Business leaders lack critical skills
HR Magazine, Jan, 2006

Nearly a third of global business leaders don't have the skills they need to help their organizations achieve business goals, according to a recent study from global HR consulting firm DDI.

Leaders polled in 42 countries gave themselves low grades on 10 qualities that are strong indicators of leadership performance and potential. While HR professionals surveyed identified "passion for results" and "brings out the best in people" as the most important qualities for leaders, leaders rated their proficiency in these areas between 61 percent and 73 percent--barely passing.

That's a problem, since researchers found that strong leadership can increase the successful implementation of business strategies by 22 percent. In addition, organizations that do a good job of developing their leaders and of conducting succession planning have higher returns on equity and profit margins. DDI's senior vice president, Rich Wellins, says, "Companies that are worried about their future profitability should be just as worried about the future of their leadership."

Paul Bernthal, manager of DDI's Center for Applied Behavioral Research and co-author of the study, says many leaders know they lack necessary skills. "We're not doing as well as we'd like,' they say, 'but nobody's helping us.'" Only half the leaders surveyed are satisfied with their organization's leadership development opportunities.

Training is the most common leader development practice--

85 percent of HR professionals reported using formal workshops--
but only 42 percent of leaders found training workshops "highly effective."

More effective, they said, is working on special projects or assignments and getting help from mentors or personal coaches.

Although two-thirds of organizations believe it will be increasingly difficult to find qualified leaders to replace retiring baby boomers, only about half of them have a succession plan. "If nobody does succession management," says Bernthal, "eventually companies will be looking at each other to steal each other's leaders. That's not going to work. It's wiser," he says, "to look within and develop internal candidates."

Leader Qualities:
Importance and Proficiency (HR professionals rated importance; leaders rated proficiency)

Skill level Importance
(% proficient) (% critical)

Passion for results 73 73
Brings out the best in people 61 65
Adaptability 68 60
Authenticity 68 55
Culture fit 72 53
Conceptual thinking 63 47



Source: DDI. Note: Table made from bar graph.
COPYRIGHT 2006 Society for Human Resource Management

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