IN JANUARY, 2016, there were two publications on leadership that, when viewed together, offer a historically significant and pivotal opportunity for HR leaders and leadership gurus regarding all leadership development programs, but especially those designed for the upper-middle and top management levels.
The first one was a book excerpt by McKinsey & Company on author Jeffrey Pfeffer’s “Getting beyond the BS of leadership literature” in which he concludes that management books and commentaries often oversimplify and seldom provide useful guidance about the skills and behavior needed to get results and the second one was a Harvard Business Review article by Ron Carucci on “A 10-Year Study Reveals What Great Executives Know and Do” that summarized the results of interviews with over 2,700 executives in which four recurring patterns of executive skills were uncovered that distinguished the performance of exceptional executives.
Regarding Pfeffer’s book excerpt, he concludes that there are several problems that are inherent in the majority of leadership development programs. First, leadership is framed almost solely within the context of morality, such as authenticity, telling the truth, integrity, agreeableness, and so on. Second, framing leadership in that way “substantially oversimplifies the real complexity of the dilemmas and choices leaders confront”. Third, he states that placing “leaders and their actions into good and bad seriously oversimplifies a much more complex reality and continues to reinforce a problematic, trait-based and personality-centric view of human behavior.”
Regarding Carucci’s article, he concludes that there are four recurring patterns of skills that distinguished exceptional executives. First, know your industry – maintain a solid grasp of the ever-changing competitive context within which their business competes “at the intersection of insights into how their organization uniquely competes and makes money, and what is most relevant to the customers they serve.” Second, know the whole business – “understand how all the pieces of the organization fit together to create value and deliver results.” Third, they are great decision-makers – “… the ability to declare their views, engage others’ ideas, analyze data for insight while balancing instinct and analytics, weigh alternatives, own the final call, and communicate the decision clearly.” Fourth, they form deep, trusting relationships – “… with superiors, peers, and direct reports, studying and meeting the needs of key stakeholders.”
Now, here comes a hard truth that all HR executives and leadership gurus must REALISTICALLY DEAL WITH – as long as investors and the market hold the Boards and top management of any private or public company accountable for achieving certain financial and operating objectives over the short and long-term, the practical reality of today’s real business world is that business leaders must have BOTH technical/executive “hard” skills and leadership “soft” skills. From the line management perspective, they typically view these skills in a 75% to 25% mix, as illustrated in Carucci’s recurring patterns or skills.
Using Carucci’s patterns, here are examples of some typical hard and soft skills that might be appropriate for a CEO and top management executives in any company.
Know your industry – competitive financial analysis, competitive market share analysis, competitive product analysis, potential acquisition analysis within the current or new lines of business, competitive business value proposition analysis (technology, quality, innovativeness, customer care, total solution, financial strength, etc.) that your company brings to its customers and markets, and so on.
Know your whole business – analyzing your company’s functional (Sales, Marketing, IS, etc.) strengths and weaknesses, analyzing the company’s divisional and product strengths and weaknesses, understanding how the company or a division coordinates all of its functional efforts when it goes to market, strategic plan objectives, succession plan strengths, and so on.
Great decision-makers – utilizing the company’s industry and whole business strengths as the pragmatic foundation upon which company decision-making rests, analyzing the processes, traditional and analytical data used on major decisions regarding product design, marketing and pricing, distribution, purchasing, manufacturing, information systems, customer care, etc., providing a practical decision-making methodology that can be inculcated throughout the company, and so on.
Form deep-trusting relationships – providing sound coaching which recognizes that, at the executive level, such relationships evolve from the respect an executive receives for having consistently achieved outstanding business results in job after job through the use of sound management, strategic planning and leadership skills, emphasizing the collaboration with other executives to achieve business objectives that are for the greater good of the entire company, stressing that each executive should offer personal assistance to other executives whenever their organization possesses skills that could be helpful to others, getting to know other executives better on a personal level in an effort to improve their relationship, and so on.
