The Urgent Need for a Major Paradigm Shift in Leadership Development



Jack Bucalo
04/09/2019

leadership development_leader on top of a hill as a group of streets holding an arrow sign

Let’s face the real business world reality regarding leadership development.  The ultimate customer for all leadership development (LD) programs is the CEO and top line management executives.  For decade after decade and in survey after survey, these executives have indicated that they believe these LD programs, especially those at the senior or upper management level, have failed primarily because they have concentrated almost exclusively on soft skill development, excluded any hard skills development and offered little or no practical business value in relation to the amount of valuable executive time that is expended on them. 

At the lower and middle management levels, typical LD programs cover such soft skills as leadership styles (democratic, autocratic, etc.) and leadership behaviors (servant, morality, authenticity, humility, integrity, agreeableness, etc.), along with key management skills (writing objectives, planning, delegation, performance review, interviewing, etc.) and interpersonal skills (communications, counseling, motivation, etc.).  At these levels, emphasizing these soft skills is appropriate, especially when they incorporate a large amount of practical application to the leader’s real world problems and situations. 

At the senior and upper management levels, there are few, if any, typical LD programs though many of the above soft skill subjects are offered.  However, when a popular new book appears on the market, such as Good To Great, In Search of Excellence, etc., a program can easily be designed around the book’s key principles.

In contrast, my experience with CEOs and top line management executives in several large companies in four major industries indicates that they prefer the following practical soft-hard skills mix in their leaders.

MANAGEMENT LEVEL/SOFT-HARD SKILLS MIX

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 article entitled “Getting Beyond the BS of Leadership Literature”, who concludes that there are several problems inherent in the majority of LD programs.  First, leadership is framed almost solely within the context of morality, such as authenticity, telling the truth, integrity, agreeableness, and so on.  Second, framing leadership in that way "substantially oversimplifies the real complexity of the dilemmas and choices leaders confront".  Third, he states that "placing leaders and their actions into good and bad seriously oversimplifies a much more complex reality and continues to reinforce a problematic, trait-based and personality-centric view of human behavior."  In other words, such programs overemphasize the soft skills of leadership in comparison to the application of the hard skills, and therefore provide little practical value. 

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, these four patterns reinforce the above 75% to 25% mix for senior and upper management LD programs.

Here are some examples of hard skills 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 planning, controlling and 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 performance.
  3. Fiscal Year Business Objectives - for the company, divisions and key executives.
  4. Business Strategy – understanding the company and divisional strategic plans and objectives, 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 a profitable financial results and strategic growth, establishing a highly effective work place culture, leadership, and so on.

Now, here is a hard truth that all HR executives must REALISTICALLY DEAL WITH - as long as investors and the market hold the Boards and top 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 real business world is that leaders must have BOTH technical/executive "hard" skills and leadership "soft" skills in the above mix envisioned by the CEO and top line management executives.

Here are some examples of these business objectives.

Financial Objectives

  1. Improve earnings per share from “X” to “Y” dollars/share.
  2. Increase cash flow by “Z” dollars.

Operating Objectives

  1. Reduce time-to-market for product “A” by 30% to dominate your competitors.
  2. Improve customer care to exceed industry standards.

Strategic Objectives

  1. Acquire a product-related business that uses a new technology which will increase sales by 20%.
  2. Train a group of at least 20 general managers who can effectively operate a $50M/year business.

In sum, when viewed together, Pfeffer is telling us what subject content of leadership should NOT be overemphasized, while Carucci is telling us what subject content SHOULD be emphasized for LD programs, especially those for senior and upper management. 

Here are some examples of how to apply this 75% to 25% mix in some LD programs for senior and upper management.

  1. GENERAL MANAGEMENT EFFECTIVENESS

Audience:     Business Unit Presidents and Division Presidents

Pre Work:     Each President brings their quantitative financial and operating fiscal year objectives, and current plans, schedules, risks, challenges and budgetary data.

 Hard Skills:  Income Statement Management

                        Cash Flow Management

                        Product/Market Development

                        Contingency Planning

                        Operational Effectiveness

                        Customer Service

Soft Skills:    Teamwork and Cooperation

                    Need for Continuous Improvement and Innovation

Business Value Outcome:  In a workshop setting, each Business Unit and Division President Reevaluates their current objectives and plans in light of any division and/or company objectives and plans, and any proven innovative practices that could significantly enhance company performance.

