Competency, Culture and Innovation

For decades, management scholars defined leadership in terms of the skills required to formulate and implement a successful business strategy; in other words, what a leader does.  More recently, psychologists have focused on interpersonal behavior and corporate culture; in other words, how a leader influences others within an organization.  Not surprisingly, research suggests that both ‘What they do’ and ‘How they do it’ are equally important when it comes to determining leadership success.  After all, there’s no point having a brilliant strategy if you can’t galvanise a leadership team or an entire organisation behind it.

For example, Google conducted a rigorous statistical analysis to determine the characteristics associated with their most effective managers. The company expected to find that technical expertise was the most important attribute for leaders to possess within a world-class technology company.  Instead, according to The New York Times, Google’s most effective leaders “were even-keeled bosses who made time for one-on-one meetings, helped people puzzle through problems by asking questions, not dictating answers, and who took an interest in employees’ lives and careers” — all “How they do it” leadership characteristics.

In contrast, a recent global study by Deloitte Consulting explored how investors determine the value of a firm. The top two factors in order of importance were financial performance and leadership. Investigating how analysts evaluated leadership, the study found three core components that clearly belong in the “What they do” category; clarity of the strategy, ability to execute, and a culture of Innovation.

The reference to Innovation in the Deloitte study is especially interesting to us at The Talent Business.  Our starting point is to assess leadership talent in terms of The Two C’s – Competency (which we break down into commercial, strategic and operational skills) and Culture (assessing management style and leadership DNA).  A business leader’s ability to deliver Innovation is becoming increasingly important for many of the creative businesses that we partner, but where does Innovation fit in terms of ‘What they do’ and ‘How they do it’?  At The Talent Business, we view Innovation as a Competency, but it’s a Competency that’s more difficult to assess than the traditional competencies in the leadership skill set.  And if Innovation is a Competency and therefore ‘What you do’, Innovation is probably the Competency most inextricably linked to Culture and ‘How you do it’.  You can’t have an Innovation driven organisation without a Culture of creativity running throughout that organisation.  Creativity (in the broadest sense) is how you take people on that journey and how you deliver Innovation.  Creativity is the ‘How you do it’ to Innovation’s ‘What you do’.  And together, they’re the hallmark of a transformational leader.

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