Constant change isn’t exactly new for business leaders, but the pace and pervasiveness of the need to transform, and the link between change readiness and significant business outcomes, are more novel.
From the rapid proliferation of AI in the workplace to the emergence of new ways of working, leaders across functions are being asked to navigate change like never before. And according to research, most are nowhere near ready.
A study out last month from global leadership firm DDI on change readiness revealed a startling reality: Just 8% of executives demonstrate the ability to leading change effectively, leaving a full 92% of top leaders unprepared to steer their organizations through transformation.
When it comes to their own perceptions, about 18% of leaders across levels feel very prepared to lead change. But despite the rising demand for change skills, preparedness appears to be backtracking. About a quarter of leaders report being prepared in some regard—a figure that has been nearly halved in the last five years.
The report analyzed data from more than 100,000 leaders across the frontline, mid-level and executive levels, with the latter exhibiting the greatest need for stronger change leadership capability. In particular, executives struggle to demonstrate the underlying behaviors associated with driving change, includin empathy, emotional engagement and influence, researchers found.
Top leaders often don’t face direct dissent and, thus are unprepared to navigate resistance to change, while they also tend to prioritize short-term performance over boundary-pushing and struggle to recognize the value of rewarding the behaviors associated with change.
“Failure to develop the core behaviors needed for change leadership threatens an organization’s bottom line, innovation and employee engagement,” says Rosey Rhyne, senior research manager of DDI’s Center for Analytics and Behavioral Research. Yet, at organizations whose leaders are effective in these areas, strong financial performance is 2.6 times more likely, making it a clear imperative for HR to emphasize new visions of what future-readiness looks like for executives.
From feelings to insights
According to the report, HR is aware of the change-readiness gaps among leaders: Just 13% of HR leaders think their company’s leaders, across levels, can effectively anticipate and react to change today.
Efforts to close leadership gaps can involve “sensitive conversations,” Rhyne acknowledges, which is why data will be critical. In fact, DDI found that organizations that rely on data for talent decisions are nearly four times as likely as others to have leaders who are ready to lead change.
“It’s important for HR to shift the focus from ‘gut feelings’ to objective, validated insights,” she says.
This aim can be realized by relying on leadership assessments, which can inform development, making the process more “relevant and actionable” for leaders, Rhyne says.
“Be mindful of leaders’ sensitivities around assessment, though, and explicitly communicate the purpose of the assessment as a tool for personal growth rather than a pass/fail judgement on their leadership abilities,” she cautions.
HR should also frame those capabilities from an organizational lens to understand broader gaps, and to ensure optimal resource allocation for training and development.
Building confidence to lead change
While a broad lack of change readiness is apparent across leadership levels, the data does suggest some areas for opportunity.
For instance, confidence in change leadership capacity is more common among Gen Z than other generations—and among women. Organizations with 100 or fewer employees also report being more prepared to lead change, at a rate of about twice that of their larger counterparts.
Rhyne speculates this could be fueled by the fewer structural constraints leaders face when it comes to decision-making at smaller orgs. The tendency toward “horizontal leadership” at these businesses, she says, gives individual contributors more influence to work cross-functionally, arming leaders with more sophisticated change muscles.
Many larger orgs are heading in that flatter hierarchical direction, in light of economic conditions and advancements in AI, further driving up the need for sharper change leadership.
“Larger enterprises are likely to need to prioritize development of new core skills, such as change leadership,” Rhyne says, “especially if they plan to shift toward a less hierarchical structure.”
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