Leadership for the 21st century | Human Capital | Deloitte Netherlands

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Leadership for the 21st century: The intersection of the traditional and the new

Human Capital Trends 2019

Leaders today face new challenges due to the speed of technological, social, and economic change. Do these new challenges call for a new breed of leaders?

Leadership in a new context

It’s clear that many people believe that organizations have new leadership needs. Eighty percent of the respondents to this year’s global survey told us they think that 21st-century leadership has unique and new requirements that are important or very important to their organization’s success. Topics such as inclusion, fairness, social responsibility, understanding the role of automation, and leading in a network were not part of the leadership manifesto a decade ago. And in the midst of these changes, many organizations are not satisfied with their leadership programs. Only 25 percent of our respondents say they are effectively building digital leaders, and only 30 percent say they are effectively developing leaders to meet evolving challenges.

Yet even though many organizations have built digital leadership models, updated their frameworks, and invested in new leadership programs, we believe the greater need may lie in the combination of developing new competencies and putting them in a new context. That new context is the changing set of social and organizational expectations for how leaders should act and what outcomes they should aim for. In the era of the social enterprise, people no longer believe that financial results are the only or primary measure on which a business’s success should be judged; they also judge organizations for the impact they have on the social and physical environment, as well as on their customers and the people who work for and with them. As a result, leaders that focus only on running a tight ship and competing relentlessly in the marketplace can be viewed as too narrow and not fully engaged with the challenges of the broader business and social environment.

Human Capital Trends 2019

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Where are the biggest gaps?

Developing leaders with new competencies requires more than an evolution in the competencies themselves. Equally paramount is for the organization to have the culture, the structure, and the management processes to cultivate these leaders. In our survey, we found three areas where significant gaps exist within many organizations.

Transparency. In today’s world of the social enterprise, transparency is the most valuable organizational currency. It helps engender trust and respect in a world where many may question an organization’s true intent. Yet as important as transparency is, only 18 percent of our survey respondents believed they have a transparent and open model; 37 percent were worried about their ability to create trust, 60 percent were worried about their employees’ perception of transparency, and 27 percent believed that a lack of transparency was creating a competitive disadvantage.

Internal collaboration. As organizations move into service-center business models, they’re able to benefit when C-suite leaders shift their focus beyond their narrow towers of responsibility and work more closely with one another. As we discussed in last year’s report, the C-suite’s roles and work are becoming much more complex and more integrated. Yet eighty-three percent of respondents told us their C-suite executives rarely collaborate or do so only on an ad hoc basis; only 17 percent said C-suite executives at their organization regularly collaborate.

Performance management. How individuals’ success is measured remains a powerful way to shape behavior. However, despite organizations’ strong desire to elicit different, more 21st-century behavior from their leaders, respondents described a very traditional approach to how they evaluate top leaders. The top three criteria organizations used to measure leadership success were driving strategy (63 percent), delivering financial results (58 percent), and managing operations well (44 percent).

Putting different performance measures in place for leaders can go a long way toward establishing a culture that supports competencies such as the ability to manage uncertainty and lead through change. Sasol, an integrated chemicals and energy company with operations in 32 countries, is one company that has made progress in establishing a culture of development through the way it measures its leaders. The company evaluates leaders based on employee engagement feedback, leadership capability assessments, and the ways in which leaders align themselves with the company’s leadership principles. These practices contribute to reinforcing a culture where leaders are encouraged to embrace change and recognize opportunities to innovate and pursue excellence.

If organizations want leadership that is ready for the 21st century, they should first look at their own attributes to create the type of environment that will give rise to leaders’ success. Transparency, internal collaboration, and performance management are good places to start that process.

More information

For more information about the Human Capital Trends 2019, please contact Petra Tito or Ronald Meijers via the contact details below.

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