Survey: Leadership Confidence is Down – Especially in HR

The results of the latest Leadership Confidence Pulse data show that while confidence in the economy is up, confidence in all internal aspects of leadership confidence declined.

The Leadership Pulse has been conducted since 2003, when we began asking leaders to help us track key business metrics and in exchange for doing so, we provide these individuals with real-time learning from their peers. Our goal is to learn and do something about what is studied; the term we use is action research. This is not research just for the sake of publishing papers but learning to improve performance.

That’s why we find the results of this July 2010 Leadership Confidence Pulse, with 677 executives participating, so disheartening. We’ve been sharing lower confidence scores for the last few years, and we’ve even explained why they are tanking. Below you will find a summary of the overall Leadership Confidence Pulse data

Compared to last year’s survey data from 667 respondents, this year the percent of people reporting they are confident:

In the economic climate increased to 55 percent from 40 percent;
In their leadership teams overall decreased to 72 percent from 82 percent;
That their firms have the right people and skills decreased to 64 percent from 73 percent;
Their organizations have the ability to execute on vision decreased to 64 percent from 73 percent;
That their firms have the ability to change as needed decreased to 55 percent from 60 percent;
Their own personal leadership and management skills decreased slightly to 88 percent from 91 percent; and
In the organization’s strategy making process decreased to 54 percent from 63 percent.

Focusing on ability to change, below are some additional statistics:

Very high performing firms report confidence in ability to change at 68 percent, while average or below average performing firms are at 42 percent.
Firms with less than 100 employees show confidence in ability to change at 64 percent while firms with 50,000 or more employees report 57 percent.
HR executives report confidence in ability to change at 49 percent while IT executives report at 70 percent.

HR’s ability to change is decreasing

Not only did confidence in ability to change decline, but confidence scores from HR are particularly low when compared to other groups. We would expect high performing firms to be better at change than lower performing firms. And we were not surprised that smaller firms had better change scores than larger firms (simply due to size). We also anticipated the group most likely to be managing change efforts (HR) would be more positive about ability to change. That, as you can see from the data, is not the case.

The ability to change is a key organizational competency that HR should be growing within their organizations, and the data show this is most likely not happening. In fact, ability to change keeps decreasing, at least according to the Leadership Pulse data. In 2003, when we began the study, 75 percent of respondents said they were confident in their organization’s ability to change; that number started sliding in 2005 and it has never rebounded to the 2003 levels.

I personally am tired of reporting these negative results. It’s time to change. This report is a call to HR executives who are reading it to CHANGE how they do change management because there is clearly something about the way it’s being done that is not working.

The traditional business and change management models need to be refreshed. They were developed at a time when the pace of change was much slower than it is today. For example, let’s look at what’s at the base of most change management models used today.

Change Management roots are in studies of grief

Many change management models are based on early learning from grief management. This work, started in the 1960s, and focused on the experience of personal loss (e.g. death of a loved one, experiencing significant health problems, etc.) to design interventions and process to help employees accept change.

The reason these models were used by organizations is that consultants saw a parallel between grieving loss in health-related issues to grieving loss of a job, department, or other organizational losses associated with change and transformation. The grief models of accepting business change worked well when change was an event (one could see a clear starting and stopping point). With the period of time between the start and stop of the change event, one could plot out a path for recovery and allow for the full range of emotions laid out in the health-related grief models. The concept of mourning the loss of the prior organization and job was quite useful in helping employees move through change.

Today, the cycles of change have escalated; there is no “relief” time between change events because business continues to speed up and leaders, managers, and employees need to keep up with this new frantic pace of business. Today’s global organization does not have time for the long grief cycle-focused change management processes that the models from the 1960s require. To be successful, organizations need to reinvent change management based on what is known about business in 2010:

Change is constant.
Change needs to be embraced, not mourned.
Resilient employees who know how to make change work for their own careers will embrace change and thrive with new change making skills.
It is critical to learn how to develop organizational and employee resiliency.

Why is IT more bullish on ability to change?

Looking over the data, it’s striking that one of the groups with the highest confidence in ability to change is IT. Many IT organizations have radically changed how they do business, and their evolution started in the 1990s with agile and extreme programming (see article on Extreme Strategizing at www.eepulse.com under Research to learn more).

These approaches to change questioned the status quo of using “waterfall” approaches to programming. This method involved starting the new product process at the top of the organization and then cascading it down to employees, much the same way many organizations implement business and corporate strategies.

The IT teams implementing agile or extreme programming opted for shorter cycle time, interacting extensively with stakeholders, taking risks, involving employees earlier in the process, mentoring, using high levels of communication, and ultimately they discovered this combination of best practices led to less “bugs” in software, more satisfied customers, and more energized employees. They learned to not just change but to embrace a culture of continuous change.

Can an entire organization speed up and use new change models?

The answer is yes, and the exciting piece of news for the HR field is that HR can lead the way. In Fast HRM, HR leaders are speeding up their organizations using the same philosophy supporting extreme and agile programming. This new approach to change management is not one embedded in models of grief. There is a discipline that can be learned to speed up an organization and at the same time build high quality, long-lasting relationships with stakeholders. The Fast HRM work uses tools developed in marketing to create and sustain a high change culture at work.

The reason we focus on change management and ability to change is that in our case study work, we find that when ability to change improves, the other aspects of leadership confidence start to follow. Being able to change quickly means strategy is more on target, ability to execute on vision is better, employees are more confident in leaders and then they are confident in themselves. Starting with ability to change has a cascading effect that improves confidence and performance.

For more information about using Fast HRM skill development to CHANGE change management and improve organization performance, write to info@eepulse.com.