Assessment Analytics (Philippines)

2012 Business Outcomes Study

admin — Mon, 30 Apr 2012 07:38:36 +0000

What is the Business Outcomes Study Report?

SHL regularly conducts studies with client organizations across the world to measure the ROI impact they realized from their assessment programs. Each study evaluates the link between assessment-based people decisions and organizational performance, using metrics specific to the goals of the client organization.

This data is summarized annually and the key findings shared in the Business Outcomes Study Report.

Highlights of the 2012 Report

Our sixth annual Business Outcomes Study Report again provides tangible proof that bottom line business results directly correlate to the talent measurement, or People Intelligence, adopted by these organizations.

In the past year SHL completed a record 66 business outcome studies with its customers. The 12 studies featured in this report include:

$995,000 in extra sales per salesperson for a car retailer
Call center collection agents who are 41% more productive
$32.5 million saved from reduced turnover and absence for an insurance company

Findings from the past six years are also included in a summarized table in the report and span various industries, from financial service and retailers to hospitality and media. They also cover many different job types, including sales, management, customer service, and engineering roles.

Navigate the talent measurement landscape with Assessment Centers

Nikko23 — Thu, 12 Apr 2012 02:14:55 +0000

One of the challenges that growing companies face is creating a pool of qualified would-be leaders who will succeed the current top management. In order to do this, HR’s role is to identify and develop the competencies these key talents need to be effective in their future role.

Using the multi-rater, multi-strategy method, and live simulations, Assessment Analytics’ Assessment Center Solution helps companies determine their talent bench, identify the training and non-training interventions, and career-pathing for each talent.

Exercises to assess key leadership competencies of managers and executives include:

Business Case Study
Meeting Role Play
Coaching Role Play
Behavioral Interview

The Assessment Center Solution provides an in-depth and thorough customized report detailing strengths and developmental areas, as well as recommendations for training and non-training interventions for each participant.

Talent challenges that keep CEOs up at night

Nikko23 — Thu, 12 Apr 2012 02:12:25 +0000

an SHL White Paper

For CEOs who understand the worth of their people, HR plays a critical role in successfully achieving business objectives and gaining a competitive advantage.

HR concerns CEOs to such an extent that issues surrounding employee attraction, retention and performance are keeping them awake at night.

The increasing focus on employing people with the right skills and talent to ensure the company performs successfully, places greater responsibility on human resources managers.

HR functionality is evolving beyond hiring and firing to focus more on understanding the overall business direction and implementing HR strategies that achieve CEO goals.

- Stephanie Christopher, managing director of SHL Australia and NZ

Research methodology

SHL commissioned independent research house, Galaxy Research, to conduct telephone interviews with CEOs and managing directors of 30 Australian companies with more than 50 employees.

The research questions were the same for all CEOs and required a mix of open-ended and multiple choice answers.

SHL also commissioned media consulting company The Hard Word to conduct in-depth telephone interviews with 16 CEOs and managing directors of a range of companies.

This part of the research looked further into the HR concerns and practices of CEOs to provide anecdotal support for the data gathered by Galaxy Research.

The result is a comprehensive report including both qualitative and quantitative data. The research was conducted between 15 January – 17 February 2012.

Research participants represented the following industries:

Mining
Health
Insurance
Media
Manufacturing
Not-for-profit
Finance
Education
Transport
Telecommunications
Retail
Professional services
Government

Top business focus for 2012

CEOs have named growth, profitability and sustainability as top business priorities in 2012. Underlying their focus in these areas is an understanding that HR is a key consideration in the organization’s ability to achieve its business goals.

CEOs have indicated that HR is absolutely one of their own priorities for 2012 and they have a strong connection to the importance of the HR
process and role.

Employee attraction and retention continue to be primary HR concerns to ensure the organization has the talent to be successful and competitive.

However, CEOs need a better view of what their talent looks like across the board, and in particular to identify skills gaps, to understand their strength.

A shift in direction, or a merger, can require key performers to guide the business through a period of change. During these times CEOs and HR may have to pay closer attention to succession planning, or develop an attraction strategy for talent needed from outside.

Your HR strategy should align with the business’ primary goals, such as profitability and growth, and work toward achieving those goals.

HR strategy

CEOs place a high value on having an effective HR strategy. CEOs who understand the importance of HR and have clear ideas about what they want to achieve ensure the HR manager is part of the executive team and is included in discussions on business strategy.

CEOs are looking for strategic HR programs that are aligned with the direction of the business, and they are prepared to spend time with HR managers to ensure they fully understand the core business values and goals.

However, HR managers must start with the basics before they can develop a workable strategy.

It’s important to know the financial information associated with people factors in the business, including cost to hire, cost of turnover, productivity and efficiency gains, and absenteeism or production rates, and develop programs with these factors in mind.

Of equal importance are measures of effectiveness, such as evaluating the strengths of the talent pool in a recruitment campaign.

Ensure your HR strategy is clearly linked to business strategy and be prepared to demonstrate how specific programs help drive business success.

The role of the HR department

HR departments have well and truly moved beyond hiring and firing to take charge of developing and implementing employee engagement programs. However, the evolution must continue if HR departments are to prove their worth.

HR must be actively engaged with senior management and have a strong understanding of the CEO’s vision for HR in the business.

HR professionals should be confident in their expertise. Where appropriate, they should challenge the CEO’s view of HR’s role and inadequate measurement tools. Working together will ensure HR activities add value and move the business towards its strategic goals.

Ensure you understand your CEOs expectations of HR and focus your efforts and energies on the areas the CEO considers to be a priority. Don’t be afraid to challenge out-dated views of the HR role.

Who is responsible for employee engagement?

Managers have the most effect on employee engagement levels. It is up managers to them to ensure the CEO’s core values cascade down the company.

However, it’s also important to remember that HR is a specific discipline and many line managers are not necessarily skilled in fostering motivation and engagement.

HR managers should consider programs that enable managers to communicate the company vision, get their teams on-board and up-skill managers who need to develop their people skills.

Motivational assessments can discover the fundamental drivers of what really motivates people in the workplace and not what line managers think motivates them.

Who’s concerned about knowledge loss and succession planning?

Surprisingly, knowledge loss is not high on the radar for CEOs, and is an oversight that could be risky. Well prepared HR managers will already have a plan in place for dealing with untimely exits from the organization.

In organizations where preventing significant knowledge loss is not already on the agenda, HR departments need to implement programs to effectively manage knowledge transfer or risk losing critical information and forward momentum.

This includes going beyond the traditional succession planning targets, such as C-level executives, to identify key knowledge holders, experts and other key players on the field that differentiates the business from its competitors.

A long-term view to supporting leadership by identifying business-critical roles and auditing the current talent pipeline allows HR to demonstrate their strategic capability and focus on business stability.

Make it a point to know the business-critical roles in your organization and develop a plan to cover movements in areas of leadership and subject specialists. A talent audit will assist in identifying the talent potential for key roles.

Future business leaders

Developing leaders continues to be important and there is a high level of commitment from CEOs to develop future leaders.

Understanding how the company’s talent stacks up against the competition can provide insight into the areas that require strengthening.

A focused approach to training and development investment will help ensure the organization’s employees are among the best in the sector.

Gut instinct and assumptions about your employees put HR campaigns at risk. Make sure you have data on your talent pool that can provide insight into their potential to step into key roles in the future.

When does HR warrant additional budget?

CEOs are prepared to spend additional budget on HR programs that will result in increased performance, profitability and staff retention.

CEOs are by nature figures-oriented, so it’s important for HR department to demonstrate the return on investment for the business before requesting additional budget.

HR managers have many methods of benchmarking the strength of the talent pool and measuring the success of recruitment strategies.

For example, if it’s a new recruitment strategy, HR can calculate the the cost of getting it wrong; such as when a candidate turns out to be unsuitable or leaves during their probationary period.

HR should be confident to use talent analytics to support a business case for new projects. If HR is not being heard and cannot convincingly communicate the need for new HR programs, the business’ ability to meet its goals may be at risk.

CEOs will look for HR strategies and programs that clearly demonstrate the impact of HR in financial terms. HR can use the organisation’s existing data to show improvements on ROI.

