4 keys to a great leadership strategy
“90 per cent of my job is to fail.”
Speaking at an event recently, that’s how the head of a digital company’s Australian division described her job. She was tasked with taking risks on an ongoing basis, with the understanding that only a handful of her initiatives would work, and that this was acceptable. Only this way could her company stay on the leading edge of innovation.
Imagine the head of an Australian Big Four bank telling shareholders the same thing. It would never happen, and neither should it.
My point is it is organisational context that first and foremost defines what good leadership looks like. The first step in a leadership strategy therefore is understanding where the organisation is going and then defining the specific capabilities its leaders need to possess to succeed in that environment and deliver the business strategy.
Recent Hudson research highlighted a sizeable disconnect across Australia and New Zealand: 92% of over 100 HR leaders said leadership was very important to businesses yet only 54% of organisations actually had their own clearly articulated leadership strategy. While 90% of those with a strategy had development programs to build leadership capabilities, some key details were missing that would impact the ultimate success of those programs.
To ensure your leadership development programs have the greatest impact, these are the four key components of a strong leadership strategy.
- Define what good leadership looks like
The digital company mentioned above was clear about where it was going and how it wanted to achieve that. Risk was acceptable as long as the pay-off was speed and innovation.
Having a well-defined capability framework as the cornerstone of your leadership strategy will ensure your hires, promotions and development programs are all geared towards gaining the specific set of capabilities your organisation needs most.
- Plan for the future
We’ve heard of businesses using capability frameworks developed almost ten years ago. To get a sense of how much has changed, think back to the features of the phone you were using in 2005. A lot has changed.
I’d suggest a leadership framework should be updated at least yearly. Just as frequently as an organisation is talking about its financial results, it should also be talking about its people and leaders, what’s expected of them and what has changed.
It’s also important to future-proof your business with a leadership pipeline. Do you know how many leaders you will need in the coming years as your organisation expands, and with what kinds of skills? Building the talent takes time and forward planning.
- Identify the people you need
When you hire, promote or develop someone you are taking a bet on them, but there are ways to spin the odds in your favour. Once you have defined the capabilities needed within your organisation, it’s time to develop assessment methodologies to understand the development areas of your leaders and evaluate new hires or high potentials. A mix of different methodologies can give the fullest insight.
If your company needs someone with an appetite for risk, for example, that’s what you have to measure. Psychometric tests can provide insights that are proven to predict future behaviour. A role playing scenario could also shed light here, by giving candidates a business scenario and looking at which courses of action they choose. Competency-based interviews could also help by asking for specific examples of where the candidate has taken calculated risks.
- Develop the capability of your leaders
If organisations are spending big on leadership development programs without a framework targeting their specific needs, they could be developing superfluous or irrelevant skills, or investing in the wrong people for the job, essentially pouring good money after bad.
Highly focused development programs are the most effective. These may be based on real-life strategies, assistance, coaching and feedback – from superiors, peers and external experts. Practical advice that is grounded in real business experience stands the best chance of helping leaders see the world differently, and changing the way they react in different situations.
Returning to the fundamentals of a great leadership strategy, what you need from your leaders should reflect what your organisation needs to do. When leaders demonstrate the capabilities the organisation needs most, and are supported to continue to improve in this area, it has a flow-on effect through the entire workplace. I’ve watched it happen and it is remarkable: organisations move so much faster to their end goals, and their people love the ride.