Ask any five management experts what makes a good leader, and chances are you will get six answers:Aspiration. Inspiration. Imagination. Creativity. Authenticity. Integrity.It’s time for a reality check. While there’s no one-word answer to the leadership question, Mckinsey has identified the stepping stones that enable organisations to develop more effective leadership across the organisation.
To pinpoint them, they looked at the major schools of leadership, including traits-based behavioural, situational, functional and psychological perspectives. Each adds richness to defining leadership, yet with the key limitation that each views leadership through a single lens. Since no single model carries the whole field, an integrated definition and approach are required.
Their fresh definition of organisational leadership strives to be comprehensive and pragmatic:Leadership is a set of behaviours that, in a given context, align an organisation, foster execution and ensure organisational renewal. They are enabled by relevant skills and mindsets.
Here’s how they arrived at that definition and the implications it triggers:
Leadership comes alive in the behaviours that are used, felt and observed across an organisation.They comprise McKinsey's unit of analysis and are what they measure objectively and seek to enhance during leadership development interventions.
The behaviours are highly contextual depending on each organisation.So, it is essential to define leadership traits that prove most effective in helping an organisation achieve its performance goals. Take the chief executive of a U.S. energy utility. When the market was deregulated, the company was plunged into the most serious financial crisis of its history. The CEO helped transform the organisation into a competitive player in a liberalised global market and is convinced that leadership should be a function of economic reality: “You have to put things in the context of a business model. Who are your real customers? What kind of partner do you need to make it work? What do you really do? And where should that work be done?”
Leaders must be able to create organisational alignment, execution and renewal.Without them, performance suffers long term. Any leadership model must seek to achieve these three factors.
A leader’s ability to demonstrate effective leadership reflects relevant skills realised through real-life experience.For example, leadership prowess around “championing the desired change” could signify strong storytelling, written and oral communication, influencing skills, and the ability to anticipate and seize pivotal moments. Leadership development intervention must help leaders forge relevant on-the-job skills and behaviours. As management authority Henry Mintzberg maintains, “Leadership, like swimming, cannot be learned by reading about it.”
Leaders must develop the right mindsets based on introspection and self-awareness.Often, underlying mindsets – including needs, fears and core beliefs – are what drive a leader’s behaviour in a situation. Only about one-third of the 2,500-plus executives in a McKinsey sample said that their organisations’ transformations explicitly assessed the mindsets that required a change to reach their goals. But those that did were four times more likely to succeed. Take, for example, a professional services business that wanted senior leaders to initiate more provocative and meaningful discussions with the firm’s senior clients. Once the trainers looked below the surface, they discovered that these leaders, though highly successful in their fields, were instinctively uncomfortable and lacking in confidence when conversations moved beyond their functional expertise. Only when the leaders realised this and went deeper to understand why were they able to commit themselves to concrete steps that helped push them to change.
Why does a definition of leadership matter? An incomplete definition will produce piecemeal leadership development programs with a misguided focus and poor impact. While organisations get plenty of leadership advice, they lack a way to cut through the noise. McKinsey's definition offers a starting point.
For a more detailed view of the different schools of leadership, or to read about McKinsey's leadership development approach in practice, read their recently released book,Leadership at Scale.
This article was originally written by Michiel Kruyt who is a Partner at McKinsey & Co, Gautam Kumra who is Managing Director of McKinsey India, and Ramesh Srinivasan who is a Senior Partner in the McKinsey & Co New York office, and full credit goes to theMcKinsey, who published this article earlier this year. This article has been reprinted for the purpose of education.
A recent survey of directors, CEOs, and senior executives found that digital transformation (DT) risk is their #1 concern in 2019. Yet 70% of all DT initiatives do not reach their goals. Of the $1.3 trillion that was spent on DT last year, it was estimated that $900 billion went to waste. Why do some DT efforts succeed and others fail?
Although digital investment is almost unquestionably the right course of action for most firms, organisations still struggle to create the desired results. Estimates of digital transformation failures range from 66% to 84%. Such a high failure rate isn’t surprising, as leaders are trying to create entirely new competencies and wedge them into an organisation with strong legacy cultures and operating models.