More Strategic Healthcare HR: Takeaways from DDI’s Global Leadership Forecast
The healthcare industry is “Headed in the Wrong Direction” and it’s struggling due to the changing business environments and demographics. Leader quality and bench strength (the capabilities and readiness of potential successors to move into key professional and leadership positions) have declined or seen no change in the recent years, according to Development Dimensions International’s and The Conference Board’s latest Global Leadership Forecast. Healthcare is facing intense talent shortages, an aging customer base that requires greater care, and evolving government regulations.
Today, most organizations are not confident that they have the leadership to address current and future needs. Only 15 percent of organizations rated their future bench strength as strong. So what can they do to improve? HR executives and their teams need to refocus on improving their development efforts with sustainable learning experiences.
Consider the following findings from DDI’s latest forecast as you plan for a successful future by helping your organization’s leaders meet tomorrow’s businesses challenges.
Are leaders ready to deliver?
Only 25 percent of HR professionals view their organization’s leaders as high-quality—the percentage has not changed since 2011. Although an estimated $50 billion is being spent a year on leadership development worldwide, only 37 percent of leaders in the study rated their organization’s leadership development program as effective, indicating no improvement from 2007 to 2014.
Development efforts won’t have a lasting impact unless they are followed by opportunities for leaders to practice and use their newly acquired skills, experts say. Organizations that report their leaders practice and receive feedback on key skills with their managers are five times more likely to have high quality and bench strength compared to those that don’t.
The new role of HR
HR’s role needs to continually evolve. For at least two decades, the challenge for HR was to move from being administrators or reactors to being business partners. Today, HR professionals have made that shift worldwide—60 percent of HR sampled in the study classified themselves as “partners.”
However, it’s now time for HR to raise the bar and take on a new role called “anticipator.” Anticipators are always looking for what might come next. They work with the organization to predict future talent gaps and strive to close them. Also, “anticipators” need to be involved in the strategic planning process. Organizations are three times more likely to have stronger leadership bench strength and over six times more likely to exhibit strong financial performance than organizations who don’t include HR or “anticipators” in the strategic planning process.
What do leaders need in order to improve?
The common piece of wisdom on how leaders learn is the 70:20:10 ratio—70 represents learning that occurs on the job; 20, learning from others; and 10, learning from formal development. Today, that’s no longer the case. The resulting data from the study shows that organizations that provide high-quality leadership development emphasize more on formal learning and learning from others: 52:27:21.
Experts suggest while experiential learning and learning from others are important, you should consider allocating more time on formal learning to build foundational leader competencies that can have wide-ranging benefits while matching up well with their learning preferences.
What’s holding them back?
Many organizations have the perception that senior leaders place more value on managing competencies rather than building interpersonal relationships—but that’s not true. Given a preference, leaders would nearly double the time they spend interacting and cut in half their time spent managing their team.
There’s a high cost to organizations that neglect striving for a better balance in how leaders spend their time. For example, a heavier focus on managing leads to less job satisfaction, higher turnover, and lower engagement among leaders. If organizations signaled that time spent interacting was as valuable as time spent managing, they likely would have a stronger leadership bench strength, which in turn would be closely linked to greater financial performance.
What happens when organizations get it right?
Growing your internal leaders can pay off quickly. Organizations that fill a larger percentage of their positions internally have significantly higher leadership strength and financial performance than organizations that don’t—more than three times higher. You must install talent audits, strategic talent planning, and high-quality development systems that allow you to confidently promote leaders heavily from within. This approach will produce higher rates of leader success.
What are your thoughts? From talent shortages to evolving government regulations, are your leaders equipped with the proper skills to address future needs and overcome tomorrow’s healthcare challenges? Please share your thoughts. We’d love to hear from you.