September 3, 2020
As a performance psychologist, I have worked with world-leading sportsmen and women, both professionals and Olympians. I have also worked globally with high-performing business leaders and teams. How we predict and then improve performance has been my life’s work and is a subject that intrigues me.
This is the second of three articles about leadership and the challenge of how a company can measure, and thus predict, the impact that leaders are going to have on its performance. The first article highlighted the difficulty in quantifying and predicting what leadership is. In this article we are looking at this same question in the context of how it differs (or doesn’t!) across different cultures. We are also examining the increase in companies utilising human capital analytics.
An IBM study of more than 700 global Chief Human Resource (COHR) Officers revealed that ‘developing future leaders’ was the skill of the greatest importance in order to achieve business objectives (p. 18). In our increasingly connected and technology-driven world, even leaders operating within their own country need to take on global leadership responsibilities. What makes a great leader?
Although the core ingredients of leadership are universal (good judgment, integrity, and people skills), the full recipe for successful leadership requires culture-specific elements. Depending on the cultural context, your typical style and behavioural tendencies may be an asset or a weakness. When assessing global leadership, many scholars have created competency models which see the wider world through a Western lens. They therefore fail to focus on which competencies are most relevant for different cultural, environmental and job/industry contexts.
What insights have come from other parts of the world?
In China, the 2018 AON Human Capital Insights China McLagan Talent Pulse Study finds that talent management tops the agenda for an overwhelming majority of the 58 participating Chinese firms, ahead of growth, innovation, and customer service.
Key areas Chinese firms are focused on to retain existing top talent,
especially high potential employees
According to their findings, more than 69% of firms that plan to focus on talent sourcing and selection for the next 2-3 years still don’t currently utilise talent assessment, such as personality or cognitive ability tests, for hiring. However, 26% of firms are now employing advanced analytics for human capital management, and these numbers are expected to rise. Taking advantage of these analytics allows firms to track the effectiveness of their current HR initiatives and programmes, and in some cases, predict future outcomes and actions.
To discover how leaders in India drive their organisations to high performance, a research team at Wharton business school interviewed senior executives at 98 of the largest companies. None of the people they interviewed suggested that their companies had succeeded because of their own cleverness at strategy or even because of the efforts of a top team. They didn’t mention skill in financial markets, mergers and acquisitions, or the deal-making talents that Western CEOs often claim underpin their companies’ performance. Almost without exception, these leaders said their source of competitive advantage lay deep inside their companies, in their people.
This Wharton research puts hard numbers on the characteristic ways Indian leaders invest in people. Far more than their Western counterparts, these leaders and their organisations take a long-term, internally focused view. They work to create a sense of social mission that is served when the business succeeds. They make aggressive investments in employee development, despite tight labour markets and widespread job-hopping; and they strive for a high level of employee engagement and openness.
Similarities in Leadership
The Centre for Creative Leadership initiated a study with input from 763 middle- and executive-level leaders in organisations from China, Hong Kong, Egypt, India, Singapore, the United Kingdom, Spain, and the United States. They found that leaders around the globe consistently face the same six challenges. It may be surprising to find so much consistency, given that leaders came from all over the world, as well as from different industries and organisations. Yet it seems that, overall, these six challenges are invariable for middle or senior managers, regardless of the context.
1. Honing Effectiveness: the challenge of developing the basic skills — such as time-management, prioritisation, strategic thinking, decision-making — to be more effective at work.
2. Inspiring Others: the challenge of inspiring or motivating others to ensure they are satisfied with their jobs and working “smarter”.
3. Developing Employees: the challenge of developing others, including by mentoring and coaching.
4. Leading a Team: the challenge of team building, team development, and team management. Specific leadership challenges here include how to instil pride, how to provide support, how to lead a big team, and what to do when taking over a new team.
5. Guiding Change: the challenge of managing, mobilising, understanding, and leading change. This includes knowing how to mitigate consequences, overcome resistance, and deal with employees’ reactions.
6. Managing Stakeholders: the challenge of managing relationships, politics, and image. Particular issues are gaining managerial support, managing up, and getting buy-in from other departments, groups, or individuals.
So what does this tell us about measuring leadership?
We have seen that there are similarities and differences in leadership focuses worldwide, but there is also a common desire to predict and measure how successful leaders will be in value creation. “Leaders have always been subjected to measurement but usually after the event: would Wellington have been regarded as such a great leader if we had lost at Waterloo?” wonders Paul Kearns, Chair of the Maturity Institute (MI). “Measuring leaders is not new but levels of objectivity and validity have to be significantly improved. This can only happen when a common scale for making meaningful comparisons is adopted.”
In the research and development we have conducted at Drax over the past three years, we have found that data analytics plays a large part in determining the value of leaders, and predicting what success looks like. Tools like PACE (which recognises specific leadership behaviours) and the Leadership Success Propensity Model (which looks at leaders’ situational, functional and domain experience) combine to provide a thorough view on capability and the potential value that a C-suite executive and leadership team can bring to a company.
In our third and final article we will elaborate and explain our take on assessing leadership and where we are in regard to living up to our vision of being able to predict the value of any leader.
Partner and Head of Leadership