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Welcome to the new normal. What does it mean for leaders?

By Rose M. Patten and Hugh J. Arnold

The "new normal" in business is disruption and change, and it comes with a call to action for companies – and leaders – to adapt and reinvent themselves.

Major forces have shifted the landscape. Company growth is more volatile. The global, borderless marketplace has rendered old corporate models obsolete. A new mix of generations and cultures has created more diverse teams and perspectives. Technology races at a new pace. Investor trust is fragile.

Everywhere, there are new demands for accountability, transparency and disclosure.

Leadership has never been more important, and it's never been harder. To survive – and create long-term success – in such an unpredictable climate, leaders in all areas of the company need new models and new capabilities. The pendulum has swung, and generic approaches won't cut it any more.

 Leadership has never been more important and it's never been harder.

A key mark of the leaders who succeed in this demanding new environment will be how well they identify, develop and utilize top talent. Integration and alignment of strategies will be critical. Organizations need to mesh their Strategy and Performance Targets with their Human Resources strategy, with a clear, two-way street between them. This is not the norm at many companies (at least not yet).

Take, for example, the case of leadership development activities. Companies often make large investments in this work, given the shortage of great leaders. But their efforts fall short when programs are delivered in a generic context and are not linked to the environment and specific challenges the organization faces. This sort of misfire is not just a Human Resources problem. For HR to have true impact in advancing the organization's agenda, all leaders – including C-suite executives – need to come together to create and endorse a "people" strategy that is aligned with organizational needs and reinforced into the warp and weft of daily management.

Several organizational enablers will be critical for sustained success in this new environment.

For all leaders, we see a big shift in the degree of ownership, engagement with, and commitment to what have traditionally been considered "HR activities". C-suite executives must now have a firmer handle on how their organization builds and develops talent, in the same way that they understand finance or how to raise capital. With human resources as navigator, the responsibility for instigating and implementing talent activities needs to be shared across the businesses. We see CEOs, and the boards they report to, championing talent and leadership development through increased rigour and review at Board meetings. This engagement is vital to each company's long-term success and all leaders across the company, not just CEOs, need to get the message out that this is a non-negotiable.

Successful organizations must create a talent pipeline to meet current and emerging business needs. Strong Talent Management practices will be essential to building these pipelines, starting with comprehensive assessments of potential based on multiple-source inputs combined with timely action plans to move and promote future leaders. All leaders – from the CEO to managers at every level of the company – need to take personal accountability for making great talent management happen. We've all heard the regret of leaders who didn't act soon enough and left employees in roles for too long, causing frustration for them and for those working with them. Inadequate assessment practices also contribute to the loss of great talent when high-potential leaders are inadvertently overlooked. .

Leadership development and succession planning is often inadequate. Development plans should target senior (not just middle-level) leaders and be linked to business needs. Too often, the supply of well-developed leaders falls below demands. This is usually not for lack of programs, but because of the false assumption that senior leaders – once accomplished – don't need formal development. With ever-changing business contexts, everyone's leadership skills need to be fine-tuned to help them stay relevant and effective. Leaders need to continuously reinvent themselves!

The ability to lead change lies at the core of how companies will assess and promote leaders. The diverse mix in our workplaces – both culturally and generationally – make change leadership much harder than in the past.

All of this calls for leaders to be resilient. When we're asked to single out today's most important leadership skill, we answer "adaptive capacity". Leaders need to find a way to embrace disruption, handle uncertainty and translate complexity to mobilize others and work through change. Great leadership is all about successfully moving from a place of comfort to embrace the unfamiliar.

Meanwhile, Human Resources needs to be much more focused on and engaged with the company's strategy. HR leaders need to think about how they can positively impact the challenges of the entire organization, and bring business strategy into the heart and pulse of everything they do.

The climate we are all working under has changed – and with it, there is a demand for new capabilities to make the most of the talent across the company. Our strategies for growing and shaping leaders need reinvention, especially in preparing them to lead in a very different context, with different expectations. Working together, business and HR leaders can execute a cohesive strategy that ultimately drives performance through the current storm of disruption to a place of sustained success.


Rose M. Patten is an executive-in-residence at the Rotman School and special adviser to the CEO of BMO Financial Group where she was Senior Executive Vice-President of Strategy and was also Head of Global Human Resources until 2011. Hugh Arnold is the former dean of the Rotman School of Management at the University of Toronto and now adjunct professor of organizational behaviour and HR Management. The two are co-directors of Rotman's Strategic Human Resource Management Program that will be offered at the Rotman School of Management. For more information visit: www.rotmanexecutive.com/hrstrategy

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