UL links talent management to strategy with SHL

Nikko23 — Thu, 12 Apr 2012 02:08:54 +0000

an SHL case study

UL is an independent global testing and certification organization, evaluating more than 19,000 types of products, components, materials and systems every year. Founded in 1894, the company today has 68 laboratory, testing and certification facilities and 120 inspection centers around the world.

UL’s mission is to protect life and property, while promoting safe living and work environments globally. As well as supporting the production and use of physically and environmentally safe products, UL makes a valuable contribution to global safety science through its research and knowledge resources.

The challenge

UL decided that driving higher commitment and performance was a priority. The company had no common organizational language for aligning staff with its strategy. The lack of a consistent selection and development model was leading to diverse approaches for goal setting, performance tracking and development planning. To create stronger links between its business objectives, staff performance and a drive for outstanding customer focus, UL decided to define a set of employee competencies to reflect its business aims and form the basis of recruitment, training, performance measurement, career development and succession across its organization.

The solution

UL chose to collaborate with SHL for the development of its competencies model. The project was led by Josh Goderis, UL’s Director of Global Talent Management, who says SHL’s assessment knowledge and strong customer focus were key selection criteria. He adds, “We were impressed by SHL’s industry leadership, particularly its wide global reach and understanding and application of best practice.”

There began a very thorough development process, in association with SHL and including the direct input of nearly a quarter of UL’s staff. Goderis explains, “We’re a highly collaborative organization, so it was natural for us to want to make sure our people contributed to the competencies model and that it made sense to them.”

All geographies, business units, functions and job levels were represented, helping create a high sense of employee buy-in from the start.

The UL competencies model was customized from SHL’s Universal Competency Framework (UCF), which sets out the key behaviors driving performance across a wide range of jobs and organizations and is based on extensive occupational psychology research.

SHL conducted Visionary Interviews with senior leadership to understand how the organization’s strategy and roles might evolve and to determine the competencies that would be critical to UL in future years. Critical Incident Interviews with managers and supervisors then followed to define the effective and ineffective behaviors for the roles in their teams. Finally, Repertory Grid Interviews were conducted to identify the personal characteristics that differentiate the best performers in a target job.

Goderis emphasizes the importance of the data collection process to the success of the project: “It was critical to the whole endeavor, as there was little opportunity to go back and correct poorly gathered data. With SHL’s help we ensured our data collectors were well-versed in consistent data collection and quality control and followed legal guidelines concerning diversity and fairness.”

SHL then analyzed the data from all the interviews and used it to calibrate an online questionnaire. Based on this feedback, revisions were then made to ensure the usability of the final framework for all UL employees.

Once all of the data had been collected, a draft of the UL Competency Framework, ‘The Critical Behaviors for Success,’ was shared with the UL project team for review and comment.

To ensure that all levels of the organization were involved and engaged throughout the project, all parties were committed to ongoing communication. As well as participating in the Visionary Interviews and the final competency review process, UL’s CEO, with other members of the executive team, senior leadership and Human Resources, explained and supported the competencies model in webinars, meetings and written communication.

Results

Today, UL’s custom competency framework is the foundation for all its people management, from recruitment to continual employee development.

In defining required behaviors across all roles and geographies, Goderis states it provides a kind of ‘cultural anchor’ for the entire organization. He says, “Along with the UL mission, vision, values and standards of business conduct, the model defines who we are as an organization, what we do and how we do it. The employee feedback we’ve received has been extremely positive.”

Thanks to the framework, UL has been able to develop and implement a new global performance management and career development process. Goderis continues, “It’s giving us a better understanding of job requirements, allowing us to set and measure against standards, enabling the assessment and development of staff, and providing a common language for discussing people capabilities.”

Core to these revised processes is a new Senior Leadership Development Center with UL employees trained by SHL to deliver personality and ability assessments and simulation exercises, all mapped to the competencies and behaviors defined in the model.

One result is that Human Resources has become a more strategic player at UL, widely acknowledged not only as a recruitment resource but as an essential partner to the business. UL has defined a model that encompasses everything from performance management and career development to the alignment of training, succession planning and rewards.

Goderis acknowledges the central role of SHL in achieving that transformation: “Thanks to SHL’s help in providing an outstanding framework for our global competencies model, we are now better able to support UL’s vision with better quality hires and a much stronger link between our business objectives, staff performance and driving outstanding customer focus.

‘Right for the moment’ Leadership

Nikko23 — Thu, 12 Apr 2012 02:05:12 +0000

By Prof. Dave Bartram & Dr. Ray Glennon, SHL

Introduction

Much is being spoken of what qualities we need in a leader to take us out of recession and how the current situation requires a different type of leader from what we may have needed in the past. In this paper we question the wisdom around the need for a ‘change of guard’ to deal with a different economic operating environment. We argue that the same key leadership qualities are required regardless of the prevailing economic climate and that recessions enable true leadership to blossom.

From 1995 to 2006, annual CEO turnover grew 59%. In that same period, performance-related turnover increased by 318%. In 1995, one in eight departing CEOs was forced from office – in 2006, nearly one in three left involuntarily. And this was against the backdrop of a burgeoning global economy.

Now that we are in the throes of very different economic conditions we can expect to see the sights on performance and shareholder return become even more focused. It is the capability of leaders to react, respond and predict that will mark out their success as we prepare for on-going uncertainty. We believe that we don’t necessarily need different people to lead during a recession, but that a recession creates the demands and uncertainties that provide an environment in which effective leadership performance is much easier to distinguish from leadership posturing.

For example, leading through change is an important requirement of most leadership roles, but it is a more visibly pervasive requirement now than in the boom times. Leaders have always needed the capability to recognize the right strategy for the moment, to execute it with the visible and motivated support of their organization, but now is the time when we get to discover which leaders can genuinely do this.

Transformational Charisma?

What do you see in a good leader?

‘When they speak, people listen’
‘They are interesting, engaging and make you feel good about what you do’
‘They make you feel valued and help you feel positive about the journey your company is taking’.

Would you be happy with this leader? If you constrict the definition of a leader to the global CEO and assume most of us don’t interact with them frequently, then the above definition might suffice. If you limit ‘leadership’ to the way someone ‘talks the talk’, then yes, a leader with this type
of charisma can give the organisation a buzz of good feeling, spur people on and instil in them a drive to succeed.

Consider this common scenario of the recent past: “Sales were on the increase, customers kept coming back for more and they were prepared to pay more year on year. We didn’t really know if our leadership team was making the right decisions but we liked what we saw most of the time, the business results were good and we got bonuses”.

In this scenario ‘Leadership by Charisma’ probably appears to be quite effective; but only in the good times when its mettle isn’t stressed. When times are good the requirements of robust leadership are no different than at any other time, they are just less necessary and easier to avoid. Asking tough questions about the business fundamentals can be avoided when revenue and profit are growing. When you are hitting all your targets you rarely get criticized for not doing even better.

When the economy was booming and running smoothly, businesses didn’t need to worry about what was going on ‘under the hood’ of leadership. For many businesses the reasons they were running smoothly was because it is easy to maintain momentum when you are letting gravity take you downhill.

Has inadequate leadership contributed to the current situation?

There certainly appears to have been a diffusion of the leadership responsibility for averting the economic downturn. Plenty of people close enough to the situation realized what was going on but no one really shouted loudly enough and with the conviction to make us stand up and listen. Maybe we just didn’t want to hear or we didn’t think it was our problem to fix. It’s only when the economy really spiralled out of control that business owners, shareholders and any commentator with a blog really started to look at the mechanics of what was happening.

In the context of this article, the ‘mechanics’ of the business are leadership behaviors. They are the little things done well that collectively construct and define a successful and effective leader.

When you try to throw a loose rein around how leadership theorists in recent times have captured the notion of ‘transformational leadership’, the ‘charismatic caring innovator’ would be the approximate caricature. The focus has tended to be on defining person-centred behaviors that inspire others and create a compelling view of a future that people want to be a part of. When these theorists talk of transformational leadership qualities they are not talking about people who have the competencies to effect change in organisations, they are talking about people who have the personal charisma to be nominated as a leader by their subordinates.

Put a charismatic person-centered leader on the luxurious platform of a booming economy and you might get duped into thinking you’ve got a true transformational leader in action.

