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Written by: Michael DeVenney Bluteau DeVenney & Company

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Table of Contents 1. Executive Summary

Page 4

2. Comparative Analysis

Page 9

3. Perspective

Page 12

4. Taking Action

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5. Conclusion

Page 16

6. Next Step

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7. Acknowledgements and Disclaimer

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The 2nd Annual Leadership Report Card Bridging the Gap between Expectations and Evaluations The Year 2008-2009: Persevering through economic turbulence S&P / TSX COMPOSITE EXCHANGE INDEX & LEADERSHIP CONFIDENCE INDEX

S&P / TSX Composite Index

Executive Summary Despite financial markets declining more than 40% in most areas over the year, employee approval ratings and confidence in leaders (particularly leaders in senior roles) remained stable and even increased marginally. Why? Employees saw leaders showing perseverance and taking charge while staying focused in the face of obstacles. Leaders communicated a clear direction over this difficult period. Leaders also were evaluated well on their continued focus to generate results delivering against the plan and for their resourcefulness in terms of simplifying the complexity of the world and making strategic decisions.

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In the short term, it seems leaders did the right things to keep the confidence of their teams. However, troubling themes underlie the overall rating. First and foremost, overall evaluations of leaders by employees remain at a B- level – we can and should do better! Three specific trends were revealed in our survey: LEADERSHIP PERFORMANCE RATING 75.0%

1. The lowest confidence level was for managers – employees rated performance much lower for managers than any other leadership position. As the adage says, people typically leave a person not a company – the low evaluation of manager performance does not speak well for attraction and retention of talented people.

73.0% 71.0% 69.0% 67.0% Men

Overall CEO President

VP Level

Women Manager/Supervisor Level

77.0% 74.0% 71.0% 68.0% 65.0%

2. There was a noticeable decline in leader confidence by young professionals over the last year. Shift happens - employees aged 25 to 39 years went from being the most pleased with leader performance last year to having the least confidence this year. Young professionals were also more than twice as disappointed in manager performance as other employees. Again, this trend does not support organizational objectives for lower turnover.

55+

40 -54

25 - 39

75%

68.75%

62.5%

56.25%

50%

2009 2008

Employees Aged 25-39

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3. Results were delivered but it seems at the expense of relationships. Leaders were ranked down this year in managing interpersonal relationships and being straightforward and composed in the interactions. Is it results at any cost? What does this mean for you? As a leader in a senior role, there are three takeaways from our survey that matter to your success: What do employees really want from you? Has it changed? o

What employees expect most from their leader comes down to four characteristics – that have not changed:  Be resourceful – simplify the world for us and be strategic in your decision-making  Build and lead teams – select the right people and focus on working together  Generate results – be clear on what you will do and then do it  Lead people – delegate, empower, and provide opportunity for growth

o

The big point here is also to do better at what you are doing now – employees expect about a 15% pick-up in performance as a leader.

LEADERSHIP PERFORMANCE RATING: GAP IN EXPECTATIONS & EVALUATIONS

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What can de-rail your organization’s performance? o

Managers are the lynchpin for converting strategy to performance – they are where the rubber hits the road. Managers are not cutting it! Leadership performance rankings are the lowest at the manager level. What is the problem? In a word – people. Managers are seen as too tactical and not working well with people. Employees ranked managers lowest on their ability to build and lead a team, managing interpersonal relationships, and being adaptable to changing situations. LEADERSHIP PERFORMACE RATING: LOWEST RANKED SKILLS (of 21 SKILLS)

o

2008

2009

CONFRONTING PEOPLE PROBLEMS

#21

#21

PEFORMANCE RATING

67.6%

67.6%

Managers need training on people skills – being a strong individual performer does not naturally translate to being a skilled leader of people. Managers need support in knowing how to stop doing so much and start leading more.

What can de-rail your success as leader? o

Same as last year, the lowest performance rating for leaders was the ability to confront people problems. Leaders were not seen to be fair and decisive in dealing with difficult people issues and conflict management.

o

Employees also wish leaders would seek more feedback and understand the impact their behaviors have on those they lead. Leaders need to hear what they need to hear – not just what they want to hear.

o

Organizations also need leaders that are decisive – enough committees and deliberating, consult and make a decision!

