The APQC Blog

The Leadership Deficit: The Problem, Its Causes, and Solutions

Only 8 percent of respondents are performing the number one solution for overcoming leadership skills gap: developing leadership capabilities in ALL employees

According to a new study from APQC, nearly 80 percent of respondents indicate that current business challenges require a different leadership style, but only 21 percent said that their organization’s leadership practices are very effective, thus indicating a broad inability to build new leadership skills. Further, 46 percent report that their organization places little or no priority on leadership development.  As outlined in APQC’s report—The Leadership Deficit—solutions for overcoming these challenges are not easy but may start with something as simple as developing necessary leadership capabilities in ALL employees, not just high performers.

Sponsored by THEaster Consulting, the research garnered survey responses from 547 professionals. “In this study, we found that leadership deficiencies are big and there are many of them, largely because leadership development is underfunded, outdated, and resisted,” said Elissa Tucker, SPHR and Human Capital Management research program manager for APQC.  “These findings suggest that organizations may need to adopt a number of cultural changes and revise human resource policies and practices to help alleviate the leadership skills shortage.  From new compensation models, to how and for whom leadership training is conducted, our study provides a number of potential solutions for what is seen as a growing business challenge.”

The Problem

APQC’s study identified the top leadership skills organizations need to succeed, and then what leadership skills employees currently possess.  When skills needed versus skills employees possess were compared, APQC identified the following as the top five leadership skill deficiencies:

  1. strategic planning
  2. change management
  3. knowledge sharing
  4. listening
  5. emotional intelligence

What’s Driving the Gap?

To identify the key contributing factors to the leadership skills shortage, participants were asked how much various leadership and business trends described their organizations.  APQC then investigated the relationship between the different leadership trends and the total leadership skills gap.  The top four leadership trends significantly associated with the largest leadership skills gaps are:

  • selection, development, and reward practices encourage an outdated leadership style
  • leaders are resistant to changing their leadership styles
  • organizations are underinvesting in leadership development
  • current business challenges require a different leadership style.

APQC conducted the same analysis with business trends impacting organizations, and found the following four trends to be associated with the largest skills gaps:

  • unpredictable events
  • reduced employee tenure
  • aging work force
  • emergence of Generation Y/Millennial work force.

Potential Solutions

Survey participants rated how well a number of leadership practices described their organizations, after which APQC examined whether each practice is associated with a larger or smaller leadership gap.  The results indicate that the top four practices associated with the smallest skills gaps are:

  • leadership capabilities are developed in all employees;
  • a leadership competency model is used to select and develop leaders;
  • employees selected as having leadership potential take part in a formal leadership development program; and
  • compensation is based on performance.

One leadership practice was significantly associated with a larger skills gap—having a significant difference between leader compensation and compensation of other employees.

“These results suggest that, contrary to common practice, leadership capabilities should be developed in all employees,” said Tucker.  “Doing so provides a larger pool from which to choose candidates for formal, high-potential leadership development programs. More importantly, organizations that go a step further to establish work cultures and practices that empower all employees to act as leaders can respond more quickly and precisely to unpredictable events.  Other practical measures, such as using leadership competency models to guide development efforts and aligning monetary incentives with organizational strategy, will help encourage the right behaviors in leaders and the best outcomes for their organizations.”

“Our clients at THEaster Consulting come to us seeking innovative, informed solutions to the toughest human resource management challenges, and The Leadership Deficit report from APQC provides us with actionable data to build support for cultivating leaders who proactively address the needs of today’s workforce, not just continue doing what they’ve always done,” commented Terri Hartwell Easter, principal at THEaster Consulting. “The reality is that present-day business challenges require a sustained investment in leadership development, and organizations who take the lead on leadership are the ones that will come out ahead now and in the future.”  

A survey synopsis as well as an infographic are available on the APQC website. Have any questions about the report? Tweet me or comment below!

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