But of course transformational leadership can’t be just about charisma and the ability to woo the masses. There has to be more to it. Surely it has to be about the impact of those leadership behaviors. There has to be a clear link between what a leader does, what impact this has and what business results it achieves.

Leaders that are ‘right for the moment’

Pronouncing that we are searching for leaders that are ‘right for the moment’ seems like a rather hackneyed poke at the current economic-driven zeitgeist. What do we need in a leader for now that is so different from what we needed in the boom times? The truth is that we need to broaden our view of what an effective leader requires in terms of personal qualities and competencies. Charisma is never sufficient on its own. Good leaders in boom times are the same people who are the good leaders in a recession, it is just harder to spot the good ones in the boom times.

Now, as before, what we need are leaders who are truly transformational such that they can effect real change and drive organizational improvement as we start to hear more and more about the slow-growing ‘green shoots’ of recovery. We need people who are right for the moment only in so far as their leadership skills allow them to evaluate the changing environment and decide on the best course of action for the future. Moreover as we remain in uncertainty, they need to be savvy enough to revisit their decisions often and re-evaluate if they are still right for the moment. Consider these examples:

Example 1: Leadership is ‘thinking like a fox?’
Consider the current popularity of scenario planning as a way of dealing with the prevailing uncertainty. It is a proven, valuable and respected approach to business planning and is as important now as ever. But it tends to come to the forefront more in times of difficulty and uncertainty.

Why is this? In the good times business growth was the norm and our optimistic expectations of growth were reinforced by more growth each year. Leaders became lax to the point where the suggestion of planning for a global financial nightmare scenario would have been laughable and interpreted as unnecessarily cautious, unaggressive and likely to dampen the ability to focus on the existing growth and profit that was there for the taking.

But scenario planning isn’t a personality type or a leadership style. At its simplest it is part of a strategic planning toolkit. Nonetheless, the better leaders had the foresight and discipline to consider this current scenario as one of a number of possible futures. They set up procedures for recognizing as early as possible the likelihood of alternative future scenarios and altered their direction accordingly. The lesser leaders didn’t. Charisma is not going to save a CEO who is driving forward a strategy that is no longer relevant.

So leadership is about breadth of vision, tolerance for ambiguity and the ability to work in situations of high uncertainty combined with planning discipline. These are enduring dispositions that we would suggest are important for all leaders to possess in some modicum regardless of the prevailing economic environment.

Example 2: Leadership is avoiding ‘groupthink’?
The lonely voice of the financial regulatory bodies lobbying for better and more transparent risk management processes fell on deaf ears in the face of leaders and employees in the financial sector looking for and expecting greater profits and bonuses. Governments, likewise guilty, failed to intervene to redress this imbalance. Some would suggest that the financial sector succumbed to a ‘groupthink’ mentality, unwilling to question the shaky foundations of credit upon which the boom times were tentatively balancing. This was probably further exacerbated by a belief that addressing and resolving such a globally pervasive phenomenon was outside the control or influence of any one individual or group.

Good leadership looks like the person who has the courage to raise their head above the parapet and question ‘conventional’ wisdom and combine this with a high degree of belief in their own ability to make an impact. Again, it’s hardly a new or unique characteristic to look for in a leader. Any good leader should be prepared to question, critique, refute and be brave enough to go against the tide to make a difference and gain competitive advantage. This is characteristic which is just as useful in boom times as in recession.

Example 3: Leadership by kindness
The idea of corporate social responsibility has not found a comfortable place in the psyche of many organisations. It has become derided by some in recent times cynically as lip-service to enable organisations to enhance their brand. Likewise the concept of Employee Value Proposition was becoming more and more recognized as an important topic to enhance employer appeal and competitor differentiation before the recession, but has received less attention since the war for talent diminished’.

These concepts have more resonance today as people have now lived through personal experiences around restructuring, and have seen employer and consumer brands enhanced or devalued by the management tactics used to bring human capital through redeployment and redundancy programs.

Once more, the concepts are not new but it is not every leader who has had the lucidity of vision to make the link between the cost of poorly executed restructuring and the cost and time it takes to re-brand your consumer products and your employee proposition. Good leadership here means having the foresight to understand that the situation requires a balancing act of cost control and operational readiness (employee duty of care and engagement, knowledge and resource management) and making the best decisions at the time given the information available, communicating this with honesty. So we need leaders with the skill to balance competing priorities with good communication skills when dealing with stressful situations. Isn’t that just another example of a leader for all times?

And on it goes. Ultimately, the leaders we need are the same people we have always needed. It’s just that we haven’t needed them before as much as we need them now.

So why are some leaders struggling with the current situation? Have we created leaders who impressed us with their charismatic style at the expense of robust judgement? Perhaps we defined a set of leadership behaviors that we believed were generically ‘good’ at the expense of trying to understand what desirable leadership behaviors might be when aligned with our organization’s direction, and its prevailing and desired values and culture?

It begs the question, how do we define and find the best leadership for our organization?

Inferring Leadership from ‘track record’

In the search for effective leaders we can easily fall into the trap of looking at results and using these to infer behaviors. It is a classic flaw of many performance management processes systems to look at what the individual has delivered, while paying less attention to either the business results these efforts contributed to or the behaviors that contributed to achieving the outcomes.

Only by looking at behaviours, deliverables and the outcome of these deliverables can you hope to understand why things are working and why they aren’t. Only by looking at behaviours, actions and impacts can we infer what is likely to contribute to success in the future and use this to guide what the individual and organisation is trying to achieve.

In difficult times some of these charismatic leaders will crumble and some will re-focus their efforts. It depends on the genuine reserves and capability they have to be truly transformational.

Add to this the fact that prior experience probably won’t apply. To have led a company into and out of a recession you need to be at least 60 years old in 2009. Behavioral disposition, more so than knowledge, is what will help.

Defining Leadership by its impact

At SHL we believe leadership is about influencing people such that they come to share common goals, values and attitudes and work more effectively towards the achievement of the organization’s vision. The implication here is that if leadership is about making people more effective we need to know what impact they have actually had and what has resulted from this. Successful leadership will result in improvements in organizational effectiveness that help the organization achieve its primary goals (market share, profit, revenue growth etc.) and are usually limited to the breadth of impact that the particular leader possesses within the organization.

Underneath this is the recognition that effective leadership requires specific behaviours, that some are more likely than others to display these behaviors, and that there are many external and contextual factors that impact on leadership effectiveness. But at its core is the idea that leadership is that which improves the organization’s ability to achieve its primary objectives.

This focus differs from many of the more traditional and recent views on leadership which focus on defining the minutiae of behavior without linking the behavior to its consequence. Defining leadership as a set of features without considering the effect of these features is of limited use. Defining your end goal is the first step in being able to achieve it.

The definition of a leader is not an easy or quick process and is particular to each organization. It must involve deep understanding of the broad and specific strategic context that your organization operates in and understanding its prevailing and future culture and values. This will help define the leadership behaviours you need to see and what impact you need your leader to have on the organization and the marketplace. This process should be facilitated, but not led, by a behavioral leadership framework.

Any broad leadership framework can only hope to define broad sets of leadership competencies which are required in different amounts at different times by different leaders. It is important to be clear in your definition phase about what particular attributes you need to look for in recruitment or development processes. Simply adopting some generic leadership model is unlikely to be helpful.

The SHL ‘Great Eight’ Leadership Model utilizes a comprehensive competency framework (the Universal Competency Framework) within which one can articulate in detail specific leadership requirements (See Figure 1). It uses the notion of leadership functions rather than focusing on the perhaps more populist concept of leadership style. As a functional model, it focuses on what leaders do and what impact they can have on the effectiveness of organizations. Whilst it also looks at their style, its focus is much broader and more concerned with effecting change and organisational improvement.

Figure 1

For each function, one competency factor provides a transactional or management focus and the other a transformational or leadership focus. Management is about keeping an existing system running, whereas leadership is about creating it, developing it or changing its direction. Confusion in leadership research is sometimes caused by the fact that it is difficult to conceive of a person who has leadership skills without that same person also having management skills. While they may be conceptually distinct, they are in practice found side by side. For that reason any practical application, such as the assessment of individual leadership potential, needs to consider both transactional (management) and transformational (leadership) areas.

