The SHL Corporate Leadership Model

Transcription

1 The SHL Corporate Leadership Model Prof Dave Bartram Research Director SHL Head Office Research Division Acknowledgements The author is grateful to Professor Peter Warr, University of Sheffield, for his valuable contributions to the Leadership project and to the production of this White Paper. Professor Warr carried out much of the literature review on which this was based and contributed to many of the ideas put forward in this paper. The author is also grateful to Rainer Kurz and Rob Bailey who worked on this project in the Research Division and contributed many of the ideas presented in this paper, and to the SHL UK Talent Management Team, who have worked with us on the implementation of the approach presented here, in particular in the contexts of succession planning and leadership development. Summary The SHL Corporate Leadership model derives from the generic model of the world of work described in Bartram, Robertson and Callinan (2002) and Kurz and Bartram (2002). It provides a significant advance by taking account of: Both leadership behaviours (as rated by oneself and others) and leadership impacts. Both individual and aggregated (i.e. team, group and organisational) measurements. Both people-measures and contextual or situational measures. It proposes a framework that takes into account organisational culture, values and other contextual factors as the environment within which to assess and develop leadership. Leadership is about influencing people such that they come to share common goals, values and attitudes, and work more effectively towards the achievement of the organisation's vision. Management is about keeping an existing system running, whereas leadership is about creating it, developing it or changing its direction. Confusion is sometimes generated by the fact that it is difficult to conceive of a person who has leadership skills without that same person also having management skills. While they may be conceptually distinct, they are in practice found side by side. For that reason, individual assessments need to consider both.

2 The SHL Corporate Leadership Model combines the currently fashionable 'transformational' and 'transactional' themes into four main functions that describe the leadership process. Each function has its characteristic types of behaviour. 1. Developing the Vision: The strategy domain 2. Sharing the Goals: The communication domain 3. Gaining Support: The people domain 4. Delivering Success: The operational domain This White Paper elaborates on these four leadership functions and shows how the Great Eight competency factors of the SHL Competency Framework (Kurz & Bartram, 2002) combine in pairs to provide coverage of these four functions. For each function, one competency factor provides a transactional or management focus and the other a transformational or leadership focus. The issue of risk factors (impeding behaviours, derailers) is considered and an approach is presented that distinguishes between individual and contingent risks. It is proposed that these need to be considered separately for each of the above four leadership functions. In addition, we need to consider both misbehaviour and incompetence when looking at individual risk factors. The model covers four sets of variables: 1. Key outcomes and impacts. What are the consequences of leadership? What impacts do leaders have? What are the focus, level and breadth of these impacts? 2. Key competencies. What are the desirable leadership behaviours? 3. Individual antecedents of these competencies. What are the stable individual characteristics that lead to such behaviours? 4. Context: What is the situational and cultural context? A four-fold situational classification is proposed based on two main variables: Environmental Uncertainly and Pressure for Change. For each context, impacts can be assessed in terms of the four organisational effectiveness criteria defined in Bartram et al (2002), using a balanced scorecard approach. The criteria are: a) Economic b) Technological c) Commercial d) Social and personal The assessment strategy for Leadership requires us to consider separately three parallel sets of variables. One set relates to the individual leader, another to the groups and teams within which the leader operates, and the third to the organisational setting within which this all takes place. Why leadership? Why is leadership so important? It is perhaps a self-evident truth that leaders are critical to the success or failure of ventures, for without leaders, there is no one to give direction, to motivate, to imbue a sense of commitment and passion, and without these there can be no success. We view much of history in terms of the leaders of important ventures and organisations, a practice that has given rise to one view of leaders as great people. Within the commercial world, leadership has always been important. However, the importance of individual leaders or teams has probably become increasingly apparent, as the commercial and economic environment has changed. As will be discussed later, pressure for change and uncertainty are two of the major factors that organisations have to respond to. Bain and Mabey (1999) give four reasons why the importance of people within organisations in ensuring competitive advantage has increased over recent years: 1. Regulated and protected markets have declined significantly, and on a worldwide basis 2. Product life cycles are shorter and new technology is being made redundant at a faster rate each year 3. Access to the required financial resources is not an inhibitor today given the mobility and flexibility of the financial markets 4. Economies of scale are much less important today than even a few years ago SHL White Paper 2004 / Page 02

