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Why Your Leadership Competencies May be Failing to Deliver

By Carol Morrison from i4cp | October 19, 2011, Issue 535

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Leadership competencies are a perennial topic of interest. HR practitioners wonder about the competencies being emphasized in their development programs as well as the skills on which other organizations focus. And even if we don't openly discuss it, we may wonder if our organization is taking aim at the right competencies or missing the target altogether.

A new report from i4cp - Developing High-Performing Leaders: Emphasizing the Competencies That Pay Off - explores the idea that the most commonly emphasized leadership competencies may not be the most effective choices for arming leaders with the expertise needed to drive organizational performance. Can it be that the competencies many companies agree are important really aren't?

It isn't that they aren't important; but what i4cp found is that the most commonly emphasized competencies aren't necessarily the ones that correlate to market performance. That means that if market performance is your business objective and the gauge by which you determine success, you'd better take a fresh look at the competencies your leadership development program emphasizes. It may be time for a change.

In its 2011 Leadership Competencies Survey - an updated iteration of a study originally conducted in 2009 - i4cp asked business leaders about two major categories of competencies: business competencies and communication and relationship competencies. Here's what we found:

Among the business competencies the survey's respondents told us leaders need, the top five, in descending order were:

Knowledge of the business
Business ethics
Knowledge of the industry
Knowledge of the customer
Ability to understand the bottom line

Most would agree those seem like ideal attributes for leadership success, and they probably are. But the business competencies that correlate to market performance are:

Strategy development
A global mindset
Decision-making sciences
Organizational development
Strategy execution

What do you notice about the second group of competencies? What strikes me is the significantly greater degree of focus. It may speak to the power of leadership competencies that center on the nuts and bolts of making specific decisions about what an organization needs and how it can grow, defining business strategies that can facilitate that development, and applying the skills to execute those strategies effectively. Doesn't that seem a lot more definitive than a general "knowledge of the business … industry … customer" and a Finance 101 grasp of balance sheets and income statements?

Survey respondents named these their most-emphasized relationship and communication competencies:

Role modeling organizational values
Building relationships within the organization
Creating an environment of trust and respect
Collaboration
Social responsibility

Again, those are valuable capabilities for any business leader. And again, a significant disconnect - except on collaboration - when compared with the list of relationship and communication competencies correlated to market performance:

Verbal communication skills
Collaboration
Building relationships outside the organization
Building organizational capacity

This group of competencies doesn't seem quite as laser-focused as their business counterparts, but it isn't their nature to be. These relationship and communication capabilities, however, can play fundamental supporting roles in shaping overall performance.

Wielding verbal skills and successfully collaborating are valuable in almost any context, but perhaps especially in marshaling and capitalizing on both internal and external resources. Easy to see how those competencies could help leaders build external relationships (with vendors, suppliers, contractors, joint venture partners, and the like) and grow organizational capacity in their efforts to help drive market performance.

Among the many insights this latest i4cp leadership research has revealed is that following the crowd, at least when choosing competencies for leadership development programming, may not offer the most powerful results. Like people, organizations that dare to be different stand out. When that differentiation involves taking a fresh approach to leadership competencies, it may translate into hitting the target like never before and gaining a competitive advantage and better performance in the marketplace in the long run.

Senior Research Analyst Carol Morrison has authored white papers, playbooks, reports, analyses and other publications on a variety of topics related to human capital, leadership and talent management. Feature articles by Carol can be found in Talent Management Magazine, Chief Learning Officer, HR Executive and in other leading print and online media.

Comments

This article is right on target. When looking at competencies of lots of companies, it is often difficult to see any differentiation at all. If competencies are going to be used at all (another conversation) they must be highly customized to the exact business issues of a specific company.

dmiller

posted by David Miller on October 19, 2011

Many leadership competency models attempt to mix management and leadership skills together and we think thisn is a mistake. We lead people and manage the business. Although both are required for business success, these are separate models since the as the skills are not related. Even communicating to lead and conmmunicating to manage are completly different skill sets. We have many managers who excel at telling people what needs to be done, inspiring them to share a vision? developing them to build their capacity? no, not really. I'd like to see an i4cp study of the performance of firms that have two separate leadership and management competenices models versus firms that pile business management related skills in with their leadership model.

posted by Bill McHenry on October 20, 2011

Great comments all around! This i4cp survey really points out the popularity of competencies models, and begins to crack the nut of why they may not be as productive as we'd like them to be. Thanks for the ideas on additional research, Bill. I'll see that our Primary Research team is informed of your suggestions.

Leadership versus management remains an ongoing debate. Would any readers from companies that are using separate leadership and management competencies like to comment on their approach?

posted by Carol Morrison from i4cp on October 20, 2011

Bill, many thanks for your comments. I also think that that leadership and management are two distinct things. Follow the link below for a theoretical basis behind our shared view.

http://www.i4cp.com/8dQLB6

There are many reasons why the two strands are combined in companies' competency framework. I think there is always pressure for an overarching model rather than separate ones and since leadership is sexier than management, everything rolls under leadership development and typically gets more budgetary focus as a result.

We purposely asked the question "Do you distinguish leadership competencies from managerial competencies" in our survey. 68% of respondents answered in the affirmative. However, there was no difference between high performing and low performing organizations. I think we do need to drill down a bit further in our subsequent research since the question doesn't really get to the extent to which the distinctions are operationalized in the development programs.

The good news is that most organizations realize there is a distinction between leadership and management. I would love to hear from other folks some detail on how this works in their companies.

posted by Amit Mohindra from i4cp on October 20, 2011