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Leadership transitions: More than just business sense


How does leadership style change across the differing echelons of an organisation? Our monthly columnist, Mark Loftus, believes it's not just about business intelligence.

In 1969 Laurence J Peter and Raymond Hull formulated what was to become their famous Peter Principle: "in a hierarchy every employee tends to rise to his level of incompetence". Formulated such a long time ago that it appears to imply the absence of women in the workforce (or that the Peter Principle does not apply to them), we are still haunted by the spectre of competent people failing to make the grade when promoted. In a recent Harvard Business Review article, Jean Martin and Conrad Schmidt report that their recent research on leadership transitions "demonstrates that nearly 40% of internal job moves made by people identified by their companies as 'high potentials' end in failure".
Previous articles have explored some of the fundamentals of leadership: that all levels of seniority require leaders to connect people – and themselves – to the organisation's purpose, and that leadership is principally a personal act: people follow people. In this article we look at some research by my colleague, Philippa Dickenson, exploring some of the differences required for successful leadership at differing levels of seniority.

Levels of leadership

We have been assessing and benchmarking leaders over the past 10 years, focusing on the pattern of their character strengths and intelligences. Philippa's research highlights the characteristics of those who have successfully made the transition to a more senior level – the ‘threshold’ factors, and the characteristics of those who not only make the transition, but who then go on to be rated strongly within that next level of leadership – the 'success' factors. These factors point to the developmental paths that people can take to increase their chance of success once over the threshold. 

"Leadership is principally a personal act: people follow people."
Drawing on the work of Elliott Jacques in 'Requisite Organization' (Cason Hall & Co, 2006) we distinguish three role levels by considering the time-horizon over which leaders have to work and the degree of complexity they have to manage. Top level senior executives, C-suite staff such as CEOs and CFOs, are responsible for leadership of the entire enterprise and need to be able to see how all the pieces fit together so that they can make choices about the business based on a broad understanding of the issues and challenges. The balance between 'leader of the business' and 'leader of the function' is decisively tipped toward the former.
The leaders at the second level, executives, formulate strategy for their area, creating goals that link strategy with operation, developing and implementing the plans and operational models that execute strategy. They need to find and then constantly re-calibrate the balance between 'leader of the business' and 'leader of the function'. The heads of department and functional managers at the third level, have the preoccupation of managing performance day to day, focusing on leading delivery and developing efficient and effective work practices. In clear contrast to the top level senior executives, the balance here is decisively in favour of leading their function.

What do we find?

At all three levels the highest rated factors in our benchmark assessments are those of drive and energy: a deep desire to make a difference and being tenacious in the pursuit of goals. By contrast, the lowest-rated factors relate to emotional and relationship intelligence: self-awareness is common by its absence. Little wonder, then, at the proliferation of courses and coaching designed to enhance emotional intelligence, and equally little surprise that so many leaders resist such interventions and much prefer development that enhances their existing strengths in driving for goals.

However, the picture changes when we look at top quartile leaders. As a head of department, high levels of emotional and relationship intelligence, particularly the ability to handle conflict constructively, is actually the most frequent picture in top-rated leaders. We could see emotional and relational intelligence as a 'success factor' rather than a 'threshold factor': the drive and energy that gets you into the role needs to be tempered with the capacity to bring people with you once you need to turn plans into action.
"The drive and energy that get you across the threshold into these senior roles needs to be complemented by other strengths."
 At executive level, the first quartile picture is characterised by the emergence of courage as a key differentiator. This picture is continued at senior executive but additional factors also differentiate at this Level, notably thewillingness to see oneself accurately. Again we see that the drive and energy that get you across the threshold into these senior roles needs to be complemented by other strengths: in the case of senior executive leaders, the courage to deal with the challenges you face once in the role and the humility to accept one’s own limitations. Indeed, Philippa's research shows that excessive drive to get things done may interfere with the open-mindedness and reflectiveness needed to see a clear way through a minefield of complex issues and the ability to take the long view.

A puzzle for leadership development

As people involved in developing leadership we face a conundrum: unless individuals are characterised by high levels of Drive and Energy they are unlikely to get a seat at the senior table. However, once at the table these self-same qualities can be the source of underperformance. Yet there is, by then, often a strongly-developed scepticism that 'fluffy' stuff is of any relevance to their success and the success of the enterprise.

In last month’s column on Organisation Purpose I referenced a number of statements of purpose from FTSE100 companies. Here is who they belonged to:

To celebrate life every day, everywhere (Diageo)

We’re an international company focused on creating value for our shareholders (Imperial Tobacco Group)

To improve the quality of human life by enabling people to do more, feel better and live longer (GSK)

Our purpose is to build deep, lasting customer relationships which help our customers achieve what’s important to them (Lloyds Group)

We exist to develop and manage talent; to apply that talent, throughout the world, for the benefit of clients; to do so in partnership; to do so with profit. (WPP)

To be trusted to deliver excellence is our central organising thought. It is what we aspire to become. It is the embodiment of the promise we make to our customers. (Rolls-Royce)

And what did our CEO and his colleagues resolve? That none of these kinds of statements worked, that somehow they needed to connect their people to the purpose of the business through the force of their actions rather than the form of their words.

Mark Loftus is a director of The Thinking Partnership. He has 20 years' experience as an organisational consultant and is a recognised authority on emotional intelligence and the art of assessing senior leaders. He is a chartered clinical psychologist with an MPhil from London's Institute of Psychiatry, and has a degree in philosophy and psychology from Oxford University.

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