It’s mid-September 1999. I’m sharing the dark-chocolate oak boardroom table with 8 Executives who’ve flown in from all over Australia and New Zealand to attend our monthly Executive Leadership meeting. We spend the first 20 minutes discussing the threat of the Millennium bug, otherwise known as Y2K. Believe it or not, once-upon-a-time software was programmed so that users only needed to enter the final two digits to represent the four-digit year. Like many businesses we were anxious about the threat of a systems crash as the clock struck midnight to welcome the first day of the year 2000.
The next item on the agenda is Leadership Training. My index finger nervously traces the rough, growth rings of this beautifully crafted table. I’m a young Human Resources Director and haven’t discovered how to get the airtime I need to have my ideas adopted by my more senior peers. This time I’m determined to get my point across. It’s my turn to speak. I am desperate to convince the Executive to introduce a formal leadership training program to our 100+ managers. I begin my pitch:
“We need leadership training for all our managers.” “Our staff are not as motivated as they could be and managers seem reluctant to give up their technical work to manage people.” “Leadership Training is just the thing we need to develop the capability to improve performance in our organisation.”
I wait for vigorous nods of agreement and to hear “Yes let’s do it Kristyn”, from our CEO before I proceed. I’m shocked when all I get back is; “How much is it going to cost?” “Why do we need this again?” “We’re too busy with our growth strategy to focus on that right now.” I say nothing. I just don’t know how to respond to these seemingly minor objections given all the obvious commercial benefits of having well trained leaders (obvious to me, anyway). The look on my face is that of a sullen child who just dropped her caramel ice cream. I dejectedly stare at the thick pile of papers in front of me that contain the short-list of leadership training providers and programs. There’s simply not enough interest to continue. My words trail off…….
The CFO moves us quickly to the Executive team’s favourite subject and is now sharing the financials, share price data and growth projections. My head remains low, eyes narrowed and downcast as I angrily talk to myself “What’s wrong with these people? “Why don’t they just get it!”
Over the past 15 years I have learned to clearly articulate the benefits of investing in developing leaders and now realise that there was nothing wrong with them. My pitch just didn't resonate with their pain points and strategic agenda.
There is no shortage of meaningful data to persuade the C-Suite to support both culture transformation and leadership development initiatives. Knowing what I know now, with the information that I have now, here is how I would handle that pitch if I were to give it today.
Thanks for giving me the airtime on an initiative that has the potential to transform our business and ensure it is around in the next decade. Half a century ago, the life expectancy of a firm in the Fortune 500 was around 75 years. Now it’s less than 15 years and declining even further and we don’t want to be one of them. (“Why Big Company Doesn’t Mean Job Security” – Forbes)
More than two out of five CEO’s now expect their next competitive threat to come from outside their industry. (CEO insights from the Global C-Suite study – IBM Institute of Business value)
To counter the threat of disruptive competitors taking market share, organisations like ours are striving to become more agile and customer-focused. To achieve this there is a trend towards designing organisations with ‘self-managed or network teams’. These teams are empowered to work on specific business projects and challenges, improving the quality of the product and reducing the time our products go to market. These self-managed or network teams are more collaborative and better able to work cross-functionally. This is a big shift away from our current traditional, functional and hierarchical structure.
According to Deloitte’s 2016 Global Human Capital Trends report, more than nine out of ten executives surveyed (92 percent) rate organisational design as a top priority.
Designing new organisational structures is actually the easiest thing to do. The most challenging part is helping leaders to adapt their mindset and skills. We need to take our traditional, top-down hierarchical leaders who are used to making all the decisions and teaching them how to share power, collaborate with others, facilitate and coach so that they are fully utilising the talent of their workforce.
Leaders who can manage networked teams are more likely to create high engagement in their workforce as they share in decision-making and use more of their natural talents to achieve their goals at work. Recent research by Gallup found that managers account for at least 70% of variance in employee engagement scores. Our own engagement scores, which are hovering around 65%, give us the best indication that our managers are not creating environments where our workforce is fully motivated and we know that a motivated workforce is an engaged workforce. (“Why Great Managers are so Rare” – Gallup)
An engaged workforce is a huge market advantage. In organisations with engaged workforces, absenteeism is lower by 37%, safety incidents down by 49%, productivity is higher by 18% and profitability higher by 16%. (“The State of Global Workplace” – Gallup)
Bottom line is that if we are to prepare ourselves for disruptive competitors by creating a more agile, customer centric culture where we can be more innovative, responsive and valued by our customer base, then we must invest in the development of our leaders.
76% of Australian CEO’s believe having a Pipeline of leaders will have the greatest impact on achieving their talent strategy (PWC – Australia Report CEO Survey) yet only 31% of employees say that leadership at their companies is equipped to lead their organisation to success. ("The future of work in Australia" – Oxford Economics Survey in conjunction with SAP)
So let’s focus on building strong, leadership capability with the 21st Century leadership skills that include building emotional intelligence, coaching skills to tap into the potential of our workforce and teaching our leaders how to facilitate great decision-making, rather than control it.
The odds are that if we don’t transition our culture and build 21st leadership capability we will not be one of those companies who thrives in this new era of disruption.
Now, the C-Suite is listening.
Let’s get into the detail……..
Yes, it’s a great time to be in HR.
Kristyn Haywood is the Founding Director of People for Success. Kristyn is passionate about helping organisations unlock the natural talents of their entire organisaton by re-shaping their cultures and developing 21st century Leadership capability. Check-out People for Success' Authentic Leadership Program, Team alignment workshops and cultural transformation journeys