|Vol. 1 - No. 2 (98)
Leadership Competency Development
Richard J. Mirabile
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LEADERSHIP COMPETENCY DEVELOPMENT: COMPETITIVE ADVANTAGE FOR THE FUTURE
Richard J. Mirabile
The concept of leadership competency development is discussed with an emphasis on the historical approaches versus contemporary requirements. Issues surrounding the notion of inherent leadership talent as compared with developing leadership capabilities are contrasted with the need for some systematic framework from which to address the leadership question. A seven-step process is suggested for identifying leadership requirements, assessing leadership talent, developing leadership competence, and creating a core business process that reinforces the ongoing requirements of leadership development.
One of the most researched and written about topics in the field of organizational behavior is leadership, (see e.g., Bennis, 1994; Kotter, 1988; Tichy, 1990; Burns, 1978; Bass, 1990). The debate about leadership covers many years and generally has centered around competing schools of thought regarding whether or not leadership is an inherent set of traits, whether or not it can be taught or learned, and to what extent it is truly situational (Gardner, 1990). Spinoff ideas are also prevalent, but for companies faced with imminent leadership crises, this debate can be summed up very simply: In the absence of clearly identified leadership talent within an organization, what are the best ways to define it, to evaluate it, to recruit for or develop it, and finally, to constantly refine its operational requirements?
These are the practical questions that surface when wrestling with the leadership question. Adding to the challenge is the need to distinguish between management capability and true leadership talent. The academic and practitioner literature has dealt with this distinction quite satisfactorily for this article’s purposes, but the line that separates what managers do from what leaders do is not always as clean as the literature suggests (Bennis, 1992; Gardner, 1990; Adler, 1997). The intent of this particular article is to address several issues regarding leadership that have practical and significant importance to businesses striving to achieve and maintain a competitive advantage in the marketplace.
From the most practical point of view, companies wrestling with the leadership question must first have a clear vision of direction. In short, what are the goals and objectives an organization has established for itself relative to the market within which it competes? Second, having a clear picture of the “what” that is the goal, it is imperative to next establish the “how.” The “what” specifies where the company is headed or aspires to be at some point in the future. The “how,” on the other hand, describes the strategies and tactics that will be employed in order to reach the destination. This is the first juncture at which critical decisions concerning leadership must be made, for there may be alternative ways to reach a particular destination. Choosing one that ensures success, using whatever metrics deemed appropriate, is the real challenge.
For example, at different points in time, companies may require a form of leadership that is more strategic than tactical, more inspirational than explicitly demanding, more focused on articulating a vision than executing a plan (Blanchard and Zigarmi, 1985; Drucker, 1995; DePree, 1989; Covey, 1992). These are very different styles and require different sets of competencies. Some leaders demonstrate excellence with respect to one style or another, but do not necessarily excel in all styles. Others, the more rare breed, can adapt to the circumstances and be both the visionary as well as the operational driver, whichever is called for at any particular time. Companies facing leadership crises or challenges should take steps to identify the style or styles of leadership that best support the company culture, organizational goals, and marketplace demands (Mirabile, 1991).
While it is relatively straightforward to describe in concept and even in procedural terms what the logical steps to develop a leadership plan might be, it is far more difficult to execute one. Despite that fact, there are some fundamental steps worth considering when attempting to address the leadership question.
Phase I: Establish Organizational Requirements
In this phase, a process should be created to identify those metrics by which company performance and success might be measured. Some typical examples are profitability, earnings, market share, stock valuation, or return on equity. Other less financially driven yardsticks include brand identity, customer loyalty, turnover, employee satisfaction, or product/service superiority. Whatever the metrics, they need to be clearly articulated, operationalized, and held as the benchmarks against which performance will be measured. Such measures will provide a useful set of criteria to determine whether or not to stay on the existing leadership plan or to redefine it in some way.
Phase II: Translate Requirements into Sets of Competencies
Once company goals, objectives, and cultural norms have been established, it is necessary to translate those requirements into identifiable sets of competencies that are needed to drive them. In this context, competencies can be defined as knowledge, skills, abilities, behaviors, accomplishments, traits, and/or characteristics, i.e., success factors, that when combined and demonstrated with the necessary level of proficiency, would most likely yield desired outcomes. A useful rule of thumb to use when working with competencies is called the Rule of D.O.M.I. This rule asks these questions:
1. Can you Describe the competency in terms that others understand and agree with?
2. Can you Observe it being demonstrated or failing to be demonstrated?
3. Can you Measure it?
4. Can you Impact or Influence it in some way, e.g., train, coach, develop, etc.?
For purposes of organizational usefulness, if a competency meets these criteria, it is worth inclusion as a focal point for planning, assessment, and development efforts.