3 increasingly the consumer is demanding greater variety without any cost penalty This White Paper is based on a project carried out by SHL in It involved an extensive and exhaustive review of the research literature on leadership and examination of current and past approaches to leadership measurement. In this paper we present some of the conclusions we drew from that work and an approach to leadership that we believe builds on the best current research and thinking in this area. Introduction In the SHL approach to leadership, we explicitly make a separation between the notions of management and leadership. It is generally accepted that management includes planning, organising, monitoring, maintaining routines, handling deviations from desired progress, and so on. These activities are typically viewed as relatively routine, whereas leadership is seen as more proactive. Some writers in this area describe management in rather negative terms, seeking instead to communicate the importance of leadership. That is not our view, good management and effective leadership are both vital to organisational success: but they are different. Management is about keeping an existing system running, whereas leadership is about creating it, developing it or changing its direction. Within any organisation the proposed approach to leadership should be part of an equally important approach to developing management. Confusion is sometimes generated by the fact that it is difficult to conceive of a person who has leadership skills without that same person also having management skills. While they may be conceptually distinct, they are in practice found side by side. For that reason, individual assessments need to consider both. Management is similar to leadership in embodying a power differential and an expectation that a manager will have impact on others. those only found in leaders; those found in both leaders and managers; and those only found in managers. Given that we must include the middle category in an account of leadership, some aspects of management will inevitably be covered in our approach to leadership. There have been many attempts at defining leadership. The following is provided as a working definition: Leadership is about influencing people such that they come to share common goals, values and attitudes, and work more effectively towards the achievement of the organisation's vision. To get to grips with the concept of leadership we need to clarify what sort of influences we are talking about, and who is influenced. The SHL Approach to Leadership covers four main types of variable: 1. Key goals and outcomes. What are the consequences of leadership? What impacts do leaders have? What are the focus, level and breadth of these impacts? 2. Key competencies. What are the desirable leadership behaviours, what are the key competencies? 3. Individual antecedents of those competencies. What are the individual dispositional factors that lead to such behaviours? 4. Context: Situational and cultural variables. These include the various 'drivers of' and 'barriers to' success. The approach also considers the role of risk factors, both in terms of individual characteristics and contextual contingencies. We might think in terms of three kinds of behaviours: SHL White Paper 2004 / Page 03

4 Dispositional measures Self / other ratings Impact assessments 3. Leadership potential 2. Leadership behaviours 1. Outcomes Competencies Impacts of behaviours Situational factors 4. Context Drivers & barriers Culture & values 1. Key Goals and Outcomes There is a distinction to be made between outcomes and impacts. Outcomes are measurable changes in the organisation. These may be financial (e.g. changes in earning per share), commercial (e.g. increase in percentage market share), technological, social, or more commonly some mix of all four (see below). The outcome is generally the result of the actions of the leader together with a lot of other people. Impacts are the measurable effects a leader has on people. In a sense they are the personal outcomes of leadership performance. An effective leader, by definition, needs to define the direction for change, demonstrate that they have made an impact, and that the impact has either directly or indirectly moved the organisation in the direction it needed to go to achieve the desired outcomes. The extent to which a leader can have impact is defined in terms of three parameters: 1. Goal Focus: Is the key outcome area economic, technological, social or commercial? 2. Organisational Level: Does the leader operate at Board level or is the role at some other level (e.g. project team leader)? 3. Stakeholder Impact: Who is going to be impacted by the leader s actions? How broad or far-reaching is the leader's impact going to be? This relates to issues of extent within the organisation and outside. 1. Goal Focus Impacts can be achieved in a range of areas not just the financial ones. A taxonomy for this has been set out in Bartram et al (2002) and represents an approach comparable to the balanced scorecard approach (Kaplan and Norton, 1992). The four criteria defined by Bartram et al, and expanded into a model of eight Goal Factors by Kurz & Bartram (2002), are: 1. Economic. This is fundamental, as commercial Organisations that are economically ineffective will not survive. As with all other criteria, the effectiveness or otherwise of an Organisation in economic terms is inextricably linked with the external economic environment. Effective Organisations must be able to adapt to changes in the economic climate. 2. Technological. Organisational effectiveness requires use of technology for service and product development, their delivery and for internal communication. The nature of the business will impact on the roles technology can play, but effective use of technological resources can be as critical in Organisational success as effective use of people. 3. Commercial. The nature of the commercial environment within which an Organisation SHL White Paper 2004 / Page 04