  1. FUNCTIONAL EFFECTIVENESS AND COMPETITIVENESS (e.g. MANUFACTURING)

Audience:    Functional (Manufacturing) Executive and Department Heads

Pre Work:    Each Department head Identifies their key quantitative industry standards, the current primary plans and programs used to meet or exceed them, along with the existing reporting tools used to measure their status versus the standards.

Hard Skills:  Purchasing

                        Production

                        Inventory Control

                        Quality Control

                        Manufacturing Engineering

                        Warehousing and Distribution

Soft Skills:    Interdepartmental Teamwork and Cooperation

                        Need for Manufacturing Innovation

                        Motivating and communicating the entire organization

                        Leading a functional renaissance

Business Value Outcome:  In a workshop setting, each Department Head identifies their quantitative industry measures and the needed departmental objectives, plans and innovative practices that are required for functional and overall Manufacturing improvement.

  1. PROFIT IMPROVEMENT

Audience:  Business Unit President and Immediate Functional Executives

Pre Work:   Each executive brings their fiscal year operating objectives and current plans, schedules, risks, challenges and budgetary data.

Hard Skills:   Market Segment Penetration

                    Sales Opportunities

                    Purchasing Efficiencies

                    Product Cost Opportunities

                    Manufacturing Cost Efficiencies

                    Product quality improvements

                    Customer Service Efficiencies

Soft Skills:      Functional Teamwork and Cooperation

                      Innovation Implementation

                      Motivating the entire organization towards improvement

                      Leading the Profit Improvement Plan Implementation

Business Value Outcome:  In a workshop setting, the Business Unit President and his/her functional executives develop a cooperative multi-functional plan to achieve profit improvement through increased sales, better market penetration, and product and operational innovation.

To be considered as important and relevant by their ultimate customer in providing business value to the company, such LD programs must reinforce the above mix of soft and hard skills, and not simply deal with leadership soft skills.  This is especially true for the LD programs for senior and upper management. In doing so, the newly acquired hard and soft skills should be TAUGHT TOGETHER in a workshop approach within the practical context of the executive’s actual business objectives, strategies, plans, challenges and risks.  These programs can be designed and developed by LD staff working in conjunction with outside consultants, business school staff and inside experts, who can also help to conduct the training itself.  These experts can present the best-of-the-best successful and innovative business practices and programs so that the attending leaders can discuss their applicability in meeting some of their current business objectives.

While the LD programs in the vast majority of companies deal primarily with soft skill development, some companies, such as GE, offer a pragmatic mix of LD programs in their Crotonville leadership institute.  This recognizes the fact that we cannot effectively teach leadership in a vacuum; devoid of the required hard skills.  This reality begs the question of who is responsible for leading this major paradigm shift?  Is it the leadership gurus, the Chief HR Officer or the Chief Learning Officer?  I contend that it is not the leadership gurus because they are providing their services to meet the training needs expressed by their customer.  Rather, the primary responsibility for doing so rests with Chief HR Officer while the secondary responsibility rests with the Chief Learning Officer.

Now, is developing such a program easy?  No.  Can it be done well and within a reasonable amount of cost?  Absolutely.  Does it require a new business-like mind set on the part of HR and LD leaders?  Absolutely.  Will doing so require more time and effort to develop the program content?  Yes.  Will the CEO and line executives greatly appreciate the pragmatic program content and more actively support future LD programs?  Absolutely.

Therefore, in order to develop such urgently needed LD programs, the Chief HR Officer faces the monumental challenge of redirecting the company’s Learning and Development staff and programs for senior and upper management AWAY from simplistic leadership styles, interpersonal and basic management skills, and TOWARDS being pragmatic business change agents for meeting some of the company’s major business objectives.

 If accomplished, such LD programs will provide real BUSINESS VALUE to the company by providing LD programs that offer the right mix of hard and soft skills, taught together, within the practical context of the leader’s real world business objectives, plans, strategies, risks, challenges and so on.

 When this occurs, the Learning and Development function will be revitalized as it achieves the implementation of this major paradigm shift.  However, if this paradigm shift is not accomplished, many years from now, the Chief HR and Learning Officers will still be wondering why CEOs and top line management executives are saying that their LD programs are failing the company in their eyes.

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