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For leaders in senior roles, you need to get a vision beyond the next six months – move away from crisis management – and focus on the people. For a developing leader working up through the ranks, career success depends more than anything else on your ability to show the most valued leadership skills. What are the five qualities most valued in developing leaders? Be resourceful – think and act strategically Persevere – work with uncertainty (it is here to stay after all) and make decisions Lead people – delegate and empower your team Be participative – communicate openly and collaborate Build relationships – negotiate, cooperate and cultivate These qualities have not changed by the way. This is what we want to see in you. Natural charisma is not the requirement. Being fast and quick in your work is also not necessary. There is just as much opportunity for the thoughtful, introverted leader as for the extroverted talker. We want leaders who clarify, focus, and communicate. Bottom line: we rate our leader as a B- overall and our managers as a C. We need better to be able to maximize our results on a sustainable basis. Execution is highly valued but in a way that engages and builds relationship. Harvard Business Review published a study in 2008 that reported organizational strategic effectiveness at 67%. Businesses lose 33% of potential financial performance. Much of what is lost results from ineffective leadership. For a group of over-achievers, is a C really acceptable? It shouldn’t be – we need our leaders to step it up.

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Comparative Analysis Have we changed in our requirements for leaders over the past year? No. Despite the dramatic shifts we have seen globally in the last year, what employees want most from their leaders remains the same. We want leaders who are resourceful and simplify the complex world for us thinking and acting strategically We want leaders who build and lead teams selecting the right people and cultivating a collaborative work environment at all levels We want leaders who lead people by delegating effectively and empowering people with challenging work and opportunities for growth We want leaders who generate results by being clear on what they will do and then following through and doing it We want leaders who persevere to make things happen confidently and clearly despite blocks and obstacles The requirements are the same for male and female employees as well as across the different generations of the workforce. We want people who can meet the challenges of their jobs as leaders. LEADERSHIP PERFORMANCE RATING: MOST IMPORTANT LEADERSHIP SKILLS

Importance

Performance Level

Building and Leading Teams

#1

#11

Resourcefulllness

#2

#3

Leading People

#3

#15

Generating Results

#4

#1

Perserverence

#5

#2

What concerns employees more now than ever is the ability to deliver results in uncertainty. The world is definitely more confusing and competitive – we need leaders who can set a direction decisively and move the organization forward.

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Over the past year, the focus has been on the leader’s ability to persevere and generate results. However, employees feel that the challenge of executing needs to be balanced with strong interpersonal relationships – balance the results and the people. Employees felt leaders lost ground with the workforce in the last year – young professionals particularly rated their leaders as being less successful in managing relationships well. Although the positive shifts occurred in the leader’s ability to deliver results, the negative shifts in performance evaluation happened in leaders’ ability to manage themselves. Leaders were ranked lower this year in their ability to interact with their teams in a straightforward and composed manner – leaders were not seen as taking time to relate to people. Leaders are seen as being more reactive than proactive. As well, leaders were marked down on their ability to seek and use feedback as to their own performance and to be personable with their people. The last year was stressful and the temptation is to hunker down, grab the ball, and lead. In some ways, employees appreciate the attitude of perseverance and delivering but not at the expense of collaborative communication and relationships. Leaders need to take time to interact with their employees to build sustainable results. The biggest gaps in leader performance were seen in the ability to lead others effectively. Building on the concerns outlined above, results at any cost does not sit well in an era of building employee engagement. Employees rated leaders lowest in their ability to: Confront problem people situations and resolve conflicts fairly and quickly – problems are left to linger, build, and impact more severely Seeking feedback and using mentoring and coaching to continue to develop their leadership Leading change initiatives and overcoming resistance to change

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LEADERSHIP PERFORMANCE RATING: LOWEST PERFORMANCE AREAS

Overall

Men

Women

#1

Confronting People Problems

Confronting People Problems

Confronting People Problems

#2

Feedback and Development

Change Management

Feedback and Development

#3

Change Management

Feedback and Development

Change Management

Again, the low ratings were similar for men and women as well as across generations. The only difference occurred for employees aged 25-39 years who ranked leaders low on their ability to provide an environment of participative management (involving people). The survey also showed that employees felt that leaders would most likely de-rail their careers based on their inability to build and lead teams. Loud and clear – leaders need to take time and work better with their people. Building relationships and investing in teamwork are not “soft” skills – they are front and center as important for leaders to generate hard results. You can drive people for results in the short term but for sustainable success, engagement is the critical path. Engagement happens when leaders build positive working relationships with their people with collaboration and communication. The same gaps in performance were seen in our survey one year ago. Leaders are not getting the message – or they hear the words but don’t take the right actions. The impact is obvious – our organizations are becoming increasingly less competitive. Canada has dropped from 12th position to 21st place in global competitiveness in the last four years alone. One of the key reasons is that we do not keep pace with other countries in investing in our people. When will leaders not just hear the message but listen to it and make needed changes?