In this way the Great Eight provides a checklist for ensuring the functional needs of the organisation are covered in the leader or across the leadership team. Analysis of popular transformational leadership style models shows these to be very constrained in that they only cover a small part of the full set of functions, typically the areas around ‘Interacting & Presenting’ and ‘Supporting & Cooperating’ in the Great Eight model. Of course, as mentioned, a framework is just that, it is not the definition of your leader but it is a robust and useful model to define and measure your organizational leadership requirements.

Leading through change

An inevitable constancy in life is the presence of change. Within this constancy, the context, intensity and direction of change can fluctuate quite dramatically. In the boom times of the last ten years change was more about fostering innovation, grasping competitive growth opportunity, creating a compelling reason for people to believe in your organization’s evolution over and above the competition and in doing so attracting and retaining’ the best people. Now the ‘change’ context is better represented by:

dealing with an ambiguous economic environment
devising survival strategies in an uncertain and changing market
making tough decisions using limited resource
restructuring the workforce and dealing with the impact of these changes
motivating people as they stay with you through these uncertain times.

Managing change, then, is not new but the context and importance of good change competence is now perhaps heightened and is seen against a different backdrop. For example the importance of accurate and timely communication to ensure employee engagement is always important but perhaps more important in times of pessimistic ambiguity than in times of economic growth.

A good leader then, is a good leader whatever the conditions, but some attributes become significant only when the situation demands significant and stressful change. If we review the SHL Universal Competencies model, we can identify those areas that become key under conditions of change (See Figure 2). Some are transactional aspects of management that relate to, for example maintaining productivity and managing resources. Others are related to the transformational aspects of leadership, driving change in difficult circumstances and bringing people through that change, through empowerment, reassurance and the creation and communication of a compelling strategy and vision.

Figure 2. Great Eight behaviors that are key in times of change

The message here is that change is constant and that change can be an overtly positive or negative experience for the organization. The competencies that are important in taking organizations through either positive or negative change are not fundamentally different, but when there is a higher degree of uncertainty and potential negative consequence for the individual, more focus will need to be placed on the correct change-leadership behaviors to ensure employees remained engaged with the organization through this period. As one would expect, in Figure 2 the overwhelming weight of behaviors relevant in times of change are clustered under the Transformational functions.

Finding Leaders ‘of the moment’

So, if the boom times effectively masked the impact of poor leadership, the onset of difficult times will support us in identifying truly transformational leaders.

Leaders who have the dispositional potential to identify what is right for the moment will succeed. Predicting and prioritizing what is right for the moment is the job of the leader. Examples might include: scenario planning, rebuilding corporate trust, positioning the business to take advantage of the emergent recovery, restructuring the business fundamentals, managing reputational risk around redundancies, motivating a stifled workforce, rationalizing or expanding the product line, reviewing manufacturing capabilities, insourcing, outsourcing, re-financing company debt, stepping up or winding back marketing/advertising, reducing the working week, exploiting the competition’s weakness through ‘mergers/acquisition’. The list of recession-beating tips is endless but the right action for the moment will not be dictated by external forces.

Making sure we have put the best person in the leadership role to make the right decisions should be the focus. Using a functional model rather than a style-driven model will provide a better framework for securing breadth and depth of your organization’s leadership capability. Bear in mind also that reality and human nature dictates that your leader will not be the complete functional article, so ensure that any of the functional requirements not strong in your leader are balanced and compensated for by the strengths of others on the leadership team.

And as a leader, rest assured that if you excelled in the good times through living the right behaviours and making the right decisions, the chances are that you are good for the tough times too. But the devil is in the detail of your behavior. It was easier to be charismatic without substance in the good times – truly effective leadership in the good times required much more than this. If you or your CEO had it then, it will continue to shine through now. If they didn’t, its absence will now be painfully impactful.

Take-aways:

Before you find the right leader you need to define what you are looking for.
Avoid applying generic definitions of ‘Leadership’ to your organization. They are as useful as any one-size-fits-all solution. Is your organisation facing the same complex challenges as the leader in the next building? If not why would you define your leadership requirements in the same way?
Relying on track record is fraught with difficulty. Most leaders of the last 10 years will be able to claim that they led a company through revenue and profit growth. Few leaders will have led through a recession.
The context and direction of change in the current economic climate heightens our focus on the behaviors that are needed to support successful change management. Successful leadership needs to be able to manage change today in a way that wasn’t as important during the boom times.
Use a relevant leadership framework to inform what you are looking for. Definitions of leadership that focus on stylistic or transformational charisma attributes are not likely to provide a well rounded leader that will improve organisational effectiveness. Ask yourself the question – is this model about style or substance? Does this model focus on a narrower set of charismatic behaviors that will inspire my people or is its focus more on impacting organizational effectiveness?
Successful leadership today looks the same as it has always looked. Leading out of a recession doesn’t call for a different leader. It calls for a true leader.

References

Booz Allen Study. “CEO Turnover Remains High at World’s Largest Companies”. May 22, 2007. http://www.boozallen.com/news/36608085

Tan Suee Chieh. “Why no one seemed to see the crisis coming”. The Straits Times, Jun 23, 2009.

Avolio, B. J., Bass, B. M., and Jung, D. I. 1999. Re-examining the components of transformational and transactional leadership using the Multifactor Leadership Questionnaire. Journal of Occupational and Organizational Psychology, 72 (4): 441-463.

Alimo-Metcalfe, B., Alban-Metcalfe, R.J. (2001), ”The development of a new transformational leadership questionnaire”, The Journal of Occupational & Organizational Psychology, Vol. 74 No.1, pp.1-27.

Ilbury, C., & Sunter, C., The Mind of a Fox: Scenario Planning in Action www.mindofafox.com/books.php

Bartram, D. (2009). Leadership Competencies: Differences in patterns of potential across eleven European countries as a function of gender and managerial experience. In Advances in Global Leadership, 5, 35-64. Emerald Group Publishing.

The SHL Corporate Leadership Model

Nikko23 — Thu, 12 Apr 2012 01:58:39 +0000

By Professor Dave Bartram, SHL

Summary

The SHL Corporate Leadership model derives from the generic model of the world of work described in Bartram, Robertson and Callinan (2002) and Kurz and Bartram (2002). It provides a significant advance by taking account of:

Both leadership behaviors (as rated by oneself and others) and leadership impacts.
Both individual and aggregated (i.e. team, group and organizational) measurements.
Both people-measures and contextual or situational measures

It proposes a framework that takes into account organizational culture, values and other contextual factors as the environment within which to assess and develop leadership.

Leadership is about influencing people such that they come to share common goals, values and attitudes, and work more effectively towards the achievement of the organization’s vision.

Management is about keeping an existing system running, whereas leadership is about creating it, developing it or changing its direction. Confusion is sometimes generated by the fact that it is difficult to conceive of a person who has leadership skills without that same person also having management skills. While they may be conceptually distinct, they are in practice found side by side. For that reason, individual assessments need to consider both.

The SHL Corporate Leadership Model combines the currently fashionable ‘transformational’ and ’transactional’ themes into four main functions that describe the leadership process. Each function has its characteristic types of behavior.

Developing the Vision: The strategy domain
Sharing the Goals: The communication domain
Gaining Support: The people domain
Delivering Success: The operational domain

This White Paper elaborates on these four leadership functions and shows how the Great Eight competency factors of the SHL Competency Framework (Bartram, 2005; Kurz & Bartram, 2002) combine in pairs to provide coverage of these four functions. For each function, one competency factor provides a transactional or management focus and the other a transformational or leadership focus.

The issue of risk factors (impeding behaviors, derailers) is considered and an approach is presented that distinguishes between individual and contingent risks. It is proposed that these need to be considered separately for each of the above four leadership functions. In addition, we need to consider both misbehavior and incompetence when looking at individual risk factors.

The model covers four sets of variables:

Key outcomes and impacts. What are the consequences of leadership? What impacts do leaders have? What are the focus, level and breadth of these impacts?
Key competencies. What are the desirable ‘leadership behaviors’?
Individual antecedents of these competencies. What are the stable individual characteristics that lead to such behaviors?
Context: What is the situational and cultural context? A four-fold situational classification is proposed based on two main variables: Environmental Uncertainly and Pressure for Change. For each context, impacts can be assessed in terms of the four organizational effectiveness criteria defined in Bartram et al (2002), using a balanced scorecard approach. The criteria are:

Economic
Technological
Commercial
Social and personal

The assessment strategy for Leadership requires us to consider separately three parallel sets of variables. One set relates to the individual leader, another to the groups and teams within which the leader operates, and the third to the organizational setting within which this all takes
place.

