Leadership

PERSPECTIVE

Last year, we identified a new leadership framework to replace traditional philosophies. We also demonstrated how organisations and leaders who use it achieve superior results by connecting employees to purpose, accomplishment, and one another. This year, we focus our attention on how organisations can develop the best leaders. It requires a fundamental shift that starts with expanding the definition of leader to include all employees and providing them greater autonomy and opportunity—broadening access to leadership development so that every employee can grow. Because when you improve the odds for individual success, the chance of business success is even greater.

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INTRODUCTION

Business leaders of the future will guide, mentor, and inspire the most diverse and dispersed workforce in history. And it won’t be easy, to say the least. Over just the next decade, leaders will face the challenges of accelerating technology, a new generation of coworkers, and still-unknown consequences of the pandemic. To succeed, they will need to be adaptable, forward-thinking, and, as we introduced in last year’s report, modern.

Modern leaders are an effective, progressive, emotionally intelligent species who reject the traditional leadership model of commanding, evaluating, and gatekeeping. Instead, they focus on coaching, developing, and empowering their people to do great work. These leaders connect the work to a greater sense of purpose, facilitate collaboration and inclusion, openly share information, and show appreciation. They also know how to combine the skills of a diverse pool of talent and create magnificent results from the mix. Organisations and teams with modern leaders are much more likely to have thriving cultures with higher engagement, retention, and employee Net Promoter Scores.

Regrettably, modern leaders are rare. A survey of CEOs by Fortune found only 7% of CEOs think their company is building effective global leaders.¹ Another survey found only 21% of employees believe their managers effectively lead them.²

Organisations must develop their future modern leaders now by taking a new approach. In fact, our research suggests organisations should train and empower every employee—whether they directly manage people or not—to view themselves as a leader.

MODERN LEADERSHIP INDEX

Modern leaders act much more like mentors than bosses, and they care deeply about the growth of the people who report to them. They excel at connecting employees to purpose, accomplishment, and one another. This year, we created an index to measure modern leadership. We found that while 64% of leaders qualify as average, only 17% are bona fide modern leaders. Of the remainder, it’s important to note that any leader who fails to connect employees to purpose, accomplishment, and one another isn’t just metaphorically treading water—they’re negatively impacting employee experiences, their culture, and business outcomes.

Figure 7. MODERN LEADERSHIP INDEX
The three key connections leaders create for employees.

“Management is about arranging and telling. Leadership is about nurturing and enhancing.”
—TOM PETERS, AUTHOR, IN SEARCH OF EXCELLENCE

Connection to purpose

Connection to purpose at work is important, particularly during challenging times. When employees struggle to find meaning and direction in a world disrupted by crisis, their organisation’s purpose gives them an invaluable lifeline. Purpose inspires individuals to see the why in their work and collaborate with others to find a common way forward. Modern leaders help employees understand the organisation’s purpose and their place in it.

Modern leaders also excel at helping employees see the importance of their work relative to the purpose. This entails understanding their employees’ jobs, so they can articulate the impact of contributions in ways that are meaningful to employees. We found 60% of leaders connect the purpose of employees’ work to what employees value, but fewer than half (44%) of leaders completely understand what their employees do. This discrepancy leads to much poorer cultural and business outcomes.

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Connection to accomplishment

Modern leaders regularly communicate what success looks like, appreciate their employees when they achieve it, and make others aware of their employees’ accomplishments.

Currently, 62% of leaders communicate what success looks like and 52% make others aware of their employees’ success. Only 57% of employees feel appreciated by their leaders. And leaders who do not connect their employees to accomplishment see diminished cultural and business outcomes.

Connection to one another

Instead of acting as gatekeepers (or even barriers) to information and relationships, modern leaders function as links. They are invested enough in the success of their employees to encourage collaboration both in and outside their teams. They oppose silos and introduce people who can help each other succeed, which also fosters a sense of belonging.

Our research shows only about half (52%) of leaders introduce their employees to potential mentors, and only slightly more (56%) encourage employees to collaborate outside their teams. Connecting employees to one another has an enormous impact on feelings of inclusion. Whether intentional or not, when leaders don’t make an effort to connect employees, employees perceive the leader doesn’t care about them and doesn’t want to help them feel included in the organisation. This, predictably, has cultural consequences.

