To live or die: the dilemma of companies on leadership issues

Transformational leadership is the key tactic for the survival of fragile companies in these times of uncertainty.

A company stands out for its leadership

Transformational leadership is a key tactic to get organizations afloat in difficult times. There are periods or situations in which leaders are challenged to demonstrate what they are made of. They are required to reinvent themselves and become, more than ever, an influence and inspiration to their collaborators; characteristics that make up the transformational style.

But why can someone under this type of leadership make a difference in complicated scenarios? What qualifications should they have, and how to manage this style?

The concept was originated and introduced by James MacGregor Burns, and is defined as the type of leadership exercised with a strong vision and personality, in order to be able to change expectations, perceptions and motivations of the work team, as well as lead the change within an organization.

In short, we can say that it is the ability to encourage others to achieve comprehensive objectives based on guiding, inspiring and modeling by example, developing inclusive thinking in the person or work teams.

In uncertain scenarios, such as possible throughout political and economic changes, companies tend to have fragile environments that have an important impact on the motivation and even concentration of employees at all levels.

Also, one can experience a climate that is not focused on results and more concerned with understanding how the current conditions can be seen and how committed your future will be within the organization.

Faced with this unfavorable situation, any company, including the most solid, may suffer a strong shock, but it is the leader who is responsible for acting on time, reversing the situation and managing the organization in bad times.

Closeness, containment and inspiration: transformational qualities

His work in these scenarios should always be close to people, with a high level of listening and empathy, and with a genuine connection with talent to really be able to have the opportunity to direct and calm anxieties. Your communication processes must be much more proactive than reactive. In the same way, the leader must be very prepared, intellectually and academically, to understand how adversity will be dealt with and how to contain good or bad news.

Another fundamental characteristic is a positive attitude and with a high emotional intelligence, where instead of seeing obstacles, learn to see opportunities within not so clear horizons. Able to have and maintain an attitude above the line; that is, proactive rather than reactive, but above all it must be someone who has a very developed capacity for inspiration, containment and empathy.

Other features that must be present in a leader in the face of complicated times are humility and resilience. Humility in the aspect of understanding that many new questions will arise, where perhaps the answers are in the new generations.

We must have humility to be accompanied, as much as possible, by people who can complement us and help us to have a more comprehensive and successful strategic vision. And resilience to recover, overcome and adapt quickly to adversities.

While it is true, that in Mexico and Latin America, company leaders are used to leading under fragile economies and uncertain circumstances. However, that does not free them from feeling vulnerable to the complexities; it is right there, when the leader and all his emotional set must gain more strength to succeed.

Points in favor

As we can see, transformational leadership determines that for an organization to grow, it is necessary to maintain the motivation of all the parts that comprise it. Thus, it requires a closer push from the worker with less responsibility to the managers or owners of the company.

Some of the main advantages that it brings are: motivation, training and effective leadership. Motivate employees, give them confidence and make them participants in the company’s successes, increase their productivity and thus obtain better business results.

On the other hand, training them encourages the individual development of employees and constantly challenges them intellectually. And as for the effectiveness of the style, we can affirm that the leader ends up becoming a real reference for his collaborators, since he knows how to manage his team and make them grow through collective goals.

Opting for a leadership style that is not very close, with little listening and only giving instructions, can bring negative results. It can cause a loss of direction and that priorities are not worked on; that there is no focus on the important things and that a toxic work environment is present.

In short, a loss of talent can occur when the collaborator feels confused, having little clarity. The transformational leader must add to the strengths of his teammates in order to achieve a stronger core that allows him to keep his entire team focused, united and focused on any situation that may arise.

Leadership is key within companies

But how do we manage optimally and reduce uncertainty in the work team?

Understand how uncertainty will disturb. Analyze the changes that will be presented and the rules of the game; make a 360 analysis that allows for more clarity.

Define what the challenge will be. List the circumstances to face, what will be the consequences and implications of the changes that are coming.

Seek inspiration from other cases that have been similar. Today everything is documented, check what has been done in other ways to resolve these conflicts, even in other industries or other markets, this will save you time for action.

Structure a well informed and clear plan. Build the strategies that will allow you to face the circumstances.

