What is expected of leaders-to-be?

A recent report from the Institute of Leadership and Management has highlighted the way large organisations carry out their leadership succession planning. 

The massive pressures on so many organisations to make the best of their talent, to avoid discontinuity from gaps in leadership consistency, expensive (and sometimes less than successful) recruitment and selection processes and the current significant financial strictures particularly on the public sector, mean that succession planning becomes ever more important to organisational sustainability. 

The ILM conducted in-depth interviews with senior HR professionals in predominantly large corporate organisations and consulting firms. This is what they found about the key attributes expected of leaders-to-be:

Leadership traits

Senior HR professionals emphasised a distinct set of personal characteristics that future leaders need to possess. These were principally in the relationship and inter-personal domain - visionary, motivational and inspirational people, emotionally intelligent, trustworthy, natural leaders and communicators, and who are also driven and ambitious.

The ability to motivate, displaying emotional intelligence and being a 'natural' leader were the most important characteristics when recruiting senior leaders.What’s more, future leaders needed to demonstrate a broad mix of all these characteristics if they were to be able to progress to the top. Strengths in one area did not compensate for weaknesses elsewhere.

Skills and knowledge

Future leaders also need a range of skills and knowledge to support their personal characteristics;

1. Appropriate technical and professional skills in relevant areas like law, accounting or engineering.

2. Commercial and financial skills and high levels of business acumen

3. Skills in people management and development, communication, coaching and feedback and team management skills

Depth of experience

The right mix of personal characteristics supported by the appropriate skills and knowledge are necessary but not sufficient – potential leaders need to have a broad range of experience encompassing different roles and, where appropriate, different sectors and industries.

Future leaders also need to be able to cope with pressure and failure with nearly a quarter of respondents stressing the importance of being able to deal with difficulties and challenges.

Education and training

The right personal qualities generally outweighed any gaps in an educational record according to the survey respondents and most businesses develop leadership and management abilities through
in-house, modular programmes that are closely tied to the business’s own operations, culture and goals, using their own developers or external training providers who know them and understand their industry.

What’s more, they want training that will transfer into improved performance, and will employ coaching and secondments to enable this learning transfer. Knowing about leadership and management isn’t enough – future leaders have to be able to put what they know into practice.

Business schools

Respondents were equivocal about business schools. Half of respondents were neutral about the effectiveness of business schools, while a third thought they were effective. While they recognise that business schools had some strengths, their major weakness was that they do not have that deep understanding of the business and its particular characteristics that they looked for in training providers.

With regards to MBAs, respondents acknowledged that they demonstrate that the holder has acquired appropriate knowledge but were critical of the disconnect between what is learnt in business schools and the workplace. The reality of the industry and workplace and an individual's ability to lead in practice for most trumped the theory and intellectual capacity of the MBA.

So, the HR professionals said they were looking for a blend of experience, knowledge and skills, many of which can be learnt and developed both on the job and in a formal training context, but ultimately it is a rich mix of skills and experience which will differentiate future leaders.

NOT about News Corp.

I'll probably leave the furore around News Corp alone - mainly because for as long as I can recall I have refused to have anything to do with that corporation or its media products such as Sky, The Times, Sun, NoW and so on. The developing bandwagon of commercial and consumer deserters of the NoW is to my mind faintly absurd, although richly deserved by a corporation that has for a long time through its outlets displayed questionable and venal behaviours, if one cared to look. It is after all only a couple of months since Sky sacked two (although maybe not the only) sexist presenters, Keys and Gray. It's just a bad lot one might assume from these latest and far more serious and disgusting revelations.


How long will these desertions last? Probably until those companies/politicians need those organs to advertise their wares/lever them back into the limelight. A week is a long time in politics, today's news is tomorrow's fish and chip wrapper and so on. But if you have some decent principles then not getting into bed with them in the first place means you don't have to join any bandwagon when it starts. News Corp shows itself again to have significant disreputable elements that, taken across a long view, might lead the man on the Clapham omnibus to assume it is a dysfunctional and not fit-for-purpose corporation. Anyway, I said I'd probably leave this alone.


