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leadership-impact-new-approach

Leadership Impact: A New Approach

by Nik Kinley
17.May.2017 Leadership Programmes

Last year, businesses worldwide invested an estimated $13 billion in finding the right leaders, and another $150 billion in supporting them with development. How well spent do you 
think that money was?

If you go by the failure rates reported for leaders, the answer is ‘not very well’. Estimates differ, but at least 40 per cent of leaders appear to either fail outright or be only minimally effective. The causes of this are varied and complex, but a growing mass of evidence points to one key issue: that the vast majority of efforts to select and develop leaders are based on a flawed understanding of how leadership actually works.

It is the reason why leaders can do all the things leadership models suggest, and still lack the impact they need. It is part of why the massive amounts spent on leaders each year often fail to yield the benefits promised. And as we will go on to show, it is why firms’ efforts to select and develop leaders can sometimes inadvertently make it harder for those leaders to succeed.

WHAT IS WRONG

The idea that we do not understand how leadership works is counterintuitive. After all, leadership is more researched and written about than just about any other business topic. We largely know the things leaders need to do to be effective, such as being strategic and motivating people. And we know the results these behaviours can produce, like higher levels of innovation, engagement, and performance.

We know all this because researchers have studied the degree to which specific leadership behaviours are associated with particular outcomes. On the basis of this, they have then said “this is the way leaders need to behave”. “Want your business to be more innovative, then do this”. “Want your people to be more engaged, then do that”. As messages go, they are clear, practical and attractively simple.

The problem is, they are too simple. Because, by focusing almost exclusively on the ways leaders behave, these models tend to ignore pretty much everything else, and two critical things in particular.


What happens between behaviours and outcomes?

Traditional leadership models suggest that if a leader behaves in a certain way then they will get a certain outcome, 
like higher motivation or performance. They focus on the initial behaviour and the eventual end result, and assume or imply that the behaviour directly produces this result, with nothing really happening in between. Unfortunately, quite a lot happens.

There are certainly some things that leaders do that can directly produce results. Things like key strategic decisions: let’s build this, invest in that. But evidence has amassed showing that most of what leaders do does not actually have a direct impact on performance. Instead, what leadership behaviours largely do is to change the environment that people work within: the things they focus on, the ways they behave, and how decisions are made. And it is this environment that then drives results such as higher performance (see Figure 1). This becomes truer the larger a leader’s team or business area is, too. So the more senior a leader is, the more indirect their impact tends to be.

Yet because traditional models focus on just how leaders behave and the results eventually produced, they miss out on this middle step – on what is happening between behaviours and results. And the piece they have missed is the actual immediate impact that leaders have.



The context around leaders

The second critical thing traditional leadership models tend to ignore is the context in which leadership occurs. Contextual factors are important because they can radically change the outcomes produced by leadership behaviours, so the same behaviour can produce very different results in different scenarios. And unfortunately, there seem to be a lot of contextual factors. There are the characteristics of followers, the culture of the organisation, its business challenges, the broader external market, and even cultural expectations of what leaders should be and do. These are just a few of the many forces at play, and all of them have been shown to change how leadership behaviours affect performance.

In fact, there are so many factors involved that trying to understand the interactions between them all and how they determine which behaviours produce which outcomes is like trying to unravel a really big, tangled ball of string. Researchers have made progress, but the sheer complexity involved has prevented them from developing clear rules of thumb that are easy for leaders to remember and act on. So most leadership models turn a blind eye to these factors. They do not say, “in these circumstances, behave in this way, and in those circumstances, behave in that way”; they just simplify, generalise, and say, “behave in this way”. And whilst this may be pragmatic, it also misrepresents what actually happens.

WHY THIS MATTERS

Current leadership models, then, largely ignore two significant aspects of how leadership works: what happens between behaviours and outcomes (which means they miss the immediate impact leaders have), and everything else outside this behaviour-outcome relationship (which means they miss the many contextual factors at play). And they have done this while trying to identify which leadership behaviours are the most desirable or produce the best outcomes. That is like trying to solve a complex math problem using only one part of the equation. Inevitably, you are going to get the math wrong, and that is just what has happened here, too. Because the consequence of ignoring these two factors is that almost all current leadership models and the behaviours they advocate do not always work as advertised. They can help and they may work. But as soon as they come into contact with any of the issues they ignore, they falter.

Even models that have been hyped as universally useful – such as transformational and authentic leadership – have been found to have negative, detrimental effects in certain situations. For businesses trying to ensure leaders succeed, this means that they are working to identify and develop leaders using incomplete and unreliable models. And for individual leaders, it means that they can do everything the models tell them to, only to find that it just does not work.

HOW TO FIX THINGS

Fixing this requires a radical change in how we view, assess and develop leadership. We need to start looking beyond leaders’ behaviours and capabilities and start paying more attention to the actual impact leaders have, and how this changes in different situations and scenarios. It is a subtle shift, but also a fundamental one: a change of focus away from leadership inputs, such as how leaders behave, and towards the outputs and impact of leadership.

The result is a more detailed and complex picture than the traditional one of leaders pulling the strings and directly driving results. It is one in which leaders’ impact on performance is more indirect and harder to see. But it offers us a fuller understanding of leadership than we have had before and a better chance of being effective in how we assess, select and develop leaders. And importantly, the shift is not a difficult one to make. In fact, there are three relatively simple things all firms can do, right now.

1. Identify Signature Environments

The first action we can take is to expand how we think about and evaluate leaders’ capabilities. Currently, what we tend to do is to look at their abilities, characteristics, and how they behave. This is a useful thing to do, too, because capabilities such as reasoning or influencing skills are clearly important if you want to gauge a leader’s ability. But to get a full picture of someone’s leadership we also need to understand their impact. And so one thing businesses can start doing right now is to combine their focus on capabilities with an equal focus on what we call signature environments.

