Developing leaders to thrive in a VUCA world

The pandemic has hyper disrupted workplaces.

To say that the pandemic has disrupted how we live and work will be an understatement! It has hyper disrupted how we live and work.  As CEO’s COO’s and CHRO’s  – you have already handled the crisis. You have quickly stabilized things and quickly adapted to the new normal. Great job so far! 

• Now, how do you leverage leadership to thrive (not just survive) in the new normal?  It is already a VUCA (Volatile, Uncertain, Complex, Ambiguous) world.
• Disruptions create both threats & opportunities.  What will it take to create an opportunity out of this crisis?
• Are you playing offense or defense?  Is your focus on merely surviving, or are you planning to thrive in the “new normal”?
• Is your leadership ready to exploit the opportunity in this disruption? Are you supporting your leaders and setting them up for success?  Or is it a SINK or SWIM approach?
• The statistics on the effectiveness of leadership development initiatives are both shocking and depressing – How do you maximize the ROI on leadership development investment in the new normal?

Changes at work after the pandemic

We have all observed a multitude of changes at our workplaces.  Work from home, remote teams, Zoom and MS Team meetings, virtual teamwork and related issues, work-life balance issues, and many other changes.  The pandemic has impacted every employee as it altered their work-life in some way. They had to adjust and adapt. 

But CEOs had the most crucial job of adapting and stabilizing to keep the business running.  What are their challenges and priorities going forward?

The top 3 CEO challenges & priorities for the new normal – Survey of 160 CEOs by Predictive Index

The Predictive Index surveyed 160 CEOs (in late 2020) about their top priorities, concerns, and challenges.  The survey report was titled – Understanding the future of leadership, teaming, remote work, and strategy.  You may read the entire report here.

I am going to share some highlights of the report.  There are three main themes.

1. Executive strategy and work to be done

• Pandemic has forced companies to change their game plan – 96% of CEOs said that they had shifted strategic direction in some way since COVID-19.  It is a new normal, and leaders developed new ways to cope.
• CEOs are laser-focused on strategy development, and it is their number 1 priority,  especially for the new normal.
• But most CEOs think – Employees are less clear on strategy – especially after the pandemic.  Firstly there is a change in strategy, and secondly, the difficulty in communicating the strategy down the line due to remote work.
• Less than 80% of CEOs believe in their employees’ ability to communicate and cascaded the strategy to others.

Key takeaway:  As organizations look to bounce back from the pandemic, many CEOs have ambitious goals. Achieving them requires a strong business strategy and execution.

2. Team stress and the need for team cohesion

• Executives are leading all-new teams. Why? – First, 69% of companies restructured their teams during the pandemic. Second, most teams worked remotely during the pandemic.  This is an entirely new experience for both executives and employees.
• Remote work and work from home (WFH) are here to stay. Once considered an employee perk, now it is likely to be part and parcel of work.  97% of CEOs believed that remote work would continue in some form even after the crisis is over and things go back to normal.
• CEOs’ No. 1 challenge is helping their remote teams work well together.  They are concerned about employee productivity, especially of their remote teams. CEOs doubted the remote team’s ability to hit strategic goals.
• Senior leaders are struggling with team cohesion. – remote working has made it worse.
• Team conflict stems from people’s problems. CEOs are spending precious time mediating people issues and interpersonal conflicts.

Conclusion – Remote work and team restructuring have caused team stress, people issues, and conflicts. CEOs are concerned about the productivity of remote teams and their ability to achieve strategic goals.

3. Building dream teams, developing leaders, and talent optimization

• While focusing on business strategy, executives can’t afford to neglect talent strategy. Businesses don’t run themselves; people do.
• People are any company’s most expensive and the most potent assets. Most CEOs and executive teams recognize the need for developing leaders and talent optimization.
• Besides, CEOs themselves need help in their own leadership development—91% of CEOs required outside help to develop leaders (themselves included) and optimize talent.
• CEOs and executive teams want to develop leaders so that they can inspire performance and get the strategy executed. A majority said that they need external help for their own leadership development.

Conclusion – C-suite executives want external help for their own leadership development to inspire and develop leaders and build dream teams to execute strategy.  They don’t have enough confidence in their internal talent development processes and prefer help from external consultants.

Read: CEO coaching – the what why and how of it

How were things before the pandemic?

The Predictive Index survey was conducted late last year in 2020 when the world was deep into the pandemic.  How were things before the Covid crisis?

In a recent study (conducted before the covid crisis), McKinsey found that the average life-span of companies listed in Standard & Poor’s 500 was 61 years in 1958. Today, it is less than 18 years. And that is not all.  McKinsey believes that, in 2027, 75% of the companies currently quoted on the S&P 500 will have disappeared, only 25% will remain.  Things are no better for small and medium enterprises.  Only 25% survive their 10th birthday. 75% close down before that.  Even for successful companies, it is a challenging environment to survive, thrive and sustain.

