Leadership Dilemma: Soft or Hard Skills?



Jack Bucalo
02/11/2020

Leadership Development Dilemma_Wooden chess figures, business concept strategy

It is fair to say that current Leadership Development executives have developed the content of their programs primarily on soft skills.  It is also fair to say that line executives are much more concerned with hard skills.  Therein is the dilemma!

Before proceeding, we need to define and illustrate the two terms.  Soft skills generally include interpersonal skills and attributes (communications, listening, motivation, creative thinking, compassion, counseling, etc.), leadership behaviors (servant, morality, trust, authenticity, humility, integrity, etc.), leadership styles (democratic, autocratic, etc.), and key management skills (writing objectives, planning, delegating, problem-solving, reviewing performance, interviewing, etc.).

Hard skills generally cover those job-related, technical, finance and business skills needed to achieve success in the position.  At the lower and middle levels of management, these skills tend to come from the position’s job description – the primary function and the four or five key responsibilities.  At the senior and upper levels of management, these skills tend to be more directly related to the particular job’s role in achieving specific business results in the department, division or company while being more broadly business-oriented. 

Leadership Development

Hard Skill Examples for Senior and Upper Management

  1. Functional Acumen– understanding various business functions (sales, marketing, product development, manufacturing, etc.) and sub-functions (for manufacturing, they are production, quality control, manufacturing engineering, inventory control, etc.), along with leading major multi-functional and/or multi-divisional team efforts to achieve critical business results.
  2. Financial Acumen– understanding the company and division Income and Cash Flow Statements and Balance Sheet, sales volume and gross profit margins for major products, budget/profit planning and financial analyses.
  3. Fiscal Year Business Objectives– for the company, divisions, and key executives.
  4. Business Strategy – understanding the company and divisional strategic plans, major product/market development plans, financial plans and contingency plans.
  5. Executive Skills – Board and top management interaction on key business issues, stock market analysis and analyst interaction, championing innovation and continuous improvement, consistently achieving profitable financial and strategic results, creating an effective workplace culture, leadership, and so on.

Since leadership development programs that cover hard skills are not commonplace, a real-life example from a $4 billion company is appropriate. A business needs analysis was conducted for a group of 80 division and business unit presidents who were running businesses ranging from $25 to $400 million per annum. It revealed that the key subjects for the program were Financial Management, Strategic Product/Market Planning, Customer Executive Management Relations and Leadership. A highly successful 30 hour program was developed to meet those needs which taught leadership in response to the practical business needs to improve Income and Cash Flow performance, determine the next version of the products/services and find new markets for them (along with the current ones), and examine how to better interact with your customer’s top management to more fully understand their strategic goals and how our products and services could better help them do that. In doing so, hard and soft skills were TAUGHT TOGETHER, within the practical context of the leader’s current business objectives and plans as they currently existed.

Soft-Hard Skills/Management Level Mix

In the CEO and line executive’s eyes, who are the ultimate customers of all leadership development programs, the proportional amount of soft and hard skills varies significantly based on management level.  My experience with CEOs and top line executives in several large companies across four major industries showed that they value the following skills mix in their leaders.

 

Lower Middle Senior/Upper
75%-25% 50%-50% 25%-75%

 

Two highly reputable studies support the above skills mix.  The first one is Jeffrey Pfeffer, in his January 2016 book entitled “Getting Beyond the BS of Leadership Literature”, who concludes that there are several problems inherent in the majority of LD programs.  Such programs that are framed almost solely within the context of soft skills grossly oversimplify a much more complex reality and reinforce a problematic, trait-based and personality-centric view of human behavior.

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The second one is the study by Ron Carucci in his January 2016 Harvard Business Review article entitled “A 10-year Study Reveals What Great Executives Know and Do”.  After interviewing over 2,700 executives, he concludes there are four recurring patterns of executives skills that distinguish the performance of exceptional executives – knowing the financial and market/product realities of your industry competitors; knowing your company’s functional strengths and weaknesses, and how best to coordinate them in any companywide effort; providing great decision-making based on the use of analytical and quantitative tools and measures for all aspects of the business; and  forming deep-trusting business relationships.

In sum, Pfeffer is telling us what subject content should NOT be emphasized, while Carucci is telling us what subject content SHOULD be emphasized, in the leadership development programs for middle, senior and upper management.