Establishing competency requirements can be accomplished in many ways. Focus group interviews with both internal and external experts, using predetermined lists of leadership competencies, scanning research literature on leadership styles and behaviors, or perhaps reviewing historical precedent in the company to determine what has worked or not worked in the past can all be valuable sources of information in this regard. The most promising strategy is likely to be some combination of these methods. The important point here is to assemble the appropriate input from the appropriate people using acceptable procedures of data collection in order to construct a profile of desired leadership competencies. Figure 1 shows a partial list of leadership competencies derived from research using the type of analysis procedures outlined above. The data collected from this process forms the basis for developing a picture of the competencies required to produce the desired results.
Figure 1 Leadership Competencies
Creativity Originates new ideas or methods; takes decisive action to initiate innovative programs, plans, and/or action steps.
Customer Operations Understands the basics of how customers operate their business, and uses this information in developing proposals/contracts, in negotiations, and in developing strategic goals; uses market-driven principles as the basis for customer relations.
Customer Trends Understands the factors/forces that shape customer trends; is aware of historical, current, and projected industry trends; maintains a focus on quality and market-driven principles.
Development of Others Identifies individuals’ career direction and assists in their development for other jobs or assignments, even if they will be lost to another unit.
Empowering Others Proactively involves others in planning, decision making, and implementation efforts.
Environment Scanning Assesses relevant market conditions/changes; anticipates required shifts in business direction and aligns resources before they are needed.
Executing Strategy Develops the objectives, processes, and action plans to implement short and long term business strategies.
Expansive Thinking Maintains a realistic vision of the goals of the company both now and in the future and understands how that translates into business unit performance.
External Focus Maintains an awareness of related or competitive organizations and uses them as reference points or benchmarks to gauge progress.
Flexibility Quickly and effectively adjusts behavior to meet a goal and/or changing circumstances, e.g., changed work schedules, customer needs, strategic directions of the company.
General Business Understands basic business principles (e.g., profit and loss, cost benefit, general finance, ROI, depreciation, profitability, etc.) and applies the knowledge to achieve objectives.
Phase III: Build a Leadership Profile
Once the critical leadership requirements have been articulated, they must be operationalized, that is, put into a form that can be used as a template against which leadership talent may be evaluated or compared. A leadership profile is often a useful tool for this purpose, and can easily be constructed using a process for establishing rank-order importance and proficiency level requirements, as well as levels of rater consensus for consistency and buy-in purposes. More sophisticated versions of this process are certainly available, but each company must decide what procedure works best for its particular culture with its particular set of demands. When building any profile to be used as a standard of comparison, it is important to distinguish between profiles that reinforce the existing set of circumstances, versus those that identify a new set of requirements that need to be in place in order to achieve future goals and objectives. These are two very different standards and will likely produce very different sets of leadership requirements.
Phase IV: Assess Internal Bench Strength
Once a template or leadership profile is available, a process of evaluation can be used to determine the extent to which existing employees match or possess the potential to match the profile. Again, various methods of accomplishing this task can be tried. Each company should carefully weigh the alternatives and make the choice of which method or methods presents the best possible outcome within the realities of time, money, resources, validity, and other operating constraints. Possible methods might include multi-rater assessments of individuals using supervisors, peers, internal/external customers, and self-ratings. These have recently been referred to as 360-degree assessments, and often provide a comprehensive and accurate picture of an individual’s strengths and development gaps relative to a profile of requirements. Other methods include external assessments from experts in personality assessment. Testing may also be a method of choice, although for senior leadership positions it is probably not as useful as other methods. Past accomplishments have been shown to be a predictor of future success, but here again, the competencies that supported past accomplishments might be different from those that are required to drive an organization into the future. Finally, combinations of methods almost always yield the best results, but these can be costly, time consuming, and require significant investment of internal resources.
