Let’s face the real business world reality regarding leadership development. The ultimate customer for all leadership development (LD) programs is the CEO and top line management, executives. For decade after decade and in survey after survey, these executives have indicated that they believe these LD programs, especially those at the senior or upper management level, have failed primarily because they have concentrated almost exclusively on soft skill development, excluded any hard skills development and offered little or no practical business value in relation to the amount of valuable executive time that is expended on them.
At the lower and middle management levels, typical LD programs cover such soft skills as leadership styles (democratic, autocratic, etc.) and leadership behaviors (servant, morality, authenticity, humility, integrity, agreeableness, etc.), along with key management skills (writing objectives, planning, delegation, performance review, interviewing, etc.) and interpersonal skills (communications, counseling, motivation, etc.). At these levels, emphasizing these soft skills is appropriate, especially when they incorporate a large amount of practical application to the leader’s real-world problems and situations.
At the senior and upper management levels, there are few, if any, typical LD programs though many of the above soft skill subjects are offered. However, when a popular new book appears on the market, such as Good To Great, In Search of Excellence, etc., a program can easily be designed around the book’s key principles.
In contrast, my experience with CEOs and top line management executives in several large companies in four major industries indicates that they prefer the following practical soft-hard skills mix in their leaders.
MANAGEMENT LEVEL/SOFT-HARD SKILLS MIX
Lower Middle Senior/Upper
75%-25% 50%-50% 25%-75%
Two highly reputable studies support the above skills mix. The first one is Jeffrey Pfeffer, in his January 2016 article entitled “Getting Beyond the BS of Leadership Literature”, who concludes that there are several problems inherent in the majority of LD 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.” In other words, such programs overemphasize the soft skills of leadership in comparison to the application of the hard skills and therefore provide little practical value.
The second one is the study by Ron Carucci in his January 2016 Harvard Business Review article entitled “A 10-year Study Reveals What Great Executives Know and Do”. After interviewing over 2,700 executives, he concludes there are four recurring patterns of executives skills that distinguish the performance of exceptional executives – knowing the financial and market/product realities of your industry competitors; knowing your company’s functional strengths and weaknesses, and how best to coordinate them in any companywide effort; providing great decision-making based on the use of analytical and quantitative tools and measures for all aspects of the business; and forming deep-trusting business relationships. In sum, these four patterns reinforce the above 75% to 25% mix for senior and upper management LD programs.
Here are some examples of hard skills for senior and upper management.
A. Functional Acumen – understanding various business functions (sales, marketing, product development, manufacturing, etc.) and sub-functions (for manufacturing, they are production, quality control, manufacturing engineering, inventory control, etc.), along with planning, controlling and leading major multi-functional and/or multi-divisional team efforts to achieve critical business results.
B. Financial Acumen – understanding the company and division Income and Cash Flow statements and Balance Sheet, sales volume and gross profit margins for major products, budget/profit planning, and performance.
C. Fiscal Year Business Objectives – for the company, divisions, and key executives.
D. Business Strategy – understanding the company and divisional strategic plans and objectives, major product/market development plans, financial plans, and contingency plans.
E. Executive Skills – Board and top management interaction on key business issues, stock market analysis and analyst interaction, championing innovation and continuous improvement, consistently achieving a profitable financial result and strategic growth, establishing a highly effective workplace culture, leadership, and so on.
F. Management Skills – knowing how to plan (including the setting of objectives), organize and control various important departmental projects, consistently leading different company organizations to achieve outstanding business results and achieving innovative results in all aspects of the job.
Now, here is a hard truth that all HR executives 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, operating and strategic business objectives over the short and long term; the practical reality of today’s real business world is that leaders must have BOTH technical/executive “hard” skills and leadership “soft” skills in the above mix envisioned by the CEO and top line management executives.
Here are some examples of these business objectives.
- Improve earnings per share from “X” to “Y” dollars/share.
- Increase cash flow by “Z” dollars.
- Reduce time-to-market for product “A” by 30% to dominate your competitors.
- Improve customer care to exceed industry standards.
- Acquire a product-related business that uses a new technology which will increase sales by 20%.
- Train a group of at least 20 general managers who can effectively operate a $50M/year business.
In sum, when viewed together, Pfeffer is telling us what subject content of leadership should NOT be overemphasized, while Carucci is telling us what subject content SHOULD be emphasized for LD programs, especially those for senior and upper management.
Here are some examples of how to apply this 75% to 25% mix in some LD programs for senior and upper management.
- GENERAL MANAGEMENT EFFECTIVENESS
Audience: Business Unit Presidents and Division Presidents
Pre Work: Each President brings their quantitative financial and operating fiscal year objectives, and current plans, schedules, risks, challenges, and budgetary data.
Hard Skills: Income Statement Management
Cash Flow Management
Soft Skills: Teamwork and Cooperation
Need for Continuous Improvement and Innovation
Business Value Outcome: In a workshop setting, each Business Unit and Division President Reevaluates their current objectives and plans in light of any division and/or company objectives and plans, and any proven innovative practices that could significantly enhance company performance.
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