HR failing to tackle leadership - Business Works
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HR failing to tackle leadership

by Jane Chesters, Co-founder, Orion Partners Organisational agility is being compromised by HR professionals failing to address weaknesses in leadership development, says Jane Chesters, Co-founder of Orion Partners. Our report, Agile HR: Mindset Not Methodology that has just been published reaches these conclusions:

  • HR directors say leadership development is key to agility

  • changes to leadership development practices fail to deliver results

  • the HR function has been chasing operational efficiencies at the expense of leadership development

  • 88% of HR directors say flexible contracts (such as zero-hours) are not important for agility.

HR professionals recognise the importance of organisational agility, with 67% describing agility as 'business critical' in a poll of senior practitioners representing companies employing almost 3,000,000 people undertaken as part of our report. The findings also show that the majority of HR professionals believe that the importance of organisational agility is set to increase - 87% of respondents believed this was the case.

The top three forces cited for change driving organisational agility were common across all organisations surveyed and are symptomatic of the global, digital age. These are:

  • changing customer needs;

  • market competition;

  • the disruptive influences of technology.

the importance of agility

The importance of agility

In light of this uncertainty, 68% of HR professionals were able to confirm their organisation has a clear purpose, vision and mission and a highly effective strategic planning process. However, just 46% of those surveyed said their response to these challenges included a clear people strategy that is an integral component of the business strategy. A further 34% said their organisation has an understanding of the importance of people issues and considers them when developing strategic plans.

Definitions of the concept of agility varied between respondents, however the one constant was that agility is as much about mind-set and behaviours as structure and process. The logical conclusion is that elements such as leadership, capability and the wider talent agenda are more important than tactical HR practices like variable reward and risk management.

Is investment in leadership developing paying off?

We have found that the people management practice that has the greatest impact on organisational agility is leadership development and 59% of the HR professionals polled recognise the influence it can have. However, the survey also identified that too many leadership development programmes weren't effective

Our research shows that HR practitioners can increase organisational agility most effectively by improving the quality of leadership. The good news is that the majority of senior HR practitioners recognise the need to focus their efforts and energies here - the bad news is that, so far, their efforts aren't delivering the goods.

5 people management practices with most impact on organisational agility

Leadership Development

1 = most important

Talent Management


Capability Development


Resource Management


Workforce Planning


5 people management practices with least impact on organisational agility

Employee Communications


Workforce Analytics




Employee Relations


Flexible work Contracts

1 = least important

The report found that none of the senior HR professionals polled rated their organisations as highly effective at building versatile leaders - with 75% believing they were no more than moderately effective in this area. In addition, in the area of cross-functional collaboration none of the respondents thought their organisations was highly effective and just 3% thought their organisations was highly effective at change management. Both of these characteristics of agility are closely linked to versatile leadership. Our research suggests that the HR function has been chasing operational efficiencies at the expense of leadership development.

On the face of it, HR should be well-positioned to play its part in driving organisational agility via critical people management practices like leadership development. The HR function has spent the better part of twenty years trying to deliver the Ulrich model but too often this has meant chasing operational efficiencies at the expense of talent management in general and leadership development in particular - even though this was never what Ulrich advocated. While cost savings delivered from integrated, centralised operations have been real, they have required huge investment in terms of change management, technology infrastructure and organisation design to deliver. That this has sapped resources from learning, performance and succession that are the backbone of effective leadership development programmes - that's meant less bang for the buck. We are reaping the consequences of failing to sell the wider business benefits of effective HR management. If agility is as important as business leaders say then HR directors need to focus on effective leadership development as a matter of urgency.

A third of the senior HR professionals polled said they had done no more than tweak their leadership development practices over the last 2-3 years. Furthermore, almost 70% saw the need for either a comprehensive overhaul or significant change to their leadership development practices.

Efforts are not on target

The research also suggested that the efforts of HR professionals to make their companies more agile were not always being focused where they will have maximum impact. Two-thirds of companies, for instance, have invested time and resources in flexible work contracts recently, but only 13% of HR professionals surveyed say that this had any significant impact on organisational agility.

Those people management practices seen as having the least impact on organisational agility were a surprise. The ability to 'switch on and off' through flexible employment contracts - zero-hours contracts being the most high-profile example - wasn't rated as important by 88% of participants. Despite the vast majority of HR directors not thinking flexible employment contracts improve agility, HR teams are still investing time and money in them.

You can see a copy of the Agile HR: Mindset Not Methodology report here

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