The importance of effective leadership skills

Effective, dynamic leadership is vital during an economic downturn, yet research suggests organisations are concentrating on the wrong skills to achieve this.

On this page:
Academics to blame?
Individual competencies
Enhancing motivation
Case study: 360-degree analysis.

Could companies be focusing on the wrong competencies for effective leadership? A recent study casts doubt on the way these competencies are defined.

Pario HR Solutions asked more than 800 people to rate managers on various aspects of their work behaviour, and found that key characteristics of leadership did not feature in up to 45% of their statements. In addition, many competency models were so “fundamentally flawed” that their value in shaping learning and development was limited.

Pario director David Sharpley explains: “The behaviours they identify don’t relate to the specified competency and there’s too much overlap and duplication. Important underlying factors, such as actions that help build trust, aren’t identified.”

The sample included managers’ colleagues, direct reports and senior management, plus external clients.

Sharpley argues that using a one-size-fits-all approach to competency modelling is particularly unsuitable during a recession, when organisations want to identify examples of high performance and weed out underperformance. But in his experience many organisations allow HR managers to import the competencies used at their previous employer.

“Competencies should be forward-looking, relating to the emerging challenges and demands that are facing the organisation so you have a dynamic focus,” he says.

Academics to blame?

Controversially, Sharpley blames academics and test publishers for partly creating the problem, saying they have a strong commercial interest in promoting standard models and off-the-shelf questionnaires.

His solution is to run a health check on competency models by using a 360-degree online questionnaire to highlight what relevant groups, including the external clients, regard as significant leadership behaviours.

In one example involving 25 senior managers in the London Borough of Bexley, Pario received feedback from more than 230 people. This was used for in-depth analysis to create a profile of effective leadership behaviour. As a result, 110 statements were whittled down to what Sharpley describes as a simplified and robust design based on 58 statements.

“These have been identified on the basis of how different respondent groups define ‘effectiveness’ of managers,” he explains.

He says the process helps ensure that talent management and leadership development processes concentrate on the most important aspects of behaviour in each particular area of business.

“It is very much a dynamic tool so managers stay focused because organisations are changing so quickly. The problem all of us have is that we get into a set way of working.”

Professor Roger Gill completed the leadership audit used by The Leadership Trust three years ago. He agrees that tailoring competency models to specific leadership roles is worthwhile but denies that off-the-shelf models lack value.

“These generic models have stood the test of time. You can fine tune them to national or regional and particularly corporate culture,” he says. Effectively, this means giving more or less emphasis to particular kinds of behaviour according to the context.

Individual competencies

However Paul Fairhurst, principal consultant for the Institute for Employment Studies (IES), gives his backing to the Pario argument, saying there should be a very close focus on individual rather than generic competencies.

“At manager level there is more commonality, but at leader level, you have to have the type of leader who is successful in that particular type of organisation. In bigger organisations, for example, it’s very important to be collaborative and to build good networks. In smaller organisations they can be more directive.”

Fairhurst proposes an alternative way of pinning down these competencies to Pario’s online questionnaire. “You could look at those people who are already highly successful leaders in that organisation and compare them with its average leaders,” he says.

“It would be a mixture of personal characteristics, skills and knowledge, which would vary from organisation to organisation.”

He warns that too much data about individual competencies can be counterproductive because the focus then tends to shift to negative rather than positive feedback.

“You should look at how to build an outstanding leader out of those strengths and then look to see if there are any real ‘blockers’ that will prevent that person being successful, and perhaps deal with those afterwards,” he says.

Steve Wigzell, partner at Praesta, believes it is vital that individuals feel a sense of ownership when receiving feedback and then deciding how to respond to it.

“Having things done to you whether you like it or not tends not to produce a very successful outcome,” he says.

Wigzell adds that ownership can be encouraged by the individuals deciding for themselves which stakeholders are most critical to their success, as well as what is the best way of responding to the stakeholder feedback.

“If an employer commissions a sheep-dip exercise, it is not your data but the organisation’s data about you,” he says.

The importance of accurately defining what competencies are needed is likely to grow during the recession simply because the demands being placed on leadership will intensify. But research published by The Aziz Corporation suggests there is widespread scepticism about management’s capacity to cope at present.

Its survey of 200 mainly mid-ranking to senior business people suggests bosses have little or no experience of dealing with a downturn. Nearly three-quarters thought that many companies are reluctant to communicate the full extent of the downturn they are facing, and two-thirds stated that too many managers regard being positive as more important than being realistic.

Enhancing motivation

Professor Khalid Aziz, chairman of The Aziz Corporation, says: “Employees are often more aware of the challenges a downturn poses – and are therefore far more scared – than their bosses realise. Being frank and forthright demonstrates control and will enhance motivation in the long run.”

Gill says some factors in The Leadership Trust audit relate very closely to the current economic climate. These include having the ability to understand people’s feelings.

“I think emotional intelligence becomes even more important in times of crisis and stress. I would be helping people in leadership positions to address human needs much more closely and carefully during times of recession when that is leading to the threat of losing jobs and so forth.”

Identifying the necessary competencies is one thing, but will organisations follow this up with relevant action, particularly when budgets are stretched? An IES report, 360 Degree-Feedback: Beyond the Spin which was published in 2005, suggests that many such assessment systems “fall down on translating feedback into effective development”.

Fairhurst says there is a variety of tools and techniques that could be used along with coaching. These include action learning to help people reflect on the consequences of a recession. Attempts could also be made to link current leaders with what was learned from previous downturns through literature, research and even contacting the former leaders who experienced the downturns.

“I think there is a role for learning and development to help leaders manage the trade-off between the need for short-term survival, and how to take advantage of the upturn when it comes. As always, it is using a blend of the different tools that people have available,” he concludes.

Case study: 360-degree analysis

The suggestion that leadership development profiles should focus on individual rather than generic competencies does not resonate with Simon Lewis of Jobcentre Plus.

As leadership development manager, he has set up a learning and development programme that will involve nearly 5,000 people over three years.

Part of the project involves sending managers on a three-day residential activity course where various aspects of leadership and being led are explored. Participants undergo a 360-degree assessment beforehand based on feedback from 10 people of their choice about their leadership competencies.

The competency audit tool for this is supplied by The Leadership Trust.

“With the Trust tool we made sure there was a fairly easy read-across to government standards,” says Lewis. He believes the advantage of a generic assessment is the ability to compare leadership progress across the organisation.

He maintains that 360-degree analysis is not the sole assessment tool for individuals, but that it does produce a useful starting point.

Feedback is discussed with a coach both before and after the residential course where participants are encouraged to discuss their competencies with course tutors and fellow course members. Lewis says this allows them to create their own focus.

“Some find it uncomfortable but also very rewarding because it is very much about self-knowledge,” he explains.