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Jon Kennard


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A new world for business: Part 1


The business world is changing and UK management needs to adapt to lead organisations out of recession, all of which has huge implications and challenges for L&D. Ruth Spellman OBE suggests a way forward.

Since the coalition government came into power, individuals and employers alike have been waiting for news about the Comprehensive Spending Review. With waiting comes speculation and a degree of guesswork, but one thing is certain - after the chancellor delivers his assessment of the economy and the government's plans for recovery, all of us will be facing a new world for business.

"There is today, just as there has been in better economic times, a clear need for employers to drive leadership skills amongst potential and existing managers."

Yet, the new world should not come as a huge surprise. Against the backdrop of recession, employees and the organisations they work for have grown accustomed to shrinking budgets, and looking for ways to ensure that spending power goes further is now an accepted business norm.

The problem is that many employers confuse good financial practice with wholesale cutbacks, giving little thought to the long-term consequences for their organisation. Earlier this month, for example, news broke that soaring cotton costs brought about by natural disasters would have a serious impact on the profitability of many well-known high street retailers. Rather than swallow what is expected to be a short-term problem, discussion centred on passing the cost on to consumers. The issue is that many of the retailer's customers have been tightening their belts and are likely to question their brand loyalty.

The world of learning and development is no different and, according to the UK Commission for Employment and Skills (UKCES) latest report 'Ambition 2020', the UK continues to strive to become world class in productivity, employment and skills. Yet we spend less than many of our neighbours and still expect more. Across Europe countries are developing skills at a faster rate, meaning that we are unlikely to improve our position in the global league table of competitive nations.

It's a problem, says the report, across many levels – none more so than for the UK's management community, and this damning indictment is one that we must not shy away from. UKCES is right, after all, to raise concerns about the management skills gap currently faced by UK employers. In simple terms, sub-standard management will have a catastrophic effect on our ability to compete internationally. There is today, just as there has been in better economic times, a clear need for employers to drive leadership skills amongst potential and existing managers. Many people have innate leadership qualities, but organisations need to nurture these skills and develop capability over the long term if they are to be truly competitive.

Failure to act

On one level failure to act will only increase levels of disengagement. On another it will impact negatively on staff retention and restrict economic recovery because employees will not respond well to haphazard learning programmes dictated by shifts in economic fortunes and skills will only be developed in a piecemeal manner.

It begs the question, of course, about what can be done to tackle this problem?

Some would argue that bad managers should be shamed publicly, and I believe in accountability but to take one recent example, I'm certainly not suggesting that the way Tony Hayward was personally lambasted for BP's handling of the oil spill is the right approach. Could it be that a more productive response would be for organisations to learn from mistakes and ensure skills are developed that the business needs, going forward?

"So much evidence suggests that where employers take responsibility for management development, where it is demand-led and competency driven, employee engagement, performance and productivity all improve."

Add this to comments made recently by Sir Michael Rake who branded our education system a 'disgrace' after claiming BT has been forced to reject thousands of apprenticeship scheme applications for poor spelling and grammar. His point was that many young people now lack the basic skills needed to get by in the workplace, so hats off to Sir Michael for highlighting the issue – it's certainly right to raise ambitions for a better qualified workforce, particularly as today's new entrants will be tomorrow's managers and leaders. It is also why I believe there is room for management and leadership development within schools, albeit at an appropriate level. However, right now employers can only work with the resources at their disposal and rather than expend energy lamenting the state of the nation, it's time to do something about it.

This, of course, means that those of you working within learning and development have a critical role to play. Budgets may be restricted, but that should not stop you from creating talent strategies. Instead of haranguing schools for the lack of 'work ready' students they produce, what are you doing to develop the skills of new starters? Can you work with education establishments, sharing what the ideal school leaver or graduate looks like and shouldn't you give students practical experience of the workplace so they know what's expected of them from day one?

Above all, don't make the mistake of thinking that the burden of action rests solely with schools. After all, if employers continue to invest less in management development than many of our competitors, can we really expect to compete? Just one in five managers in the UK currently holds a professional qualification and, according to recent research by the CMI, 63% of managers admit they have had no management training. Worse still, 47% of people leave their jobs because they haven't been given adequate training to do them properly. Is leaving people in the dark really the best way to manage talent? Isn't it just a waste of limited resources to bear the cost of recruitment only to lose staff and have to start again, because training is ignored?

Ruth is chief executive of the Chartered Management Institute and will deliver the opening address at the World of Learning Conference, the UK's leading dedicated L&D event. The conference is part of the World of Learning Conference & Exhibition, which takes place at the NEC Birmingham on 28 and 29 September.

Ruth will be speaking on a topic entitled 'A new world for business?' and examining the implications and challenges for L&D professionals at the World of Learning Conference on 28 September. To register for free entry to the World of Learning Exhibition, or to book your place on the World of Learning Conference, visit or call +44 (0)20 8394 5171.

Author Profile Picture
Jon Kennard

Freelance writer

Read more from Jon Kennard

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