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Perspectives People are disengaged … and unhappy. Yes – but we’re getting results, right? Sadly, this conversation is actually happening in organizations today. Are we still in the Dark Ages? We are supposed to be experiencing the Renaissance of collaborative leadership. Several recent studies (DDI, Corporate Executive Board, and Towers Perrin) all list active employee engagement at less than 20% of the workforce. The same studies report that active disengagement is also around 20%. That means that 60% of employees would like to be engaged if leaders would just show them how. Six of your team members are on the field but don’t know where to take the ball while two more are actually sitting down not watching the play at all. How can the two remaining members of the team win their best results based on this? The impact of disengagement on productivity is enormous. DDI reported that for Japan, where active engagement is only 9%, lost productivity accounted for $232 billion each year. In Canada we are not immune. The Conference Board of Canada reported that Canada is slipping in our global competitiveness (losing 9 places in the last four years) and our productivity is less than half that of the United States. Our leaders may be able to generate results in the short term but there is a trend of long-term deterioration. Although numbers and figures are easy to work with, leaders need to focus more on the people. Emotional intelligence in leaders is of critical importance to leader performance. Working well with both interpersonal issues and intrapersonal feedings is vital to success. Leaders need to be self-aware of their strengths and behaviors while also knowing how to connect and relate to people. Focus on the balance sheet and profit and loss statement alone will not make for great leadership. There is a growing demand for collaboration and participation. The rise of the knowledge worker increases the need for understanding the

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impact of personality and teamwork in the workplace. The societal shifts resulting from the Millennial generation of employees scream for more open communication, feedback, and inclusion. Our survey shows again this year that leaders are not heeding the call for greater interaction and inclusion. LEADERSHIP PERFORMANCE RATING

Participative Management • Gap in Expectations and Performance Overall Ranking

2008

2009

19.7%

20.2%

5th Lowest

5th Lowest

In the next ten years, the power will change – more leaders will be bounced by the demands of the employee than of the shareholder. Keeping the stock price moving up may be front and center today, but it will be a blip in the career life meter if results are not balanced with creating a work environment where people are valued and empowered. Managers and supervisors are the most vulnerable to this power shift. Although a large proportion of organizational training and development budgets are allocated to managers and supervisors, the focus is generally on technical and functional skills rather than leadership competencies. We understand the need for results and being competitive but we are not focusing in the right areas to build our advantage. As leaders, we need to move away from the superficial perspective of numbers – this is only the surface – and take action to resolve the underlying deterioration in organizational performance resulting from the lack of attention to peoplefocused leadership.

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Taking Action Do something! Leaders need to pay attention to the swell before the wave takes them out. Results matter but how you get there matters more now and in the long term. Focusing on performance alone will not create sustainable success and will actually cost the organization more in time, money, and lost customers. Employees value leaders who can clarify, focus, and follow through on a clear vision and strategy while including and empowering the workforce in the journey. For senior leaders, we recommend the following actions: Given the consistent importance of the core leadership competencies of resourcefulness, building teams, generating results, and leading people, leaders should seek feedback and benchmark their current performance specifically. Complete a 360-Degree Performance Feedback to understand your leadership strengths, challenges, and direction for growth. Hear what you need to hear not just what you want to hear and do something about it. Put in place training programs for your managers and supervisors that focus on building people skills – building and leading teams, managing interpersonal relationships, participative management, and adapting to changing situations. Assess your current managers and supervisors, clarify the gaps, and provide training to support their development. Take responsibility for helping them! Ongoing programs that span a full year and incorporate actual work projects and assignments and involve senior leaders are shown to have a significantly greater positive impact on the performance development of managers and supervisors.

