In the current economy with fast changes due to globalization and digitalization good leadership could play a crucial role, and in order to have good leaders companies need to define a strategy for leadership development. It is even said that ‘‘companies that fail to invest continuously in the leaders of tomorrow may find themselves falling behind their competitors’’ (Schatsky and Schwartz, 2015, p. 21). The leaders of the future might need different capabilities then today and therefore it’s an important thing for companies to consider. Defining the meaning of a strategy for leadership development and global leaders is essential for this research. In this research a leadership development strategy can be described as ‘‘the skills and behavior that are needed to implement the business strategy and create the desired culture (skills, competencies, knowledge base)’’ (Pasmore, 2014, p. 3).
In order to find an answer to the central question “How should companies organize their future strategy for leadership development?” this research starts with a literature review. According to the Royal Literary Fund a literature review is ‘‘a search and evaluation of the available literature in your given subject or chosen topic area’’ (‘‘What is a literature review?’’, 2014). In this literature review several sources are used, written by people with experience or knowledge in the field of leadership development. Together with the research in the form of an interview, these sources will help to find an answer to the research question.
3.2 Current focus of leadership development
Some people have a natural gift or talent in being a leader and other people need to develop these skills. Therefore, companies have developed strategies and set up leadership development programs for future leaders to obtain the necessary skills. The way leadership development is done varies from company to company. Some focus more on technical skills, some more on social skills. Some start already early with developing their employees, some have leadership programs only for their top employees. The importance and level of investments also varies. For example, it could depend on how fast a company is growing or what trends are in the market.
It is said that ‘‘many multinational companies, particularly Japanese, Indian, German and some American ones, still concentrate vital decisions in the hands of a small group of trusted leaders from their home country’’ (George, 2012, p.1). However, as growth for global companies comes from emerging markets there is a need to have many leaders who are able to understand local cultures. The current focus is mainly on leadership development by sending the small group of national leaders to assignments in other countries (George, 2012).
3.3 Market developments
There are also changes in the market or external environment that need to be taken into account when developing leaders. The way companies were managed before might not work in the future. For that reason, the question is what are the most important market changes and trends that influence leadership development? A very interesting research based on a survey with 194 respondents and 33 interviews with top executives of global companies was performed by Gitsham (2009). The findings are that several trends are expected to have an influence on future risks or opportunities and they can be summarized into, the natural environment, globalization and new pressures. The natural environment because natural resources, such as energy, are becoming more scarce. Globalization relates to opportunities in emerging markets. There are also new pressures because some organizations have an increasing influence in regulation, public opinions and consumer preferences (Gitsham, 2009).
How companies respond to market developments plays a role in how successful they are. They can make new products or use innovations to change their production, but in general the respondents of the survey think a change in organizational capabilities and culture is just as important. Leaders, managers and employees are required to develop their knowledge and skills. Normally it has been easier to focus on hard skills, but soft skills should also get more attention. Organizations are complex and consist of many employees with informal relationships and networks and therefore a culture with individual leadership instead of focusing on formal hierarchies is being considered (Gitsham, 2009). Shyamal Jani, who is knowledgeable about the best ways of organizing a future strategy for leadership development, confirms this. He says that ‘‘if you want to develop leaders, who think about was is best for a company, collaboration to achieve results should be stimulated more’’ (S. Jani, personal communication, November 20, 2015).
3.4 Leaderships skills
According to the research of Gitsham there are a few specific skills necessary for global leaders in response to the market developments described above (Gitsham, 2009). The skills can be clustered as context, complexity and connectedness. Shyamal adds to this that, ‘‘in the future, leadership development will be even more focused on personal skills instead of knowledge’’ (S. Jani, personal communication, November 20, 2015).
In ‘A new era for global leadership development’ George (2012) mentions that leaders must be effective in aligning employees around the company’s mission and values and empower other people to lead. In contradiction to traditional leadership this means hierarchy is less important and leaders should be able to reach people of different cultures and make sure they adopt the values of the company. When the focus is on these values, people are also able to make their own decisions based on this and collaboration is stimulated.
3.5 Future leadership development
With the context of changes in the market and necessary future leadership skills in mind a strategy for leadership development can be formulated. If you look at globalization, companies require leaders who really understand local cultures. According to George (2012), leadership development will be effective if people work and live in several different countries instead of only travelling there from their own headquarter. In his opinion, there should also be more focus on self-awareness and emotional intelligence. An example of how this can be achieved is asking advice on decisions and discussing challenges and mistakes. This is supported by Shyamal‘s view that leadership programs should make a good use of coaching on the job by senior leaders. ‘‘It’s very good to use leaders to develop leaders. If they are involved you can learn for their experience and get support if necessary’’ (S. Jani, personal communication, November 20, 2015).
Next to that, Shyamal thinks that it’s very effective to start developing them early in their career path and to focus more on accentuating personal needs (S. Jani, personal communication, November 20, 2015). Schatskty and Schwartz (2015) add to this that organizations should focus their leadership development at all levels instead of only the strategic leaders, because the future success of an organizations depends on the performance of the operating leaders.