The above hard and soft skills can be developed by having the HR and/or leadership experts working directly with a mix of outside consultants, graduate business school staff and internal experts. In doing so, the current skills can be intertwined with the latest and newest relevant skills and ideas on any particular subject, while the appropriate executives can join the outside experts to act as program designers, instructors, and conference leaders.
In addition to the above hard and soft skills listed for the CEO and top management executives, here’s a similar set of skills that were used in a 30 hour Leadership Development program for a group of 80 division and business unit presidents who were running businesses ranging from $25 to $400 million per annum in a $4 billion company. The program content revolved around the four key subjects of Financial Management, Strategic Product/Market Planning, Customer Executive Management Relations and Leadership. The program taught leadership in the practical context of improving Income and Cash Flow Statement performance, determining the next version of the products and finding new markets for them while maintaining the current ones, and interacting with the client’s top management to better understand their strategic goals and how our products and services could better help them to achieve those goals. The line executives who attended the program had an annual cash compensation range of $400K to $800K and they, along with the CEO and top management, evaluated it as a 4.5 on a 5.0 scale.
To fully understand this new path forward, we must step back and learn from the past. First, for many decades now, leadership development programs have concentrated almost exclusively on the subjects of interpersonal skills and basic leadership styles. Second, these programs have been developed devoid of the critical hard skills that the executives utilize to achieve the business objectives that are required of their position and for which the company is committed to its customers and stockholders to achieve. Third, CEOs and line executives, the ultimate customers for such programs, have consistently stated for many decades that such programs have failed in their eyes, and yet these programs continue to be developed as they have been in the past which are destined for almost certain failure. Fourth, the CEOs and line executives are saying that the programs offer little or no practical business value in relation to the amount of valuable line executive time they expend to attend them.
Therefore, the new path forward is to develop executive-level leadership development programs with an appropriate mix of 75% hard and 25% soft skills that reflect the practical reality of the executive’s real world in which he/she is held accountable for achieving various operating and financial business results. When such programs are designed to work within the executives’ real-life complexity, problems and business objectives for which they are accountable to the board and top management, there is a much greater chance for success.
Now, is developing such a program easy? No. Can it be done well and within a reasonable amount of cost? Absolutely. Does it require a new business-like mindset on the part of HR leaders? Absolutely. Therefore, the challenge for the Chief HR Officer is to direct his or her realigned staff resources AWAY from their comfort zone of interpersonal skills and basic leadership styles content and TOWARD the practical realities of the real-world business environment in which all line executives live. If accomplished, such programs will provide real BUSINESS VALUE to the company which is something HR is always striving to achieve.
In my opinion, Pfeffer confirms that concentrating on various singular morality subjects, like authenticity and integrity, substantially oversimplifies the real complexity of the issues that executives face and continues to reinforce a problematic, trait-based and personality-centric view in leadership situations, while seldom providing practical guidance about the real mix of skills needed to get results. Meanwhile, Carucci offers some pragmatic findings of what subject content is really important for an executive to achieve exceptional performance.
At the beginning of this article, I indicated that these two publications represent a historically significant and pivotal opportunity for HR leaders. In sum, Pfeffer is telling us what subject content of leadership should NOT be emphasized, while Carucci is telling us what subject content SHOULD be emphasized for Leadership Development programs, especially for the upper/middle and upper management levels.
In light of the failed past history of such programs, it seems to me that Leadership Development programs at a CRITICAL CROSSROADS. If we continue down the same path we have had for decades, in the eyes of the CEO and line executives (our ultimate customers), the outcome is very likely to remain the same or worse, as such programs will receive less and less top management funding and attention because they offer little or no business value to the executive’s real world. Conversely, if current HR leaders view this moment in time as a pivotal one and seize this opportunity to try something new by designing the subject content for these programs that reflect the real world findings of these two publications, greater success is much more likely to occur.
This point in time may very well represent the Chief HR Officer’s last real opportunity to upgrade its leadership development programs so that they are providing REAL BUSINESS VALUE for the company’s management, employees, stockholders, and customers. If future leadership development programs continue to be developed without dealing with the hard skills and actual business objectives of the executives involved, they will continue to fail in the eyes of the CEO and line executives … the ultimate customer.