Human Resources: Executive Summary:Leadership

Today's leaders face complex challenges, mounting scrutiny, flatter organizations and a future that promises more of each. Those who aspire to leadership roles will need to possess a unique combination of intellectual and emotional strengths.

The leadership model of the future is predicted to have fewer managers, fewer levels and a more collaborative environment, according to expert forecasters Marvin J. Cetron and Owen Davies. Already, there is evidence of this in Fortune 100 companies, where the proportion of executives in both the top and middle tiers dropped about five percentage points between 1980 and 2001, while the proportion in the bottom tier rose from 7.1% to 17.8%, according to a study of each firm's top 10 executives.

In addition to this changing structure, the business environment is demanding higher levels of ethical behavior, accountability and strategy execution. Characteristics that will help leaders succeed in such an environment are being described with terms such as courage, confidence and spirituality. While left-brain competencies are often called into play in this fast-paced global environment, it may well be the emotionally based right- brain competencies such as intuition and reflection that give the edge to future leaders.

The profile of a business leader is changing, too. Today's leaders are younger, more educated and move faster than ever, especially female leaders. And international experience is more common, with the proportion of chief executives in the 100 largest U.S. firms who have worked abroad increasing from 21% in 2002 to 33% in 2004.

These executives are facing unprecedented pressures. Global competition, limited resources and an increased emphasis on delivering results are all contributing to the rising focus on developing leaders. In fact, 65% of the 500 respondents to a 2004 Right Management survey placed leadership development as one of the top five focal points for corporate strategy.

Organizations are responding by moving leadership development programs from the classroom to actual business situations, through techniques such as action learning, communities of practice, learning teams, mentoring and coaching. But that may not be enough. Many firms have turned to external executive coaches to identify and develop personal attributes. In the U.S. alone, spending on coaching is estimated to be as much as $1 billion annually.

The focus on leadership development is important for another reason. The Employment Policy Foundation estimates a shortage of 4.3 million workers by 2011, adding a sense of urgency to the need for developing new leadership talent. Organizations have already begun looking outside their companies and, indeed, outside their industries for leadership talent.

Some firms, like Infosys, are stepping up efforts to groom new leaders from within to feed their succession pipeline. Infosys has a three-tier model that calls for mentoring to cascade down from board members to business unit leaders to high-potential employees. The academic world recognizes the need as well. Villanova University developed its Leadership Challenge program - focusing on corporate ethics, social responsibility, leadership, teamwork and communication - as a required MBA component.

And PricewaterhouseCoopers (PwC) created a voluntary leadership development program for hi-pos nominated by senior leaders. PwC says their Genesis Park program encourages innovation, collaboration and multinational problem-solving and that graduates demonstrate stronger presence, inquisitiveness and willingness to question the status quo. Rich Baird, a global human capital leader, said, "Do not underestimate the capabilities, creativity and change-management maturity that younger people can bring if you set them loose and let them help formulate their own vision of what your organization ought to be."

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The Institute for Corporate Productivity (i4cp, inc.) improves corporate productivity through a combination of research, community, tools and technology focused on the management of human capital. With more than 100 leading organizations as members, including many of the best-known companies in the world, i4cp draws upon one of the industry’s largest and most-experienced research teams and Executives-in-Residence to produce more than 10,000 pages annually of rapid, reliable and respected research and analysis surrounding all facets of the management of people in organizations. Additionally, i4cp identifies and analyzes the upcoming major issues and future trends that are expected to influence workforce productivity and provides member clients with tools and technology to execute leading-edge strategies and "next" practices on these issues and trends. i4cp is a for-profit company with offices in St. Petersburg, Florida.