5 operates is critical to its success. Effectiveness can be defined in terms of finding or developing a specific market niche, or confronting the competition headon and taking market share. 4. Social and personal. This is intended as a broad notion of social, to include sociopolitical, ethical and cultural measures of effectiveness. Organisations are not only collections of people, but also have impacts on people (customers, suppliers, shareholders and the public at large) outside. The effects of economic success or failure are social effects (employment, standard of living and quality of life). Organisational goals may have ethical, social and political dimensions. As such, they may conflict with purely economic goals. An effective leader is one who makes a demonstrable impact on one or more of these criteria in a positive way by influencing the behaviour and performance of others. Once the goal focus has been identified, it is then necessary to specify in qualitative terms what the critical success factors are and from this to identify measurable key performance indicators. 2. Organisational Level Organisations need leadership at all levels. While the corporate leader and top team may have the greatest impact on the setting the direction for the organisation, leaders at other levels also have their roles and need to make impacts that will aggregate together in building towards the organisations desired goals. Leadership is needed from supervisors of work teams, from creative groups, from project teams and so on. In the SHL Leadership model, we differentiate five organisational levels as shown in the table below. Each Level is associated with different degrees of job complexity, types of jobs, qualifications and richness in terms of the demands made upon an individual s competencies. The definitions provided for these are consistent with those used in defining job levels within the UK national occupational standards framework. Level Job type Definition 5 Directors, Senior Management / Professionals, Consultants, Leaders, Innovators 4 Middle Management / Professionals 3 Junior Management / Professionals, Supervisors 2 Skilled Workers, Administrative & Clerical Staff 1 Un- & Semi- Skilled Workers Competence that involves the application of a significant range of fundamental principles and complex techniques across a wide and often unpredictable variety of contexts. Very substantial personal autonomy and often significant responsibility for the work of others and for the allocation of substantial resources feature strongly, as do accountabilities for analysis, diagnosis, strategic design, planning, execution and evaluation. Competence in a broad range of complex work activities performed in a wide variety of contexts and with a substantial degree of personal responsibility and autonomy. Responsibility for the work of others and the allocation of resources is often present. Competence in a broad range of varied work activities performed in a variety of contexts, most of which are complex and nonroutine. There is considerable responsibility and autonomy, and control and guidance of others is often required. Competence in a significant range of varied work activities, performed in a variety of contexts. Some of the activities are complex and non-routine, and there is some individual responsibility and autonomy. Collaboration with others, perhaps through membership of a work group or team, may often be a requirement. Competence in the performance of a range of varied work activities, most of which may be routine and predictable. The main focus of the present white paper is on levels 4 and 5. However, we must not forget that leadership attributes and leadership functions are important at all levels. 3. Stakeholder Impact In considering impacts, we also need to consider who is impacted and the scope of the impact. There are, broadly, five categories of people who are affected by the impact a leader will have. SHL White Paper 2004 / Page 05

6 1. Investors and shareholders. Effective leadership engenders trust and is important in ensuring that the Organisation provides a good return on investment, long-term stability and growth. 2. Employees look for job satisfaction, stability of employment, career prospects, personal development, good pay and rewards. Leadership is important both through the primary and secondary routes described above in creating a positive work environment, giving clear direction and providing inspiration and motivation. 3. Customers are indirectly affected as good leadership, especially in relations to customer service areas, helps ensure they perceive the organisations as providing value for money, quality of product or service, good support and after-sales care. 4. Suppliers want to work with an Organisation that is dependable and provides them with long-term stability as a market; reliability in payment, and is aware of the constraints on the suppliers' ability to supply. As with customer service, effective leadership impacts on this. 5. Others look for the impact of the Organisation's activities on their environment and way of life (economic, social, political, and cultural) to be positive and beneficial. Leaders, whose roles involve impacts with the outside world, are crucial in managing this effectively. Leaders of major organisation in the public service sector and senior managers in large multinationals are all perceived as providing leadership that is broader than that required for their organisation on its own. Such leadership may be in areas of standards setting, professionalism, good governance and probity, strategy, and innovation. Finally, a leader's impact may be broad or narrow. A leader may have impact within their local work group, the local organisation, the immediate local environment, nationally or internationally. 2. Key Competencies Desirable leadership behaviours or competencies have been classified and labelled in many different ways. Some approaches from the literature are summarised below. Initiating structure and consideration behaviours (from the 1940s) are sometimes termed task-centred and person-centred, covering planning, organising, target-setting etc., and fairness, sympathy, concern etc. respectively. They emerge in some form in most models, and need to be covered in ours. It is possible to view and measure each one in overall terms or through several sub-components. In addition, laissez faire leadership (taking little action) was identified in early writings, and is still examined in the literature. It seems to represent the low end of the above behaviours. More recent emphasis has been on transformational, innovative or charismatic leadership versus transactional or maintenance leadership, usually assessed through the Multifactor Leadership Questionnaire (MLQ, Bass and Avolio). The large-scale analysis by Avolio, Bass and Jung (1999) of the most recent MLQ version (MLQ5X) supported a six-factor solution for 36 items and also a threefactor higher-order account. The six factors were labeled Charismatic/Inspirational (CI) 1 leadership, Intellectual Stimulation (IS), Individualised Consideration (IC), Contingent Reward (CR), Active Management by Exception (MA), and Passive-Avoidant (PA) 2 leadership. It has been conventional to view transformational leadership as including CI, IS and IC; and transactional leadership as including CR, MA and the Managementby Exception (Passive) part of PA. 1 Charismatic/Inspirational leadership combines three scales previously viewed as distinct (but correlated): Idealised Influence (Attributed), Idealised Influence (Behaviour) and Inspirational Motivation. SHL White Paper 2004 / Page 06

