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Industry News

 

Study Finds Most Companies Unprepared for Upcoming Leadership Gap

Sunday February 22, 2009

 

Mountain View, Calif.
CPP Inc., a provider of research, training, and organizational development tools including the Myers-Briggs Type Indicator assessment, announced the results of its worldwide study on workplace leadership. The study shows that organizations worldwide face strikingly similar challenges regarding workforce and succession management.

Though results indicate broad awareness of the looming leadership gap expected to materialize during the next decade as baby boomers begin retiring in droves, the majority of organizations are neither prepared, nor are taking the necessary steps to meet this challenge.

"If businesses continue to ignore the oncoming leadership gap, they may see devastating consequences," said Jeff Hayes, CEO of CPP Inc. "As it becomes increasingly difficult to obtain and retain top performers with strong leadership experience, organizations may find their greatest asset — their workforce — in jeopardy."

The report summarizes the opinions of hundreds of HR professionals and line-of-business managers from North America, Europe, Asia-Pacific, Brazil and South Africa on their preparations and projections for the coming decade, as well as their current challenges and practices. The study found that while 58 percent of respondents expect their organizations to grow during the next 10 years, the majority from all regions except Brazil also expect hiring, retaining, and developing leaders to become more difficult. Despite this broad anticipation, however, the study indicates an overall lack of preparedness, with no more than 40 percent of all respondents reporting having a formalized succession or executive coaching program in place in their organizations, and only 54 percent reporting having a process in place to identify potential leaders.

"With the slowing economy and changing workforce, organizations face significant leadership challenges in the coming years," said Josh Bersin, president of Bersin & Associates. "Consequently, leadership development, executive coaching and career development should be among the priority investment areas for most companies today."

Preparing for the Worst by Grooming the Best
The apparent lack of urgency on the matter seems to go hand in hand with a sense of perceived inevitability of baby-boomer retiree-induced leadership skill decline. The majority (72 percent in the U.S. and 60 percent around the rest of the globe) of respondents are bracing for the impact of ill-equipped employees assuming higher-level positions due to the lack of available talent. Consequently, respondents also anticipate a high level of employee burnout.

"Companies should be concerned because poor leadership can have serious top-to-bottom ripple effects, from employee burnout to underperformance of the entire company," said Mike Morris, Ph.D., senior research scientist at CPP Inc. "The survey data tells us that hiring and developing leaders will be more difficult in the future, and companies that prepare their leaders should have a big advantage."

Respondents cited several challenges to their leadership development plans, including a rapidly changing competitive environment, knowledge retention, pressure to innovate, generational differences and, most notably, pressure to cut costs.

"While these problems will continue to plague business, organizations are not unavoidably at the mercy of such forces," said Hayes. "CPP helped companies with developing a leadership pipeline long before the leadership gap emerged, and shares the opinion of the many respondents that a solid long-term leadership development program can identify, retain and prepare future leaders and reenergize employee bases."

For more info: http://www.cpp.com/Pr/Workforce_and_succession_mgmt.pdf