It was already a VUCA world!

Even before the crisis, we were already in a VUCA world.  Volatile, uncertain, complex, and ambiguous.  Global competition, the fast pace of change that is getting faster, flatter organizations, new technologies, continuous change and disruptions, and then the pandemic.

The pandemic only hyper-accelerated the already VUCA world.

The change and disruptions that were likely to happen in 5-10 years have been squeezed into less than a year.  For example – In normal times,  the transitioning to remote work may have taken at least a few years.  Pandemic forced most organizations to get it done in a few months!  It only accelerated what was already a VUCA world.

Covid crisis is a wake-up call

The VUCA world has been a reality for at least a decade or more.  Companies holding on to their old strategy and their outdated leadership paradigms of the 20th century are now exposed. Although Command and control are outdated but old habits, die hard.  The status quo is remarkably resilient.  It resists any attempt to change it.  The pandemic was a serious wake-up call for leadership and organizations stuck in the past.  The new normal means it is now a case of a change or die!

To quote Warren Buffet – Only when the tide goes out to do you discover who has been swimming naked.

Many companies and their leadership teams are still stuck in the 20th-century beliefs.  They may have been doing OK before the crisis but are now both exposed and vulnerable.

The new normal may be the opportunity of the decade – Are your leaders ready to leverage it?

Is the pandemic a crisis or an opportunity?

The first order of business for CEOs and their teams was to adapt, stabilize, and survive quickly. So what is next? Under normal circumstances, the status quo is resistant to change.  The dismantling of the status quo and unlearning the long-ingrained habits is a tedious and lengthy process that takes immense effort and many years.  The silver lining of the pandemic is that the crisis has already dismantled the status quo.

The opportunity of the decade?

This pandemic may be a once-in-a-decade (or even once-in-a-lifetime) opportunity. It is an opportunity to rebuild leadership, culture, and processes from scratch.  It is time to put the final nail in the coffin for the old paradigm of Command and control.  It is time to take advantage of its quick demise due to the crisis and rebuild for the new normal. The question is, are you now playing offense or defense.  Playing defense will only help you in the short term.  Revamping leadership and culture will help survive, thrive, and sustain in the long term.

You may be leaving money on the table.

The pandemic hurt some industries, some were neutral, and some benefitted.  Even if you are a successful company and navigated the crisis with flying colors, you may be leaving money on the table.  You may not be leveraging the business performance to the full extent.  And there are always issues of sustainability in the VUCA world.

We already know about the classic examples of Nokia and Kodak.  Extremely successful companies who could not sustain and be almost out of business.

But there are more recent examples also. Think about Intel.  They practically had a monopoly in making microprocessors for PCs and laptops.  Do they make any processors for mobile phones? They don’t!  How about Microsoft?  Do they have an operating system for mobile phones? They don’t!  Think about Google.  They had the first-mover advantage, and they could have been the next Facebook and the next Netflix.  They already had Orkut and YouTube years before Facebook and Netflix.  They could not capitalize on these opportunities and “left money on the table.”

If you are not optimizing business strategy, leadership development, and talent strategy, you will definitely leave money on the table in a VUCA world.

New normal will need a new kind of leadership – Are you developing the right leadership skills?

What factors are needed to THRIVE?

What is needed in such an environment to survive, thrive and sustain it?  Speed, flexibility, experimentation, learning faster than the pace of change, collaboration, and utilizing your diverse teams’ collective intelligence to stay ahead of disruptions.  Learn more quickly than the speed of change.  Create a culture of high performance.

Which matters more? Culture or Strategy?

A strategy is cool and sexy.  Changing culture is complicated and messy.  You can ignore culture at your own peril!  Growing talent to implement the strategy is critical.  And yet, many CEOs underestimate the need for it. 

To quote Peter Drucker:  Culture eats strategy for breakfast.

Culture will eat your strategy for breakfast, employee motivation for lunch, and change and innovation for dinner!  Any strategy that doesn’t account for implementing a supportive culture is likely to fail.

Read: Culture eats strategy for breakfast

What drives profits – Korn Ferry study

 

Here is a study by the Korn Ferry Hay group.  What factors impact any company’s bottom line?  They found five factors that influence a company’s bottom line.

• Strong franchises: Think of an Apple or a Coca-cola.
• Munificent environment:  Supportive of favorable environment like in the Silicon valley
• Intellectual property: Think of a Qualcomm or Pharma company.
• Regulatory barriers:  Protective tariffs and obstacles imposed by countries
• Massive resources:  Think of Google or Proctor and Gamble.

These five factors combined account for 65% of a company’s bottom line.

What about the other 35% of the bottom line?

Leadership behaviors drive organizational culture – and corporate culture drives business performance and bottom line.  It is the only factor that is entirely under the circle of influence of the company!  Thus developing leaders is the best way to improve the bottom line. 