7 The three-factor account suggested by Avolio et al (1999) adds to that dichotomy: Transformational leadership (CI and IS), Developmental-Transactional leadership (IC and CR) and Corrective Avoidant eadership (MA, PA and laissez faire). Similar components are covered in the Transformational Leadership Questionnaire (Alimo-Metcalfe and Alban-Metcalfe, 2001). Several authors have set out lists of leaders (or at least managers ) behaviour. For example, Yukl and Van Fleet (1992, p. 156) propose 16 key practices. Much of the confusion in the approaches to leadership competencies arise from the failure to differentiate on the one hand between leadership and management and on the other between individual and contingent factors. The model outlined later makes these distinctions a core part of the model. We believe that provides a degree of much needed clarity that sets our approach apart from others. 3. Individual Antecedents These are the disposition and attainment characteristics (Kurz and Bartram, 2002): that underlie or are pre-requisites for leadership behaviours. They include aspects of cognitive ability, relevant knowledge, certain personality dispositions and forms of motivation. It is useful to view the antecedents of all behaviours (not necessarily those of leadership) in two broad categories: dispositions and attainments. Leadership behaviours can be viewed as specific instances that manifest these underlying characteristics in a particular situation. 1. Dispositions Aptitudes and abilities. A general need in organisations is for fluid cognitive ability, as well as for specific psychomotor abilities or processes of creative thinking or complex thinking. Such variables are important in studies of managers. Style or personality. Self-reports of personal styles are in effect a person s descriptions of his or her typical behaviours, so necessarily link to the key competencies (see 2, above). Recent research has confirmed not only the importance of links between personality traits and leadership, but also shown how the pattern of relationships depends on context. A meta-analysis of many studies carried out by Judge et al (2002) showed, for example, that while Extraversion, Openness to new experiences and Emotional Stability are predictive of leadership in business settings, for more bureaucratic settings (government and military) the predictors are Emotional Stability, Conscientiousness and Extraversion. Overall, the correlation (multiple regression) of the Big Five personality factors and leadership effectiveness was Motives and Values. Less common is the examination of leaders' and managers motives, values or attitudes. For example, what motives underlie certain behaviours in a particular setting: a desire for power, for money, or to achieve ethical goals? Motives, values and personality overlap, and relate to corporate culture when aggregated across individuals. In general motives may be viewed as more localised in time and space while values are deeply internalised and set the rank ordering of importance and the prioritisation given to potentially competing demands: making money or treating people well; creating a stable working environment or ensuring innovation and change can flourish. Examination of motives and values may be particularly important in assessing risk factors in leadership, and get to the bottom of socalled personality clashes. It is also worth noting that when Judge et al (2002) examined a broader range of traits than just the Big Five they found some even stronger relationships with leadership. In particular, traits with a strong motivational component (dominance, achievement, locus of control) all had substantial correlations with leadership. 2 Passive-Avoidant leadership combines the scales of Management by Exception (Passive) and Laissez-Faire. SHL White Paper 2004 / Page 07

8 Managers who are successful tend to have energy, stamina, hardiness and continuing good health. These attributes underpin the persistence of motivation and effective behaviour across years, but they rarely appear in the literature. Interests. The sphere of an individual's interests will influence their choices of work setting and the extent to which they will get satisfaction from working in one function or context rather than another. Interest categories are useful for capturing expertise that is profession, function or industry specific, and are likely to be good predictors of overall performance in closely related jobs, or closely related competencies. 2. Attainments Knowledge and skills. Despite theoretical suggestions and empirical evidence about the crucial role of knowledge in the determination of effective behaviour (e.g., Schmidt and Hunter, 1992), this is under-emphasised in the leadership literature. We need to consider knowledge both about job tasks and about organisational functioning. The former (labelled as task expertise ) covers both declarative and procedural knowledge (and thus skills ), and the latter ( organisational wisdom tacit knowledge ) includes wider practical understanding. Experiences and qualifications: McCall (1998) emphasises the need to put high potential talent into developmental situations where they can gain the experiences necessary to perform successfully at later career stages. Qualifications (for example, MBA or DBAs, qualifications gained on leadership training programmes etc) formally attest to knowledge, skill and experience. The value of different types of qualifications on leadership performance has received little attention in the literature. However, if it is possible to 'develop' or train leaders, it should be possible to break down some aspects of leadership expertise into relatively discrete sets of knowledge and skills that can be taught at practical and theoretical levels. 4. Context: Situational Variables and Culture Although it is clearly established that desired leader behaviours can differ between situations, there is little agreement about the nature of the contingencies and almost no research evidence about effectiveness in different situations. Published suggestions include the following: Fiedler (1967) argued that the most effective leadership style was a function of three variables: his or her power relative to subordinates, the degree of task structure, and the quality of leader-member relations. In situations favourable to a leader (e.g., high power, high task structure and good relations) and in situations unfavourable to him or her (e.g., low power, low structure and poor relations), a task-oriented style was advocated, but otherwise a personcentred approach was recommended. Evidence has not been very supportive, and the model has faded away (rather than being explicitly rejected). One problem is that even with only three dichotomised situational factors, analyses have to cover eight settings, and comprehensive tests of predictions in all those settings are difficult to carry out and interpret. House s (1971) path-goal theory drew attention to the importance of a leader identifying goals valued by individual subordinates and setting up paths to those goals. Aspects of the situation such as the nature of the task and subordinate attributes were said to determine the optimal approach. The number of variations in goals and paths between settings and individuals is clearly considerable, and, despite plausibility and general acceptance as a partial account (emphasising employee motivation), empirical evidence is slim. Hersey and Blanchard (1982) extended the idea in their model of situational leadership to suggest that leaders emphasis on setting up paths to goals should depend on two aspects of subordinate maturity (job maturity and psychological maturity).while again plausible, this has rarely been examined or demonstrated. The multiple linkage model (Yukl, 1981) assumed that situational influences arise from variables such as subordinate effort, subordinate ability, type of work SHL White Paper 2004 / Page 08