Communicate and involve the team. Draw them and listen to them to be very close. Get them on board for the transformation process and make sure that the actions and plan are being carried out correctly and with the expected result. It is essential to constantly evaluate to determine the effectiveness of the strategy, and if necessary, change course.

Companies with satisfied employees

Finally, it is precisely these times of uncertainty, crisis and transformation that allow us to leave our comfort zone and develop skills that we may not have today, both as a leader and as a member of a team.

We must not be afraid of the changes, on the contrary, we must visualize them as a form of growth and challenge ourselves to be better professionals, but above all, understand that if we take it from the point of view of an opportunity, rather than a threat, the perks can be extraordinary. It is an opportunity to strengthen, discover new skills and aptitudes, but above all to work more as a team.

Qualities and skills of a transformational leader:

  • Close and with an open and direct communication for all its collaborators;
  • Positive and purposeful;
  • Humble and resilient;
  • Disruptive thinking and able to find new solutions;
  • Capable to adapt to any situation (flexible);
  • Able to generate strategic alliances and with high internal and external influence.

This article originally appeared in our International Website. It was written by Angeles Madrigal, our partner in Mexico.

SME’s and Mid-Caps: The Backbone of the EU Economy facing many challenges!

SMEs (0 to 250 employees), Mid-Caps (250 to 3000 employees), including family companies, are the major part of the European economy and important drivers of growth, innovation and employment. They represent 99% of businesses in the EU, employ two thirds of the active working population and represent over 85 % of job creations.

Although they are leveraging on innovation and economic performance, they are very often facing the same challenge and issues.

Difficult and slow-paced international development

Indeed, their size is often critical, and they have many projects in their domestic markets, but they have a hard time grasping international markets and their specificities. They have an opportunistic international vision that unfortunately lacks long-term structure with synergies and rich cultural mix within their teams.

More and more aware of this challenge, European Union has launched several programs (f.i. COSME) with more focus to support international development and access to markets for SME’s and Mid-Caps, but also to facilitate access to financing at all stage of their international development (f.i. specific active support of the European Investment Bank).

Managerial renewal difficulties

Mostly facing reverse pyramid of age effect in the management and executive level (with a majority of the population in the range of the 60 years), the problem of executive succession planning arises regularly.

To preserve the long-term DNA of the company and to support future expansion, these companies need to anticipate the succession planning by establishing appropriate related governance.

Supervisory Boards should, for instance, be more open to external independent advisors, to anticipate and secure successions, but also to makes some sensitive decisions easier. With specific understanding and experience with these SME, Mid-Caps and Family companies, these advisors should demonstrate specific leadership and listening skills, empathy and ability to understand the most complex and emotional dimensions of these companies.

Some Corporate functions still lacking empowerment and impact

Corporate functions (HR, Finance, Purchasing, IT,…) are still too often neglected and considered as “secondary” asset. Although, these functions play a key role in structuring and supporting the development of the company.
General Management should rely more on some Corporate functions to support their international expansion and growth.

  • CFO’s playing key role for managing the company, evaluate flexibility, securing growth of the business (financing, cash management,…) or evaluate external growth opportunities.
  • Human Resources Directors playing crucial and leading role in the social transformation of the company (transmission, cultural renewal, skills development, anticipating social conflicts,…).
  • IT Directors perceiving the digital transformation opportunities on the market, but lacking benchmarks and information in order to progress on these topics and make the right choices.

Very often SME’s, Mid-Caps are hesitant to recruit sufficiently high profiles to face these challenges, fearing the cultural difference. However, by recruiting profiles that do not have the level to tackle the strategic challenges, they take the risk of being unable to achieve a successful transformation and as such losing major growth opportunities.

Increasing attractiveness to recruit experienced executives from large groups

Stability, long term vision, freedom and agility on investment strategy, quicker decision process, are strong arguments SME’s, Mid-Caps and family companies can oppose to large international groups completely depending on stock exchange evolution and facing recurrent restructuration and rationalization programs.

The opportunities they can offer to the candidates are becoming more and more attractive to experienced executives working in large international corporation and willing to have more impact and front-end responsibilities in their next career step.
However, selection and integration process of candidates coming from large groups should be approached with maximum care as the professional context, organization and expectations are very different. Candidate should be much more polyvalent and hands-on as there is no large corporate structure to rely on; they should be self-motivated, entrepreneurial and much more evolutive in their approach. Strong adaptative skills are definitely key in this context.