The Answer to the Dilemma

The answer to the dilemma is to develop leadership development programs that are reflective of the Soft-Hard Skills/Management Level mix in your company.  In doing so, you would better satisfy the business needs (which are typically far different than training needs) of your line executives, who are the ultimate customer.  Moreover, the content of these programs should practically apply the appropriate skills to the leader’s actual business objectives, plans, challenges, risks and problems.

HR and Leadership Development Reputations

Here’s the harsh but true business reality regarding these reputations in most companies. 

Regarding HR, in survey after survey for decade after decade, the CEO and top line management executives have stated that they do not consider their HR leaders as an equal business partner primarily because they have little pragmatic operational, financial or strategic understanding of the business and are almost exclusively concerned with their administrative responsibilities.  In the past and today, the HR function has struggled mightily to convince the CEO and line executives of its worth to the company as being comparable to the worth of the other functions.  Unfortunately, the HR function has not been able to demonstrate, in a pragmatic way, exactly HOW its services can DIRECTLY help the CEO and its line executives to achieve the company’s critical business objectives and strategies.  

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Regarding Leadership Development, the CEO and top line management executives have stated that their programs, especially those for middle and higher levels of management, have failed in their eyes primarily because they have offered little practical business value.  Simply covering soft skills, devoid of their relationship to the hard skills that are used by the leader to achieve the position’s business objectives, is not a realistic approach because it does not consider the leader’s associated challenges, problems and risks.   

Both of these negative reputations represent an opportunity for HR and Leadership Development management to address them in a positive way by covering the appropriate hard and soft skills together within the practical business context of the leader’s complex and difficult business reality of achieving certain critical business objectives.  If this is achieved, both reputations can be greatly improved.

Advantages of Teaching Hard and Soft Skills Together

  1. The company and division’s ability to achieve some of its business objectives and strategies will be enhanced.
  2. The practical business value of appropriate leadership development programs will be recognized by line management executives as a practical way to achieve some of its business objectives to which they are held accountable by the CEO and the Board of Directors.
  3. By providing practical business value in the appropriate leadership development programs, HR will clearly demonstrate its ability to be an equal business partner to its line management peers.
  4. Line management attendees are taught how to implement the relevant soft skills in the practical business setting of applying the relevant soft and hard skills together in an effort to achieve its business objectives.
  5. With the improved reputation of some leadership development programs to appropriately cover the relevant hard skills as they relate to the practical business objectives of the leader’s actual job, line management executive’s support for these programs and those that deal solely or primarily with soft skills will be greatly enhanced.
  6. By dealing with the appropriate hard skills in relation to the leader’s business objectives, the leaders and their superiors will value their time and effort spent on the program as being much more worthwhile than previous programs.

Implications

  1. The design of the hard skills portion of a program can be developed by using internal experts, outside consultants or graduate school staff who are fully knowledgeable of the relevant skills and the latest innovative practices on the subject.
  2. It is best to have a team of internal and outside experts to present the content in the actual program implementation. The relevant skills and latest innovative practices should be presented so that the attending leaders can discuss their potential application in meeting current business objectives.
  3. The company cost for any particular program will likely be about 20 to 25% more than the normal development costs for such a program. However, recognizing the increased business value for it, this cost increase is minimal and might even be absorbed by the line organization if needed.
  4. The Leadership Development staff for such programs will likely have to be realigned AWAY from their comfort zone of interpersonal or leadership skills and TOWARD the relevant hard skills. Hard skills content should not be avoided simply because the Leadership Development staff is uncomfortable or unfamiliar with it.
  5. Any cost savings or operational value resulting from the program should be quantified and documented to help justify the business value of other similar programs.
  6. It should be recognized that as long as investors and the market hold the management of any private or public company accountable for achieving certain financial, operating and strategic business objectives over the short and long term, the practical reality of today’s business world is that leaders must have BOTH hard and soft skills.

Conclusion

At present, CEOs and line management executives do not have a favorable view of many leadership development programs, especially those designed for senior and upper management.  Leadership Development and HR management can reverse that viewpoint and EARN their respect as an equal business partner by offering programs that reflect the appropriate mix of hard and soft skills, taught together, within the practical context of the leader’s actual business objectives, strategies, plans, risks, challenges and problems.  By doing so, such programs provide practical business value that CEOs and line executives desire and appreciate. 

If you question the validity of this viewpoint, just ask a representative sample of line executives and any former HR manager who has subsequently moved into line management whether they would prefer such a program.

W-A-R-N-I-N-G

Relying almost exclusively on soft skills may be hazardous to the health of your leadership development function.

 

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Photo courtesy:  StockPhotoSecrets

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