Risky Selection of Leaders

Everybody in the business world has a litany of woes about leaders. There are many causes attributed to it, but the pertinent question is- are we choosing the right leaders or is this a case of blind choosing the blind? I found some flabbergasting research highlighting that leadership selection is mostly done on attributes perceived to make a person successful. More often than not, the actual traits required for leadership are ignored.  Read on to assess for yourself whether organizations are doing risky selection of leaders.

1.    What attributes are organizations looking for?

The “2009 Best Companies for Leadership” report of Hay Group with Bloomberg identified 20 companies globally that were best in developing leadership talent. The results indicated that these companies gave better shareholder returns in short-term and over a 10-year period than the S&P 500. Infosys Technologies was the only Indian company in the listed 20. The graph below shows the traits top 20 companies value in leaders. Strategic thinking, execution and soft skills rate above technical skills.

2.    What is the percentage of effective leaders?

On the face of it, the above-mentioned attributes seem to be present in most of the staff. However, another survey -“The Global Leadership Forecast 2011” conducted by DDI  “found that only 33 percent of HR leaders are highly confident in their frontline leaders’ ability to ensure the future success of their organization.”  Now these frontline leaders are critical to the growth of the business as they interact with the customers. Hence, their leadership is crucial for increasing profitability of the organization

Secondly, in the long run these frontline managers are most likely to become business unit heads and hold other critical positions in the organization. We assume that with experience the leadership capabilities improve. This is an incorrect assumption. A research conducted by Hogan and Curphy (2004) asserts that managerial incompetence base rates are as high as 50% of all managers. So where are we going wrong? Dolitch & Cairo succinctly described the problem in the following words:

It’s instructive that an individual as ideally suited to a job as Pitt (former SEC chairman) could ultimately fail.  Too often, we assume that someone whose professional background is a perfect fit for a job—who has the ideal combination of intellectual acumen, experience, and expertise—cannot fail.  The lesson:  Never underestimate the power of personality in undermining the success of even the most brilliant and well-suited leader. (Dotlich & Cairo, 2003, p. 62)

3.    How are managers doing on personal attributes?

A 2010 survey of HayGroup- Emotional Intelligence at the heart of performance – identified the crux of the problem. It showed that out of 12 competencies for measuring emotional intelligence20% of the respondents had no strengths, 52% had 3 or fewer and just 16% had 9 or more. This means, that just 16% of the respondents are emotionally capable of being good leaders.

ESCI scores further analysis indicated that – the competencies typically seen as strength include achievement orientation, teamwork and organizational awareness. Whereas, those that typically require most development include emotional self-awareness, conflict management, influence and inspirational leadership. Think of it, without the emotional intelligence to understand one’s own and other people’s behavior, – can an individual positively influence others, lead teams and inspire people?

This means two things. First, that society doesn’t have a high percentage of emotionally intelligent people. Second, people without the emotional intelligence get leadership positions on technical and execution skills. Beyond a point, this results in failed leadership and causes damage to the organization. Leaders with low emotional self-awareness de-motivate 60% of the staff. The staff is disengaged, suffers in a toxic work environment and organization faces retention problems.

 4.    Why do organizations choose ineffective leaders?

 In light of the above facts, we assume the organizations should be doing a better job at selecting leaders. However, they are failing because psychologically humans chose leaders with negative traits. I am highlighting a couple of aspects on it.

Strategic thinking is the most important skill organizations are looking for amongst leaders. To develop a good strategy, leaders need to be creative thinkers. However, as I wrote previously in the article Creativity @ Risk” based on the Jenniger S. Mueller’s research paper – people don’t chose leaders with creative ideas. When a person with creative ideas is pitted against a standard thinker who follows established norms, the standard thinker wins the leadership selection battle. People select the creative thinker only when specifically asked to choose a charismatic leader. Therefore, people by themselves may not choose an inspiring leader.  That means, people chose leaders based with whom they are comfortable with, rather than the intellectual capability of the leader. The clear message is that organizations will get strategic thinkers and inspiring leaders only when they specifically focus on identifying, developing and promoting them.

The second aspect is the soft skills or emotional competencies of the leaders. A research paper by Robert W. Livingston, Taya R. Cohe, & Nir Halevy titled – Empowering the wolf in sheep’s clothing: Why people choose the wrong leaders – highlights that people tend to chose leaders with harmful attributes and lacking emotional skills.  The research indicates that there is stark difference in what people say that they value as leadership traits and the people they select as leaders. People chose leaders who are socially appealing but may not be interested in the welfare of the group. Social individuals are perceived as high status. Although they may be more self-serving, power seeking and self-promoting, people prefer them to an altruistic person.

This means, paradoxically people chose a person as a leader who is domineering and competitive  rather than an empathic team player concerned over the welfare of his team mates. Nice guys lose the battle of leadership. Therefore, we shouldn’t be surprised that organizations have such aggressive cultures with backstabbing and backbiting being the norm.

The quandary is, that in a drive to achieve targets and growth, competitive people rule. The thinkers, team players, influencers and change agents are not preferred choice for leadership roles. The excessive focus on achieving numbers itself reduces profitability due to destructive corporate culture.

Organizations need to maintain balance while selecting leaders. The right mix is required. A sales team leader needs to be more emotionally aware of customer reactions and be sociable. On the other hand, to develop and train resources a learning and development leader needs to be altruistic and empathetic. Hence, organizations will reduce leadership selection risks by identifying various emotional capabilities and soft skills required by a leader to fulfill a job description.

 Closing thoughts

 When one does the math for ineffective leaders, the failure rate is remarkable. While most organizations are focusing on developing leadership talent, a root cause analysis for failure of leadership and selection of ineffective leaders is not done. Realization dawns normally when organization is on the brink of a catastrophe.

Therefore, it is a good idea to build in an emotional competency evaluation system for selecting leaders. A fine balance has to be maintained between technical and emotional competency of the individual and organization objectives and culture. Without plotting the data on a matrix and evaluating it objectively, organizations might not get the right leaders. While leadership is a soft skill organizations require hard data to select a good leader. Leaders can make or break an organization; hence, huge risks occur when wrong leaders are selected. Risk managers must call management attention for selecting good leaders by conducting a leadership skill assessment.

References:

1. Better Leaders, Better Outcomes The Power of Selection Tools to Drive Business Results – A research paper by DDI

2. 2009 Best Companies  for Leadership -The future of leadership: a spotlight on the best -Hay Group Webinar Feb 18, 2010

3. EI at the heart of performance -The implications of our 2010 ESCI research – Hay Group

4. Empowering the wolf in sheep’s clothing: Why people choose the wrong leaders – Robert W. Livingston, Taya R. Cohen, & Nir Halevy- Kellogg School of Management, Northwestern University

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