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SPECIAL FEATURE: LEADERSHIP

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Decoding leadership: What really matters

New research suggests that the secret to developing effective leaders is to encourage four types of behaviour. By Claudio Feser, Fernanda Mayol and Ramesh Srinivasan

Telling CEOs these days that leadership drives performance is a bit like saying that oxygen is necessary to breathe. Over 90% of CEOs are already planning to increase investment in leadership development because they see it as the single most important human-capital issue their organisations face.1 And they’re right to do so: earlier McKinsey research has consistently shown that good leadership is a critical part of organisational health, which is an important driver of shareholder returns.2 A big, unresolved issue is what sort of leadership behaviour organisations 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 modelling, 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 programmes address an extraordinary range of issues, which may help explain why only 43% 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 organisations4 around the world to assess how frequently certain kinds of leadership behaviour are applied within their organisations. Finally, we divided the sample into organisations whose leadership performance was strong (the top quartile of leadership effectiveness as measured by McKinsey’s Organisational Health Index) and those that were weak (bottom quartile).

What we found was that leaders in organisations with high-quality leadership teams typically displayed four of the 20 possible types of behaviour; these four, indeed, explained 89% of the variance between strong and weak organisations in terms of leadership effectiveness (see figure below).

Four kinds of behaviour account for 89% percent of leadership effectiveness:

  • Solving problems effectively. The process that precedes decision-making is problem-solving, when information is gathered, analysed, 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 emphasise the importance of efficiency and productivity and to prioritise the highest-value work.
  • Seeking different perspectives. This trait is conspicuous in managers who monitor trends affecting organisations, 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 organisational 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 behaviour that will be relevant to most companies today, notably on the front line. For organisations investing in the development of their future leaders, prioritising these four areas is a good place to start.

This article is credited as property of McKinsey & Company.

Notes

1 Tthe state of human capital 2012 false summit: why the human capital function still has far to go (PDF–1,204 KB), a joint report from The Conference Board and McKinsey, October 2012.

2 The hidden value of organizational health – and how to capture it, McKinsey Quarterly, April 2014.

3 Do you have the right leaders for your growth strategies?, McKinsey Quarterly, July 2011.

4 The 81 organisations are diverse in geography (for instance Asia, Europe, Latin America, and North America), industry (agriculture, consulting, energy, government, insurance, mining, and real estate), and size (from about 7 500 employees to 300 000).

AUTHORS l Claudio Feser is a director in McKinsey’s Zürich office, Fernanda Mayol is an associate principal in the Rio de Janeiro office, and Ramesh Srinivasan is a director in the New York office

Isn’t this what it’s all about?

In a time where we find our best days consumed by work, should there not be a broader agenda focusing on the bigger picture that allows us to leave a proud legacy? By Ebrahim Dhorat

The current political, economic and social landscape locally and globally is underpinned by a shift from expected norms. Many governments across the globe face a potential fiscal ‘cliff’, unprecedented currency fluctuations, oil and  commodity price movements, political revolt, social unrest and climate change are only a few of the new norms that government, business and labour are required to contend with. Concerns around ratings downgrade exacerbate but illustrate the extent of issues to contend with. In these challenging times, where do we as professionals and our stakeholders turn our attention and focus?

It is no longer sufficient that core business drive the agenda and diaries of professionals, indeed our influence has to be that of creating a legacy – a legacy that extends beyond work, one that utilises the experiences and opportunities from daily routines to drive a bigger agenda. In these trying and challenging times, a mindset shift is required that enables our thinking to critical areas of leadership, personal, team and community growth. As professionals, we should see ourselves as having a broader and greater responsibility – understanding the impact that we have through the insights and services we deliver as individuals and as a profession, we are helping to build people, capital markets and economies across the world. All this, underpinned by unquestionable ethical practices and being role models within the profession and across professions.

Coaching and mentoring of individuals and teams coupled with a deep personal interest in their well-being will go a long way in building leaders of the future. We know that when our CAs(SA) use their time and skills in their communities, we make a difference, be it through pro bono services at non-profits or social services or focus on other areas where that could make the biggest positive impact, for example supporting entrepreneurs and strengthening the workforce of the future. Entrepreneurs, particularly in emerging markets like ours, help propel future growth and create jobs and wealth. By strengthening the workforce of the future, one is able to assist our people to reach their full potential and provide them the dignity and honour they deserve. All of this strengthens the foundations of a more productive society.