Modern leadership requires work in all three areas of the index. We found only 35% of leaders connect their employees to purpose, 36% connect employees to accomplishment, and 38% connect their employees to one another.

“The essential work of a conductor has never really been about the exercise of authority. Conducting is really about the creation of a culture of responsibility, of respect, of musical and social awareness, and of listening. Connecting is a metaphor, not for absolute power but for shared experience, for collaboration, for listening.”
—TOM SERVICE, AUTHOR, MUSIC AS ALCHEMY: JOURNEYS WITH GREAT CONDUCTORS AND THEIR ORCHESTRAS

RECOGNITION IS A POWERFUL TOOL FOR CONNECTION

In situations where inclusion and connection are critically important (like now), leaders play a major role in helping employees feel seen by both leadership and their peers. And in organisations where diversity is high, recognition is a great way to showcase how everyone can work and succeed together.

Recognition is such a valuable tool because it can improve all three areas of modern leadership. Leaders who recognise their employees’ accomplishments connect them to:

Purpose—by affirming how great work contributes to the organisational purpose

Accomplishment—by helping employees feel appreciated and motivated to continue to do great work

One another—by ensuring employees are seen, feel they belong, and know why

Leaders can maximise the power of recognition by doing it frequently, making it personal, and applying it to everyday efforts, not just major achievements. Some leaders believe the more recognition they give, the less meaningful it will become. The data would disagree. As long as it’s genuine and sincere, more recognition is always better than not enough. When done right, recognition dramatically increases the odds of connecting employees to purpose, accomplishment, and one another.

recognising effectively also impacts cultural measures:

“It’s important to understand the value that each of your individual employees is bringing to the table and appreciate who they are as a person, both the impact they make and the character traits that contribute to the diversity and success of your teams.”
—SAMANTHA ELLIOT, TOTAL REWARDS PROGRAMS LEAD, BASF

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THE FUTURE OF LEADERSHIP: EVERY EMPLOYEE IS A LEADER

Most modern leaders don’t arrive at organisations with their abilities to lead. Nor do they find and practice their skills instinctively. On the contrary, they are the product of cultures that have integrated leadership development and responsibilities into everyday organisational life, where everyone from executives to individual contributors know and live common leadership principles, and where leadership development is open to and expected from all employees. Modern leaders develop in cultures that believe every employee is a leader.

This belief requires every employee to take ownership of their work, projects, and sphere of influence. It allows every employee to develop leadership skills, and the organisation benefits from improved cultural and business outcomes and a strong pipeline of leaders as a result. Our research shows the organisations most successful at developing modern leaders don’t consider leadership to be an exclusive club—they see and cultivate the potential in everyone.

We also see modern leaders are concentrated (81%) in organisations where all employees are considered part of a shared leadership responsibility, even if they don’t have people who report to them.

“Everyone is a leader because everyone influences someone.”
—JOHN C. MAXWELL, AUTHOR, LEADERSHIP COACH, AND SPEAKER

RETHINKING LEADERSHIP DEVELOPMENT

The paradigm “every employee is a leader” can guide how organisations rethink, develop, and implement leadership development.

A study by McKinsey found organisations that had the most effective leadership development programs were 6–7x more likely to extend development opportunities across the organisation.¹¹ Our research indicates organisations should ensure every employee has access—and encouragement—to develop leadership skills. In fact, leadership development should saturate organisational culture with formal training opportunities.

Finally, leadership development must not be an empty gesture—it has to advance peoples’ careers and it needs to be continuous. Leaders can learn concepts in courses, but if they aren’t reminded of, exposed to, and practicing what they learn, they will lose 40–80% of it.¹²

To fully synthesize leadership development into the culture, it must be inclusive, abundant, and meaningful.

“I didn’t want the 23-year-old to be afraid to speak up in a meeting because they weren’t a vice president, and I didn’t want people’s egos to get in the way of doing great work.”
—ED MITZEN, CEO, FINGERPAINT MARKETING

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RECOMMENDATIONS & IMPACT

To fully integrate leadership development, organisations should adopt the following ideas:

1. Be inclusive by offering leadership development to all

Josh Bersin, global analyst at Bersin by Deloitte, argues that the model of “getting people ready for leadership” is outdated.¹³ Traditionally, leadership development has been offered to only “high potential” employees or current leaders. And currently, less than half (49%) of organisations offer leadership training to all employees. Of employees who have not participated in their organisation’s leadership programs, the most commonly cited reason is they were not invited (36%).