The linchpin of team performance – A culture of psychological safety

Google spent two years and millions of dollars and resources to find out what makes real work teams effective.  Google conducted over 200 interviews, studied 180 real work teams, considered 250+ variables (team composition and dynamics), and used Google’s immense intellect and computing power to run statistical and other analytics models to hone down on factors that impact team effectiveness.

Google found that team composition, who was on the team, didn’t impact team performance much.  They honed down on five factors that affect team performance, and all five factors were related to how the team interacted.  The single most crucial factor was psychological safety.  Google called it the “linchpin” of all other factors. 

Watch the webinar

The Leader’s Role in Creating Psychologically Safe Workplaces

New leadership culture for a new normal

VUCA world and new normal needs a different leadership.  The pandemic has accelerated volatility, uncertainty, complexity, and ambiguity.  A new style of leadership is imperative in the new normal. 

• We have moved from Command and control to empowering and nurturing talent.
• We have moved from the leader as a boss to the leader as a facilitator.
• We have moved from team members do what they are told to team members are vital contributors of knowledge and insights.

To thrive and sustain in the hyper VUCA world’s new normal, organizations need to unlearn and relearn faster than the rate of disruptions. 

To quote Alvin Toffler – The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.

Which of these is the most difficult? Learn, Unlearn or Relearn?  Usually the unlearning is the most difficult.  Thanks to the pandemic and the disruptions, the unlearning has already started!  The status quo is already dismantled.  It provides the decade’s opportunity to create a culture that will help thrive and sustain for the long term.

In business environments with complexity, uncertainty, and interdependency – you need to create a culture of psychological safety so that you can utilize the collective intelligence of your talent.   Amy Edmondson’s research has shown that psychological safety lacks in many work teams.  Developing leaders in the new normal should include teaching them skills to create a culture of psychological safety.

Who and what creates the culture (of psychological safety)?

The level of psychological safety varies on teams, even in groups within the same organization.  This is true even for organizations that have a “good” culture. The research also shows that the single most crucial factor contributing to the level of psychological safety on teams is the team leader’s behaviors.   It is a critical competency for a 21st-century leader.  A culture of psychological safety is essential for high-performance culture, where teams learn faster than the pace of disruptions. The collateral damage of lack of psychological safety is immense.  Many progressive organizations now focus on developing leaders to thrive in the new normal by systematically focusing on teaching them how to create a culture of psychological safety in their teams. 

Read: Psychological safety at work – Why you need it and how to develop it

Sink, swim, or set up to succeed – How are you developing your leaders in the new normal?

Leaders have huge responsibilities.  A lot is riding on leadership.

Think about your executive leadership team.  Who reports directly to the CEO, and who reports to those people.  This is your senior leadership team.  How many leaders does your organization have on the senior leadership team?  Now, what is the total employee count of your organization? It is not uncommon to have a senior leadership team of 30 leaders responsible for driving results through 1000 employees.  Leaders need help and support. CEOs, CXOs and CHROs, and CLOs need to take up this challenge and responsibility.  Are you using a sink or swim approach to developing leaders in the new normal?  Or are you supporting them and setting them up for success?

Is leadership development working?

Typically companies develop leadership by sending leaders to a B school or an in-house leadership development program. An estimated $62 billion were spent worldwide on leadership development in 2014.  That figure is now likely to exceed $100 billion. 

One would think that with that kind of money spent, leadership should be at an extraordinary level.  But it is not!  The numbers on the effectiveness of leadership programs are both shocking and depressing!

While 89% of CEOs consider developing leaders their top priority – only 10% think their leadership development has any business impact.  Kristi Hedges wrote an aptly titled Forbes article –  If you think most leadership development programs are a waste of time and money, you may be right!

HR, talent management, and leadership development departments have failed to deliver programs that have a clear business impact.

And then there is E-learning. E-learning is a fantastic tool, but often it is overhyped, especially for leadership development.  To assume that E-learning will teach executives leadership is like believing that you can teach someone to swim by having them watch a video on your LMS!! 

The way most organizations are developing leaders for the new normal and the hyper VUCA world is not working!

Ten tips to get a measurable ROI from your leadership development initiatives

Here are ten tips to get a measurable return on investment from your leadership development initiatives.

Stop sending a few people to episodic leadership development programs (internal or external)!

Disjointed internal and external leadership development programs do little to alter their actions and behaviors at work.  A hypothetical case study at a B school may look good in a simulated environment – but does it have real relevance to the job?  Some companies spend millions and many years before realizing that the check the box leadership development programs contribute little.  Don’t make that mistake. 

Have a comprehensive long term leadership development strategy

Leadership development is a process, not an event.  It is not something that is “done.”  Without aligning leadership development to strategic direction, even an effective leadership program will underperform.   A comprehensive strategy for developing leaders is needed.  The leadership development plan should span many years and cover the entire population of leaders.