9 organisation and other task-related features. Vroom and Yetton (1973) presented a prescriptive decision-making theory to identify the appropriate leadership behaviours in different situations. The effectiveness of a given procedure was said to depend on a large number of variables, such as the amount of information possessed by a leader or by subordinates, the likelihood of subordinate acceptance of a particular decision, and the complexity or importance of the decision. The model was presented as a set of flow charts, of such complexity that the measurement and observation of all combinations has never been achieved. In the present approach, we try to balance complexity and the need to maximise potential validity against practical considerations. To achieve this we need to limit the number of situational variables we consider to those that are most likely to have an effect on a leader's performance and impact. The current literature is not very helpful in identifying what these variables should be; almost all writers merely point out that situational differences are important and then pass on to other topics. 1. Contextual Uncertainty and Pressure for Change One feature that appears in many discussions is the degree of uncertainty in a particular setting. Waldman, Ramirez, House and Puranam (2001) cite Milliken s (1987) definition of perceived uncertainty as an individual s perceived inability to understand the direction in which an environment might be changing, the potential impact of those changes on that individual s organisation, and whether or not particular responses to the environment might be successful. Uncertainty is stressful, and may make people more receptive to active leadership. Uncertainty can arise from several contextual features: the number and complexity of the factors that might affect outcomes, lack of needed information, a very large number of options, inability to predict developments, doubt about one s ability to succeed or about the consequences of one s actions, etc. So contextual uncertainty could be used as a rather general construct to represent current ambiguity and lack of clarity about the best way forward. Uncertainty is also a function of the degree of interdependency in an organisation's structures. For a small organisation or one with a simple structure, the potential impacts of change processes are easier to predict than for more complex organisations. This issue of 'predictability' is directly related to the issue of risk. The less predictable the outcome of an intervention, the higher the risk associated with it. For intervention in complex organisations with high levels of interdependence between their parts, leadership is never a 'ballistic' process. That is, having set the vision and strategy one cannot initiate a process and hope it will run through to success without further interventions and 'course corrections'. A second general feature that varies between situations is the degree of external pressure to act. Only a few writers draw attention to the need to look outside an organisation (whereas most restrict themselves to inward-looking psychological themes), but a macroscopic concern for economic or technological conditions might appeal to managers (and also be theoretically useful). So a second possible contingency might be viewed in terms of the degree of market or other pressure for change. Restricting ourselves for presentational purposes to a two-by-two table, we might think in the following terms. The framework now shifts from descriptive to prescriptive, advocating an emphasis on different 'types' of leadership in four different contexts. High external pressure for change > Transformations Low external pressure for change > Improvements High contextual uncertainty High risk, rapid change Change by revolution Medium risk, slow change Change by evolution and continuous improvement Low contextual uncertainty Medium risk, rapid change Change by innovation and paradigm shift Low risk, maintain status quo Process change and maintenance SHL White Paper 2004 / Page 09

