It’s been more than a decade since the first alarm about a coming shortage of leaders.
Who can forget the countless surveys that indicated a significant decline in confidence in leadership bench strength, or the reports that the leadership gap is a top concern among talent management professionals and CEOs alike?
Common causes of the leadership gap contributing to a leadership shortage include generational shifts in the workforce due to the retirement of many Baby Boomers, changes in the nature of work itself, recruiting wars for high-potential talent, and poor organizational practices identifying, selecting, and developing talent.
Yet companies, government agencies, nonprofits, and educational organizations need leaders who can effectively navigate complex and changing situations in the future.
To address the leadership gap, organizations need to be asking “Who do we have?” and “What do they need to do?” as well as “Are they equipped to do it?”
What Is the Leadership Gap?
Simply put, the leadership gap is how aligned current leadership is with what’s thought to be important for leadership effectiveness in the future.
And current research shows that current leaders aren’t adequately prepared for the future. This finding is consistent across countries, organizations, and levels in the organization.
At CCL, we have a long history of studying the leadership gap. More than 15 years ago, we started to document the gap between the readiness of future organizational leaders and their current leadership skills. Our research has found that the leadership gap persists, and that little progress has been made in addressing it.
We designed a research project to understand which leadership skills are critical for success, now and in the future; how strong current leaders are in these critical skills; and how aligned today’s leadership is with what will be the most important skills in the future. And we found that crucial leadership skills in organizations are insufficient for meeting current and future needs.
Other academics and leadership development organizations have documented similar shortcomings. Below we’ll share more about what the leadership gap is and what the challenges are with closing it.
What Causes a Leadership Gap?
A leadership gap can be caused by either:
- A lack of mastery of the required competencies, or
- A lack of focus on necessary skills.
The first is a matter of degree; the second is a matter of substance. But either can be a problem, in both the short and long term. Organizations will want to address this coming leadership gap in their talent development.
Our study found that today’s leadership capacity is insufficient to meet future leadership requirements. Many organizations have a list of high-priority leadership competencies for their future leaders; our research shows the limitations of current skills in many of these areas and flags areas of particular concern. The data from our study indicates that most organizations today are experiencing a leadership deficit now, and can expect a leadership gap in the future.
We’ve identified 9 specific leadership competencies that are weak or missing in terms of future leadership needs and current skills:
- Managing change
- Inspiring commitment
- Leading employees
- Taking initiative
- Building collaborative relationships
- Having a strategic perspective
- Knowing strategic planning
- Embracing participative management
- Being a quick learner
Notably, the leadership gap appears most problematic in high-priority, high-stakes areas. Other areas where there’s a significant gap between the needed and existing skill levels were employee development and self-awareness.
Barriers to Bridging the Leadership Gap
To be sure, companies, government agencies, and nonprofits want their future leaders to be prepared for the future. But internal and external forces are often blocking or slowing down leader development efforts, creating the leadership gap. Those include:
- Outdated ideas about leadership. For many leaders and employees, the term “leader” still suggests an individual whose role is to provide all the answers. However, we know the most effective leaders are those who are skilled at influencing, collaborating, and helping a team or organization discover the answers through coaching conversations. Our research has also found that some individuals view leadership roles as requiring trade-offs with other priorities, such as family. Those perceptions — whether true or not — are likely dissuading many high-potential employees from pursuing leadership development and leadership roles.
- Digital disruption. The pace of technological innovation over the last generation has reshaped markets, created new industries, and transformed the way we work. But many organizations and their workers are struggling. Training and adoption of new technologies — such as those required for remote working and distributed teams — hasn’t kept up. One study a few years ago found that more than 60% of organizations surveyed provided no training for virtual teams or virtual team leaders on how to deal with the challenges of collaborating virtually. And opportunities such as analytics and the promise of Big Data have many organizations scrambling to understand what talent and skills they’ll need to fill their leadership pipeline. One way to mitigate this challenge may be by setting up reverse mentoring arrangements.
- Flatter organizations and more dynamic environments. In our faster-moving economy, rigid hierarchical organizational charts have given way to flatter, more agile structures. While this helps companies respond faster to customer needs and changing markets, it has also eliminated the traditional “move up the ladder” leadership development path. Now lateral movement — perhaps to a different geographic or functional area — is required for individuals who want to become leaders. Mapping out these lateral-and-upward career paths is tough for individuals and organizations.
- Intense competition for top talent and higher turnover. The days of a 30- or 40-year career with a single organization are long gone. Organizations find themselves focused on competing with other organizations to attract and retain high-potential talent. In addition, as more workers reach retirement age, organizations may be challenged to identify new potential leaders and build a leadership pipeline.
- Misaligned systems for measuring and rewarding work performance. Old ways of evaluating and rewarding employees don’t make much sense when career growth requires lateral movement — and employees may switch from one employer to another every few years. Furthermore, organizations may be investing in outdated practices that contribute to the leadership gap and also fail to align with organizational goals and strategies. Organizations need to become aware of what truly engages and motivates employees and start bridging their leadership gap with the 9 key leadership competencies.
What Can Be Done About the Leadership Gap?
How Organizations Can Take Action on It Today
To avoid a discrepancy between areas of strength and areas of need, our white paper offers 5 steps that organizations can take to help bridge the leadership gap between current leadership talent and future leadership needs:
1. Perform a needs assessment.
Identify the capabilities that managers need now and in the future to execute and sustain the organization’s strategy. Use your people data to determine organizational needs and understand leadership gaps.
2. Create a leadership strategy.
A clear understanding of the leadership behaviors and business goals allows executives to develop a leadership strategy. In turn, organizational development initiatives can be aligned with operational needs.
3. Develop clear, specific goals and strategies for individual leadership development.
Assess managers’ strengths and weaknesses as leaders against the core competencies identified in the needs assessment. You can use 360-degree leadership assessment tools to do help evaluate individuals’ strengths and development needs. Be sure to factor in feedback, coaching, and assessment towards addressing these development needs and to ensure goal attainment.
4. Create systems.
When important competencies are found to be weak spots, targeted development initiatives can be put into place. Evaluating your managers’ opinions about development needs can help you create a plan for developing leadership talent and closing the leadership gap. On the individual and tactical level, managers need to align the development experiences of managers with organizational objectives. Make sure that you don’t overlook vertical development when doing this.
5. Evaluate.
Build in systems for measuring how these efforts are paying off across the organization. Evaluating the impact of leadership development is a critical final step in order to understand what additional resources are needed and key metrics to track. Leadership analytics and evaluation services can help you determine ROI.
A Closing Word On Addressing the Leadership Gap
At CCL, we have developed a Leadership Gap Indicator that’s specifically designed to help companies examine their own data and better understand particular strengths, challenges, current leadership deficits, and anticipated future leadership gaps specific to their organization. This information can help senior management facilitate conversations about the identification, development, and retention of key leadership talent.
The sooner organizations understand the reality of their leadership gap, the quicker they can move to adapt by refocusing leadership development efforts and rethinking recruitment priorities.
To increase leadership capacity, strengthen the future leadership pipeline, and close the leadership gap, organizations need to take both a strategic and a tactical approach.
Ready to Take the Next Step?
Future-proofing your organization’s talent pipeline requires you to first understand where a leadership gap currently exists. We’re ready to help you to close the gap and build critical leadership skills and competencies that are right for your organization’s unique context and culture. Partner with us to unlock the power of your people data, diagnose your current state, and design a customized leadership development solution that will start closing your leadership gap today.