Align leadership development to the organizational context, strategy, and strengths

Every organization has a strategy and strengths aligned to the strategy.  Think of two very successful companies – Starbucks and Walmart.  Starbucks has built the business on providing superb customer service.  Walmart has succeeded due to its ability to run a lean, low-cost operation to pass on the savings and offer the lowest prices.  Would a one size fits all B school leadership program help them both leverage and align their leadership strengths?  Obviously not.  Leadership development needs to align with organizational context, strategy, and strengths.

CEOs and C-suite teams need to take responsibility for leadership and culture.

Developing leaders start at the top. It begins with the CEO and C-suite team. They have to be personally invested and involved in the leadership development initiatives. CEOs cannot delegate this critical responsibility solely to the Human Resources and the talent management departments.  They can certainly help in the process, but developing leaders’ primary responsibility remains with the CEO and the C-suite team.  Their primary responsibility is to create a culture that allows others to do their best work.  Developing leaders and role modeling the behaviors is the best way to create a high-performance culture. 

Customize leadership development to the individual leader

Standard curriculum and competencies(one size fits all approach) don’t work in leadership development.  Covering broad themes in leadership programs doesn’t work.  Instead of focusing on 1-2 specific individual skills needed to improve the leadership performance at work. 

Utilize the collective intelligence of diverse teams

Leadership is a relationship.  Leaders and teams both need to take the journey of development. Involve the team throughout the leader’s development.  The team’s involvement helps utilize the collective intelligence of the groups.  When the leaders’ role models their own growth, the team usually goes along.  This has a multiplier effect on engagement and performance.

Connect leadership learning to the application at work

Many B school leadership programs rely on case study methodology.  A hypothetical case study may look good in a simulated environment – but does it have real relevance to the work?  Leadership frameworks and theories appear elegant in the classroom but have little practical application.  Besides, most leaders don’t need to learn more.  They have undergone several leadership programs and understand the theory very well.  They have difficulty in applying the learning to the actual work with their real work teams. 

Measure what matters-not vanity metrics!

There are many vanity metrics—person-days of training, percentage of leaders, covered, number of training programs, etc. Then there are surveys – “nice” place to work etc.  And there are awards! Best-in-class training or leadership development – awarded to so and so company or individual.  These are vanity metrics and don’t really matter much.  What really matters is the impact at work. What matters is the behavior change at work – as observed and anonymously rated by the leader’s own team members.

Focus on changing both mindsets and skillsets

Any program that doesn’t help with skillset,  toolset, and mindsets is unlikely to deliver lasting change in behaviors. 

Start with and include the entire executive team.

Start with and include the entire C suite team.  You are always leading by example – whether you know it or not, believe it or not, like it or not, want it or not!  What message are you sending to others when you say that – hey, these guys under me need leadership development, not me!   Including the entire executive team in leadership development also has a multiplier and a cascading effect.

Keep these 10 tips in mind while designing your leadership development programs. 

Read: How to create and implement an organization-wide leadership development plan

Leverage your leadership THRIVE in the new normal

Take advantage of the opportunity of the decade to reset your leadership and organizational culture.

Are you ready to play offense and not just defense?  Are you prepared to thrive and not just survive in the new normal?

NAL Triple Advantage Coaching delivers guaranteed and measurable leadership growth.  It is based on a stakeholder-centered coaching process with a 95% effectiveness rate (in a study or 11000 leaders on 4 continents).  It is used by companies ranging from start-ups to 150 of the Fortune 500 companies to develop their leaders.

Here are some of the salient benefits of NAL Triple Advantage Coaching

• Time and resource-efficient: The leader does not have to leave work to attend training programs.  We go to the leader and her team.  And it only takes 1.5 hours per month. The rest of the time, the leader is working to implement with her team.
• Separate and customized improvement areas for each leader – Every leader is different.  One size fits all approach doesn’t work.  Individual development areas for each leader are aligned to the business strategy.
• Involves entire team: Unlike most leadership programs, NAL Triple Advantage Coaching involves the leader’s entire team, and it has a cascading effect – increasing the team effectiveness and improving organizational culture.
• The leader becomes the coach for continuous improvement for leaders themselves and their teams.  It is like kaizen for your leadership development.
• Cost-Effective: Our entire one-year coaching engagement often costs less than sending the leader to a short duration leadership program at any reputed B school
• Guaranteed, measurable leadership growth as assessed – not by us – but anonymously rated by the leader’s own team members.
• No growth, no pay: We work with many of our clients on a no growth no pay basis.  What does it mean?  If the leaders don’t grow, you simply don’t have to pay us.

Schedule an exploratory 15-minute conversation with our leadership adviser today: no cost or obligation and no sales pitch.