Now for some important stats to amaze your friends, improve your reports and impress your clients:

• In England, local authorities' total expenditure was £168 billion in 2009-10.
• In 2009-10 local authorities employed 1.8 million full-time employees staff and nearly 50 per cent of service expenditure (gross of income) was spent on these employees.
• About 64 per cent of local authorities' gross income in 2009-10 came from central government (through grants or re-distributed non-domestic rates). Other income from local sources included council tax, sales, fees and charges, council rents and capital receipts.
• The largest share of net current expenditure in 2009-10 was on education services with 37 per cent of the total. Social services accounted for a further 17 per cent, housing (excluding Housing Revenue Account) 16 per cent and police 10 per cent.
• Average Band D council tax, for a two adult household, in 2009-10 was £1,414 an increase of 3 per cent on 2007-08.
• In the North East, 56 per cent of dwellings are in the lowest council tax band (Band A) compared to just 4 per cent in London.
• Average in year council tax collection rates in 2009-10 stood at 97 per cent compared with 92.6 per cent in 1993-94.
• The average in year council tax collection rate in Inner London Boroughs has risen from 76.0 per cent in 1993-94 to 94.6 per cent in 2009-10.
• Revenue expenditure has increased by 149 per cent cash terms between 1993-94 and 2009-10. The corresponding increase in real terms was 68 per cent.
• About 25 per cent of revenue expenditure is funded through council tax.
• Revenue spending per head in 2009-10 was highest in parts of the North and London.
• All shire counties spend £500m or more a year, while most shire districts spend less than £40m a year.
• Local authority capital expenditure has risen from £14.3 billion in 2004-05, to £21.4 billion in 2009-10.
• Capital spending per head in 2009-10 was highest in London and the North East.
• In 2009-10 capital expenditure of £5.0 billion was financed by unsupported borrowing, under the new prudential system in place since April 2004 (23 per cent of the total).
• Local authorities' gross outstanding debt at 31 March 2010 was £54.4 billion, the largest proportion of which is owed to the Public Works Loan Board (75 per cent).
• Local authorities' investments at 31 March 2010 were £21.5 billion following a fall of approximately £4.5 billion during 2009-10; nearly 70 per cent of these investments were deposits with banks or building societies.

Early Intervention Bonds - Big Risk. Low Opacity?

Here's a piece from the Prevention Action website, of May 2010:

"Among new mechanisms for funding early intervention that do not depend on Government money, Allen (Graham Allen, MP, Labour) and Duncan Smith suggest an early intervention bond or some similar financial instrument that will allow private and public investors to invest in proven programs.

"Funds could be raised on the market and dividends paid as children's health and development improves (and calls on expensive treatments subside)."

They end on a pragmatic but optimistic note. "As politicians we must avoid the temptation of claiming to have found the magic bullet, whether it is Family Intervention Projects or Family Nurse Partnerships, in isolation from all the vital supporting components. In Nottingham's case, several proven programs working alongside excellent mainstream services compound and complement each other. 

"As in other aspects of politics the stakes with respect to early intervention are very high. It matters for the millions of individuals and future generations who will benefit, and it moves us closer to giving early intervention the same depth and permanence as the National Health Service."

Scroll forward to June 2011. The ideas have developed and firmed-up enough to be launched formally. Here's what Polly Toynbee writes in today's Guardian:

"... the plan put forward yesterday by Iain Duncan Smith, Oliver Letwin and Labour MP Graham Allen to issue "early intervention bonds" to solve the infinitely complex problems of families in trouble flaps away into delusion.

Here is the fantasy. Poverty and social dysfunction, addictions, depression, crime, teen pregnancy and illiteracy cause expensive crises. One person can cost scores of thousands a year in prison, courts, rehab and A&E overdose visits. But what if the very clever people in the City could roll all that sub-prime behaviour into an investment product? It's as clever as a credit default obligation. With a wave of a wand, the risk from all that bad stuff can be placed with investors instead. Social investment bonds could evaporate poverty and its consequences at no cost to you or me. These people can be monetised to turn a profit for all. Amazing.

Nick Clegg, speaking in the City recently, explained that if investors paid for preventative work up front, the state would repay them later out of money saved. He called for "creative ways to bridge the gap between initial investment and the long-term returns", praising the City as "one of the most innovative financial services centres in the world". Duncan Smith, writing in the Guardian last week, quoted private equity investor Sir Ronnie Cohen as predicting that social impact bonds are "the wave of the future" and "the new venture capital".

Do these bonds sound suspiciously like a relative of the sort of bonds based on packages of toxic debt, traded until their mortgagees defaulted on their loans? That then unraveled so rapidly in 2008/09 taking several international money houses with them, Lehman Brothers, Bear Sterns included? And almost sank RBS and LLoyds, consuming over £60bn in public funds to keep the service tills working? Surely not. 


Or maybe it's a type of back-end loaded PFI. The sort of pay-later model that leads to this recent report:

"HM Treasury’s ‘inadequate’ monitoring of trading in Public Finance Initiative (PFI) debt has allowed banks and builders to ratchet up £2.2bn in undetected profits, an industry analyst has claimed.

