In a breakthrough executive-trends global research study that I conducted with my colleague, Bonnie Hagemann, we clearly confirmed that identifying and developing high-potential and emerging leaders is and will continue to be one of the top business issues facing CEOs. In most organizations, 40 to 70% of all executives will become eligible for retirement in the next five years.
In our increasingly knowledge-driven world economy, organizations are right to fear this imminent brain drain, suspecting that, when executives leave the firm, business may follow. Yet high-potentials and emerging leaders—those most likely to rise to fill those highest positions—account for less than 8 to 10% of the talent pool. That’s in the United States. In other countries, like Canada, Australia, the United Kingdom, Japan, and China, and in just about every country except India and various countries in Africa and South America, this issue is as pronounced as it is in the United States, if not more so. Therefore, identifying, developing, and retaining such rare talent truly is a mission-critical global challenge for CEOs, senior executives, managers, and HR directors.
Given this indisputable global business challenge, the implication for current and emerging leaders is clear: The demand for outstanding leaders will soon surpass the current supply, and therefore, if you are a current leader or emerging leader, you will be able to capitalize on substantial opportunities if you are poised and ready. In your own ascent up the ladder, you can be certain that all organizations will be asking more of their leaders; expectations, demands, and pressure will only increase, not decrease. The demand for truly outstanding leaders has never been higher, and organizations are raising the bar—as they must—in order to compete successfully on the global stage.
Where Are the Outstanding Business Leaders?
As I travel the globe, meeting with senior executive teams, coaching executives, and speaking to various management groups, it is clear to me that the world of business has very few outstanding leaders. There are many very good leaders. The distribution of outstanding leadership, like anything else, follows the shape of a bell-shaped curve. I always knew this. Everyone has always known this. But nobody really cared because being a good leader has always been good enough to keep a position and meet its basic requirements. But things are changing quickly. The bell-shaped curve needs to be shaped into a negatively skewed distribution, in which all organizations possess a larger percentage of very good and outstanding leaders just to be able to compete.
I had suspected the need for this critical shift for a couple of years, but it became very clear in 2011 as we were interviewing executives as part of our Trends in Executive Development Research Study (Pearson, 2011). Beyond the actual research, an interesting qualitative note emerged. When I ask executives to identify a great leader in their lives—someone who had a positive impact on them and helped shape their values—roughly 9 times out of 10, they mention a former teacher, coach, parent, grandparent, or friend, as opposed to a business leader. Unfortunately, the fact is that most of us in the business world can identify the poor managers we have had much more quickly than we can the great ones. Why is this?
There is no clear answer; however, it is pretty clear that many managers are promoted before they are ready to assume leadership roles. They are not adequately trained, coached, and mentored by more seasoned executives, who often can share stories and insights to dramatically shorten a manager’s learning curve. More than anything else, I believe the speed and pace of change in business—technology shifts, demographic shifts, and a more demanding operating environment—present daunting challenges to most leaders. Frankly, very few possess both the strong inner core of values, character beliefs, thoughts, and emotions and the set of outer-core leadership competencies that are truly required to successfully overcome these challenges. In the end, too many executives are beginning to derail or have already derailed be-cause of character flaws or perhaps just sheer immaturity. .
Who do I consider an outstanding leader?
Role Models of Outstanding Leadership
First and foremost is Jeff Bezos, the CEO of Amazon.com. In an interview in U.S. News & World Report, which David LaGesse conducted with Bezos in 2011, Bezos demonstrated numerous examples of his strong inner core (i.e., character, values, positive beliefs, positive emotions, self-concept) and outer core (i.e., leadership competencies) that together, form the foundation of what I refer to as leadership maturity. When Bezos was asked about the need for a long-term view, he replied: "My own view is that every company needs a long-term view. If you’re going to take a long-term orientation, you have to be willing to stay “heads down” and ignore a wide array of critics, even well-meaning critics. If you don’t have a willingness to be misunderstood for a long period of time, then you can’t have a long-term orientation. Because we have it done it many times and have come out the other side, we have enough internal stories that we can tell ourselves. While we’re crossing the desert, we may be thirsty, but we sincerely believe there’s an oasis on the other side"
In this answer, Bezos reveals numerous examples of his leadership maturity:
- Character elements of diligence and focus
- The ability to handle uncertainty and ambiguity
- An understanding of the value of experience and “references” that are the foundation for creating strong and compelling beliefs about what is possible
- A powerful sense of optimism
Another great example of outstanding leadership is Anne Mulcahy, former CEO of Xerox. When Mulcahy took over Xerox in 2000, she delivered a blunt message to shareholders: “Xerox’s business model is unsustainable. Expenses are too high and profit margins too low to return to profitability.” Shareholders, wanting easy answers to complex problems, started to dump their shares, which drove Xerox’s stock price down 26 points the next day. Looking back on that dark time, Mulcahy admitted she could have been more tactful; however, she had decided it would be more credible and authoritative if she had acknowledged that the company was broken and that dramatic actions were needed to fix it.
Although she had been with Xerox for 25 years and knew the company well, when Mulcahy was named CEO, she acknowledged her lack of financial expertise. She quickly enlisted the treasurer’s office to tutor her in the fine points of finance before meeting with the company’s bankers. Her advisors told her to file for bankruptcy to clear $18 billion in debt, but Mulcahy resisted, telling them, “Bankruptcy is never a win.” In fact, Mulcahy thought that using bankruptcy to escape debt would make it more difficult in the future for Xerox to compete seriously as a high-tech player. Instead, she chose a much more difficult and risky goal: “restoring Xerox to a great company again.” To gain support from Xerox’s leadership team, she met personally with the top 100 executives. She let them know honestly how dire the situation was and asked them whether they were ready to commit. A full 98 out of 100 decided to stay, and the bulk of them are still with the company today.
Like Bezos, Mulcahy’s actions reflect numerous examples of her execu-tive maturity:
- Character elements of honesty, modesty, humility, and courage
- A powerful sense of vision
- Skill at empowering others
- Her passion, drive, and incredible zeal
How many executives do you know who exhibit the qualities of Bezos and Mulcahy?
Excerpted, with permission of the publisher, from Intelligent Leadership. Copyright 2013, John Mattone. Published by AMACOM. For more information, www.amacombooks.org