Ensuring ongoing leadership capability is a key priority not only for today’s CHRO but for the C-suite. Often, the key decision point boils down to, “build or buy?” Each demands a very different approach. The build-decision focuses on leadership capability development and succession planning, while the buy-decision on expert leadership assessments and hiring expertise. Whatever be the chosen approach, the desired end result must be clear i.e. having a capable, sustainable leadership team which drives business growth and people growth.
The Leader of Tomorrow: A Skill Snapshot
The future leader is going to be very different from the leader of today. Some of the core leadership capabilities shall continue to remain the same, for example, the curiosity to learn and evolve, ability to build and nurture networks, self-awareness etc. Yet, a whole new set of capabilities is what shall differentiate successful leaders – disruptive envisioning, multidimensional sense-making, the ability to manage multidimensional diversity, institution-building mindset, and talent magnetism. Finding all these capabilities in one leader is definitely not an easy task. Especially in India, where the complex business environment demands some very diverse leadership skills. Often, inhouse leaders may even lack the potential to build these skillsets. Hence, organizations feel the need to buy leadership talent.
Leadership in India
The Indian corporate sector is multi-varied, with conglomerate-style family businesses vying for market leadership alongside mammoth global MNCs and nimble start-ups. As the millennial workforce grows, leading a digital-first workforce calls for an entirely new skillset, balancing the needs of the diverse workforce. Many organizations are, in fact, looking to rejig the leadership layer itself, to make it more future-relevant. It is not uncommon to hear of millennials occupying leadership positions, and many organizations are willing to scout the CXO talent market, to cultivate a sustainable leadership team.
80% of the organisations in India are currently facing a leadership talent shortage either because the present leaders are on the verge of retiring or because millennials prefer to change jobs frequently**.
Leadership Development Trends 2019', Mercer|Mettl
Cost is no bar to find the right candidate to lead the organization into the future. In fact, leadership hiring continues to be strong, despite the slowdown in the economy in the past few quarters. As quoted by Sapphire Human Solutions CEO Ankit Bansal to TOI, “Across India, there have been over 400 CXO movements in August, The number has remained more or less the same over the last few months”. Much of this may be attributed to the burgeoning e-commerce and start-up ecosystems*5
Leadership Hiring Challenges:
Hiring a new leader comes with its own challenges; after all the leader must have a strategic, business, people and cultural alignment with the hiring organization and must be productive from Day Zero! Some observed challenges in India (as well as the universal market) are:
. Lead time to take a decision: While leadership hiring numbers do not appear to reduce, the hiring decision is being made with more caution, checks and balances. A flurry of new mandates, and the pressure to make the right talent choice in the first go has now expanded the hiring lead time to even 6-7 months in India*.
• Talent at a premium: Capable leaders very well know the high demand for the right leadership skills, and so they are seeking much more than the traditional 20% hikes. Often, the ask is a 40% hike* for critical leadership positions, as top talent knows that they can demand a premium and companies will be willing to pay the premium for the top-end skills they bring to the table.
• Inaccurate hiring methods: A core challenge seems to be the inability to identify the right talent due to inaccurate skills assessment. Globally, 23% organisations misjudge and reject the right talent, only to select the wrong one***. Using scientifically validated hiring and assessment tools is the first step to overcome this challenge.
• Lack of Leadership Competencies: Some organizations do not seem to know what kind of talent to hire in the first place- 16% of the surveyed organizations exhibited this issue, as per the Mettl-Mercer Leadership Hiring Trends Report, 2019***. The reason may be a lack of a Leadership Competency Framework outlining the cognitive, personality, behavior, domain and technical skills required. This too, seemed to be a global observation.
Leadership Hiring Opportunities
Some of these talent trends may help the leadership hiring agenda:
• Leveraging an extended workforce: With longevity and willingness to work beyond the retirement age, a new slice of workforce is now amply available to provide leadership insights. Second-inning careers are now not uncommon, with retired corporate and government professionals contributing towards leadership agendas, through full-time or consulting contracts.
• Shuffling of the Pack: Many companies are looking at bringing in a “fresh perspective” by bringing in leaders from other sectors. Same-industry hiring continues to trend due to the faster turnaround and lesser risk involved. Yet, organizations are more willing to explore cross-industry hiring as a new perspective-changing strategy. As more and more organizations embrace a diversity of thought and innovative strategies, this is coming to the forefront, especially in sectors like healthcare, technology, education, financial services and consumer markets****. In 2018, 40% of CEO placements and 43% of CXO placements were cross-industry hires*5 (Executive Access research)
• Adding a professional touch: Family business is a big component of corporate India, and the vision to “professionalize” business and strategy at the leadership level, is coming out strong. Some of the drivers for this trend are the expanding business families, diverse personal and business interests, ambitious growth plans, rapid technological changes and a significant increase in low-cost competition*6. Today, family businesses are compelled to align the family vision and family dynamics with business objectives, thereby spurring them to bring in professional leaders.
These factors are giving an impetus to leadership hiring, thereby creating a market-churn at the CXO level.
Making the right leadership hiring decision involves a multi-faceted assessment. Not only must the chosen leader be strategically aligned on business objectives, but he or she must also be personally aligned on the values and culture front. In an age when leaders are expected to espouse the values of authenticity, collaboration, openness, and people-first approach, it is critical to carry out the right cultural and visionary assessments in leadership hiring. This holistic assessment is the only way to ensure that the organization succeeds through a transformational leadership overhaul.
Pic Source- India Today
*5 https://timesofindia.indiatimes.com/business/india-business/cross-industry-ceo-hiring-max-in-e-tail/articleshow/68016879.cms (report by Executive Access)
https://www.indiatoday.in/education-today/news/story/how-are-companies-developing-leadership-skills-in-employees-survey-reveal-top-trends-1570923-2019-07-18 , https://mettl.com/downloads/wp-content/uploads/sites/12/2019/05/Leadership-Hiring-Trends-2019.pdf