10 In relation to the above classification, it may be that contextual uncertainty increases the value of transformational behaviours, whereas those are of more limited importance (or may even be disruptive) in situations of stability and clarity (Waldman, Ramirez, House and Puranam, 2001). Degree of contextual uncertainty and the speed with which change is required are both key factors in making any assessment of leadership risk (see below). 2. The role of culture Relevant aspects of organisational values and culture are important factors in either facilitating or hindering a leader's impact. These have rarely been examined in the academic leadership research, but it is likely that certain styles of leadership are particularly appropriate in certain kinds of culture. We need to consider the fit between a leader's personal values and the prevailing or desired culture of the organisation (or that part of it in which the leader needs to have an impact). We also need to consider how culture changes as a consequence of the impact of leadership. For our current model we distinguish two aspects of culture: Norms regarding behaviour - how we do things and how we treat people in this organisation. Values - what we care about and what we regard as important. Sitting around these are the visible outward signs of culture, such organisational artefacts as house styles, logos and so on, and the often-unconscious basic beliefs on which the values depend. It is well known that norms and values are hard to change, probably because they are built on beliefs. It is easy to change the outward signs of a culture, the artefacts, and there is a danger that people may think that by changing the overt manifestations of a culture, the norms, values and beliefs will follow. While it is vital in assessing any leadership situation to know what the current culture is and how it needs to change to be consistent with the new vision, the approach we take is that culture change follows organisational change rather than driving it. Culture changes as new behaviours become 'bedded' in and accepted as more effective than the old one. Value change probably follows even more slowly on the back of changes in norms, as new priorities become internalised as values and shifts occur in people s beliefs. Bringing in new talent whose values are congruent with the new vision, and losing staff whose values are out of touch or incompatible with the desired culture will speed up the culture change process. The SHL Model of Corporate Leadership In the introduction it was stated that leadership was about influencing people such that they come to share common goals, values, attitudes and work more effectively towards the achievement of the organisations vision. An initial problem is to establish the boundary between those behaviours that are narrowly 'leadership' and those that are broadly desirable in managers but are not explicitly 'leader like'. If we are over-inclusive in our definition of leadership we run the risk of devaluing the concept of leadership and confusing it with effective management (which arguably is what has happened in the debate around transactional and transformational leadership concepts). The definition we have provided, in terms of influencing other people, forms the focus for the proposed framework. It needs also to consider the competencies required for effective management, as leaders need to be complete people: we cannot consider disembodied qualities in isolation anymore than we can consider the impact of people in isolation from the situation they operate in. A framework of specifically leadership behaviours thus needs to sit above a broader framework of other competencies, with the latter applicable to both leaders and nonleaders. We distinguish between general employee (or managerial) effectiveness (levels 1, 2, and 3 in the model) and more specific leadership effectiveness (levels 4 and 5 in the model). SHL White Paper 2004 / Page 010

11 We also distinguish between competencies that define leadership and those that are supportive of or necessary for effective leadership. Leadership competencies. The model considers leadership from the viewpoint of process. What do leaders do? In general terms, they provide the vision and set the strategy, they share that vision with others, define goals and gain buy-in and support, and they either deliver the vision themselves or set in place the mechanisms to ensure that it is delivered. Supporting competencies. These are behaviours that are desirable in general, and may be necessary in practice, but do not directly involve influencing people (e.g., Written Communication, Specialist Knowledge). The competencies are considered within a context specified in terms of the situational variables, culture and intended impact. Outline description of the SHL Model of Corporate Leadership The SHL Corporate Leadership model combines the currently fashionable 'transformational' and 'transactional' themes into four main functions, each with its own characteristic types of behaviour. They are listed here in terms of their relationship to the SHL Great Eight competency factors (Bartram, 2005; Kurz & Bartram, 2002). These factors form the most general level of a hierarchical competency framework, which has 112 components, above which sit 20 dimensions of competency, which in turn map on to eight broad factors describing the domain of desirable behaviours at work. Research has shown that these eight factors not only provide a parsimonious but complete account of work behaviours, but they also provide a structure that relates well to the predictor domain. The latter includes all those instruments (personality, ability, motivation etc) that we use to predict people s potential for success at work. functions. As each of the Great Eight are very broad collections of competencies, it is important to note that they are not purely transactional or purely transformational. For example, the factor Interacting and Presenting includes competency components associated with persuasion and influence that are transformational. For any given project, a leadership risk assessment needs to be made. This assessment would seek an answer to the question: What would be the consequences for each of the key impact areas in this situation of a failure in leadership? Following on from that, each leadership attribute needs to be considered to assess its criticality in ensuring that failure does not occur. 1. Developing the Vision - the Strategy Domain Developing a vision and strategy is a core function of leadership. The vision defines where the organisation or group is going and the strategy sets out how it will get there. As a precursor to defining the vision and setting the strategy, the leader has to engender a shared sense of need. There needs to be a good reason for the vision and a case made for it defining a more desirable state of affairs than the current one. For this reason, effective leaders need to be able to understand the market and competitor realities and engender in others a sense of the urgency with which change is needed. Developing the vision is not just about a lone leader having an idea, it is about that person bringing together the necessary 'forces' within the organisation, to lead the change implied by the vision. Getting the buy in of that team, or subgroup, is a critical part of getting the strategy to the point at which it becomes a realistic vehicle for organisational change. This function is closely related to the competencies in Creating & Conceptualising and in Analysing & Interpreting in the SHL Competency Framework s Great Eight Factors. For each pair of the eight factors, one emphasises the transformational aspects of leadership and the other the more transactional (or management-focused) SHL White Paper 2004 / Page 011