Phase V: The Recruit versus Develop Decision
Determining internal bench strength forces companies to a critical decision point. What are the tradeoffs between developing internal leadership talent versus recruiting it from the outside? This is a sensitive issue that can have enormous consequences, both positive and negative. On the positive side, developing internal talent carries with it all the positive benefits of sending strong messages to employees about internal career opportunities; it eliminates the need for someone to learn the culture and the business; and it rewards candidates who have performed successfully in the past and have demonstrated some degree of loyalty. Recruiting from the outside promises fresh ideas and perspectives from someone who comes with fewer preconceived notions of how things should be done; it may come closer to matching the desired profile with someone who has already been there and done it before; and it signals a very deliberate change in philosophy, operating style, culture, and performance expectation setting, assuming those are the signals the company wants to send.
The negative side of an internal development decision can also lead to in-breeding, which might inadvertently cause reinforcement of the status quo; it can be very costly and time consuming to groom talent to assume higher levels of responsibility; and there can often be internal discontent whenever someone is passed over for promotion and a peer suddenly becomes the boss. On the recruiting side, it too can be costly and time consuming; the new candidate can be at odds with the culture; despite reference checks and track records, there is still an element of “unproven in this environment” attitude that prevails; and once in power, leaders sometimes make decisions and changes that were unexpected from what was intended. All of these possibilities are just that, possible consequences of the decision to develop from within or to recruit from the outside. This is a difficult decision, one that should be carefully weighed from both perspectives and considered in the context of what is in the best interests of the business, the shareholders, and the employee workforce.
Phase VI: Refine the Leadership Profile
This phase refers to the continuous improvement and learning processes that should be in place supporting an organization’s survival under constantly changing conditions. Mechanisms for ongoing viability should be part of the leadership development plan, for without them, reactive decision making tends to be the normal course of business. A formal or even informal refinement process is one in which, on some regular basis, a company takes time to reassess its original goals and objectives, determine where it is today relative to those intended outcomes, identify what the possibilities for continued movement towards the goal might be, and what, if any, changes in leadership talent would be required to increase the chances of successful goal attainment. These constitute a set of questions that should be addressed on a continual basis in order to keep the company on track with its vision.
Phase VII: Make it a Core Business Process
Whenever a process is created on a one time or an as-needed basis, it runs the risk of being viewed as a distraction from daily operational demands, and worse, is often conceived, developed, and implemented in the context of a “snapshot in time” versus a more strategic perspective. Processes that become part of the company culture, that is, become core business processes, tend to be more accepted by the employees and shareholders, they tend to produce consistent outcomes, and they provide an ongoing framework from which improvements and refinements can be made. The need for leadership talent is never a one-time event. Sooner or later, the issue will surely surface again in the future. Therefore, organizations need to establish a long-term plan and set of processes that would build the aforementioned framework so that quality and consistency can be more readily assured, as well as achieving the best possible outcomes on a regular basis. In short, establishing leadership development as a core business process should be done in order to reduce the need for reactive decision making and increase the likelihood that a well thought-out strategy and executable plan could be successfully implemented.
The importance of identifying and developing leadership talent has become more important to business survival than ever before. One reason for the urgency of this issue is the extreme changes in the marketplace that are underway. Changes in workforce demographics, mergers and acquisitions, global competition, overseas market opportunities, skill shortages, emerging technologies, downsizing trends, and numerous other factors have created a complex environment in which companies must now compete. The leadership requirements that have led to success in the past are not likely to be exactly the same ones that will lead companies into the next century. A global economy, by definition, changes the parameters by which companies must now operate, and using the same logic, those changed parameters fundamentally change the challenges, tasks, behaviors, and strategic and tactical operating requirements faced by leaders of contemporary business.
While leadership is not the only variable that accounts for business growth and viability, it could probably be considered the glue that holds the complex mix of business goals and operational requirements together. Put quite simply, appropriate leadership either creates the necessary vision, synergy and operational competence to move companies towards competitive advantage, or the lack of it contributes to organizational dysfunction.
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Richard J. Mirabile, PhD, is CEO and co-founder of Success Factor Systems, Inc., a consulting and software company dedicated to designing, developing, and implementing state-of-the-art competency-based human resource programs. He has been involved with competency-based programs and systems for more than 15 years from a variety of perspectives including program development/implementation, software development, research, journal publications, and conference presentations.