Know thy company, ceo

Is bad management des-troying your business? According to one expert in the international banking industry, the lack of quality leadership does have the potential to destroy a company’s bottom-line. Sylvia Chrominska, Execu-tive Vice President of Human Resources, Scotiabank, was giving her views at the Employers Consultative Asso-ciation’s (ECA) Annual Chair-man’s Dinner at the Trinidad Hilton. She told her audience that a company’s leadership was a defining element in its formula for success. Business leaders, she said, had a responsibility to ensure that the success of their businesses was not hampered by a lack of leadership talent. According to a study recently conducted by Ernst and Young, between 30 and 35 percent of investor decisions may be linked to the quality of management of a company.

“Leadership has the potential to affect share price,” Chrominska said. “It could   could also affect a company’s ability to attract talent,” she added. At present, a war is on for talent worldwide.  There is going to be fierce competition for key skills Chrominska said and predicted a skills shortage is eminent in North America and Europe. Talented employees have become a “key differentiator,” she said, adding that competitiveness in the 21st century would be based on the calibre of a company’s workforce. “Manager quality is the number one factor in an employee’s decision to work for and remain with a company,” she asserted but a weak understanding of what constitutes leadership in the 21st century may result in poor hiring decisions and turnover. Turnover is expensive, she said. A generally accepted rule of thumb is that turnover costs about 150 percent of someone’s salary. An impending labour shortage had also made good quality leadership important, she stressed. A rapidly aging population combined with smaller generations entering the labour force, younger retirees and a greater demand for better-educated, more highly skilled workers will eventually result in senior leadership gaps for unprepared companies, Chrominska warned.

Of particular concern was the fact that leadership traits which were successful in the past, are not guaranteed to have the same results in the future. Companies needed to diversify their capabilities, placing emphasis on new ideals of team building, the ability to move cross culturally and the ability to leverage diversity. Additionally, she added, the need for strong leaders with global perspective was growing. Chrominska said, “Leaders who understand how to think globally and operate in the local market are essential to us winning. “Companies that have effective leadership enhance their ability to change in an era of growth, deregulation and international competition.” However, while they were aware of this fact, most organisations were not yet prepared to meet the challenges of a potential void  in their leadership ranks. Studies conducted in North America have found approximately 94 percent of American Human Resource professionals readily admit that their organisations have inadequately prepared younger generations to assume leadership positions.

Additionally, 99 percent of top executives revealed that their top 200 managerial pool needed to become much stronger in the next three years, while only three percent of the executives surveyed agreed that their companies developed senior managers effectively. Chrominska said that little was being done to capitalise on the hidden internal strengths in many companies. She said, “Too many organisations do not have an active talent management strategy or a systematic process for identifying and developing candidates for leadership of management positions.” Questioning whether bad management was driving young talent away, she stressed the need for companies to understand the needs and priorities of their employees. “Solutions can no longer be based on one-size fits all,” she said. “You need to know what talented people are looking for. You need to know your existing and potential workforce in much the same way as you know your customers.” The latter, she said,  are the feeder pools for your leadership bench.

The approach to the management of talent has changed, Chrominska continued, power has now shifted from companies to the individual, placing power in the hands of the more talented individuals. Busines-ses now have to work harder to attract and keep this talent. However, she noted, while companies were quick to claim that their employees were their most important assets, many act otherwise and risked being caught up in the global fight for talent. “Talented people have more options, are more discriminating and have higher demands of us as employers,” she noted, adding that talented employees expected to work for great leaders and managers “It is a virtuous circle where talent attracts talent,” she said. Chrominska had some ad-vice for employers. This included adopting fresh approaches to recruiting employees, managing recruitment more as a marketing campaign to attract the top talent and identifying and targeting a number of rich sources of candidates by actively marketing to them.

Companies, she stressed, should treat the recruitment and selection of people, as well as talent management as an ongoing core business process. Additionally, executives should all be clear about the value of employees, outlining the key competencies which were necessary for success, she said. They should also provide opportunities for emerging leaders to learn from experience by matching people to jobs, thereby focusing on building their leadership capability. “For business and government, planning your future leadership needs is a critical issue. It must be a major strategic priority,”  Chrominska said. “It’s too important to be left to change and it won’t happen overnight,” she said.