In order to face all these challenges, recruitment of management and executive level has become a major challenge for SME’s, Mid-Caps and Family Companies. But as the financial impact of an error is far from being negligible, partnering with recognized international executive search network with strong references in this niche is essential.

Jean-François Mahieu – INAC Belgium

3 Top HR Trends for 2020

We know that the workforce of the future will be different. Weʼre already experiencing dramatic changes in the composition of workers. Baby boomers are retiring in record numbers, and beyond millennials, weʼre seeing generation z enter the workforce. As we move towards the majority of workers being digital natives, these tech savvy employees have different expectations about working. Below weʼll look at three top HR trends for 2020 and beyond.

Remote Working

Whether you embrace or fight the idea of employing remote workers, the shift toward remote working is gaining more and more momentum. In fact, some companies in the technology space are fully remote by design. By using cloud resources, they can eliminate the overhead cost of facilities yet provide full access to systems regardless of employee location.

Remote working has also become a perk that many job seekers request. Be it full-time remote, or a couple of days a week, the perk has benefits for both the employee and the company. For example, employees that arenʼt tied to specific hours can work when they are most productive, regardless of the time of day. And companies in rural areas have a better chance of attracting more top-notch talent since the employees donʼt have to relocate.

Technology has made it easy to manage distributed workforces. With tools like Slack, Trello, Google Hangouts, etc… itʼs as easy to connect with someone halfway around the world as it is someone down the hall. This also applies to HR. You can now access larger candidate pools as well as SaaS solutions that make it easier to manage the process.

Employee Satisfaction

According to Harvard Business Review (HBR), the key to happy customers is happy employees. Per the article, “Becoming a customer-centric business is a worthwhile goal. But our research reminds business leaders that becoming more customer-oriented while allowing workplace morale to suffer is a poor and short-sighted strategy. Instead, customer and employee satisfaction should be seen as two sides of the same coin.”

If you havenʼt already, setting up programs that provide honest, two-way lines of communication is imperative to improving the employee experience. Providing a voice to employees invests them in the company. When people are heard and acknowledged, you can reduce turnover rates, increase productivity, and improve financial results.

Another area that can improve employee satisfaction is wellness. We are just now realizing the impact on the entire company that wellness can have. From sick days to retention rates, wellness encompasses both physical and mental wellbeing. Encouraging physical wellness can be achieved through programs such as gym memberships or reimbursement, providing healthy snacks, and related initiatives.

Encouraging mental wellness is a newer issue for HR teams, even though burnout and anxiety are not new issues in the workplace. These often undiscussed issues are the first things that will undermine your corporate culture. A great first step is simply acknowledging that mental health is important to the company. By bringing the issue into the open, you destigmatize it. In addition to encouraging people to use their EAP benefits, make sure you set up an open door policy, encourage work-life balance, and be flexible when discussing mental wellbeing issues with employees.

Retraining

Technology has forever changed how we work. This has opened up an entirely new world of opportunities for people. Jobs that could be automated, have been creating new, more fulfilling jobs. However, these roles require new skills. And many of these new roles have job shortages because there simply arenʼt enough people with the requisite skills.

The area of retraining is, for the most part, new to HR. Never before have we seen this kind of workplace transformation happen this quickly. Ongoing learning has been a requirement in certain fields, but in todayʼs landscape, itʼs becoming a given, for every industry. And HR must lead the charge in identifying skill sets in employees who are interested in learning a new role.

According to Heide Abelli, Senior Vice President, Content Product Management at Skillsoft, “The growing sense of urgency to address gaps in the readiness of the workforce to execute on the digital agenda. With the introduction of new roles, the elimination of outdated roles, the increased scope of responsibility in key roles and the removal of management layers, the challenge around talent readiness is enormous.”

In assessing both the hard and soft skills of employees, HR can set up individual learning programs using online and or classroom learning. Programs like LinkedIn Learning (formerly Lynda.com), or Bootcamps like AppAcademy can provide intensive training programs in a short amount of time. We expect to see continued evolution and growth of retraining programs in 2020.

If you have questions or wish to explore further please send us a note. Our global team of executive recruiters can help you build out your leadership team, address culture needs, and provide guidance on how these and other HR trends and how they may be affecting your business.

Jon Gordon – INAC USA

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