It is generally accepted that a lack of focus on cultivating future leaders negatively impacts organizational performance. The findings of OnPoint’s 2011 Execution Gap Survey support that view. The study found that implementing succession management programs and leadership development programs is strongly correlated with job satisfaction, employee engagement/retention, and effective strategy execution, which are all key predictors of organizational success.
Firms with a more strategic focus continue to invest in succession and leadership development despite changes in the economic or competitive environment. As such, they are well-positioned to address planned and unplanned leadership changes. To support this effort, an organization needs to understand which competencies make a difference in a leader’s effectiveness and the extent to which this varies by level. To help answer these questions, OnPoint Consulting, in partnership with the American Management Association, collected data on the managerial effectiveness of 622 managers across organizations including government agencies, non-profits, multi-nationals, Fortune 500, and Fortune 1000 organizations.
Four key findings about the competencies that drive leader effectiveness came out of our study:
1. Exceptional managers, regardless of level, demonstrate competence in four key areas.
Our study found that Action Orientation, Building Teams, Building Trust & Personal Accountability, and Critical & Analytical Thinking differentiate top performers at all three levels: first-line manager, manager of managers, and functional manager.
Implications for Talent Management—Because these competencies appear to be essential for top performance at higher levels as well as for managers of individual contributors, both formal and on-the-job training that help develop these competencies should be targeted to first-line managers to ensure they develop these skills early in their careers. Allocating resources to this area will help build a strong pipeline of internal managers who are prepared to make the transitions to the next level of management and take on additional responsibility.
2. In addition to the four core competencies mentioned above, it is important to master specific competencies that are critical for success at each level.
In addition to the four core competencies described above, exceptional managers master specific competencies required for success at their level. We found that exceptional managers received substantially higher ratings than average performers in the following key areas:
- First-line managers: Self Development and Resilience & Stress Tolerance
- Managers of managers: Influencing, Interpersonal Savvy, Creative Thinking, Emotional Intelligence, and Strategic Planning
- Functional managers: Action Orientation, Customer Focus, and Managing Conflict
Implications for Talent Management—These findings provide guidance for making selection decisions and for the timing and content of training and development. For example, since the most successful first-line managers are learners and have a high tolerance for stress, organizations should assess leaders for these competencies as part of the selection process. On the job support for developing these competencies would also be important. In addition, preparing people to take a broader organizational perspective and building strong interpersonal skills before they are promoted to a manager of managers role would increase the probability of success in that position.
3. The ability to effectively execute plans and initiatives is the hallmark of an exceptional manager.
The managers in our study who were considered exceptional received higher ratings in the areas related to execution and getting things done: Action Orientation, Problem Solving, Decision Making, and Results Orientation. Competence in these areas appears to set the best apart from the rest.
Implications for Talent Management—Most organizations understand the need to develop an exciting vision and a realistic strategy. The key issue for organizations today is fulfilling the promise of that vision. In a recent OnPoint survey, 49% of respondents reported a gap between their organization’s ability to formulate a vision and strategy and deliver business results. Sixty-four percent of those people lack confidence in their organization’s ability to close the gap. Ensuring managers have the skills required to deliver consistent results and get things done day-to-day should be a top focus of an organization’s management development activities.
4. Practice is required to build competence and expertise—managers don’t need to be born with it.
Our study suggests that managers who are in a position for five to ten or more years are more likely to be seen as exceptional. Exceptional managers gain competence and enhance their performance over time, while the average managers reach a performance plateau. This supports the idea that expertise and effectiveness are the result of experience and practice.
Implications for Talent Management—Moving managers to the next assignment too quickly does not provide enough time for them to learn from the experience. Managers need to see the impact of their actions to truly develop competence. In addition, expertise results when managers are required to tackle problems and situations they have not faced before and that take them out of their comfort zone. This finding emphasizes the importance of providing on-the-job learning opportunities such as action learning projects where leaders work on solving real business problems.