These are the common features of the working environment that each leader tends to create, which mark it as uniquely theirs. Their impact can obviously vary from situation to situation, but they also tend to have a distinctive imprint on the people and processes around them, and this is their signature environment.
Focusing on this is important for three reasons. First, if you understand both a leader’s inner capabilities and their signature environment, then you are more able to predict whether they will do well within a particular scenario than if you only understand their capabilities. Second, looking at the consistencies in the environments that leaders create also pushes you to look at how their impact can vary in different contexts. And third, once leaders are aware of their signature environment, they are more able to adjust and adapt it to suit different business challenges, contexts and teams.

For example, we recently worked with a leading financial services business to assess both individuals’ core leadership capabilities and their signature environments. The business reported that the addition of the signature environment data made them more able to think about and accurately predict the impact candidates would have within particular roles and scenarios. Similarly, with another business we paired our JDI model of potential with an assessment of Signature Environment to give the business a sense of not just whether a candidate had potential, but also the types of roles and business challenges they would most likely thrive within.

2. Develop impact through interactions

The second action firms can take is to evolve how they do development activities. As with assessment, the focus at present tends to be on what leaders know or how they behave. But having acknowledged that the impact of behaviour can vary in different situations and with different people, we need to find a way to bring this context into development activities. One way to do this is to focus on how leaders interact with others. Because interactions inherently involve others, their experience of you and reactions to you, focusing on them makes it easier to ensure leaders have the impact they need to.

One important type of interaction to focus on is frequently reoccurring leadership situations, such as team meetings and performance reviews, and the impact leaders typically have in these. Another, are the ‘Moments of Truth’ leaders are faced with – the crunch situations and big calls. Their reactions to these stressful situations and dilemmas act as a kind of window to the soul for followers, telling them what their leaders are really like and thereby setting the tone for all interactions.

One thing you can do through focusing on such interactions is to develop leaders’ signature environments. Interactions can also be used to develop some more traditional interpersonal capabilities such as influencing skills. But you can also use this to develop what we might think of as more internal capabilities, such as strategic thinking. For example, one aspect of strategic thinking concerns our natural thinking style, and whether we are short-term or long-term focused, and big-picture or detail-oriented. This can be done through focusing on how our interactions with others boost or inhibit these more internal capabilities. With strategic thinking, this would mean how we encourage challenge and debate, how we question ourselves and others, and how we use others’ thinking to enhance our own.

With all such interactions, the focus is on ensuring that the impact leaders have and the experience they give to followers is what is intended and needed. To enable this, we have developed a new type of 360 feedback tool. Traditional 360s tend to ask people for feedback on how leaders behave. But working with organisations from different industries and geographies, we have developed a 360 that also asks people about the impact leaders have on them, and how leaders affect how they think, feel and behave. This is an important foundation, because once leaders have a good understanding of the experience that others have of them, they are then more able to hone this experience to bring out the best in both themselves and the people around them.

3. Focus on leaders’ responsiveness

The third action firms can take is to focus on leaders’ ability to adapt and improve their impact in different scenarios. Once we accept that no one style will always work, and that context can affect the impact of what leaders do and how they behave, then understanding how able leaders are to adjust and adapt becomes essential. This ability has been increasingly researched over the past 30 years, and in academic circles is commonly referred to as Contextual Intelligence. It has been shown to be critical for leaders’ effectiveness in moving between different contexts or business challenges, and in them remaining successful amidst changing, complex or uncertain situations. And as such, it is a skill that appears to be becoming ever more vital as the business world becomes increasingly volatile and unpredictable.

Through our work with leaders in different industries and geographies, we have found that there are three core components to this ability to adapt:

  • Insight – understanding your impact on the context, people and processes around you.
  • Flex – the degree to which other people and processes have an impact on you and can change what you do, the things you focus on, and the way you make decisions.
  • Control – your ability to consciously change both the impact you have on others and how you react to your context.

All three of these are important to developing leaders’ responsiveness, but the second is probably the least explored and most ignored in current leadership evaluation and training. With this in mind, we have developed a simple survey tool that evaluates how leaders’ behaviour changes around different people and in response to different situations. This helps leaders to better understand what kinds of environmental cues they are most sensitive to, how these cues can change how they behave, and in so 
doing helps them to control and shape their responses to ensure they have the impact they intend.

WHAT YOU NEED TO DO NOW

There is a seemingly endless array of models and theories all exhorting people to be a certain type of leader. They may all sound different, but they almost all share one common feature: they are preoccupied with how leaders need to behave. As a result, they inadvertently, but fundamentally, misrepresent how leadership actually works and what leaders need to do to succeed.

For the vast majority of the time, what leaders do is create a strategy and environment for their business and people to succeed within. It is this impact that they have, rather than how they behave, that is the key to success or failure. Behaviour is of course still a massively important part of the equation, of the mechanics of how leadership works. But it is one part, and not – as it is so often presented – the whole piece.

To move beyond this oversimplified picture, we need to supplement our focus on behaviour and capability with a similar focus on the actual impact leaders have. And what this means in practice is assessing leaders’ signature environments; developing leaders through interactions; and helping leaders become more responsive to the challenges and contexts they face.

This is not just semantics. It is important because of the high leader failure rates reported and the overwhelming evidence that the majority of leadership training and development spend does not currently produce real improvements in leaders’ performance. And it is past time to rectify that.


Read YSC's Leadership Impact research report.

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