How organisations approach who gets leadership training has a significant impact on how employees view leadership at their company.

Organisations who give individual contributors access to leadership training have significantly higher positive cultural and business outcomes compared to those that do not. This increases even more when individual contributors actually participate in leadership development opportunities and when it’s common knowledge that every employee can participate.

Not surprisingly, organisations that offer leadership development opportunities to all employees see an increase in inclusion and a decrease in exclusion. They have a higher likelihood of employees agreeing that their leaders have diverse backgrounds and identities, further improving diversity and inclusion efforts.

“You don’t have to hold a position in order to be a leader.”
—HENRY FORD, FOUNDER OF THE FORD MOTOR COMPANY

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2. Provide plenty of opportunities for development

Giving all employees the chance to learn leadership skills is key to developing modern leaders. While it’s not sufficient in itself, it appears to be a necessary element given the density of modern leaders at organisations that do. Other supportive data includes the organisational probability of having modern leadership. When organisations had at least one type of leadership development opportunity, the odds increased 328%. And where there were multiple opportunities, the increase grew with them:

The definition of leadership development opportunities isn’t limited to formal training classes. Much of the development happens when people have new experiences in the workplace. Deloitte’s research finds exposure is one of the most important factors in leadership development.¹⁵ Granting employees the opportunity to lead in actual situations can help them develop skills in a memorable way.

Organisations that encourage employees to express leadership behaviours also have a higher concentration of modern leaders. Workers in these places have more autonomy, lead special projects, and provide feedback to peers. By supporting employees in continually practicing and perfecting leadership skills, organisations provide ongoing development and reinforce the idea that every employee is a leader.

3. Bake leadership development into the culture

Existing leaders play a pivotal role in developing future leaders by making the development opportunities more meaningful and integrating them into the organisation’s culture. Specific suggestions for leaders include:

• Model the principles taught in leadership development
• Participate in leadership development opportunities
• Open opportunities for advancement
• Make the time to keep up with new leadership thoughts and ideas
• Seek out feedback and constructive criticism

When senior leaders model the practices and principles taught in leadership programs, more employees see what good leadership looks like and adopt the right behaviours (instead of developing bad ones or stumbling through trial and error). According to the data, organisations with senior leaders who model modern leadership practices have 226% greater odds of having modern leaders. These organisations also have 6x greater odds of having an above-average score for opportunity, 5x greater odds of having an above-average score for success, and 5x greater odds of having an above-average engagement score.

Of course, that’s not the end of the road. Employees need to see that the reward is worth the work and that participating in leadership development leads to greater advancement opportunities. Advancement demonstrates that the organisation is serious about developing and retaining its people by filling leadership positions from within. And when this happens, culture scores climb sharply:

“Leadership and learning are indispensable to each other.”
—JOHN F. KENNEDY, US PRESIDENT

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CONCLUSION

Over the next decade, organisations must adopt a new approach to leadership development if they want to create modern leaders who connect employees to purpose, accomplishment, and one another. The approach involves creating leadership development opportunities throughout the employee experience and melding the expectation that “all employees are leaders” into the culture.

Recognition can be both a point of connection for modern leaders to leverage, as well as a way for organisations to reward individual contributors who exhibit modern leadership traits. This reinforces modern leadership practices that improve the employee experience.

Modern leaders will embrace new technology, build a more inclusive workplace, be the mentors Gen Z is desperately searching for, and help see companies through challenging times. They will bring organisations together by unifying diverse employees in a common purpose. And they will appreciate and blend unique skillsets that deliver unrivaled results. In short, modern leaders are compulsory for organisations to thrive in the next decade.

LEADERSHIP—4 KEY TAKEAWAYS

Modern leaders connect employees to three things: purpose, accomplishment, and each other.

Recognition is a powerful tool modern leaders use to connect employees.

Modern leaders develop in organisations where every employee acts as a leader.

Leadership development opportunities should be inclusive, abundant, and meaningful.

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