Leading through Uncertainty: Start with Data
How people data and analytics help leaders to navigate through uncertainty and allow organizations to create a talent strategy that can flex as business context, environment, and strategy changes.
In 2022 we have seen the business landscape shaken by “The Great Resignation” a permanent reshuffle to remote-hybrid work models and an emphasis on a human-centric approach to work. As we look forward, the landscape is overshadowed by persistent high inflation, global supply chain constraints, headwinds of a financial recession, and an enduring battle for scarce and increasingly expensive talent. The buzzword for organizations right now is “uncertainty.”
As Josh Bersin has indicated, this current operating climate has left CEOs and CHROs “baffled.” Organizations are simultaneously paying unprecedented compensation packages to attract new talent whilst also implementing pay freezes and lay-offs. If we look at the data, 528,000 jobs were added to the US labor market in July this year. At the same time, the US economy shrank for the second quarter. This level of uncertainty and ambiguity about the future appears to be leaving organizations in a panic, leading to knee-jerk and short-sighted reactions that will ultimately prove costly.
Furthermore, these actions undermine trust in an organization’s leaders at a time when employees need it most. To navigate uncertain times, trust and transparency are critical to building, engaging, and retaining a successful workforce. Against a backdrop of financial squeezes, high inflation rates, and supply chain issues, an organization’s talent is often the key differentiator between success and failure.
Navigating through uncertainty
Best-in-class organizations are using data and analytics to assess their workforce. Across the organization, they have data to understand the talent that they have today, where they are strong, and where they have gaps. This allows them to create a talent strategy that is agile and data-driven to flex as the business context, environment, and strategy change. This steers them away from confusion and “baffling” actions towards an intentional approach to nurturing talent to succeed in the context in which they are operating.
As we continue toward business uncertainty, context is a key factor in determining who will be successful. The characteristics that create a successful leader in times of organizational growth are very different from the characteristics required to be successful during an economic downturn. In fact, SHL’s research has demonstrated that the relationship between personality characteristics and leader performance depends heavily on the context in which the leader works. Context includes elements of the organization, such as business priorities and culture; and elements of the team, such as the structure, cohesion, or amount of collaboration.
SHL’s research has demonstrated that the relationship between personality characteristics and leader performance depends heavily on the context in which the leader works.
Who will deliver under high uncertainty and ambiguity?
We have established that many organizations are facing a high degree of uncertainty and ambiguity right now and that is one thing that is not set to change soon. Against this context, what are the characteristics that are related to high performance in leadership? Interestingly, SHL found that an important element of the leader’s role is the organizational level. Responsibilities and expectations will differ between a first-level manager and a senior leader, even if they share many of the same contextual challenges. We found that the characteristics predicting performance within contexts are essentially the same for mid-level leaders and higher, but for many contexts, the characteristics predicting performance for first-level managers are unique from those predicting performance at higher levels.
For example, successful first-line managers in ambiguous situations tend to follow rules, accept the majority decision, and persist in getting the job finished. They rarely display emotions and are likely to keep their opinions to themselves. In contrast, when we look at mid to senior-level managers, we see a reverse trend. As leaders become more senior, it is those who are more opinionated, independent-minded, outspoken, and have a tendency for rule-breaking who are more successful.
SHL found that an important element of the leader’s role is the organizational level. Responsibilities and expectations will differ between a first-level manager and a senior leader, even if they share many of the same contextual challenges.
An example of these differential relationships across levels is shown in the figure below. The lines in the graph represent the relationship between a measure of Rule-Following and a measure of overall performance for mid/senior-level leaders and for lower-level managers. When the tendency for following rules is low, lower-level managers’ performance tends to also be low, while performance tends to be high when rule-following is high. The opposite is seen with mid/senior leaders, as performance tends to be highest when rule-following is low and lowest when rule-following is high.
To succeed in times of uncertainty, a talent strategy needs to start with talent data: Who do you have today? What do you need for the future? Where are your strengths and where are your gaps? As organizations look to manage their talent through the uncertain times ahead, it will pay off to think about the context in which your managers and leaders are operating. One size does not fit all.
Leading and navigating through uncertainty is a challenge that every organizational leader has undertaken from the era of ‘The Great Resignation’ onward. Contact us to learn how we can help you boost your talent strategy.