Decoding leadership:
What really matters
New
research suggests that the secret to developing effective leaders is to
encourage four types of behavior.
Telling CEOs these days that leadership drives performance is a bit like
saying that oxygen is necessary to breathe. Over 90 percent of CEOs are already
planning to increase investment in leadership development because they see it
as the single most important human-capital issue their organizations face.1 And they’re right to do so: earlier
McKinsey research has consistently shown that good leadership is a critical
part of organizational health, which is an important driver of shareholder
returns.2
A big, unresolved issue is what sort
of leadership behavior organizations should encourage. Is leadership so
contextual that it defies standard definitions or development approaches?3 Should companies now concentrate their
efforts on priorities such as role modeling, making decisions quickly, defining
visions, and shaping leaders who are good at adapting? Should they stress the
virtues of enthusiastic communication? In the absence of any academic or
practitioner consensus on the answers, leadership-development programs address
an extraordinary range of issues, which may help explain why only 43 percent of
CEOs are confident that their training investments will bear fruit.
Our most recent research, however,
suggests that a small subset of leadership skills closely correlates with
leadership success, particularly among frontline leaders. Using our own
practical experience and searching the relevant academic literature, we came up
with a comprehensive list of 20 distinct leadership traits. Next, we surveyed
189,000 people in 81 diverse organizations4 around the world to assess how frequently
certain kinds of leadership behavior are applied within their organizations.
Finally, we divided the sample into organizations whose leadership performance
was strong (the top quartile of leadership effectiveness as measured by
McKinsey’s Organizational Health Index) and those that were weak (bottom
quartile).
What we found was that leaders in
organizations with high-quality leadership teams typically displayed 4 of the
20 possible types of behavior; these 4, indeed, explained 89 percent of the
variance between strong and weak organizations in terms of leadership
effectiveness .
- Solving problems effectively. The process that precedes decision making is problem solving, when information is gathered, analyzed, and considered. This is deceptively difficult to get right, yet it is a key input into decision making for major issues (such as M&A) as well as daily ones (such as how to handle a team dispute).
- Operating with a strong results orientation. Leadership is about not only developing and communicating a vision and setting objectives but also following through to achieve results. Leaders with a strong results orientation tend to emphasize the importance of efficiency and productivity and to prioritize the highest-value work.
- Seeking different perspectives. This trait is conspicuous in managers who monitor trends affecting organizations, grasp changes in the environment, encourage employees to contribute ideas that could improve performance, accurately differentiate between important and unimportant issues, and give the appropriate weight to stakeholder concerns. Leaders who do well on this dimension typically base their decisions on sound analysis and avoid the many biases to which decisions are prone.
- Supporting others. Leaders who are supportive understand and sense how other people feel. By showing authenticity and a sincere interest in those around them, they build trust and inspire and help colleagues to overcome challenges. They intervene in group work to promote organizational efficiency, allaying unwarranted fears about external threats and preventing the energy of employees from dissipating into internal conflict.
We’re not saying that the
centuries-old debate about what distinguishes great leaders is over or that
context is unimportant. Experience shows that different business situations
often require different styles of leadership. We do believe, however, that our
research points to a kind of core leadership behavior that will be relevant to
most companies today, notably on the front line. For organizations investing in
the development of their future leaders, prioritizing these four areas is a
good place to start.
By Claudio Feser, Fernanda Mayol,
and Ramesh Srinivasan
http://www.mckinsey.com/insights/leading_in_the_21st_century/Decoding_leadership_What_really_matters?cid=other-eml-alt-mkq-mck-oth-1501
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