12 2. Sharing the Goals - The Communication Domain Once the vision and strategy have been developed and the leader has built the core support team needed to drive the change process, the next step is to communicate the new goals to the rest of the organisation or group affected by the change. Ensuring that everyone has a shared understanding of what the new goals are is a critical part of the change process. This not only requires the effective use of all modes of intra-organisational communication (small and large meetings, s, workshops, notices etc), but also ensuring that the change leaders themselves model the new behaviours - i.e. they walk the walk as well as talking the talk. Effectively serving the group's needs in interaction with others and creating a positive impression of the group are essential aspects of leadership that are not well covered in published models. This function is closely related to the competencies in Leading & Deciding and in Interacting & Presenting in the SHL Competency Framework s Great Eight Factors. 3. Gaining Support - The People Domain Gaining support for any change process involves motivating and empowering others to become part of the guiding team. It also involves the identification and removal of barriers to change - whether these are physical, organisational, social or personal. The tactics of gaining support will need to include a plan for ensuring sufficient 'quick wins' to demonstrate the benefits of change as well as putting in place processes for handling the problems arising from the downside of change - increased stress and uncertainty, feelings of isolation or lack of involvement etc. This function is related to the competencies in Supporting & Co-operating and in Adapting & Coping in the SHL Competency Framework s Great Eight Factors. 4. Delivering Success - The Operational Domain The delivery of success is about consolidating gains and keeping the change process going until the goals have been achieved. It also entails the management of culture change. This means clarifying for people what the relationships are between their behaviours, the organisation's 'reward structures' and organisational success. Arguably, shifts in culture are not something imposed on organisations by leaders from above, rather they are a consequence of the behavioural changes and changes in priorities required to effect change. In other words, leaders do not change behaviour by issuing a 'dictat' that the organisation's culture has changed, they do so by changing the structures within the organisation that impact on people's behaviour (the drivers and the barriers). Delivering success is the function most clearly requiring a fine balance between leadership and management skills. It is also the function within which barriers to success can act to hinder progress. Such barrier can include: Formal structures that are no longer appropriate A lack of the necessary knowledge and skills in the workforce Managers or others failing to support individual's behaviours aimed at realising the new vision. Inappropriate or ineffective communication systems. This function is related to the competencies in Organising & Executing and in Enterprising & Performing in the SHL Competency Framework s Great Eight Factors. Understanding Combinations of Behaviours The Great Eight Factors provide a good basis for defining pairs of dimensions, as outlined above. For each leadership functions, we can classify people in terms of whether they score high or low on each of the two competency factors that define the function. Some illustrative names are given below to indicate how this could be used as a typology for classifying people in terms of (a) the SHL White Paper 2004 / Page 012

13 leadership potential and (b) their actual leadership behaviours. Function 1. Developing the Vision: Creating & Conceptualising Scores Low High Analysing High Analyst Visionary and Interpreting Low Conservator Creator Function 2. Sharing the Goals Leading & Deciding Scores Low High Interacting High Presenter Communicator and Presenting Low Supporter Decision-maker Function 3. Gaining Support Creating & Conceptualising Scores Low High Supporting High Team Player Change Agent and Networking Low Defender Adventurer Function 4. Delivering Success Organising and Executing Creating & Conceptualising Scores Low High High Implementer Business Driver Low Idealist Entrepreneur Aggregating measures across all four functions provides a summary grid in which we find the four main transformational/transactional types. Transactional focus Transformation focus Scores Low High High Manager Corporate leader Low Specialist Leader Risk factors Unlike management, leadership is a high-risk activity. If a manager fails to manage well there will be some downside, but in many cases, those they are managing will continue to work and contribute positively to the organisation. If a leader provides the wrong direction, or fails to have the impact necessary for achieving a change in direction, the results can be disastrous for the whole organisation. Each of the four main functions described above has risks associated with it. These risks can be differentiated into individual and contingent risks. 1. Individual risk factors. Individual risk factors are the personal attributes likely to create problems in any leadership situation (e.g. over-impulsiveness, inconsistency, ego-centrism, dishonesty etc). A major consideration in the approach adopted by others to leadership competencies is the notion of risk factors. Individual risk factors are behaviours that increase the likelihood of failure. Within the literature these are often referred to as 'derailers' (Hogan and Hogan, 1995). Individual risk factors are attributes or behaviours that increase the likelihood of failure. Individual behaviour can be divided into misbehaviours and actions that arise from incompetence. Misbehaviours reflect personal weaknesses that result in counterproductive work place behaviours, such as aggression, abusive behaviour, theft or fraud, and so on. Incompetence arises from lack of relevant knowledge or skill. 2. Contingent risk factors. Contingent risks are problems not directly associated with the qualities of the leader as a person, but which are likely to arise in a situation and affect the leader's ability to have the required impact. As noted earlier, certain situations are intrinsically more risky than other (e.g. where there is high contextual uncertainty, where the focus of the change is broad rather than narrow). For each of the situational types defined above, there are likely to be different patterns of contingent SHL White Paper 2004 / Page 013

