Global Leadership Forecast: The State of Leadership Around the World

By EverwiseOctober 15, 2015

The Conference Board and Development Dimensions International (DDI) recently released the 2014-15 Global Leadership Forecast (GLF), which identifies leadership challenges and opportunities. The GLF survey includes responses from 13,124 leaders, 1,528 global HR executives, and 2,031 organizations with representation from four leader levels, both genders, 48 countries across all regions, 32 major industry categories, and a mix of multinational and local corporations.

The findings of the GLF survey are quite compelling. While an increasing proportion of leaders express confidence in the overall quality of leadership in their organizations, the needle hasn’t moved at all according to HR professionals. Even more concerning is the fact that only 37% of leaders indicate a belief that their organization is effectively developing future leadership and an even smaller proportion – 15% – rated its up-and-coming leaders as strong.

Why does this feeling of unpreparedness prevail? According to the GLF, leadership development efforts have stalled, despite the fact that approximately $50 billion per year is spent on developing leaders worldwide.

There is currently a wide variation in leadership quality and future readiness around the globe. Many countries have not seen an improvement in leadership quality, and even in many where leadership quality has improved, leaders are still failing to keep up with peers. There is also variation between industries. While some sectors currently excel in leadership quality and are developing a strong bench of future leaders (e.g., Financial Services and Business Services), others struggle due to a lack of both current and future high quality leadership (e.g. Healthcare Providers, Manufacturing).

So, what is holding organizations back? What can they do to jumpstart effective leadership development and improve the quality of current and future leadership? Below are five key challenges and suggested responses from the GLF:

Organizations currently value management versus interaction skill.

Research has shown that quality interactions can create durable competitive advantage through relationship capital, which is a key ingredient for effective leadership. Despite this fact, leaders spend on average 41% of their time managing and only 25% of their time interacting with co-workers and employees. Organizations must flip this statistic. One way to do so is to hold all levels of managers accountable to their interpersonal skills and the results they accomplish. Organizations can this by including a metric for interaction skills in selection and promotion criteria, thus minimizing the current bias to promote leaders based on their technical versus leadership skills.

Organizations currently divide formal and on-the-job learning opportunities.

The barriers to formal learning and on-the-job learning are not uniform. In fact, they are nearly exactly opposite. Organizations must therefore view on-the-job and formal learning as integrated (versus distinct) events. They should use formal learning to build structure and on-the-job learning to better convert those formal learning experiences into sustained changes in leader behavior. Leaders who practice and then receive feedback on key skills they’ve learned are five times more likely to have high leader quality and future potential compared to those that don’t. Organizations must also stay alert to how changes in strategy should tie into changes in the focus and presentation of leadership training.

Women are underrepresented in higher levels of leadership.

The GLF survey found no significant difference between men and women in terms of leadership skills or ability to handle management/ business challenges. In fact, diversity pays off: the GLF found that organizations in the top 20% of financial performance counted 37% of their leaders as women, whereas of organizations in the bottom 20%, only 19% had female leaders. Organizations should implement promotion systems that minimize gender bias and bolster development that allow leaders – particularly women – to build knowledge, skills, and most importantly, confidence. They should also strongly support mentorship programs that support these practices, as women who have achieved senior leadership roles overwhelmingly reported that mentorship was critical in their growth and career advancement.

The most important leadership skills are being ignored.

Organizations currently focus on developing two skills: building consensus and communicating with others. However, HR employees agree that neither of these is critical for leadership. Instead, organizations need to focus on the two most important skills for leaders to accomplish strategic objectives: fostering employee creativity and leading across cultures. Multinational companies, in particular, should emphasis global leadership skills to prepare their leaders to meet intercultural challenges and drive global growth. Furthermore, organizations should seek leaders who possess the skills to encourage risk-taking, networking, and new idea generation.

The majority of organizations lack agile leadership.

An agile leadership pool is often tied to improved organizational performance and faster growth. Organizations in the top 20% of financial performance are 5.8 times more likely to have a high proportion of agile leaders than those in the bottom 20%. Organizations should hire and promote leaders high in agility and train up-and-coming leaders to manage constant change. They can also facilitate leadership agility by simplifying complex processes as well as reducing non-value-added steps and layers of approval. Beware: claiming to be agile but failing to back it up with decisive action will repel the most agile leaders. It is critical to not only talk the talk, but also walk the walk!

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