Why Leadership?

Why is leadership so important? It is perhaps a self-evident truth that leaders are critical to the success or failure of ventures, for without leaders, there is no one to give direction, to motivate, to imbue a sense of commitment and passion, and without these there can be no success. We view much of history in terms of the leaders of important ventures and organizations, a practice that has given rise to one view of leaders as ‘great’ people. Within the commercial world, leadership has always been important. However, the importance of individual leaders or teams has probably become increasingly apparent, as the commercial and economic environment has changed. As will be discussed later, pressure for change and uncertainty are two of the major factors that organizations have to respond to.

Bain and Mabey (1999) give four reasons why the importance of people within organizations in ensuring competitive advantage has increased over recent years:

“Regulated and protected markets have declined significantly, and on a world-wide basis.
Product life cycles are shorter and new technology is being made redundant at a faster rate each year
Access to the required financial resources is not an inhibitor today given the mobility and flexibility of the financial markets.
Economies of scale are much less important today than even a few years ago… increasingly the consumer is demanding greater variety without any cost penalty”

The approach also considers the role of risk factors, both in terms of individual characteristics and contextual contingencies.

1. Key Goals and Outcomes

For organizations, primary goals reflect the Organization’s raison d’être, and generally will be described in commercial terms (market share, profit levels etc). Secondary goals are about how to achieve the primary goal, and often focus on internal Organizational criteria (levels of job satisfaction, developing the ‘right’ culture, effective internal communication and so on).

For leadership we should consider the primary outcome to be improvements in the effectiveness of performance of the whole organization (for high-level corporate leadership) or for small subgroups within the organization. These improvements are ones that help the organization achieve its primary goals.

Secondary outcomes of effective leadership will include subordinate satisfaction, increased motivation, positive attitudes, sharing of values etc. These in turn may act as intervening outcomes that influence organizational success. It is worth noting that most current approaches to leadership assessment focus on secondary measures and not on impacts or assessments of primary outcomes.

There is a distinction to be made between outcomes and impacts. Outcomes are measurable changes in the organization. These may be financial (e.g. changes in earning per share), commercial (e.g. increase in percentage market share), technological, social, or more commonly some mix of all four (see below). The outcome is generally the result of the actions of the leader together with a lot of other people.

Impacts are the measurable effects a leader has on people. In a sense they are the personal outcomes of leadership performance. An effective leader, by definition, needs to define the direction for change, demonstrate that they have made an impact, and that the impact has either directly or indirectly moved the organization in the direction it needed to go to achieve the desired outcomes.

The extent to which a leader can have impact is defined in terms of three parameters:

Goal Focus: Is the key outcome area economic, technological, social or commercial?
Organizational Level: Does the leader operate at Board level or is the role at some other level (e.g. project team leader)?
Stakeholder Impact: Who is going to be impacted by the leader’s actions? How broad or far-reaching is the leader’s impact going to be? This relates to issues of extent within the organization and outside.

1) Goal Focus

Impacts can be achieved in a range of areas – not just the financial ones. A taxonomy for this has been set out in Bartram et al (2002) and represents an approach comparable to the balanced scorecard approach (Kaplan and Norton, 1992). The four criteria defined by Bartram et al, and expanded into a model of eight Goal Factors by Kurz & Bartram (2002), are:

Economic. This is fundamental, as commercial Organizations that are economically ineffective will not survive. As with all other criteria, the effectiveness or otherwise of an Organization in economic terms is inextricably linked with the external economic environment. Effective Organizations must be able to adapt to changes in the economic climate.
Technological. Organizational effectiveness requires use of technology for service and product development, their delivery and for internal communication. The nature of the business will impact on the roles technology can play, but effective use of technological resources can be as critical in Organizational success as effective use of people.
Commercial. The nature of the commercial environment within which an Organization operates is critical to its success. Effectiveness can be defined in terms of finding or developing a specific market niche, or confronting the competition head-on and taking market share.
Social and personal. This is intended as a broad notion of social, to include socio-political, ethical and cultural measures of effectiveness. Organizations are not only collections of people, but also have impacts on people (customers, suppliers, shareholders and the public at large) outside. The effects of economic success or failure are social effects (employment, standard of living and quality of life). Organizational goals may have ethical, social and political dimensions. As such, they may conflict with purely economic goals.

An effective leader is one who makes a demonstrable impact on one or more of these criteria in a positive way by influencing the behavior and performance of others.

Once the goal focus has been identified, it is then necessary to specify in qualitative terms what the critical success factors are and from this to identify measurable key performance indicators.

2) Organizational Level

Organizations need leadership at all levels. While the corporate leader and top team may have the greatest impact on the setting the direction for the organization, leaders at other levels also have their roles and need to make impacts that will aggregate together in building towards the organizations desired goals. Leadership is needed from supervisors of work teams, from creative groups, from project teams and so on.

In the SHL Leadership model, we differentiate five organizational levels as shown in the table below. Each Level is associated with different degrees of job complexity, types of jobs, qualifications and richness in terms of the demands made upon an individual’s competencies. The definitions provided for these are consistent with those used in defining job levels within the UK national occupational standards framework.

The main focus of the present white paper is on levels four and five. However, we must not forget that leadership attributes and leadership functions are important at all levels.

3) Stakeholder Impact

In considering impacts, we also need to consider who is impacted and the scope of the impact. There are, broadly, five categories of people who are affected by the impact a leader will have.

Investors and shareholders. Effective leadership engenders trust and is important in ensuring that the Organization provides a good return on investment, long-term stability and growth.
Employees look for job satisfaction, stability of employment, career prospects, personal development, good pay and rewards. Leadership is important both through the primary and secondary routes described above in creating a positive work environment, giving clear direction and providing inspiration and motivation.
Customers are indirectly affected as good leadership, especially in relations to customer service areas, helps ensure they perceive the organizations as providing value for money, quality of product or service, good support and after-sales care.
Suppliers want to work with an Organization that is dependable and provides them with long-term stability as a market; reliability in payment, and is aware of the constraints on the suppliers’ ability to supply. As with customer service, effective leadership impacts on this.
Others look for the impact of the Organization’s activities on their environment and way of life (economic, social, political, and cultural) to be positive and beneficial. Leaders, whose roles involve impacts with the outside world, are crucial in managing this effectively. Leaders of major organization in the public service sector and senior managers in large multinationals are all perceived as providing leadership that is broader than that required for their organization on its own. Such leadership may be in areas of standards setting, professionalism, good governance and probity, strategy, and innovation.

Finally, a leader’s impact may be broad or narrow. A leader may have impact within their local work group, the local organization, the immediate local environment, nationally or internationally.

2. Key Competencies

Desirable leadership behaviors or competencies have been classified and labelled in many different ways. Some approaches from the literature are summarised below.

‘Initiating structure’ and ‘consideration’ behaviors (from the 1940s) are sometimes termed ‘task-centered’ and ‘person-centered’, covering planning, organizing, target-setting etc., and fairness, sympathy, concern etc. respectively. They emerge in some form in most models, and need to be covered in ours. It is possible to view and measure each one in overall terms or through several sub-components. In addition, ‘laissez faire’ leadership (taking little action) was identified in early writings, and is still examined in the literature. It seems to represent the ‘low’ end of the above behaviors.
More recent emphasis has been on ‘transformational’, ‘innovative’ or ‘charismatic’ leadership versus ‘transactional’ or ‘maintenance’ leadership, usually assessed through the Multifactor Leadership Questionnaire (MLQ, Bass and Avolio).
The large-scale analysis by Avolio, Bass and Jung (1999) of the most recent MLQ version (MLQ5X) supported a six-factor solution for 36 items and also a three-factor higher-order account. The six factors were labelled Charismatic/Inspirational (CI)1 leadership, Intellectual Stimulation (IS), Individualized Consideration (IC), Contingent Reward (CR), Active Management by Exception (MA), and Passive-Avoidant (PA)2 leadership. It has been conventional to view ‘transformational’ leadership as including CI, IS and IC; and ‘transactional’ leadership as including CR, MA and the Management-by Exception (Passive) part of PA.
The three-factor account suggested by Avolio et al (1999) adds to that dichotomy: Transformational leadership (CI and IS), Developmental-Transactional leadership (IC and CR) and Corrective Avoidant leadership (MA, PA and laissez faire).
Similar components are covered in the Transformational Leadership Questionnaire (Alimo-Metcalfe and Alban-Metcalfe, 2001).
Several authors have set out lists of leaders’ (or at least managers’) behaviour. For example, Yukl and Van Fleet (1992, p. 156) propose 16 key practices.

