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7 May, 2015

Five Key Gaps In Frontline Leadership Competencies

Many senior managers and executives are concerned that the leadership competencies of their frontline managers are not what they need.

I have noticed a consistent and growing concern amongst senior managers: many first-line managers and middle managers are ineffective people leaders and lack the necessary leadership skills and mind-set to get the best from their people. Opportunities for profit are being lost because of poor sales and service performance, staff turnover and lack of commitment to cost control. The need for proven leadership development programs has never been stronger.

Front-line leaders spend too much time behind their desks

My clients describe the problem in terms of what they see and don’t see. Their first-line managers are supervisors rather than leaders. They spend too much time behind their desks, instead of leading from the front. Coaching is a ‘result session’ focused on the ‘what has been achieved and not achieved,’ rather than on effective behavioural coaching to maximise team performance. And both first-line and middle managers appear unable to inspire their people and are unwilling to have the hard conversations with them.

Contributing to these problems is an issue that appears across many industries — first-line managers are generally promoted because they are technically good at their job, not because they have leadership potential. And there is often little, if any, training given to help them to become effective leaders. This lack of leadership capability in first-line and middle managers limits an organisation’s productivity.

A report by the Centre for Creative Leadership

The Centre for Creative Leadership (CCL) regards the gap between current leadership competencies and future leadership demands as a serious liability for organisations. Their view was confirmed by The Leadership Gap, a 2009 report on a study conducted by CCL over two years across 2,200 managers, 15 organisations and three countries. More than half the people surveyed were middle managers.

The leaders surveyed were asked to rate the importance of 20 leadership competencies, and the difference between what managers need to demonstrate to be fully effective in the future compared to what they currently demonstrate.

The study found that today’s leadership capacity is insufficient to meet future leadership requirements. many leadership development programs do not take in the top 20 leadership competencies. From the 20 leadership competencies, the study identified 12 which are important for the future (five years out). Of these 12, several competencies were identified as key gaps. The five most important future skills — leading people, strategic planning, inspiring commitment, managing change and developing employees — are amongst the weakest competencies for today’s leaders.

Five key competency gaps

I’d argue that for frontline managers strategic planning is of lower importance because it is a skill rarely required at that level of management. Therefore, I can reasonably conclude that four of the key competency gaps for first-line and middle managers are:

  1. Leading people
  2. Inspiring commitment
  3. Managing change
  4. Developing employees.

I’ve noticed that senior managers in the Asia-Pacific region also believe that one other skill set is amongst the top five competencies in which people managers are weak. That is the skill of:

5. Confronting people

confronting people as ‘acting resolutely when dealing with problems,’ and agree that it’s not a current strength for leaders. Consulting firm Lominger is of the same opinion. They found this skill set to be a competitive-edge leadership competency for both first-line and middle managers.

So what happens when these gaps aren’t addressed?

Well, company performance starts with the most basic act: showing up for work. According to data from the Gallup organisation, engaged employees average 27% less absenteeism than those who are actively disengaged. They point out that in a typical, 10,000-person company absenteeism due to disengagement costs the business about 5,000 lost days per year, worth a whopping US$600,000 in salary paid where no work was performed.

Did you know 88% of employees quit for reasons other than money?

People resign for many reasons. Even perfectly managed employees don’t always plan to stay with the same company forever. But quitting often has everything to do with the job. The Saratoga Institute’s research shows that 88% of employees leave for reasons related not to money, but to the job, the manager, the culture, or the work environment. These internal reasons are issues that are within the power of the organisation and the manager to control and change.

The cost of employee turnover

The average cost of losing an employee has been estimated as one times annual salary. This means that a company with 300 employees, with an average employee salary of $35,000 and a voluntary turnover rate of 15% per annum, is losing $1,575,000 per year in staff turnover costs alone. If, by way of example, 70% of this company’s annual employee turnover is avoidable, then the company could, by correcting the causes, save $1,102,500 per year.

Employee turnover isn’t the whole story

Just looking at turnover costs doesn’t tell the whole story, though. Long before employees leave, they become disengaged. Disengaged employees are uncommitted, marginally productive, frequently absent and, in some cases, working actively against the interests of the company (e.g. work groups with a high number of disengaged workers lose 51% more of their inventory due to theft than do those on the other end of the spectrum).

Hundreds of Gallup studies reveal that on average business units with employee engagement scores in the top half compared to those in the bottom half have:

  • 86% higher customer ratings
  • 70% more success in lowering employee turnover
  • 70% higher productivity
  • 44% higher profitability
  • 78% better safety records.

The vast majority of managers in the position to create these sorts of outcomes for an organisation are the first-line managers and the middle managers to whom they report. These are the managers I refer to as Frontline Leaders. And what is proving more and more essential for improving organisational productivity, customer loyalty and profitability are programmes that develop Frontline Leaders and close the five key Frontline Leadership gaps.

 

To get our report “The Secret to Leadership Effectiveness”, which shows how YOU can help your organisation improve leadership quality, employee engagement, and financial success, click here.

 

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