Sunday, August 28, 2011

Looking for the Right Leaders for Growth


It is great to be back after a hiatus getting through the Summer activities, work and my Doctorate program at UPenn.

Let's get down to business.

In July, our friends at McKinsey completed and posted a study titled "Do you have the right leaders for your growth strategies?" In this study, McKinsey looked at the linkage between leadership competencies and revenue growth. This is important research. In my efforts working on my Doctorate, there is a lack of conclusive research just on the linkage between leadership and organizational performance. I wrote about that in a previous blog post titled "Leadership and Organizational Performance...Lack of Linkage." So it is great to see other organizations like McKinsey taking a crack at this important topic.

The big takeaway is that leadership quality is critical to growth. You might say..."Well that is a no brainer Keith." You are probably right. The real issue is identifying the right set of leadership competencies needed for future business growth...and then identifying current leadership capacity in those competencies. Not just from an individual leader perspective, but from an organizational leadership capability. The key is to identify the leadership behaviors you this study McKinsey focused on eight.

Thought Leadership
Market Insight
Strategic Orientation

People and Organizational Leadership
Change Leadership
Developing Organizational Capability
Team Leadership
Collaboration and Influencing

Business Leadership
Customer Impact
Results Orientation

The difference between executives in top quartile companies by revenue growth versus bottom quartile companies across all eight competencies was statistically significant. The study also found relevance in companies with multiple growth strategies vice singular growth strategies had excellence in a range of leadership skills of managers across multiple levels of the organization.

This is an important point when compared with another key aspect of the report dealing with Mergers & Acquisitions (M&A). It specifically states:

"By contrast, companies in the top quartile of M&A-driven revenue growth had top-leadership teams that excelled at a broad range of skills. The first is market insight—in other words, looking beyond a company’s current business landscape to discern future growth opportunities. That competency no doubt supports the identification of deals, while another competency crucial for M&A-driven growth—a well-honed orientation toward achieving results—helps in post merger integration."

There is a significant gap in research on the importance of leadership at the organizational-level, not just the C-suite, in M&A activity. Specifically, are there specific organizational leadership behaviors that would indicate a M&A has potential to be more successful or less successful.

As this research indicates, there appears to be key leadership behaviors associated with critical business areas like growth. The key for Human Capital Management leaders and leadership development professionals are to identify these key leadership behaviors based on the business needs, context and environment of the organization and then create them either through hiring or developmental activities.

If you take this approach, you and your organizations are better positioned to communicate the importance of leadership development and your effectiveness at doing it...explicitly.

Nuff Said!


J. Keith Dunbar is a Global Talent Management Leader...Creator of Talent, Leadership Capability, and Culture Change...He can be found connecting and sharing knowledge on Twitter and LinkedIn.

Twitter: JKeithDunbar
LinkedIn: J. Keith Dunbar
Blog: DNA of Human Capital

The opinions or views expressed here are mine alone and do not represent the views of the Department of Defense or the Defense Intelligence Agency.