According to Deloitte's 4Q21 "CFO Signals™" survey, asking Chief Financial Officers from across North America what their top priorities for 2022 are, 31.6% responded that growth was top of mind for the new year – ranking number three on the list. It's worth noting that talent/labor ranked number one at 60.7%. The survey elaborates further, stating that to realize growth, CFOs will emphasize generating more revenue, increasing sales, optimizing the capital structure to finance growth strategies, investing in growth opportunities, and supporting new product launches. Of course, at the root of achieving these outcomes is strong leadership.
As an executive search firm, never before have we seen such a shift in what it means to be a leader – and, more importantly, how successful leaders have evolved to meet the rapidly changing attitudes around work. Getting it 'wrong' runs the risk of massive PR nightmares and significant productivity and profit losses – in an organization of 100 people, staff turnover due to poor leadership (57%) can cost the company upwards of $550,000.
So we got curious about the characteristics of leaders thriving in today's landscape of change and uncertainty – and some of the best determining factors for long-term success and employee retention. From our research, we continued to come across four core leadership themes: leading with kindness isn't negotiable, agile infrastructures are critical to crisis management, and investing in development and innovation is a must.
In November of 2021, a record 4.5 million Americans voluntarily left their jobs. Let us repeat – voluntarily left their jobs. And, 79% of people quit their job due to a lack of appreciation. This transition of power has forced business leaders, keen to retain their talent, to look inward at underlying issues causing employees to pack up and move on.
Compensation and benefits packages are potentially low-hanging fruit to address, with more and more employees prioritizing their well-being and mental health. But, increasingly, leaders who can wholly lean into what their employees need to flourish will "create people-first cultures that take into account the whole human experience above and beyond the workplace."
This matters because failing to lead empathically, without respect, is the quickest way to estrange the very people you are trying to lead and promote internally. Developing the next generation of quality leaders requires existing employees in power to set the tone. Otherwise, you threaten your ability to retain these individuals and ultimately grow as a business.
According to a 2020 Forbes article, below are eight habits of highly empathetic leaders:
With widespread talent shortages across nearly every major industry, leaders who demonstrate the ability to infuse more humanity into their approach will quickly become employers of choice and build long-term sustainable relationships with employees. Still not convinced? Remember this. You won't grow or have the ability to reach organizational goals if you don't have the people you need to get you there.
While growth may be a key priority for you this year, how will you be able to realize long-term, sustainable growth if your business isn't agile enough to adapt to what might come in the future? Successful leaders will recognize that change and uncertainty are inevitable and prioritize building infrastructures and contingency plans to manage said changes. This requires leaders to get organized and start developing roadmaps for various scenarios – now. Do you have the right technology in place? The right talent? The right investment strategies? Answering these questions in the present will be critical to future success. And, your employees will experience a stronger sense of security and purpose alignment as an added benefit.
If you want to grow your organization, one way to do that beyond increasing profitability is to make sure your people are sticking around. And investing in internal mobility, learning and development, succession planning, and leadership development are proactive ways to address the threat of employee turnover. LinkedIn's Global Talent Trends 2021 report shows that employees stay 41% longer at companies that prioritize internal recruiting. Furthermore, 74% of employees feel a lack of development opportunities prevents them from reaching their full potential, 87% of millennials believe that workplace learning and development is essential, and 76% think companies are more attractive if they offer additional skills training. Best-in-class leaders help their employees visualize a place at their organization and craft personalized paths for growth.
As for leadership development, 83% of organizations believe it's crucial to develop leaders at every company level. Yet only 5% of businesses have implemented leadership development at all levels. This statistic reveals a tremendous area of opportunity for organizations to outperform and differentiate themselves from competitors. We already mentioned the importance of specific leadership soft skills above, but these skills aren't always innate – some degree of training may be required.
Instability will potentially be our reality for some time. This requires leaders to embrace change and be prepared to pivot and innovate quickly. Adopting an experimenter's mindset will assist in outperforming competitors and contribute to overall organizational growth. But to innovate effectively requires organizations to foster a culture equipped to do just that. In a forthcoming article on innovative cultures published by HBR, it cites the following four requirements:
To summarize the article slightly, innovative cultures aren't about throwing just anything on the wall and hoping for the best. Instead, they require accountability, discipline, strong management, highly effective communication, skill, and honesty.
The global pandemic, increased awareness around social injustices, climate change, and so on are all massive influencers on the complexity of what it means to be an effective leader today. However, practicing empathy, prioritizing resiliency, investing in development, and fostering a culture that promotes innovation are current leadership trends that will help you realize your growth goals in 2022 and beyond.
If you need support identifying the right executive talent for your business, contact us today!