Chemistry has seen an unprecedented demand for companies to better understand their leaders throughout the pandemic, highlighting how leadership has metamorphosed into a complex beast. How will companies shift how they support, develop and recruit leaders, to avoid the current talent crisis making its mark at the highest level?
By MaryLou Costa
From making important decisions via endless video calls, to mentoring, developing and inspiring teams from behind a screen – while simultaneously navigating an ongoing crisis and one of the biggest changes to how we work – the pandemic has given business leaders more to juggle than ever.
It’s precipitated the Great Resignation, of course, which saw a record one million Britons change jobs between July and September 2021. In the US, meanwhile, a record 4.5 million people quit as job openings reached an all time high. With the narrative focusing largely on employees across the wider workforce, though, the effects on senior managers, directors and the C-suite are potentially being overlooked.
Yet in a recent HiBob and Fiverr study of 1,000 US-based HR leaders, 46% say that managers and directors are leaving their companies more so than entry-level employees, underlining how the Great Resignation is unfolding across the highest corporate ranks.
34.5% of the 200 senior UK investment, law, private equity and consulting professionals surveyed by M&A tech firm Datasite say they’re prioritising family time for 2022. While 17% of respondents will be looking for their next job opportunity, an equal number plan to focus on accelerating their retirement plans – leaving businesses facing not just a labour shortage, but severe talent gaps in the most crucial areas.
It’s plain to see, then, why demand for a better understanding of leaders has “gone through the roof”, according to Roger Philby, founder of talent strategy consultancy The Chemistry Group. He and his team have focused more on senior leadership in the past 12 months than in the previous four years, underlining how complex leadership roles and responsibilities have now become.
Dissolving the disconnection that’s translated to friction
Two key trends converged during the pandemic – “servant leadership”, dictating that leaders must always put their teams first, and the lack of connection felt across teams as remote working became widely adopted, Chemistry insights show. Personal growth and development at leadership level, as a result, has “fallen off a cliff”, according to Philby. Companies must quickly double down on their leaders to prevent another crisis emerging, he warns, as how the pandemic has distanced leaders from their organisation is showing up in engagement scores.
“Every board in every company’s number one focus right now should be: ‘how are the executives that are running this firm?’” Philby stresses. “They should literally be sitting down and going, ‘how are you?’ When the person says, ‘I’m fine’, they need to say, ‘no, really.’”
Leadership teams have turned to Chemistry as disconnection has translated to friction, observes Harriet Western-Williams, organisational psychologist and operating partner at Chemistry. Harnessing the data from psychometric testing of individuals within leadership teams has resulted in them functioning with a greater level of awareness and cohesion.
Western-Williams gives the example of a building society Chemistry has been working with. Their challenge was two-fold: new executive leaders remotely joining an already established leadership team – one that was so embedded in the organisation they had begun to assimilate into the culture and didn’t truly know each other.
“They were struggling to understand each other, why they were making decisions, why they were doing things in a certain way. We profiled everyone and have taken the team and individuals through the psychometric data to know what drives their behaviour and choices,” Western-Williams recalls.
Chemistry’s testing looks at 30 different traits, then measures an individual’s motivation and what energises them at work. They also conduct a behavioural interview, talking through a recent project, and couple this with an understanding of their intellect, personality and motivations to understand how and why someone behaves in a certain way. Importantly, they can also detect a misalignment between what they say and how they present.
“That might be because they’re in an environment or culture that is forcing them to behave in a different way. Then it’s really about understanding who they want to be as a leader, or as a group, what they’re trying to achieve strategically and personally, and then determining which of the behaviours they need to focus on the most,” Western-Williams explains.
Honing in on priorities is paramount, she adds, as cognitive and energetic limitations mean it’s not possible for one person to index highly in every behaviour and attribute.
“It’s about picking the behaviours that are going to help you get to where you need to, and also having an understanding or acceptance that there are some behaviours you might just not naturally be very good at, so it might not be worth trying to become amazing at them, because your intrinsic preferences, your personality, your motivations, might not be aligned to them,” Western-Williams reasons.