There are about 920 PFI projects in the UK with a capital value of £72.3bn, of which 720 are operational. A report by Dexter Whitfield from think tank the European Services Strategy Unit alleges few PFI projects would have received approval if average subsequent profits of 50.6% had been taken into account at the evaluation stage.

Entitled The £10bn Sale of Shares in PPP companies, the report reveals the Barnet hospital PFI project was subject to five later transactions and the Calderdale hospital scheme was sold nine times between 2002 - 2010.

Research shows PFI firms have subsequently sold the equity of 622 schemes on the secondary investment market and the scale of such deals is significantly higher than the sales identified in the HM Treasury PFI equity database and estimated by the National Audit Office (NAO).

Report author Dexter Whitfield said:'The level of profiteering from PPP equity transactions makes a nonsense of the original value for money assessment.PPP projects are little more than money-making mechanisms for builders and banks.'

Among its recommendations the report calls for standard contracts to be re-written, imposing a ceiling on profits taken from PFI equity, together with a requirement that the public sector should have a 50% share in any profit above a specified level.

It also calls for the scope of HM Treasury's PFI equity database to be extended to cover all historic and future equity sales, made publicly available and regularly updated.Additionally,spending watchdog the NAO should research the longer-term effects of the growing secondary market.

Margaret Hodge, chair of the influential Public Accounts Committee agreed with Mr Whitfield’s call for greater oversight of the system,'so that if there is some profit over time in the funding of these PFI contracts, that profit can be shared between the taxpayer and the private investor.' 

Now, early intervention clearly works, and Sure Start centres were one of the manifestations of that understanding. So, if the Coalition believes so much in early intervention why is it calling for the creation of what we must consider to be risky, bond-based initiatives to fund the interventions? Might it be to do with cuts elsewhere that are damaging projects like Sure Start with 20% cuts and removing ring-fencing and/or getting expenditure like this off the public books? 


Short termism amongst traders has variously caused the collapse of the pound, the collapse of banks and rupture of sovereign economies. Why would we possibly want to introduce this risky model into the funding of (early) interventions, with the attendant difficulties of measuring improvement statistically tight enough to trigger payments to the investors? 


Finally, what's the safety net for the bonds if their market fails? Will it be the taxpayer again, as it was with the banks recently, even though risk purportedly rested with the banks - which in the final analysis could not be allowed to fail, in the UK at least?     

These bonds really require a long, hard look.

Executive Coaching

The Positive Psychology website is always a mine of fascinating articles and research write-ups. Take this link, which is to an article featuring a 2008 coaching conference bringing together theorists and practitioners to explore the intellectual and evidenced-based foundation for the emerging field of coaching psychology. The GROW model makes an appearance, as do various short pieces exploring the development of coaching psychology, models of practice and noted authors. Despite being a 2008 article it opens the door into a range of more current articles which those of us keen to explore positive psychology and its organisational benefits find a helpful resource.


http://positivepsychologynews.com/news/louis-alloro/200809291053

In addition, at The Open Channel, coaching is an essential feature of our practice. The GROW framework is one of several we use with clients. Frameworks provide structure to individual coaching sessions and also help clients to locate themselves in the piece of work, being able to see the development of the themes and threads in each contact session. We'll say more about the impact of coaching in later posts, as we reflect on and explore the implications of our real-world work with clients.

Quick updates on news of the moment

Hear the new Chair of the LGA, Sir Merrick Cockell share some earlier ideas on sharing services from his perspective as the Leader of RB Kensington & Chelsea in London.


http://audioboo.fm/boos/193538-cpc10-sir-merrick-cockell-explains-how-councils-can-save-money-via-combining-services

Here's his inaugural speech to the LGA conference in Birmingham this week.


http://www.lgcplus.com/topics/politics/sir-merrick-cockells-speech-to-the-lga-in-full/5031851.article

His election is not universally well received (actually worse than that) on the ConservativeHome website, mainly because the bloggers there demand the LGA's abolition - which is pretty much the answer one hears from that  worldview for anything that isn't directly 'wealth-creating' (who is that 'wealth' for, by the way?).


http://conservativehome.blogs.com/localgovernment/2011/06/cllr-sir-merrick-cockell-to-be-new-lga-chairman.html

News of a more edifying nature - peace breaks out with Eric 'Neutron' Pickles saying:

"many councils had experienced a challenging year, but added: ‘I’m immensely grateful to local government for delivering – it has delivered in a way which has confounded many critics of its ability to manage. (Pickles of course being its greatest critic!!)

‘I think it is [now] in a stronger position.’

‘Of course, at the same time, we were devolving powers and hopefully, we’re about to go on to devolve financial controls to local authorities. It’s time to move on to a period where we can now genuinely, from a position of partnership, work to improve the quality of services.’"

Oh still my beating heart.