There is nothing more rewarding then listening and reading inspiring stories about some of the ways people have made a difference. And even more special is to be part and parcel of that legacy. Are we doing our fair share in presenting an individual commitment and participating in exceptional teaming of people? What we are doing to build a better world?

AUTHOR l Ebrahim Dhorat CA(SA) is Director for Assurance at EY

The quest to becoming a great leader

Clear, honest and effective communication, healthy boundaries, delegation and feedback all form  part of the journey to becoming a successful leader. By Nickolette Assy

Great leaders have a number of qualities that make them great. The one that stands out most for me is that great leaders practise mindfulness and focus on awareness. They are aware of who they are. They know their strengths and weaknesses. Great leaders understand what they can do and what they cannot do. They understand where they need support and they are able to ask for the support that they need. In other words, great leaders are comfortable with who they truly are and they have come to accept who they are. This self-acceptance allows them to see others for who they are and so great leaders accept others as they are.

Great leaders are honest and authentic – even with their flaws. They are able to do this because they are constantly working to improve themselves. Great leaders are passionate about becoming the best version of who they can be. They live a life of purpose and so everything that they do becomes meaningful both in their personal lives and professional lives.

As a result, great leaders tend to lead by example. What follows is that people naturally become inspired and want to follow, or do the same. Your team is then more likely to produce quality work and you will have gained their respect. To walk your talk: be your word, and do what you say you will do. This builds character and also encourages others to do the same.

Only an inspired person can inspire others. Gandhi said: ‘Be the change that you wish to see in the world.’ What kind of change in leadership do you wish for? What kind of leader do you endeavour to be?

Great leaders understand the big picture and so they are able to translate what needs to be done for others. Clear, honest communication goes a long way in keeping people up to date and feeling a part of the team. If you can effectively communicate what you want to accomplish, people can see how they can support you and your goal.

Knowing what you want to be accomplished may seem clear in your head, but if you try to explain it to someone else and you are met with a blank expression, then you know there is a problem. If this has been your experience, it is time that you begin to focus on honing your communication skills differently. Being able to describe what you want to be done is extremely important to your success as a great leader and a team player. If you are unable to effectively relate your vision to your team, it’s unlikely that you will all be working towards the same goal.

To create a productive work environment, clear lines of communication and boundaries are essential for success. To know what is acceptable and what is not, what is expected, by when, and how things are to be done, contribute to how well things get done. Team members will also have a good understanding of who you are – and who they are – in relation to you. This also builds trust within the team or organisation.

Often in communication, we can miss out on important information such as non-verbal cues. For effective communication and connections, we need to receive as many of the signals being expressed – verbal and non-verbal. Ask clarifying questions and check for understanding so that you can receive the message in the way that it was intended.

Do not assume that the person understands completely what you are saying. How often have you heard people agree with you but when the crunch comes, you realise you do not have their support. Their mouths said ‘yes’ but they only said yes so that the meeting could end on time and they can get to their next appointment on schedule. Remember to listen and give constructive feedback at all times.

Sharing your brand vision is essential to creating an organised and efficient business. Learn to trust your team with that vision or you might not progress to the next level in your business. Great leaders trust their teams with their ideas and vision. It is a sign of strength and not a sign of weakness. Remember to listen and give constructive feedback at all times.

Check the level of trust that you have in yourself and in your team. There may be times when you will need to make unpopular decisions. Follow the code of conduct as best you can as a CA(SA) or professional person.

Delegating tasks to the right team member is one of the most important skills you can develop as your business and team grow. You will find that as the number of emails and tasks begin to pile up, the lower the quality of your work becomes and you become less productive. The key to delegation is identifying the strengths of your team and to leverage on that. Get to know your team members. Find out what each team member enjoys doing most. This will prove to your team that you trust and believe in them. It will also allow you time to focus on the higher level and strategic tasks that should not be delegated. It’s a fine line to balance, but one that will have a huge impact on the productivity and the bottom line of your business. As a CA(SA) you need to work with a few departments and other leaders or team members so it is important to have a good relationship to allow you to deliver your results at all times.

In summary, great leaders are constantly working to improve themselves through meditation, self-reflection, journaling, having a personal trainer, a professional coach, a mentor and so on. Just be yourself and keep it real.

AUTHOR l Nickolette Assy MPhil(Coaching)(USB) is an executive coach and founder of Nickolette & Associates, Coaching and Mentoring

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