In 1997, Ed Michaels, Helen Handfield-Jones, Beth Axelrod of McKinsey & Company wrote a book entitled: The War For Talent.
The book depicted a battle for talent during the dotcom era.
However, going into 2014, we are in a new era that I have referenced as an unprecedented fight for growth. In meeting with corporate leaders worldwide, there is consensus that the problem of growth – or lack of it – is rapidly becoming the world’s No. 1 problem. Governments and corporate CEOs alike are grappling with the growth question, even if from different perspectives.
At the core of the growth issue is the question of leadership – not the individual superhero CEO or head of state, but the leadership team that collectively demonstrates insight, courage and inventiveness to deliver double-digit growth in single-digit markets. Such leaders are few and far between today. So unlike the talent war of the 1990s and 2000s, which was driven by a lack of supply of all talent, today’s war is all about a lack of supply of the right talent.
The End of an Era – No More Easy Paths to Growth
The mid-1990s to 2007 was a period of growth unusual for its scale and speed. Raising capital was easier and cheaper than any other period in history, globalization created access to new markets and consumers, innovation in technology and financial services took value to new heights and the rise of a middle class drove consumer spending. To grow, all you had to do was show up, and not mess it up.
An entire generation of corporate leaders was shaped during this era of “easy growth.” Now, that era is over, having been replaced by what I admit is the “new normal.”
The New Normal: In “The Post Crisis Era,” Slow Growth and Fast Change
After six years of global economic turmoil, we are now in a post-crisis era. In this era, changed market conditions posed a set of circumstances different from anything in the past. Current challenges could persist for decade, creating a “new normal.”
In this new normal, growth is slow, but change is fast. The challenge for leaders is to create growth opportunities that far outstrip the potential of the global economy. Leaders in the new normal will have to think and act very differently — the differences between “easy growth” and “new normal” conditions are not trivial.
Source: Korn/Ferry client discussions
What This Means for Leadership Talent
The twin threats of slow growth and fast change make the leadership challenge in the new normal much more complicated and nuanced than ever before. Based on our discussions with CEOs, we have identified four shifts that characterize the changing requirements of leadership.
Are Leaders Ready for the New Normal?
Measuring the readiness of leaders to change, adapt and create new growth is not an easy task. Cognitively, it is easy to understand that outsized performance in an easy growth era will not automatically transfer the new normal. Raising awareness and providing clarity around changing expectations however, can go a long way in creating readiness.
We found in our study of outperforming leaders that two leadership constructs define a level of readiness, or reveal the lack of it. These are leadership maturity and learning agility.
Leadership maturity is defined as an individual’s ability to operate effectively at the appropriate level of complexity, ambiguity and scale. Think of maturity as the indicator of a “seasoned executive,” experienced in highly complex situations with the grace and temperament to take difficult leadership challenges in his or her stride. Given the complexity and the un-nerving problems of the new normal, maturity will be a critical differentiator.
Learning agility is defined as an individual’s ability to operate effectively at the appropriate level of disruption, speed and volatility. Think of agility as an indicator of a “fast-learning executive,” someone who knows what to do even when he or she doesn’t know what to do. Plus leaders must have cultural dexterity – the ability to meet customer needs at the exact right time to tap borderless consumers.
Given a fast changing environment in the new normal, agility will be a second critical differentiator.
Taken together, leadership maturity and agility is the best combination of factors to predict readiness to outperform in the new normal. Both can be measured fairly accurately, and benchmarked against leaders in the relevant industry and markets – critical considerations to ensure the pragmatic use of these factors in business. Most importantly, both can be developed over time, giving a clear line of sight to leaders focused on enhancing the ability of their teams to win in the new normal.
Businesses that excel in this gain in the marketplace as (paraphrasing Warren Buffett) the retreating tide exposes the winners and losers of the new normal.