Why Leadership style won’t make the difference in coping with the current crisis, and what will make the difference …

Published by Jan De Visch, on 02/02/2009

The fact that nearly everyone has had some direct experience with both disappointingly ineffective leaders and surprisingly effective ones has led to the common-sense belief that there are important personality differences between good and poor leaders. Most people reject out of hand the competing idea that the enduring personal qualities of the leader are largely irrelevant to effective leadership. Although the latest issue of the Harvard Business Review (January 2009) on ‘Transforming Leaders’ still assumes that personality traits and competences play a major role, it is acknowledged that it is their ‘thinking’ that makes the difference.

The demands of strategic leadership are enormous. The strategic leader operates in a highly faceted, changing, probabilistic environment where the consequences of strategic decisions will often not be known for several years. The current business landscape is littered with enterprises brought to ruin by “experienced” leaders who failed to anticipate the ruinous consequences of strategic decisions. It seems unlikely that these leaders failed because they lacked specific managerial skills. Although a few may have had significant character flaws, most leaders with such defects are identified and their career progression halted before they reach the highest levels of leadership. To operate effectively in such an environment requires from senior executives the ability to “read” the business situation at hand and the ability to systematically evaluate and address the needs and concerns of six kinds of stakeholders : their current CEO, peers, direct reports, customers, analysts  and the board.

What will make the difference

What,  does distinguish effective strategic leaders from ineffective ones, if not experience and skill levels? The Constructive Developmental Framework and the Work Level Approach sheds a completely new light on this question.

The fundamental individual difference variable that most often distinguishes successful strategic leaders from unsuccessful ones is the extent to which leaders’ conceptual capacity meets or exceeds the conceptual demands inherent in their work. Those promoted to strategic leadership positions typically already possess the requisite interpersonal and technical skills needed to be successful. These skills and the motivation to lead will usually already have been amply demonstrated at lower managerial levels. What is often not known, is whether the new strategic leader has the conceptual capacity to grasp the complexity, scope, ambiguity, and volatility of the circumstances that must be grasped if sound decisions are to be made at the strategic level.

From the developmental perspective, a firm’s sustained competitive advantage is related to the mental growth of key persons, in particular their cognitive growth. A significant attempt in linking the complexity level of executive work and the capabilities of individuals was made by Elliott Jaques (1994). He developed the concepts of size of person and size of role . In a simplified way the former refers to a person’s capability, seen by Jaques chiefly as determined by their ability to handle mental complexity. The latter refers to the level of work complexity of a managerial role.

Simply stated  leaders who lack the capability to construct an understanding that match: or exceeds the complexity of their work will be unable to carry out their most critical tasks effectively . Capability is more than mere cognitive complexity. It is a broad set of “critical” and “constructive” capacities that include the capacity for integration, abstraction, independent thought, and the use of broad and complex frames of reference. It is the fluidity in the use of these different mental ‘thought forms’ that make the difference. Futhermore high levels of ‘capability’ are most likely to be found in individuals who have achieved a high level of social emotional development (Otto Laske, 2008). The combination of the cognitive and social-emotional development determine how managers construct meaning.

The reason organizations typically lack this information is that the nature of managerial work changes qualitatively as one moves from one organizational level to the next. This qualitative difference in the nature of work at various levels is thought to demand qualitatively different thinking skills. For this reason demonstrated competence at an individual’s current level of work may reveal little about that individual’s capacity to grasp the nature of the work at higher levels.

Implications

My  constructive-developmental view of managerial capability has implications not only for selection decisions, but also for managerial training and development programs. Most important is the implication that competence-based training programs are not likely to have a significant impact on managers’ capability. The reason traditional instructional methods typically fail to have an impact on conceptual capacity is that the information presented can often be assimilated to the student’s current cognitive structures. When they cannot, the instructional materials are typically such a small part of the individuals’ experience that persons can compartmentalize the resulting dissonance and thereby avoid changing their fundamental conceptual orientation to their larger world. Only when one experiences a failure to master one’s larger world is there the possibility that one’s views of the world will expand. The heart of managerial development, therefore, should be the planned assignment of high-potential leaders and managers to successively more challenging work roles where a mentor is present who can help the individual better understand the new, more complicated world in which the new manager must now operate.

Here again, the organization must have the expertise needed to assess both the manager’s current level of conceptual capacity and the conceptual demands of the proposed developmental position (*). Too often, such “developmental” job changes result in a change in the nature of one’s responsibilities (e.g., a move from logistics to personnel) without any change in the level of conceptual demands in the new position. Such job transfers may require the individual to learn a new job content, but they will not require a more complex mode of thinking. Accordingly, little managerial development will result.

A key implication of matching size of person with size of role is that through organizational design we need to ensure that managers’ work complexity matches their level of cognitive development, what Elliott Jaques termed requisite organization. This match includes that the right number of accountability levels exists, not too few and not too many. McCay Carter (2008) estimates that some organizations have up to 80% mismatches and that a decrease of the number of mismatches has a profound effect on the overall performance of the company. Management structure design is often overlooked as a significant driver of enterprise performance (Van Clieaf, 2008) and will become an important domain in the current organizational re-design exercises. Organizational reviews become a very important activity in making a talent management strategy work .

Conclusion

So the basic point is that ‘capability’ could be one of the major HR-answers to the current crisis, building on the insights that success on a higher level of complexity is related to a different, more extensive and varied mind-set/capability.
_________________________________________________________________________
(*) Connect & Transform organizes workshops to assess the capability level of senior executives. All programs are tailor made, in function of clients specific questions.