaders also indicate that there is a misalignment between development opportunities and future requirements within the organization.

So, if leadership is important in the organization and we are not quite getting it right, what should we change in our approach and perspective of leadership?

Leadership is one of the most important building blocks to creating a sustainable organization, that can adapt to challenges and rally people to its purpose.

The fundamentals of organizational leadership capability

Whilst the individual leader is relevant and important, leadership capability refers to the collective quality of leaders within the organization, and the effectiveness of leadership applied within the organizational context. Leadership extends beyond personal and individual attributes, to describe collective leadership capability and the capacity of leadership to sustain the business.

There are some fundamentals that can be applied to embed this approach and perspective:

  1. Strategic alignment
    Strategic intent should always direct organizational leadership requirements, now and in the future. What is trending externally might be a good reference point, but without defining how leadership enables the achievement of organizational strategy, it is unlikely that leadership efforts will translate into much value for the organization.

  2. Defined leadership requirements
    Leadership requirements should be clearly defined. Once there is an understanding of the organization’s needs, be explicit about what is needed from leaders to deliver on strategic intent. Having a defined competency framework supports the identification, development, and deployment of leadership where it adds the most business value.
  3. Leadership at all levels
    To ensure a healthy and ready leadership pipeline, define leadership requirements at each level. What do we need leaders to learn and let go of as they progress in the leadership pipeline? Regardless of the type of pipelining or leveling approach, keep it simple and ensure there is enough differentiation to direct development and career paths.
  4. Include your specialist pipeline
    As we see the world of work changing and emergent career trends, access to specialist skills are increasingly the differentiating factor for successful organizations. For organizational sustainability, specialist skills should be considered as part of broader leadership capability and what expectations of specialists are at all levels.
  5. Understand leadership capacity
    Once requirements are clear, understand the current leadership capacity through measurement that provides both quality and valid data insights.
  6. Aligned leadership development
    Enormous effort and budget are spent on leadership development. Understanding the collective strengths and gaps in your leadership capability is a powerful way to align leadership development to where it will add the most business value.

Building leadership capability should rightfully be prioritized on the business agenda. However, context is key. What good leadership looks like at the individual level is arguably irrelevant if it is devoid of the organizational context and challenges. Simply put—for leadership to be effective, there must be clear alignment between what we expect from leaders, with what we need to be good at as a business and why it exists. In the words of the chess prodigy, José Raúl Capablanca,: “In order to improve your game, you must study the endgame before everything else”. And in the case of leadership capability this could not be more true.

Talk to us to explore how we can support your organization in your journey!

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Marna van der Merwe

Marna is an Organizational Psychologist and Senior Professional Services Consultant at SHL. She has extensive experience in Human Resources, Organizational Effectiveness and Strategic Talent Management. Her research areas of interest are in the talent management domain, specifically the evolution of talent management in the 4IR, experience design, as well as the changing nature of careers within this context. Marna holds a Master’s degree in Organizational Psychology and is currently completing her PhD research, focused on the development of an adaptive talent management model for the changing world of work.

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