Organizations today don’t have the leaders they will need tomorrow. Research shows only 27 percent of business units have leaders equipped to handle the future needs of their organization; while 32 percent of HR leaders would replace members of their senior leadership team if they had the chance.
“The problem is not that these leaders are ineffective,” said leadership expert and HR practice leader at CEB Brian Kropp. Kropp deep-dived into the topic of leadership at a recent Harvard Business School Club of Washington, DC Global Networking Night event. “In fact, 82 percent of them are meeting or exceeding their performance objectives. The issue is that these leaders are focused on their own business unit and helping only their teams complete their individual objectives.”
“The leader of the future will need to do more than that – he or she must also be effective at contributing to and leveraging the performance of other teams. This leader, the enterprise leader, can effectively do both of these things, and is the leader organizations need to be successful in the future.”
Why do organizations need enterprise leaders?
“In the past, leaders just needed to focus on the performance of their own business unit, and if every business leader did that, the company would do well. But the nature of work has changed. Today, it is more collaborative, matrixed and inter-connected. Now we need leaders that focus on doing the right thing for the company, not just the right thing for their own business unit.”
“It also makes good financial sense to build enterprise leaders because they have a bigger impact on the financial outcomes of the company. Not only do they improve the revenue growth of their own business unit, but they also impact revenue growth for other business units. Each business unit in an organization can achieve up to a 12 percent increase in revenue growth if all leaders in the company are enterprise leaders.”
But, the enterprise leadership model comes with risks
“Focusing on enterprise leadership is a change in approach for most leaders today – and those types of changes come with some trepidation. Leaders who have an individual focus worry that by focusing on extending their influence to include other teams, they will lose the control they currently have to lead their business successfully. They also don’t know precisely what it means to be an enterprise leader – in fact, only 37 percent of leaders today understand how to productively contribute to their network.”
In order to move leaders in the direction of enterprise leadership you can’t just tell them to do it. Leaders are proud people who have had very successful careers based on accomplishing their individual goals. In order to get leaders to operate differently, companies need to do two things.
There are two steps to creating enterprise leaders
“First, organizations need to help their leaders self-realize they need to change rather than expecting them to change on their own. Second, rather than telling leaders to go to other people for help, companies need to create situations where they can help other people. This approach aligns more effectively with the nature and mindset of leaders.”
How should organizations reward enterprise leaders?
“While changing mindsets is a critical step to creating enterprise leaders, companies also have to reward their leaders for these behaviors. The most important step in this process is clarify the connection between leader contributions and their pay. The most effective way to accomplish this is through shared, horizontal MBOs (management by objectives) across leaders.”
3 Ways Enterprise Leaders Lead
“Enterprise leaders do three key things. First, where individual leaders use peer contributions to improve their business unit, enterprise leaders use and provide contributions to improve the enterprise as a whole. Second, they don’t just delegate work to their team, but they also pull value from them, empowering employees to surface ideas and bring change on their own. Lastly, rather than simply direct their teams in how to accomplish tasks, enterprise leaders facilitate performance by connecting their employees with the people and teams who they need to work with to get the job done.”
Women and millennials are just as likely to be enterprise leaders
“When we look at our data, we find that women and millennials are just as likely to be enterprise leaders as any other leadership segment. Self-reflection is key. Think about what you have accomplished across the last six or 12 months, then list out all of the people that you were dependent on to actually accomplish those results. Once you have gone through that process, most leaders start to realize how collaborative their work has become.”
Learn more about Harvard Business School Club of Washington, DC.