3. Individual Antecedents

These are the ‘disposition and attainment characteristics’ (Kurz and Bartram, 2002): that underlie or are prerequisites for leadership behaviours. They include aspects of cognitive ability, relevant knowledge, certain personality dispositions and forms of motivation. It is useful to view the antecedents of all behaviours (not necessarily those of leadership) in two broad categories: dispositions and attainments. Leadership behaviors can be viewed as specific instances that manifest these underlying characteristics in a particular situation.

1) Dispositions

Aptitudes and abilities. A general need in organizations is for fluid cognitive ability, as well as for specific psychomotor abilities or processes of creative thinking or complex thinking. Such variables are important in studies of managers.

Style or personality. Self-reports of personal styles are in effect a person’s descriptions of his or her typical behaviors, so necessarily link to the key competencies (see 2, above). Recent research has confirmed not only the importance of links between personality traits and leadership, but also shown how the pattern of relationships depends on context. A meta-analysis of many studies carried out by Judge et al (2002) showed, for example, that while Extraversion, Openness to new experiences and Emotional Stability are predictive of leadership in business settings, for more bureaucratic settings (government and military) the predictors are Emotional Stability, Conscientiousness and Extraversion. Overall, the correlation (multiple regression) of the ‘Big Five’ personality factors and leadership effectiveness was 0.39.

Motives and Values. Less common is the examination of leaders’ and managers’ motives, values or attitudes. For example, what motives underlie certain behaviours in a particular setting: a desire for power, for money, or to achieve ethical goals? Motives, values and personality overlap, and relate to corporate culture when aggregated across individuals. In general motives may be viewed as more localised in time and space while values are deeply internalized and set the rank ordering of importance and the prioritization given to potentially competing demands: making money or treating people well; creating a stable working environment or ensuring innovation and change can flourish. Examination of motives and values may be particularly important in assessing risk factors in leadership, and get to the bottom of so-called ‘personality clashes’.

It is also worth noting that when Judge et al (2002) examined a broader range of traits than just the Big Five they found some even stronger relationships with leadership. In particular, traits with a strong motivational component (dominance, achievement, locus of control) all had substantial correlations with leadership.

Managers who are successful tend to have energy, stamina, hardiness and continuing good health. These attributes underpin the persistence of motivation and effective behaviour across years, but they rarely appear in the literature.

Interests. The sphere of an individual’s interests will influence their choices of work setting and the extent to which they will get satisfaction from working in one function or context rather than another. Interest categories are useful for capturing expertise that is profession, function or industry specific, and are likely to be good predictors of ‘overall performance’ in closely related jobs, or closely related competencies.

2) Attainments

Knowledge and skills. Despite theoretical suggestions and empirical evidence about the crucial role of knowledge in the determination of effective behavior (e.g., Schmidt and Hunter, 1992), this is under-emphasised in the leadership literature. We need to consider knowledge both about job tasks and about organizational functioning. The former (labelled as ‘task expertise’) covers both declarative and procedural knowledge (and thus ‘skills’), and the latter (‘organizational wisdom’ ‘tacit knowledge’) includes wider practical understanding.

Experiences and qualifications: McCall (1998) emphasizes the need to put high potential talent into developmental situations where they can gain the experiences necessary to perform successfully at later career stages.

Qualifications (for example, MBA or DBAs, qualifications gained on leadership training programs etc) formally attest to knowledge, skill and experience. The value of different types of qualifications on leadership performance has received little attention in the literature. However, if it is possible to ‘develop’ or train leaders, it should be possible to break down some aspects of leadership expertise into relatively discrete sets of knowledge and skills that can be taught at practical and theoretical levels.

4. Context: Situational Variables and Culture

Although it is clearly established that desired leader behaviors can differ between situations, there is little agreement about the nature of the contingencies and almost no research evidence about effectiveness in different situations. Published suggestions include the following.

Fiedler (1967) argued that the most effective leadership style was a function of three variables: his or her power relative to subordinates, the degree of task structure, and the quality of leader-member relations. In situations favourable to a leader (e.g., high power, high task structure and good relations) and in situations unfavourable to him or her (e.g., low power, low structure and poor relations), a task-oriented style was advocated, but otherwise a person-centered approach was recommended. Evidence has not been very supportive, and the model has faded away (rather than being explicitly rejected). One problem is that even with only three dichotomised situational factors, analyses have to cover eight settings, and comprehensive tests of predictions in all those settings are difficult to carry out and interpret.
House’s (1971) path-goal theory drew attention to the importance of a leader identifying goals valued by individual subordinates and setting up paths to those goals. Aspects of the situation such as the nature of the task and subordinate attributes were said to determine the optimal approach. The number of variations in goals and paths between settings and individuals is clearly considerable, and, despite plausibility and general acceptance as a partial account (emphasizing employee motivation), empirical evidence is slim. Hersey and Blanchard (1982) extended the idea in their model of situational leadership to suggest that leaders’ emphasis on setting up paths to goals should depend on two aspects of subordinate maturity (job maturity and psychological maturity). While again plausible, this has rarely been examined or demonstrated.
The multiple linkage model (Yukl, 1981) assumed that situational influences arise from variables such as subordinate effort, subordinate ability, type of work organization and other task-related features.
Vroom and Yetton (1973) presented a prescriptive decision-making theory to identify the appropriate leadership behaviours in different situations. The effectiveness of a given procedure was said to depend on a large number of variables, such as the amount of information possessed by a leader or by subordinates, the likelihood of subordinate acceptance of a particular decision, and the complexity or importance of the decision. The model was presented as a set of flow charts, of such complexity that the measurement and observation of all combinations has never been achieved.

In the present approach, we try to balance complexity and the need to maximize potential validity against practical considerations. To achieve this we need to limit the number of situational variables we consider to those that are most likely to have an effect on a leader’s performance and impact. The current literature is not very helpful in identifying what these variables should be; almost all writers merely point out that situational differences are important and then pass on to other topics.

1) Contextual Uncertainty and Pressure for Change

One feature that appears in many discussions is the degree of uncertainty in a particular setting. Waldman, Ramirez, House and Puranam (2001) cite Milliken’s (1987) definition of perceived uncertainty as an individual’s perceived inability to understand the direction in which an environment might be changing, the potential impact of those changes on that individual’s organization, and whether or not particular responses to the environment might be successful. Uncertainty is stressful, and may make people more receptive to active leadership.

Uncertainty can arise from several contextual features: the number and complexity of the factors that might affect outcomes, lack of needed information, a very large number of options, inability to predict developments, doubt about one’s ability to succeed or about the consequences of one’s actions, etc. So contextual uncertainty could be used as a rather general construct to represent current ambiguity and lack of clarity about the best way forward.

Uncertainty is also a function of the degree of interdependency in an organization’s structures. For a small organization or one with a simple structure, the potential impacts of change processes are easier to predict than for more complex organizations. This issue of ’predictability’ is directly related to the issue of risk. The less predictable the outcome of an intervention, the higher the risk associated with it. For intervention in complex organizations with high levels of interdependence between their parts, leadership is never a ‘ballistic’ process. That is, having set the vision and strategy one cannot initiate a process and hope it will run through to success without further interventions and ‘course corrections’.

A second general feature that varies between situations is the degree of external pressure to act. Only a few writers draw attention to the need to look outside an organization (whereas most restrict themselves to inward-looking psychological themes), but a macroscopic concern for economic or technological conditions might appeal to managers (and also be theoretically useful). So a second possible contingency might be viewed in terms of the degree of market or other pressure for change.

Restricting ourselves for presentational purposes to a two-by-two table, we might think in the following terms. The framework now shifts from descriptive to prescriptive, advocating an emphasis on different ‘types’ of leadership in four different contexts.

