The Great Leadership Taboo

Plenty of CEOs and senior executives scoff at the idea of having anything to gain from leadership development. After all, if you’re running a business or a division of a corporate, you’re evidently accomplished in your role, so why would you need a guiding hand?

It’s an old-fashioned way of thinking and one of the reasons that over half of the Fortune 500 have either burned out or faded away in the past 15 years. As volatility and uncertainty across the business landscape have become the accepted norm, there’s no room for complacency and blind-spots in the top team.

The Human Resources Director is uniquely placed to understand where an individual executive, or the whole ExCo for that matter, may require additional support to help them achieve their goals faster.

With this in mind, Criticaleye polled a selection of HRDs on whether enough is being done to sharpen leadership skills among executives. The results show there is a gulf between how organisations are set up and what HRDs believe is required.

According to the results, 86 per cent identified a lack of leadership capability as a barrier to growth. Thirty-nine per cent said that their existing framework for reinforcing leadership skills is inadequate, while just over half (52 per cent) want to improve what is currently in place.

Matthew Blagg, CEO of Criticaleye, says “the figures clearly suggest that CEOs and leadership teams are not doing enough to ensure they have the right expertise in place for the future”.

Saying the “L” word
So, is there some kind of taboo around the question of leadership development for senior executives, including the CEO?

Orlagh Hunt, Group HR Director for Allied Irish Banks, Corporate Banking, Ireland, comments: “It is difficult to tell people they are not as good as they think they are, and also to get senior executives to focus on development.

“They should see life as a learning journey; no matter what your experience is you should always seek to learn and develop.”

A degree of openness or, to use a popular term at the moment, ‘curiosity’ is not always easy to find. Simon Laffin, Chairman of FlyBe Group, gives the example of trying to persuade a CEO to take on a mentor. “CEOs tend to have large egos…You are totally reliant on the CEO being open to having a mentor or not. I personally would encourage it but some don’t want it,” he says.

Yet our survey identified external mentoring and experiential learning as the most effective tools to support senior executives in performing at the highest level. These were followed by executive coaching, partnering with business schools and external courses.

Elements of a high-performing executive team
Organisations fixed on a hierarchical model are going to struggle in the current environment. An overly directive approach results in poor communication, inflexibility and an organisational culture where information and knowledge are withheld, rather than shared.

Such an environment won’t appeal to the best talent and everything seems to point to successful businesses adopting an agile model. According to the survey, the most important elements of a high-performing executive team include trust, constructive challenge and collaboration – all components of a flat hierarchy.

Another key element identified was a common purpose. Nicky Pattimore, HR Director at Equiniti, comments: “The leadership team has to be aligned with the purpose… we ran workshops with all the senior management team to ensure this. Consistency of messaging is critical and you have to have regular touchpoints with employees across the organisation.”

Difficulties arise when executives pursue their own agendas too aggressively. Indeed, the survey found that a lack of alignment over strategy is the primary reason for senior executives quitting.

Ian Cheshire, Chairman of Debenhams, suggests that the top team must genuinely agree where the future of the business lies. “Alignment comes when people have had the chance to work together and own the strategy. You can’t just hand them a to-do list,” he comments.

The HRD and CEO can create the right degree of openness and collaboration within the executive team, provided they’re willing to make the effort. “There will be moments as a HRD when you are standing alone,” says Orlagh. “All the pressure will be on you to tell the CEO about the issues within the business, largely because the other executives won’t raise it themselves.”

Ultimately, there can’t be any sacred cows or taboos in the executive team, especially when it relates to talent. “Some CEOs don’t find managing individuals within the team and the team dynamics that easy, [whereas other] leaders accept challenge as a natural part of a healthy team dynamic,” adds Orlagh.

“Even if you find it tough, as the HRD, it is important that you are willing and able to challenge. It is important that your relationship with the CEO is such that they know that you are doing it from a desire to enable their success, not from a point of ego.”

What are your thoughts on leadership development? If you have experiences and opinions that you’d like to share, please email marc@criticaleye.com

This article was inspired by Criticaleye’s recent HR Director and CEO Retreats
Find out more about our upcoming Asia Leadership Retreat or read more on Strengthening the Executive Team

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Reinventing the Role of the HRD

In the face of new technology, shifting demographics, the need for greater diversity and international competition, the boards of global companies expect a lot more from the Human Resources Director (HRD). While process and compliance matter, the fact is that the HRDs which provide the most value are the ones who understand why the talent and people agenda must be mapped to the business plan.

Matt Stripe, Group HR Director for food company Nestlé UK & Ireland, says: “The transactional element of the function can’t be ignored. You have to undertake performance development reviews, pay rises and so on, but that’s not the stuff that adds value to the organisation.