14 risk. For example, someone who is good at pushing for change may be a risk factor as a leader in a stable commercial environment, which needs leadership with the 'If it isn t broke don't fix it' mentality. Management by exception may be fine in a well-structured stable environment, but could be a disaster in other situations. 3. What can go wrong? One approach to risk assessment in leadership is to consider it from the viewpoint of things that can go wrong, which would critically impact on the chances of successful outcomes being achieved. Problems can arise in relation to each function and through failures of either the transactional or transformational aspects of the function. The following list is intended to be illustrative rather than exhaustive. 1. Developing the Vision: The strategy domain a. The vision is based on an incorrect analysis of the situation b. The vision represents an ineffective solution for the problem, though the analysis was correct. c. The need for change is not recognised in the organisation. d. Change is initiated when none is needed. e. The urgency with which change is needed is either over or underestimated. f. The leader fails to pull together the right team to lead the change 2. Sharing the Goals: The communication domain a. The vision is not communicated effectively b. The vision is not communicated widely enough c. The relevance of the new goals for individuals and their work is not communicated d. The change process is not communicated 3. Gaining Support: The people domain a. People are not provided with sufficient support and assistance during the change process. b. Line management are not adequately involved in implementation. c. Old structures and obstacles which block change are left in place d. Methods for dealing with individuals who resist the change are ineffective. e. There are no quick wins. 4. Delivering Success: The operational domain a. The change process is terminated before the change has become consolidated. b. Changes do not become embedded within new organisational norms and values. c. The need for 'course corrections' is not appreciated and the change process gets pushed off course. d. The timing and nature of course corrections are inappropriate or ineffective. Assessment strategy The assessment strategy for the SHL Corporate Leadership model has four strands to it: 1. Situational assessment to identify the leadership qualities required, the culture, and the impact parameters. 2. Risk assessment, to evaluate the chances of success or failure, the consequences of each, and the risk mitigation options. 3. Individual assessment of the leader or potential leaders. 4. Assessment of the outcomes achieved and the specific impacts the leader has had. This involves the assessment of three parallel sets of variables. One set relates to the individual leader, the second to the groups and teams within which the leader operates, and the third to the setting. 1. The leader: Individual measures: a. Assessment of the individual's potential (using, for example, SHL s OPQ32, Motivation Questionnaire, FastTrack and other ability test measures, Scenarios and other instruments). b. Assessment of the individual's behaviours (using self-and other assessment of competencies), including the identification of individual risk factors. c. Assessment of their impacts through performance appraisal. 2. Groups and teams a. Leaders work within teams (such as the Top Team for Corporate Leaders). Any assessment of a leader within a corporate SHL White Paper 2004 / Page 014

15 setting needs to take account of the team and groups with whom they need to work. b. A full assessment of leadership within an organisation needs to look at more than just one person. In our new approach we advocate looking closely at the mix of people who are supporting the leader in their role. supporting succession planning, organisational change management and other such processes. 3. The setting: organisational and corporate measures: a. Assessment of the culture (norms and values) of the 'focus' setting (e.g. use of SHL s Corporate Culture Questionnaire). b. Identification of potential drivers and barriers (risk factors). c. Definition of the expected outcomes: the critical success factors and associated key performance indicators. Gap analysis of differences between these provides the basis for leadership reports: leadership potential (based on attribute measures like OPQ, MQ and ability tests) ; leadership fit (e.g. fit against current or future Competency Requirements); leadership behaviour (e.g. 360 Competency Assessment); leadership development (e.g. Development Plans on basis of the above). Rather than assessing only a person or only a situation, it is desirable to take a person-incontext approach to leadership development. Through multi-source ratings, it is possible to identify development needs for each set of key behaviours. The format for reporting follows the four main functions defined above: Developing the Vision, Sharing the Goals, Gaining Support and Delivering Success. Conclusion The leadership approach outlined here represents a functional view of leadership. It focuses on what leaders do and what impacts they can have on the effectiveness of organisations. SHL s assessment instruments provide the tools needed to measure relevant attributes at the individual, group and organisational levels. The model of corporate leadership provides the framework for making sense of these measures and for developing intervention and consultancy programmes for SHL White Paper 2004 / Page 015

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