In relation to the above classification, it may be that contextual uncertainty increases the value of transformational behaviors, whereas those are of more limited importance (or may even be disruptive) in situations of stability and clarity (Waldman, Ramirez, House and Puranam, 2001).

Degree of contextual uncertainty and the speed with which change is required are both key factors in making any assessment of leadership risk (see below).

2) The role of culture

Relevant aspects of organizational values and culture are important factors in either facilitating or hindering a leader’s impact. These have rarely been examined in the academic leadership research, but it is likely that certain styles of leadership are particularly appropriate in certain kinds of culture. We need to consider the fit between a leader’s personal values and the prevailing or desired culture of the organization (or that part of it in which the leader needs to have an impact).

We also need to consider how culture changes as a consequence of the impact of leadership. For our current model we distinguish two aspects of culture:

Norms regarding behavior – how we do things and how we treat people in this organization.
Values – what we care about and what we regard as important.

Sitting around these are the visible outward signs of culture, such organizational ‘artefacts’ as house styles, logos and so on, and the often-unconscious basic beliefs on which the values depend.

It is well known that norms and values are hard to change, probably because they are built on beliefs. It is easy to change the outward signs of a culture, the artifacts, and there is a danger that people may think that by changing the overt manifestations of a culture, the norms, values and beliefs will follow. While it is vital in assessing any leadership situation to know what the current culture is and how it needs to change to be consistent with the new vision, the approach we take is that culture change follows organizational change rather than driving it. Culture changes as new behaviors become ‘bedded’ in and accepted as more effective than the old one. Value change probably follows even more slowly on the back of changes in norms, as new priorities become internalized as values and shifts occur in people’s beliefs.

Bringing in new talent whose values are congruent with the new vision, and losing staff whose values are out of touch or incompatible with the desired culture will speed up the culture change process.

The SHL Model of Corporate Leadership

In the introduction it was stated that leadership was “about influencing people such that they come to share common goals, values, attitudes and work more effectively towards the achievement of the organizations vision”. An initial problem is to establish the boundary between those behaviors that are narrowly ‘leadership’ and those that are broadly desirable in managers but are not explicitly ’leader like’. If we are over inclusive in our definition of leadership we run the risk of devaluing the concept of leadership and confusing it with effective management (which arguably is what has happened in the debate around transactional and transformational leadership concepts).

The definition we have provided, in terms of influencing other people, forms the focus for the proposed framework. It needs also to consider the competencies required for effective management, as leaders need to be complete people: we cannot consider disembodied qualities in isolation anymore than we can consider the impact of people in isolation from the situation they operate in.

A framework of specifically leadership behaviours thus needs to sit above a broader framework of other competencies, with the latter applicable to both leaders and non-leaders.

We distinguish between general employee (or managerial) effectiveness (levels 1, 2, and 3 in the model) and more specific leadership effectiveness (levels 4 and 5 in the model).

We also distinguish between competencies that define leadership and those that are supportive of or necessary for effective leadership.

Leadership competencies. The model considers leadership from the viewpoint of process. What do leaders do? In general terms, they provide the vision and set the strategy, they share that vision with others, define goals and gain buy-in and support, and they either deliver the vision themselves or set in place the mechanisms to ensure that it is delivered.
Supporting competencies. These are behaviors that are desirable in general, and may be necessary in practice, but do not directly involve influencing people (e.g., Written Communication, Specialist Knowledge).

Outline description of the SHL Model of Corporate Leadership

The SHL Corporate Leadership model combines the currently fashionable ‘transformational’ and ‘transactional’ themes into four main functions, each with its own characteristic types of behavior. They are listed here in terms of their relationship to the SHL Great Eight competency factors (Kurz & Bartram, 2002). These factors form the most general level of a hierarchical competency framework, which has 112 components, above which sit 20 dimensions of competency, which in turn map on to eight broad factors describing the domain of desirable behaviors at work. Research has shown that these eight factors not only provide a parsimonious but complete account of work behaviors, but they also provide a structure that relates well to the ‘predictor domain’. The latter includes all those instruments (personality, ability, motivation etc) that we use
to predict people’s potential for success at work.

For each pair of the eight factors, one emphasises the transformational aspects of leadership and the other the more transactional (or management-focused) functions. As each of the Great Eight are very broad collections of competencies, it is important to note that they are not purely transactional or purely transformational. For example, the factor ‘Interacting and Presenting’ includes competency components associated with persuasion and influence that are transformational.

The model considers the context in terms of (1) the impact area, (2) the situation, and (3) the culture within which leadership occurs. These have been discussed above. In summary:

The impact area is defined in terms of goal focus, organization level and extent of impact.
The two key situational variables are Contextual uncertainty and Pressure for change (as defined above). These define a two-by-two matrix of situations, each cell of which is likely to favor different patterns of leadership behavior.
The assessment of culture provides the means of exploring the fit between the leader as an individual and both the prevailing organizational culture and any intended culture change.

For any given project, a leadership risk assessment needs to be made. This assessment would seek an answer to the question: What would be the consequences for each of the key impact areas in this situation of a failure in leadership? Following on from that, each leadership attribute needs to be considered to assess its criticality in ensuring that failure does not occur.

1) Developing the Vision – the Strategy Domain

Developing a vision and strategy is a core function of leadership. The vision defines where the organization or group is going and the strategy sets out how it will get there. As a precursor to defining the vision and setting the strategy, the leader has to engender a shared sense of need. There needs to be a good reason for the vision and a case made for it defining a more desirable state of affairs than the current one. For this reason, effective leaders need to be able to understand the market and competitor realities and engender in others a sense of the urgency with which change is needed.

Developing the vision is not just about a lone leader having an idea, it is about that person bringing together the necessary ‘forces’ within the organization, to lead the change implied by the vision. Getting the buy in of that team, or subgroup, is a critical part of getting the strategy to the point at which it becomes a realistic vehicle for organizational change.

This function is closely related to the competencies in Creating & Conceptualizing and in Analyzing & Interpreting in the SHL Competency Framework’s Great Eight Factors.

2) Sharing the Goals – The Communication Domain

Once the vision and strategy have been developed and the leader has built the core support team needed to drive the change process, the next step is to communicate the new goals to the rest of the organization or group affected by the change. Ensuring that everyone has a shared understanding of what the new goals are is a critical part of the change process. This not only requires the effective use of all modes of intra-organizational communication (small and large meetings, emails, workshops, notices etc), but also ensuring that the change leaders themselves model the new behaviors – i.e. they ‘walk the walk’ as well as ‘talking the talk’.

Effectively serving the group’s needs in interaction with others and creating a positive impression of the group are essential aspects of leadership that are not well covered in published models.

This function is closely related to the competencies in Leading & Deciding and in Interacting & Presenting in the SHL Competency Framework’s Great Eight Factors.

3) Gaining Support – The People Domain

Gaining support for any change process involves motivating and empowering others to become part of the guiding team. It also involves the identification and removal of barriers to change – whether these are physical, organizational, social or personal. The tactics of gaining support will need to include a plan for ensuring sufficient ‘quick wins’ to demonstrate the benefits of change as well as putting in place processes for handling the problems arising from the downside of change - increased stress and uncertainty, feelings of isolation or lack of involvement etc.

This function is related to the competencies in Supporting & Co-operating and in Adapting & Coping in the SHL Competency Framework’s Great Eight Factors.

4) Delivering Success – The Operational Domain

The delivery of success is about consolidating gains and keeping the change process going until the goals have been achieved. It also entails the management of culture change. This means clarifying for people what the relationships are between their behaviors, the organization’s ‘reward structures’ and organizational success. Arguably, shifts in culture are not something imposed on organizations by leaders from above, rather they are a consequence of the behavioral changes and changes in priorities required to effect change. In other words, leaders do not change behavior by issuing a ’dictat’ that the organization’s culture has changed, they do so by changing the structures within the organization that impact on people’s behavior (the drivers and the barriers).

Delivering success is the function most clearly requiring a fine balance between leadership and management skills. It is also the function within which barriers to success can act to hinder progress. Such barrier can include:

Formal structures that are no longer appropriate
A lack of the necessary knowledge and skills in the workforce
Managers or others failing to support behaviors aimed at realising the new vision.
Inappropriate or ineffective communication systems.

