Four leadership traits that are making the most difference to organisational performance

Screen shot 2015-01-08 at 11.02.17The Churning is a book on leadership in times of change. It is a ‘how to’ book that aims to identify the key focus areas that will make the most difference for you, the reader/leader.

It argues that there are two key areas of leadership that matter: inner leadership (for inspiration) and outer leadership (for results).

But how realistic is this? How does this match against what companies are actually doing today, and does it get results?

McKinsey & Co. have just published the results of a survey into the specific leadership behaviours that are currently making the most difference in the business world.

  1. They identified twenty distinct leadership behaviours and attitudes (see image).
  2. They asked 189 thousand people, from 81 organisations worldwide, which of these twenty traits were present in their organisations.
  3. They compared the results with the performance of the 81 organisations, as defined by the McKinsey Organisational Health Index.

What they found was that a shade under ninety percent of the variation in performance between strongly performing organisations and weak ones could be explained by just four key measures.

Just four key leadership habits currently make the difference between success and failure.

They are:

  • Solving problems effectively
    This involves skill at gathering and interpreting the relevant information, as well as making the ultimate decision. This skill is just as important in resolving short term daily issues (such as handling team disputes) as for long term strategic issues (such as diversification and consolidation).
    .
  • Having a strong results orientation
    Leaders with a strong results orientation are good at emphasising the importance of efficiency and productivity, and at prioritising the highest-value work.
    .
  • Seeking different perspectives
    This trait is essential for understanding changes in the environment, encouraging employees to contribute towards improved performance, differentiating between important and unimportant issues, and for giving appropriate weight to stakeholder concerns. Leaders who do well on this dimension typically base their decisions on sound analysis and avoid the many biases to which decisions are prone.
    .
  • Supporting others
    This means sensing and understanding how other people are feeling, showing authenticity and a sincere interest in those people, and building trust. It also means inspiring and helping colleagues to overcome challenges, and acting to dispel unnecessary fears and reduce internal conflict.

It is perhaps no surprise that these four critical dimensions fall into the two categories defined by The Churning: outer leadership (identifying strategy and converting it to execution) and inner leadership (managing our own emotions and those of others).

What might be surprising is that inner and outer leadership are both equally represented. Both provide two of the four leadership attributes that are making the most difference in today’s business environment. Both are equally important.

The Churning not only identifies these leadership attributes but provides tools for developing them, in a step by step process that builds from chapter to chapter.

The four behaviours are woven through the structure of The Churning, and the specific ways in which the book works to develop these four attributes is as follows:

  • Solving problems effectively
    Outer leadership provides tools for making sense of your business environment, identifying critical success factors, and then identifying your strengths, weaknesses, and consequent action plan.
    In inner leadership, Chapter 2 is about removing decision bias, while Chapter 3 shows how to widen the range of solutions considered.
    .
  • Having a strong results orientation
    You cannot have a strong results orientation until you know what your priorities are. The whole focus of inner leadership is about identifying your priorities and distilling them into a clear vision. With this defined, you then have the clarity and focus needed for a results orientation.
    Outer leadership provides tools for clearly identifying and then managing risks, opportunities, or re-envisioning the business, as appropriate. Again, once the situation is clear then the objective becomes clear, and you can focus on achieving it.
    .
  • Seeking different perspectives
    Chapter 2 of inner leadership explicitly describes how to avoid information bias.
    Chapters 3 and 4 are about identifying additional alternatives and choosing the best way forward.
    Chapter 1 of outer leadership provides a tool for bringing all the different perspectives together.
    And Chapters 5, 6 and 7 of inner leadership are about encouraging others, as well as the importance of identifying and demonstrating your core values and priorities. Show not tell.
    .
  • Supporting others
    The whole of inner leadership is about developing and manifesting your own authenticity.
    Chapter 6 is explicitly about inspiring yourself and others.
    Chapter 7 is specifically about tools for sensing, understanding, and supporting what others might be going through emotionally.

You can read the McKinsey article here.

The first half of The Churning, on inner leadership, will be published in the Spring of 2015.

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