“For example, if a leader is really low on the trait of ‘care’, they’re probably going to struggle with creating empathy with people. So they should be surrounding themselves with team members who are better at doing that. It can be learned, but it’s going to be harder for them. It’s about weighing up whether the effort is worth the reward and outcome.”
Building diversity beyond demographics
Ensuring diversity, not just in demographics, but in attributes and ways of thinking, means leadership teams can complement each other to ensure fewer blind spots, agrees Laura Brennand-Carter, Chemistry’s client partner and US office head. But one thing that is more obviously lacking across the board is in communications skills, specifically, the capability for storytelling which can help unite teams.
“It’s one thing to come in and be disruptive with new ideas, but it’s another to actually be able to inspire people and help them connect with the mission you’re trying to deliver on. Helping people truly understand their contribution creates followership, and it seems like there is a gap here,” Brennand-Carter outlines.
“You’ve got people who are super smart, bringing in innovation and their ability to work that hard, and think so logically, means they can be kind of disconnected with some of the softer side of leadership. I’ve seen a number of clients who are struggling with this.”
And this issue is impacting how employees overall feel about their jobs and their companies, playing a deciding factor in whether to stay or go. 80% of the 2,500 UK and US employees employee engagement platform Workvivo surveyed feel less connected to their company culture since the onset of the pandemic. 57% say feeling a sense of belonging and part of a greater purpose would make them stay longer at their company, while on the flip side, 53% feel a company with an inspiring mission and purpose would convince them to move.
Making purpose a reality
Few firms have succeeded at conveying a genuine purpose that teams can buy into, notes Matthew Neale, Chemistry’s director of client services. More often than not, the authenticity companies strive for remains skin deep, with a weak level of investment across an organisation, Neale assesses.
“Somebody recently said to me, ‘it now feels too dangerous to go to market, either customers or employees, without an authentic purpose at your side, whereas five years ago, you didn’t have to do that. The purpose of a company like GE, for example, was to be first and second in each industry in which it competed. It didn’t need a purpose beyond that,” he says.
“The drift towards an organisation that has a purpose, usually social or community-led, as a thing it’s trying to do in the world, feels distinct and more engaging than the old, ‘we have a mission statement and values’ strategy.
“I do believe people who say something tend to believe it, but has it really guided how they deal with their broader stakeholders and community? I’ve not really seen that yet.”
The impact of a leader’s ability to connect the wider workforce through purpose shouldn’t be underestimated. 62% of US employees talent marketplace Gloat surveyed believe it’s very important for their work to align with their values, passions, and interests. Yet 54% feel their employer doesn’t take their future interests and aspirations into account enough.
“Never has it been more important to understand the people that you have – what they care about, what they don’t care about, what energises and de-energises them, because energy, whether we like it or not, is something people are really focusing on now,” Brennand-Carter puts forward.
“Great people are turning down very well-paid jobs. In the banking world, for example, where people have been paid eye watering amounts of money, they’re now saying, ‘I’ll take my mental health over $3 million’.”
Indeed, when mental health platform Unmind recently surveyed 1,500 HR decision makers, it found that 75% call out the C-suite, senior leadership and people managers as the level of business where mental health awareness needs the most improvement.
As Western-Williams comments, leaders must recognise the critical role they play in impacting people’s mental health and supporting them with that, which makes a difference, too, on satisfaction and loyalty. When presentation platform Pitch analysed 2,000 US and UK employees to drill down into what makes workers thrive, 100% of those classed as thriving said the right leadership were in charge at their company, compared with 55% of those deemed to not be thriving.
A call for dedicated leadership development
Philby’s appraisal of the current situation is that the lack of support for the behavioural change required to evolve from manager to leader has left effective leadership in many businesses simply “to chance”. Leaders have been left to fend for themselves amongst the growing pile of demands. It’s time, then, for businesses to rethink how they support and develop senior leaders, Philby warns.
