Leadership Strategies for Retaining Talent in Era of the “Great Resignation”

By Heather Ogan

By now I think we have all heard that “people leave people, not companies”.  This concept is more important than ever in the current labor environment of the “great resignation”. Good leadership clearly makes the difference.

The Essence of Strategic Leadership

Leadership theory is what leaders do, while leadership styles are how leaders do what they do.  Strategic leadership involves the setting of the path forward (notwithstanding the ambiguous events and data available), by understanding the core competencies of the business, understanding external threats, identifying opportunities, and setting a clear future strategy to position the company for success.

Strategic leadership is a key concept because in today’s world, due to advances in technology, there is more data than ever about events impacting specific industries as well as impacting the broader global economy available to organizations.  The advent of social media has provided businesses with insights into customers’ wants and needs.  Because the data and these insights are often not well defined, there are multiple alternative choices available to leaders.  Successful strategic leadership provides guidance through this ambiguity, providing a clear road map that leverages the company’s critical resources to gain competitive advantage.

Employee retention is a key issue for all employers, especially now in the era of the “Great Resignation”. The latest PwC Pulse Survey, “Managing Business Risks in 2022” shows this issue to be the most pressing for company executives, second only to cybersecurity:

I see five ways that companies can leverage leadership attributes to invest in their teams for both short- and long-term talent retention:

• By harnessing the power of employee and company resilience in the face of inevitable change
• By leveraging technology
• By providing motivation to employees via sustainability initiatives
• By embracing positive leadership models
• And by discouraging negative leadership attributes

Let’s dive into each of these ways companies can work harder to retain their prized talent.

Harnessing The Power of Resilience in the Face of Change

A key concept in strategic leadership is resilience.  Resilience is essentially the ability to continually adapt to changes in the environment and rebuild.  Learning organizations are characterized by personal mastery, mental models, shared vision, team learning and systems thinking.  Ironically, the current global pandemic and its negative impact, macro-economically, has been the catalyst that prompted many companies to institute much needed changes.

Another way to think about resilience is from an enterprise risk perspective.  Many organizations have business continuity plans (BCP) in place that consider risks from various threats such as cyber-attacks, terrorism, natural disasters, fire, global pandemics, and other business interruptions, and develop mitigation plans to ensure that supply chain interruptions are minimized, and losses are covered by insurance.  Critical resources that are valuable, rare, inimitable, and non-substitutable (VRIN) provide a business with competitive advantage.  It is important to note that it is rare for a company’s critical resources to have all four VRIN characteristics, however, they can still convey competitive advantage.

Leveraging Technology

Technology is a critical resource for many organizations in today’s world and creates both a value proposition and competitive advantage.  The quality and timeliness of information of the data collection by technology are key inputs into strategic planning. Technology resources also include information technology and connectivity infrastructure.  This infrastructure when robust and well maintained is essential to support a business’s ability to pivot such as was required to convert to complete work from home for all employees at the onset of the COVID-19 “shelter-in-place” orders.  One key advantage resulting from the changes to the ways we work implemented due to the global COVID-19 pandemic is the expansion of availability of talented people as physical location is less of a barrier to employment with more companies adopting and perfecting remote work strategies. This increases the company’s access to exceptional human talent in the technology space, allowing it to stay on the cutting edge.

Providing Employee Motivation Via Corporate Sustainability

Another key concept of strategic leadership is sustainability.  The international business community has embraced the notion of sustainable development and corporate environmental responsibility.  This concept first came to the fore in the early 1980s and generally requires that corporations set their growth strategies keeping in mind the need to safeguard the ability of future generations to meet their own requirements.  Customers in turn, are motivated by companies’ stated interest in preserving the environment for future generations, evidenced by their investments in cleaner technology, and their commitment to sustainability and social responsibility.  A resurgence in attention to this concept has emerged following the COVID-19 pandemic and the resulting global economic crisis.  As customers share their opinions using social media platforms, both good and bad, the company acts on these insights.  The scale and speed of social media has made it more important for companies to live up to the expectations of their consumer.

Embracing Positive Leadership Models

Some key other characteristics of good leaders include self-awareness and prioritizing of self-development, the development and mentorship of others, encouragement of strategic thinking and innovation, integrity, and transparency.  Transformational leaders are charismatic, inspire confidence, and create commitment by using inspirational motivation techniques.  They articulate a compelling vision, encouraging teams to challenge the current state and think creatively to achieve goals.  They show personal care and concern for employees and the community they serve.  This increases the amount of trust employees have and reduces their discomfort with the ambiguity that often accompanies change.  They also exhibit a posture of stewardship rooted in the more modern notion that leaders should work towards a purpose larger than material gain by paying attention to the common good for our community.  Working towards the common good for our community also ties into the re-emerging notion of sustainable growth and ESG (environmental, social and governance).

Discouraging Negative Leadership Attributes and Behaviors

Some of the main barriers to leadership effectiveness include prevalence of change and tone from the top.  Teams can be resistant to certain initiatives due to the prevalence of change barriers, especially when they believe that adoption will be detrimental to their workloads if the changes implemented ultimately fail or are abandoned.  In addition to the prevalence of change barrier, there is an implicit risk of creating fear and apprehension in teams whenever a new strategy is introduced, no matter how well thought out.  This is due to human nature and the desire for the maintenance of the familiar state, even if that familiar state is no longer preferable for the long-term success of the company.  Another major barrier to leadership effectiveness is incongruity between what leaders say and do.  Essentially, the failure of leaders to practice what they preach.  Simply put, the “tone from the top”.

If you find yourself in need of great leaders that employees want to follow, call us at FLG – we understand that all projects require working with cross functional teams with varying levels of seniority and expertise and so we leverage a situational leadership style which is characterized by varying leadership styles based on the needs of the situation.  Our exceptional CFOs are charismatic, inspire confidence, and create commitment thereby encouraging teams to embrace change and think creatively to achieve goals.  Their personal care and concern for employees increases trust and reduces discomfort associated with change. By providing clear and frequent communications around the goals of our projects, along with periodic status reports, our CFOs are able to reduce ambiguity and build trust, and thereby, get buy-in from cross functional teams to drive projects to a successful conclusion and achieve positive business outcomes.