Increasingly complex demands are being placed on leaders as social change, shifts in the global economy, resource scarcity, and technological advances disrupt long-standing business models. Leaders are being called upon to create new ways of working to meet these challenges and to drive cost reduction without destroying value.
Yet less than 10% of senior management have the capabilities and experience required to bring about this type of transformational change, according to a study of 6,000 leaders conducted by Harthill Consulting in collaboration with PwC.
It’s not just tenure that counts, and the skillset needed for successful transformation is different from that needed to excel in the day-to-day running of a company or to thrive in a crisis.
The research, conducted earlier this year, describes 52% of current senior management as “achievers”. This type of leader is action- and goal-oriented and well-suited to managerial roles. He or she is able to juggle managerial duties and market demands, as well as achieve strategic goals efficiently, through his or her team.
However, solving direct challenges to business-as-usual calls for a different type of leader with different attributes. The “strategists” who are capable of leading successful transformation in a complex business environment possess a multifaceted way of looking at the world, an ability to reflect on and learn from each experience, and the humility to enquire rather than advocate and engage instead of command.
Strategists can articulate a vision for the future of an organisation while also ensuring it runs effectively in the present. They also create opportunities for others to thrive.
6 capabilities of transformational leaders
According to the researchers, strategists possess the following capabilities:
- A fresh perspective. Being able to see a situation from a number of perspectives can generate new approaches and therefore promote innovation and problem-solving.
- Acting on the big and small picture. Leaders must be able to provide vision and direction, as well as get involved in detailed action where necessary.
- Passionate detachment. Leaders must balance passion for their mission and objectives with the detachment to weigh situations objectively and change course when required.
- Creative use of power. Whether it be formal, informal, institutional, or personal power, using it wisely builds long-term commitment and trust amongst peers, employees, and other stakeholders.
- Positive use of language. Strategist leaders use language with skill and awareness to inspire and influence, with the clear goal of creating positive outcomes.
- Leading with vulnerability and courage. Effective leaders have the courage to make tough and potentially unpopular decisions. Meanwhile, vulnerability, a characteristic less common amongst leaders, is crucial to enabling others to both take responsibility and give frank, honest feedback.
Such leaders are in short supply, and few have emerged over the past decade. Research conducted in 2005 classified 7% of all senior managers as strategists, and the figure for the 2015 survey was 8%. The research also indicates that strategists are often to be found working in consultancy or advisory roles, and may be reluctant to work directly for an organisation, particularly if it relies on hierarchical management structures. In this context, organisations need to do more to attract, retain, and develop the type of individuals capable of taking their business forward.
How to develop and retain transformational leaders
Drawing on best practices observed in the study, researchers suggest organisations take the following steps to develop transformational capabilities:
- Distribute responsibility. The first step to developing this type of capability is distributing responsibility downwards and outwards, enhancing the organisation’s adaptability, resilience, and intelligence as a whole.
- Be realistic about the quality of information. Be aware of and acknowledge the limitations of available data.
- Build an empowering collective culture. Turn shared aims into behavioural norms across the organisation.
- Invest in professional development opportunities. To develop transformative leaders, life coaching, action learning, and reflective thinking should be prioritised.
- Recruit for transformation. Prioritising the attributes of transformative leaders right from the recruitment and on-boarding processes helps create the conditions they need to thrive and ensures cultural fit.
- Address conflict and failure openly. In successful transformations, there is a culture of experimentation in which failure is seen as a necessary part of the development process. Some companies in the study discuss unsuccessful projects, identifying what went wrong and what lessons can be learned. Other organisations in the study have developed forums in which colleagues can discuss the personal aspects of any conflicts that arise.
Take a holistic view of employees
Those organisations defined by researchers as strategists demonstrate their concern for their employees’ overall wellbeing with policies such as life coaching or on-site child care. Other approaches include:
- Build strategy collectively. Many strategist organisations have defined methods of working collectively on business strategy. The theory is that anyone who shares responsibility for execution of the strategy should get a say in its formulation.
- Prioritise reflection. All staff should set time aside for unstructured reflection on a regular basis.
- Tone from the top. For strategists to grow and develop at all levels of the organisation, senior leaders must also embody these values.
—Samantha White (firstname.lastname@example.org) is a CGMA Magazine senior editor.