The Leadership Capability Equation
The core purpose of our business ‘Culture by Design’ is to partner with organisations in building cultural excellence that supports execution of key strategic goals for any organisation. The ‘why’ behind this is to ensure business success by way of increased market share, higher margins, lower cost base, increased profitability and protection against downtrend. As an initial step in partnering with any organisation, we spend dedicated time and energy to work out bespoke priority actions required to start building cultural excellence. However, even with this intense assessment effort, in more cases than not, our starting point is always about creating focus on the need to develop leadership capability within the organisation. What I mean by the term ‘leadership capability’ is not so much the individual skillset of a leader, but rather leadership capability that is imbedded across the business. It is organisation-wide capability that is entrenched through united leadership language, expectations, and behaviours which, are aligned to core purpose and strategy objectives. We start here because we understand and often see the devastating impact that lack of leadership capability is having on the likelihood that an organisation will successfully achieve execution of their strategy in full. Many of the organisations we partner with have definitely made previously attempts at developing their leaders so with this in mind, an important question is why do some many leadership development endeavours fail? It appears that even with decades of robust leadership development research and billions of dollars spent worldwide on leadership interventions, organisations are still struggling to secure ROI through an imbedded sense of strong leadership capability.
A recent McKinsey Quarterly article titled ‘What’s missing in Leadership Development’ greatly resonated with me as it touches on many aspects related to building Leadership Capability that we often advocate to organisations. This article delivers crucial research insight into four key principles that underlie successful effort for imbedding leadership capability at an organisational level. To follow are a few vital takeaways from these four principles:
1) It’s important to develop leadership capability with language, behaviours and expectations that are bespoke to your purpose and strategy. There is infinite leadership content that you could focus on which, would potentially add little or no value to the organisation. Hence, it’s important to drill down on specific strategic goals and objectives to identify appropriately aligned leadership behaviours and expectations. This will allow your leaders to more effectively manage the required, sometimes turbulent, organisational change in meeting strategic needs. For example, if developing continuous improvement and innovation capability is important to your envisioned future, then leaders will need to demonstrate behaviours that role model curiousity and an open mindset. They will need to actively encourage employees to think differently and challenge the status quo.
2) The development of consistent leadership capability should be aimed at all organisational levels, for example, from say Production team leaders to senior executives. This allows for the leadership language, behaviours and expectations to start truly becoming entrenched into the DNA of any organisation. There are so many benefits to this approach, none more important than the ability to execute strategy goals at all levels of the organisation. A large amount of global research indicates that the majority of organisations that design a business strategy fail to execute on strategy goals in full. One of the main reasons for this is lack of strategy clarity and messaging from all people leaders at all levels across the business. Hence, when you develop leadership capability at all levels of the organisation you have a powerful conduit in your leaders for educating all employees about strategy. Another key benefit in developing leadership capability at an organisational level relates to the reduction of silo mentality between teams and departments, allowing for better cross-functional collaboration. Again, in managing and leading the change required to meet strategic goals and objectives, organisational wide collaboration is obviously critical.
3) When you develop leadership capability in line with purpose and strategy it opens up fantastic opportunities to ensure the third principle that the McKinsey Quarterly article highlights: transfer of learning. Leadership programs that encourage or require attendees to immediately use their newly learned leadership behaviours to deal with real work problems have a higher rate of sustained learning transfer into the work environment. In addition, programs that encourage participants to develop further their existing leadership strengths versus potential areas of weakness have better transfer. On-going coaching for leaders will also ensure transfer as it supports growing awareness and personal insight for leaders into whether their behaviours are aligned to the bespoke, organisational leadership capability.
4) The organisation’s infrastructure is also vital to learning transfer. If the business requires new leadership behaviours to support strategy execution but does not have appropriate processes and systems to support these behaviours, then clearly there is less prospect that these behaviours will imbed. For example, People and Capability processes such as recruitment, induction, reward and recognition, and performance management are all fundamental in identifying and educating on acceptable behaviours for an organisation. So, it’s important that these processes are fit for purpose. Evolving technology in HR systems can play an essential part in ensuring up to date, relevant, accessible processes are in play.
The McKinsey article makes a final, very important point relating to the need for CEOs and those responsible for designing leadership development interventions to work closely together. This is to ensure that there is strong validity in the interventions. That the leadership interventions are aligned to purpose and strategy, that they are practical and straight forward to implement and have full support and backing from the top table. In closing, while the McKinsey article does not necessarily provide any revolutionary, breakthrough thinking in leadership development, what it does do is succinctly highlight the key concepts that collectively are vital in bringing to life robust leadership capability.