Bridging The Leadership Gap

Fazila Banoo Manzur Elahi, Head of Performance, Rewards & Employee Experience, Bank Muamalat Malaysia Berhad.

In this article, Fazila Banoo Manzur Elahi discusses the strategic necessity of bridging the leadership gap due to retiring leaders and high turnover among younger employees. She emphasizes the importance of performance management, leadership development and succession planning, to build a strong leadership pipeline and ensure organizational continuity and stability in today’s dynamic business environment.

Bridging the leadership gap is a strategic necessity in today’s business environment. With experienced leaders retiring and the need for new skills growing, the importance of performance management and leadership development has never been greater.

Leadership gaps occur when there is an insufficient supply of leaders within an organization compared to the demand for filling pivotal roles. When leadership roles remain unfilled or inadequately filled, the organization's ability to drive business results is compromised. This shortage often stems from two primary factors—the retirement of an aging workforce and increasing turnover rates among younger employees.

As the older generation reaches retirement age, organizations are losing a significant portion of their experienced leaders. These individuals carry years of institutional knowledge and expertise, creating a substantial void when they exit the workforce. Concurrently, younger employees who are expected to step into these leadership roles exhibit higher turnover rates. This generation seeks diverse career experiences and opportunities, often moving between organizations more frequently than their predecessors. Consequently, the continuity and stability needed for effective leadership development are disrupted.

To tackle these challenges, organizations must implement a strategic succession plan, anticipating and managing leadership gaps. This includes early identification of high-potential employees and offering them targeted development opportunities. Through structured career paths, mentorship programs and continuous learning initiatives, future leaders can be prepared to fill critical roles. By nurturing a growth-oriented environment, organizations can build a strong leadership pipeline to mitigate risks linked with turnover and retirement.

Drawing from personal experience, the initial step in addressing the leadership gap involves establishing a robust performance management system. This system distinguishes high-performing employees and clarifies potential leadership candidates. By tracking performance and development systematically, organizations ensure the identification of suitable individuals for future leadership roles, laying a strong foundation for their leadership pipeline.

“Implementing a strategic succession plan and nurturing a growth-oriented environment are essential for building a strong leadership pipeline and mitigating risks associated with turnover and retirement.”

Secondly, it is crucial to identify and analyze the leadership supply and demand over different time horizons: short-term, medium-term and long-term. This analysis should include identifying the job roles and competencies required to achieve the business goals. Once the required competencies are mapped out, organizations can evaluate whether any of the high-performing employees or the talent pool possesses these competencies or can be groomed to develop them. This foresight ensures that the organization is not caught off guard by sudden leadership vacancies.

If the talent pool includes individuals who can potentially be groomed for these competencies, the next step is to craft a focused development program for them. It is important to understand their aspirations and align them with the organization’s requirements. When there is alignment between an individual’s career aspirations and the organization’s leadership needs, the likelihood of successful leadership development increases significantly. These high-performing individuals, who show potential to step into leadership roles, should form the succession pool.

Individualized development plans are vital for these individuals, tailored to their specific needs. Ongoing interventions should be customized, with regular check-ins to closely monitor progress and performance. The 70-20-10 model offers a useful framework, emphasizing that 70 percent of learning comes from on-the-job experiences, 20 percent from interactions with others such as mentoring and coaching and 10 percent from formal educational events like training sessions and workshops. This balanced approach ensures practical experience, guidance and formal knowledge acquisition.

Finally, as opportunities arise, these individuals should be given the chance to test their capabilities by performing in leadership roles. This practical application is crucial as it allows them to apply what they have learned, gain confidence and demonstrate their ability to lead. By providing these opportunities, organizations not only assess the readiness of their future leaders but also keep high-potential employees engaged and motivated.

A key indicator that succession planning is effective is when individuals from the succession pool are successfully promoted to fill pivotal roles. This outcome demonstrates that the organization has not only identified and developed potential leaders but also prepared them adequately to step into critical positions when needed. Achieving this requires a future-focused process where the right individuals are selected from the beginning of the journey.

Throughout this journey, it is important to communicate clearly about what the succession planning process will entail, what is expected from the participants, and how they will benefit from this journey. Knowing the end result—such as potential leadership roles and the skills they will acquire along the way—motivates participants to fully engage in the process. A well-executed succession plan undoubtedly would help organizations in building a strong pipeline of leaders poised to drive future success.

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