“What businesses are really looking for now, and I think line managers and business leaders are far more people-savvy than they’ve ever been, is for HR to participate in determining and shaping business strategy.”

Yetunde Hofmann, former Global HR Director for Imperial Tobacco, agrees that the “traditional terrain of HR” of policy, well-being, employee relations and health and safety, are not going to disappear. At the same time, because of HR’s critical role, it will need to align its agenda so it’s simultaneously operational and strategic.

In essence, it’s having the ability to facilitate the development of an organisation’s capabilities and culture in order to deliver on strategy. Debbie Hewitt, Chairman of retailer Moss Bros, comments: “HR Directors are increasingly around the top table… If you’re having the debate about whether they should be, you’re 20-years’ behind. Great HR Directors have a huge contribution to make in many places across the business.

“The challenge for a HR Director is to make sure they’re not at the board table just for HR. I take it for granted [that] they will do a brilliant presentation on talent, succession and HR strategy. Where I get massive added value from a strong HR Director is when they contribute to issues other than those specific to HR, such as if there’s an acquisition to be made or an investment – they can bring a unique perspective.”

Stuart Steele, Partner for Human Capital Consulting at professional services firm EY, says: “Chief HR Officers [CHROs], HR business partners and subject matter experts need to understand context… [and] have an appreciation of the organisation’s strategy, its competitors, [the wider] economic trends and how these are forecast to impact [the] current and future workforce. I meet practitioners who demonstrate this capability on a daily basis – however, they are probably still in the minority.

“Interestingly, we are increasingly seeing the appointment of CHROs who have not come from the HR function… In part, I believe this underlines the importance being placed on understanding business strategy and operations. As good leaders, these individuals are expected to be able to mobilise the HR function to develop and execute people initiatives in direct support of the business strategy and plan.”

Deborah Cooper, Director at search firm Warren Partners, says: “The strongest HR directors have had experience outside the HR function… They tend to have more business credibility and ask different questions, rather than having a narrow skill-set purely through HR. Those who are rounded and have broader business experience tend to be meeting demands more effectively.
“The most effective HRD is one who can bring strategic thinking, real enterprise vision and business understanding and not one who’s necessarily technically strong in siloed skill-sets.”

The role will continue to evolve in this manner, especially as the more process-driven elements of the function become easier and cheaper to outsource. For many HRDs, the question has to be: Unless they are involved in harnessing capabilities and culture to deliver against strategic goals, what value are they really adding?

A person of influence

The use of data and proper information management are a prerequisite for efficient HR functions. For Matt, the insights provided by technology to enhance performance need to be watched closely: “It’s exciting to think what analytics will give us in a very short period of time – we have bits of it, so I can pull off good information now but in the future, and we’re probably only talking a couple of years, you’ll be able to look at so much more.

“It won’t just be whether a business leader is delivering on their results; you’ll be able to add the 360 degree evaluation to that, plus some others tests to check on emotional and social intelligence, including an ability to measure employee stress levels. It will be a lot more holistic.”

Nicola Pattimore, HR Director for business process outsourcing concern Equiniti, comments that “the use of data analytics to help drive decision-making has increased hugely”. However, in order for this to be meaningful, HRDs need to be commercial in their thinking and strong-willed when presenting information to the top.

If this isn’t the case, there is the danger of data simply being used to create added layers of bureaucracy, or for HRDs to shy away from discussing harsh truths about performance. “It can be a lonely job because often you’re having to act as the conscience of the business, challenging senior leaders and sometimes telling them things they might not want to hear,” says Nicola.

“When you’re sat at the table with a CEO, CFO and COO, you need to be able to inform and help make strategic decisions. A lot of that will entail providing a perspective on people, but you need to have that impact and influence.”

Charlie Wagstaff, Managing Director of Corporate & Public Sector at Criticaleye, comments: “While being technically and commercially competent, effective HRDs are unerring in their focus on how talent can be utilised to deliver against the business plan, both for the short and long term.

“The very best HRDs are distinguished by their ability to collaborate and form partnerships across an organisation – they understand how to influence the CEO and the board.”

It’s a case of having a full appreciation of what levers need to be pulled in order to improve performance. Stuart says: “I aspire for CHROs to contribute to the determination of business strategy, however, where they can really come into their own is during the development of the organisation’s business [plan]…

“CHROs can also challenge untested assumptions around the business… As an example, if an organisation is [setting] up a new business in a new geography, should they implement along the lines of the existing operating model, or use this initiative as an opportunity to adopt a different approach?”

The difference in value lies in a HRD being involved in the formulation of plans, as opposed to merely responding to operational necessity. While some HRDs are functioning at this high level, it’s evident that others have a long way to go.

I hope to see you soon

Matthew

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