“Having leaders be more empathetic with their people, and in how they manage virtual teams, is all great, but that’s just putting more demands on a leader who is actually going through their own sh*t,” he surmises.
“Organisations don’t have a systematic approach to the development of their leaders. They’ll get them a coach, but how do they know whether that’s having an impact on the leader’s development, and whether that’s having an impact on the outcome?
“I think there’s a space for very personalised, individual development of leaders, and then a metric that demonstrates the impact of that development growth on the business outcomes. I can’t see any evidence-based leadership development out there.”
Breaking the cycle of old-school recruitment
The shift required goes beyond just how companies develop leaders, but in how they recruit them too. Companies who want to change their culture but are stuck in a cycle of hiring the same kinds of leaders will inevitably reach a stalemate, as Michael Lock, Chemistry’s chief product officer, has witnessed.
Lock recommends companies define the talent they need, measure the talent they have, then determine how to close that gap with highly selective new hires. These hires should be based on scientific, intuitive and comprehensive measures of who the candidates are as people – and not how they appear on paper, or in an interview.
“If you can understand the leadership protocols you’re trying to build, it’s very easy to take the guesswork out – and the best person for the job is not always going to be the person that you feel most comfortable with,” Lock notes.
“What I’d advocate strongly against doing, which I’ve seen happen time and again, is recruiting people with potential and telling them to be more innovative and better with technology, without adjusting the leadership. The dissonance between what you’re telling people to do and how leaders behave creates enormous stress.”
Culture and values over skills
Culture and values alignment can often be the most telling indicator of the right leader for an organisation, reveals Diarmuid Harvey, Chemistry’s head of science.
“Culture is extremely important to an organisation, as it really frames the entire employee-employer relationship. Younger generations are increasingly sensitive to organisational culture, and the extent to which their values are reflected more broadly in their workplaces or represented by their leaders. Hiring purely for skills means you are ignoring this cultural-values component, and running the risk of a misalignment,” Harvey explains.
“It’s a fundamental aspect of our approach to capture a client’s existing, or desired culture, and utilise a variety of measures at the selection stage that identify individual values to determine how well aligned they are. If you’re basing your hiring decision on limited information that doesn’t account for who someone is, what they value, and how they are likely to behave, then you’ve got a poorly defined hiring practice, which is usually indicative of a poorly defined culture.
“What you’re therefore likely to get are a motley group of individuals who reflect each hiring manager’s own subjective preferences, due to the many cognitive and interpersonal biases we are all susceptible to, who will struggle to coalesce cross-functionally around shared objectives.”
Knowing what an individual values is crucial at leadership level, Harvey adds, because those are the roles that create and manage culture: in terms of maintaining a happy, integrated workforce that is more motivated by what they do than what they’re paid, the responsibility ultimately lies with them.
When organisations can use data to capture what makes their most valuable leaders so successful, and put a laser-sharp lens on what kind of leaders need to be brought in from outside, the business opportunities will be “massive”, as the Chemistry team emphasises – and the way to avoid an impending leadership crisis.
- Managers and directors are leaving their companies more so than entry-level employees
- Chemistry has experienced unprecedented demand for a better understanding of leaders, with the team focused more on senior leadership in the past 12 months than in the previous four years
- Two key trends converged during the pandemic – “servant leadership”, dictating that leaders must always put their teams first, and the lack of connection felt across teams as remote working became widely adopted, Chemistry insights show. Personal growth and development at leadership level, as a result, has “fallen off a cliff”
- It’s time, then, for businesses to rethink how they support and develop senior leaders
- Leadership teams have turned to Chemistry as disconnection has translated to friction. Harnessing data from psychometric testing of individuals within leadership teams has opened up a greater level of group and self awareness, resulting in teams functioning with much more cohesion.
- The shift required goes beyond just how companies develop leaders, but in how they recruit them too. Companies who want to change their culture but are stuck in a cycle of hiring the same kinds of leaders will inevitably reach a stalemate