Insider Business Club: leadership

Is there a leadership gap emerging in UK Plc?

Nikos Kourtis, associate partner, human capital consulting, IBM

The findings of our recent research study, Unlocking the DNA of the adaptable workforce, suggests there’s a big leadership vacuum with a deficit caused by demographic shifts. In addition to the ageing workforce problem, there seems to be a problem with developing leaders, especially at speed.

Our report is not specific just to the finance community ­ it’s a problem that exists across industries, across different functions and so on. But the overall message is that there is a leadership gap. The good news is that there is a number of things that can be done to address this problem if an organisation recognises and acknowledges it. Our belief is that it actually becomes an opportunity rather than a gap.

Research suggests that it’s not completely a new thing; there’s always been a problem with leadership. Having said that, it’s perhaps the number of people available that’s changing, because of the ageing workforce. And the way in which people expect to be employed and treated is changing.

More than that I think the key difference is that the speed of change is becoming increasingly faster, so adapting to the demands of today’s business is possibly exacerbating the leadership gap.

Another key driver is the trend towards globalisation. With emerging markets coming into play, competition is coming from all sorts of new and different areas. The rapid advances of technology mean that many functions, processes and workflows can be automated, which leads to improved speed. So all of those factors contribute to a much faster pace of change.

So 20 or 30 years ago, you would have expected an organisation to undergo some major transformation business process re-engineering that could last for ten or 15 years. And what you now see is the half life of the transformation could be 18 months, before you have to change and adapt again to something new that’s emerging. So the key challenge is that you can’t just set up an organisation and hope it’s going to last for the next 15 years without changing. You have to be able to adapt to whatever the market environment is driving you towards.

Is the leadership gap narrowing or widening?

Richard Ashcroft, group financial director, Harvey Nash

This could be quite a controversial point. But our experience has been that people entering the workforce are not necessarily equipped to do what’s needed, and there is still quite a gap between the skills being taught at schools and universities and the skills actually needed to succeed in business. And, in particular, it is about practical skills and, above all, interpersonal and communication skills.

Working in the executive search and recruitment industry, we talk all the time about the war for talent and the shortage of skilled people to fill leadership positions. The speed of change is accelerating within organisations and finding people who’ve got the experience and the flexibility to adapt to those changes is becoming more difficult.

There is also a demographic shift going on where there are fewer people coming into the workforce and that’s exacerbating the skills shortage. I think it has always been an issue, but it’s become exacerbated by the growth in the economy and the skill shortages we’re experiencing. I would say, yes, to an extent it is actually getting worse.

Of course, change is a continuous process. It’s not about setting up a business model and running with it. I worked in an organisation once where they did 20-year plans. It’s very difficult to do even a six-month plan at the moment. The ability to adapt is a key competency for anybody wanting to take on a business leadership position, because the pace of change is accelerating as a result of rapid technological advances and globalisation.

There is no such thing as a perfect business model and it is a continuous evolution. And as we go through time, the pace of change is accelerating and there is no such thing, I believe, as a perfect business model. It’s a question of constant evolution and the ability to react to those changes that’s important.

Chaired by Damian Wild

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