Making the most of our leaders

By VICKI JAYNE

In any complex and fast-paced business environment the step up to chief executive officer is steep and the landing, once you are there, slippery.

One British study estimates four in 10 senior leaders fail within 18 months in the job.

The high levels of CEO movement in major international companies is reflected in New Zealand where, a survey by search company Sheffield shows, two-thirds of CEOs have held their position for no more than five years.

While some move on or up, others trip up, often because the challenge of leadership brings out character traits best left under wraps. Personal arrogance and insensitivity, for starters.

Having successfully scaled the corporate hierarchy, some managers mistakenly believe they now know everything, and stop listening to suggestions from the ranks.

Gaps in leadership qualities tend to show up most in high-stress situations, says Justine Winter, a senior consultant with Sheffield, who has specialised in leadership and succession planning.

"You get people using their personality to overpower others," she says. "They do things their own way and stop listening to anyone else. I've heard stories of managers using office equipment as missiles when they get frustrated - not a particularly productive way to behave."

Behaviour like that can be attributed to inadequate EQ (emotional quotient), she says.

Some senior managers are not aware of the impact they have on others because they're not in tune with their own emotions or those of anyone else.

Gaps in leadership competency, if not recognised and addressed, lead to career derailment.

Arrogance is one of four most common CEO derailers identified by Development Dimensions International, a global consultancy specialising in building leadership capacity.

The other three are: risk aversion (reluctance to take necessary business risk), an overly controlling leadership style, and reluctance to deal with difficult people issues.

Those are the top derailers in New Zealand, too, agrees Winter.

"They are key factors. One of the things I see quite a lot is a lack of communication which comes back to a form of arrogance.

"People are unwilling to share a problem because they believe they can solve it themselves. Or they don't involve others in decision-making because they want to retain all the control.

"Problems tend to become evident when someone is promoted to a role they are ill-equipped to handle," she says.

"They might not know enough about how the business works in terms of systems and processes. Another derailer is lack of job experience - they lack the strategic nous to lead large teams through change, for instance."

Job challenges, organisational knowledge, leadership competencies and personal attributes are all potential derailment pressure points.

Winter says some CEOs who find themselves out of their depth retreat behind their office door and stop communicating.

So, how to prevent derailment?

Behaviours are not easy to change, says Winter.

"It's not going to happen unless you know about it and you want to change it. It's a bit like people with addiction problems. Until they admit they're an addict, nothing will happen."

Organisational health checks such as 360-degree feedback on individual performance from workmates help to identify gaps in leadership competencies but - a Catch 22 situation - are least likely to be introduced in a work culture that needs them.

And it can get lonely at the top. Coping with negative feedback is no less difficult because you are the head honcho. Instead of being a catalyst for change, criticism could prompt a defensive retreat.

That, says Winter, is where the concept of coaches or mentors becomes really important, providing "someone you can trust who is a credible source of information, someone you can rely on to give you balanced feedback. That is even more critical when you're moving into senior organisational roles".

She suggests that anyone in a senior role who does not have that sort of person around should try to find one. "Whether or not it is someone on the board or someone external to the organisation, having someone who can take an objective approach and challenge you to do something about problem areas is very important."

There is recognition, too, that building leadership strengths within a company ensures ongoing success.

But a recent Sheffield survey of businesses which probed succession management and leadership bench strength identified concern about the shortage of potential leaders, says Winter. It is a worldwide crisis that is going to make buying in relevant skills harder and more expensive.

Besides, there are pitfalls in imported leaders short on company comprehension. And promoting people to positions for which they are ill-prepared is a sure recipe for executive derailment.

The alternative is for firms to "grow" their future executives.

"Companies need to think hard about where they are going, what kind of leadership they'll need to get there and what they can do to develop those leaders so they'll be equipped to handle future challenges.

"Knowing people's strengths and gaps is the key to preventing derailment."

* vjayne@iconz.co.nz