Leadership Capacity: Creating Leadership Capability that Matches Your Strategy

Organisations will often create strategic plans with the aim to seize opportunities that align with their vision. The results, however, are not always as intended.

Mckinsey’s Tsun-yan, Hsieh and Sara Yik argued that many organisations fall short of their strategic aspirations due to leadership gaps. These gaps can lead to capability shortcomings and make it challenging to seize strategic objectives.

Strategy in itself is impacted by many variables and is often executed in environments of uncertainty. This can bring about ambiguous outcomes. To combat this and ensure success, top-performing corporations keep the dangers of mismatched capabilities, poor asset configurations, and inadequate execution under close watch in order to mitigate the failure of strategic objectives. Where companies tend to lose sight, however, is in recognising leadership capacity as a lever and starting point of strategy implementation.

I would describe having leadership capacity as the following:

The broad-based and skilful involvement and development of leaders throughout an organisation that allows the company to capture the imagination of employees, to negotiate real changes and to tackle the inevitable challenges the company faces in today’s environment.

The critical challenge is to develop leaders who understand the shared vision of the organisation, full scope of the work and are able to achieve these. Leaders make an organisation’s strategy come true, as Shirley Keith (Founding Director of CDL Insight Consulting Ltd.) suggests, “leaders determine the success of a business: if they fail, then the whole business fails too. It’s critical for a business to have strong leaders, and that is why leadership development is essential,” leadership development: building strong leaders.

When a new strategic initiative is launched without pre-determining your employees’ leadership capacity, executives will often try to fill the gaps themselves. This can start off as fulfilling a variety of additional responsibilities and lead to the executives having less time to perform their day-to-day tasks.

Prolonging this then results in an overall drop in the effectiveness of your leaders and a decline in the development of younger leaders. This becomes even more of an issue when senior leaders begin moving on to retirement and leave an even wider gap in the leadership capacity within the organisation.

When succession planning, the development of leaders should not be a periodic investment, but instead, a proactive and systematic endeavour to ensure capability through all levels of the company. Identifying shortcomings to accommodate the organisation’s overall objectives and the continuous development of leadership capability to match strategic intentions should therefore be a priority for talent managers.

Below I will describe some high level ideas to start the thinking process of how organisations can be better prepared for future leadership capacity demands and why a strong and continuous development programme should be incorporated.

Provide experiential learning opportunities

In the short run, an effective way to develop talent is via experiential learning. Giving people assignments that allow them to further develop themselves and gain job experience is both effective and will help mitigate capacity shortage. The assignments may be beyond their current skillset, but this is one of the most effective ways to develop future leaders. To get started, talent managers should identify and match assignments that will be challenging but are still within reach of the employee’s skill level. Improving performance management sessions and holding these regularly will help to identify their talents and skills.

Create Leaders at every level of your business

Senior leaders are at the head of formulation of strategy, change management, leadership coaching and outcome delivery on the journey toward the intended outcome. That being said, preparing individual employees to become better at communication, more responsible and effective in building high performing teams and improving motivation will be of great benefit in the future. This will also foster fundamental skills that can bridge the gap between executive leaders and mid-level managers.

Position and nurture people’s capabilities

Nurture people towards specific roles 12 to 24 months ahead of time. Technical skills are often well taken care of, but cultivating the soft skills needed to become an effective leader are equally as important. Ensure that skills such as managing stakeholders and people are equally developed. Tomorrow’s leaders need an array of skills that do not stop at simply managing teams. Market dynamics are constantly changing and with them, the capabilities that are necessary to ensure business performance. Adaptability, change, innovation and the anticipation of the unexpected are topics central to changing environments and need to be developed as internal capabilities today.

It seems obvious that continuous attention to leadership capacity will future proof organisations by up-skilling the right people so that they can formulate and execute strategic plans. Development efforts should be intentional and made a part of the organisation’s culture every step of the way. The key to success is to understand the vision of the company and identify said capacity gaps as early as possible. If your company is not growing, then it is slowly dying! A shortage of leaders has been identified as one of the biggest obstacles to company growth.

In order to maximise company growth, the right leaders with the right capabilities need to be developed. Therefore, position capabilities in such way that long-term strategic objective demands can be met. This can be accomplished by conceptualising the capacity gaps of future objectives and then creating a clear development plan for the success of the strategy and delivery of your company’s business model. This will include measuring and improving development processes and benchmarking these against strategic priorities. It will not only enable the organisation to track capacity building efforts, but also will be more likely to achieve senior buy-in.

What are some of your organisation’s capability needs? How will you develop these and measure their value in terms of organisational and individual performance?

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