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Communicate a clear vision and strategy over and over again to your employees. Clarify the vision, focus on a strategic plan that incorporates participation from employees, and communicate regularly progress and shifts to the plan. Ask for input, say what you are going to do, do it, and let us know how you are doing. Get results but get out of your office and talk to us. Developing leaders who want to build successful careers should commit to a personal growth and development plan focused on strengthening emotional intelligence and strategic thinking. Involve your boss and create a program for growth that is focused on strengthening your leadership competencies – they can be learned. The executive arena is competitive and when you step into the ring be aware that the single attribute that separates those that win from those who fail is the ability to lead people. Polish your technical expertise that got you here but invest in learning how to build teams, communicate effectively, collaborate, and think strategically. Find out where your business is going, understand the leadership skills that will support this direction, and invest in an ongoing leadership development program that will build your skills. And don’t forget to involve your boss. The leader of 2020 will need to … o o o o o

Think strategically Make decisions in uncertain situations Delegate and empower Communicate and collaborate Negotiate, cooperate and cultivate

A wide variety of leadership development programs are available and there is simply no excuse for not investing in your leadership skills if you want a successful executive career.

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Conclusions The world has changed, people have changed – leaders need to change. We need leaders that can connect with people, involve them, and show them the path to a bigger future. Performance results more from investing in relationships rather than directing actions. Effective leadership aligns the leader competencies most important to the organization with business strategies. Translating potential to performance turns on the ability of leaders to engage employees to invest in the strategy and take ownership for results. Are there core competencies that will develop successful leaders for the future? Yes, the critical qualities for leaders in the new society are known and can be developed. The key skills for leaders will separate organizations that win from those that fall behind. The payoff of leadership development done well is the greater confidence people expressed in their leaders’ ability to achieve long-term success for the organization. Employees continue to rank leader performance at a B- level and expect a 17% improvement to meet their expectations and win their engagement and investment. Is it worth developing leadership skills to meet employee expectations? The answer is yes if you are a leader who wants to see higher revenues, higher productivity, higher retention of talented employees, higher employee engagement, and higher customer satisfaction. Are you that leader?

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Next Step Diagnose before you cure. Contact us to access our Leadership Success Analysis for your organization and leaders to understand leadership strengths, challenges, gaps, and how to maximize performance. Our analysis also can be applied to your managers and supervisors. Move your score up – use our Leadership Success Analysis for your organization.

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Acknowledgements and Disclaimer In March 2009, Bluteau DeVenney and Company informally surveyed employees in organizations located in Atlantic Canada. The objective was to assess the confidence people had in their leaders – how did employees evaluate leader performance against expectations. The survey asked respondents to rank the importance of twenty-one key leadership characteristics. The leadership characteristics have been identified as determined by the Center for Creative Leadership (CCL), a globally recognized leadership research and education institution. Further, respondents were also asked to evaluate how their leaders were performing currently in relation to the same twenty-one leadership characteristics. Results were received confidentially. Participants were drawn from private and public corporations as well as non-profit and government organizations in many different industries and sectors. Responses were tabulated internally by Bluteau DeVenney and Company with no adjustments made to the participants’ responses. Bluteau DeVenney and Company thanks all participants who responded to the survey. The authors and publishers of this work and the accompanying materials have used their best efforts in preparing this work. The authors and publishers make no representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this work. The information contained in this work is strictly for educational purposes. Therefore, if you wish to apply ideas contained in this work, you are taking full responsibility for your actions. Materials in our work and our website may contain information that includes or is based upon forward-looking statements. Forward-looking statements give our expectations or forecast of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate”, “estimate”, “project”, “intend”, “plan”, “believe” and other words and terms of similar meaning in connection with a description of potential earnings or financial performance. Any and all forward-looking statements here or on any of our sales materials are intended to express our opinion of earnings potential. Many factors will be important in determining your actual results and no guarantees are made that you will achieve results similar to ours or anybody else’s, in fact no guarantees are made that you will achieve any results from our ideas and techniques in our material.

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The authors and publishers disclaim any warranties (express or implied), merchantability, or fitness for any particular purpose. The authors and publishers shall in no event be held liable to any party for any direct, indirect, punitive, special, incidental or other consequential damages arising directly or indirectly from any use of this material, which is provided “as is�, and without warranties. As always, the advice of a competent legal, tax, accounting or other professional should be sought. The authors and publishers do not warrant the performance, effectiveness or applicability of any sites listed or linked in this work. All links are for information purposes only and are not warranted for content, accuracy or any other implied or explicit purpose. This work is Š (copyrighted) 2009 by Bluteau DeVenney and Company Limited. No part of this work may be copied, or changed in any format, sold, or used in any way other than what is outlined within this work under any circumstances.

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