This function is related to the competencies in Organizing & Executing and in Enterprising & Performing in the SHL Competency Framework’s Great Eight Factors.

Understanding Combinations of Behaviors

The Great Eight Factors provide a good basis for defining pairs of dimensions, as outlined above. For each leadership functions, we can classify people in terms of whether they score high or low on each of the two competency factors that define the function. Some illustrative names are given below to indicate how this could be used as a typology for classifying people in terms of (a) the leadership potential and (b) their actual
leadership behaviors.

Aggregating measures across all four functions provides a summary grid in which we find the four main transformational/transactional types.

Risk factors

Unlike management, leadership is a high-risk activity. If a manager fails to manage well there will be some downside, but in many cases, those they are managing will continue to work and contribute positively to the organization. If a leader provides the wrong direction, or fails to have the impact necessary for achieving a change in direction, the results can be disastrous for the whole organization.

Each of the four main functions described above has risks associated with it. These risks can be differentiated into individual and contingent risks.

1. Individual risk factors.

Individual risk factors are the personal attributes likely to create problems in any leadership situation (e.g. over-impulsiveness, inconsistency, ego-centrism, dishonesty etc). A major consideration in the approach adopted by others to leadership competencies is the notion of risk factors. Individual risk factors are behaviors that increase the likelihood of failure. Within the literature these are often referred to as ‘derailers’ (Hogan and Hogan, 1995).

Individual risk factors are attributes or behaviors that increase the likelihood of failure. Individual behavior can be divided into ‘misbehaviors’ and actions that arise from incompetence. Misbehaviours reflect personal weaknesses that result in counterproductive work place behaviors, such as aggression, abusive behavior, theft or fraud, and so on. Incompetence arises from lack of relevant knowledge or skill.

2. Contingent risk factors.

Contingent risks are problems not directly associated with the qualities of the leader as a person, but which are likely to arise in a situation and affect the leader’s ability to have the required impact. As noted earlier, certain situations are intrinsically more risky than other (e.g. where there is high contextual uncertainty, where the focus of the change is broad rather than narrow). For each of the situational types defined above, there are likely to be different patterns of contingent risk. For example, someone who is good at pushing for change may be a risk factor as a leader in a stable commercial environment, which needs leadership with the ‘If it isn’t broke don’t fix it’ mentality. Management by exception may be fine in a well-structured stable environment, but could be a disaster in other situations.

3. What can go wrong?

One approach to risk assessment in leadership is to consider it from the viewpoint of things that can go wrong, which would critically impact on the chances of successful outcomes being achieved. Problems can arise in relation to each function and through failures of either the transactional or transformational aspects of the function. The following list is intended to be illustrative rather than exhaustive.

Developing the Vision: The strategy domain

The vision is based on an incorrect analysis of the situation
The vision represents an ineffective solution for the problem, though the analysis was correct.
The need for change is not recognized in the organization.
Change is initiated when none is needed.
The urgency with which change is needed is either over or underestimated.
The leader fails to pull together the right team to lead the change

Sharing the Goals: The communication domain

The vision is not communicated effectively
The vision is not communicated widely enough
The relevance of the new goals for individuals and their work is not communicated
The change process is not communicated

Gaining Support: The people domain

People are not provided with sufficient support and assistance during the change process.
Line management are not adequately involved in implementation.
Old structures and obstacles which block change are left in place
Methods for dealing with individuals who resist the change are ineffective.
There are no quick wins.

Delivering Success: The operational domain

The change process is terminated before the change has become consolidated.
Changes do not become embedded within new organizational norms and values.
The need for ‘course corrections’ is not appreciated and the change process gets pushed off course.
The timing and nature of course corrections are inappropriate or ineffective.

Assessment strategy

The assessment strategy for the SHL Corporate Leadership model has four strands to it:

Situational assessment to identify the leadership qualities required, the culture, and the impact parameters.
Risk assessment, to evaluate the chances of success or failure, the consequences of each, and the risk mitigation options.
Individual assessment of the leader or potential leaders.
Assessment of the outcomes achieved and the specific impacts the leader has had.

This involves the assessment of three parallel sets of variables. One set relates to the individual leader, the second to the groups and teams within which the leader operates, and the third to the setting.

The leader: Individual measures:

Assessment of the individual’s potential (using, for example, SHL’s OPQ32, Motivation Questionnaire, Verify ability tests, Scenarios and other instruments).
Assessment of the individual’s behaviours (using self and other assessment of competencies), including the identification of individual risk factors.
Assessment of their impacts through performance appraisal.

Groups and teams

Leaders work within teams (such as the ‘Top Team’ for Corporate Leaders). Any assessment of a leader within a corporate setting needs to take account of the team and groups with whom they need to work.
A full assessment of leadership within an organization needs to look at more than just one person. In our new approach we advocate looking closely at the mix of people who are supporting the leader in their role.

The setting: organizational and corporate measures:

Assessment of the culture (norms and values) of the ’focus’ setting (e.g. use of SHL’s Corporate Culture Questionnaire).
Identification of potential drivers and barriers (risk factors).
Definition of the expected outcomes: the critical success factors and associated key performance indicators.

Gap analysis of differences between these provides the basis for leadership reports:

leadership potential (based on attribute measures like OPQ, MQ and ability tests) ;
leadership fit (e.g. fit against current or future Competency Requirements);
leadership behaviour (e.g. 360 Competency Assessment);
leadership development (e.g. Development Plans on basis of the above).

Rather than assessing ‘only a person’ or ‘only a situation’, it is desirable to take a ‘person-in-context’ approach to leadership development. Through multi-source ratings, it is possible to identify development needs for each set of key behaviors. The format for reporting follows the four main functions defined above: Developing the Vision, Sharing the Goals, Gaining Support and Delivering Success.

Conclusion

The leadership approach outlined here represents a functional view of leadership. It focuses on what leaders do and what impacts they can have on the effectiveness of organizations. SHL’s assessment instruments provide the tools needed to measure relevant attributes at the individual, group and organizational levels. The model of corporate leadership provides the framework for making sense of these measures and for developing intervention and consultancy programs for supporting succession planning, organizational change management and other such processes.

References

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SHL Occupational Personality Questionnaire

admin — Tue, 03 Apr 2012 05:52:58 +0000

The SHL Occupational Personality Questionnaire, the OPQ32, is one of the most widely used and respected measures of workplace behavioural style in the world. It sets a high standard of measurement excellence, providing HR professionals and business managers with relevant and accurate information to make fast and well-informed people decisions. The OPQ32 provides a clear framework for understanding the impact of personality on job performance. it is internationally recognised for its accuracy of assessment. Over 90 independent validation studies have been conducted on the OPQ over a period of 25 years, across 20 countries and 40 industries, providing concrete evidence of its power to predict performance in the workplace.

OPQ32r dimensions

The following 32 specific personality characteristics, measured by the OPQ32, can be mapped to the required competencies of a given job role.

Relationships with People

Influence – Persuasive, Controlling, Outspoken, Independent Minded

Sociability – Outgoing, Affiliative, Socially Confident

Empathy – Modest, Democratic, Caring

Thinking Style

Analysis – Data Rational, Evaluative, Behavioural

Creativity and Change – Conventional, Conceptual, Innovative, Variety Seeking, Adaptable

Structure – Forward Thinking, Detail Conscious, Conscientious, Rule Following

Feelings and Emotions

Emotions – Relaxed, Worrying, Tough-minded, Optimistic, Trusting, Emotionally Controlled

Dynamism – Vigorous, Competitive, Achieving, Decisive

Download complete information sheet & sample report on OPQ

2012 Global Assessment Trends Report

admin — Mon, 02 Apr 2012 01:19:20 +0000

The Global Assessment Trends Report is an annual indicator of assessment practices, giving HR professionals a comprehensive view of how organizations around the world measure talent across the employee lifecycle.

This year’s report presents the results of an online survey conducted in late 2011 and completed by 481 human resources (HR) professionals employed in companies headquartered throughout the world. The report focuses on organizations’ talent assessment practices with both employees and job candidates. As in previous reports, pertinent comparisons are drawn to results of the prior years’ Global Assessment Trends Reports to identify trends over time.

The report concentrates on three areas: the HR focus and landscape in 2012, the nature of assessment use in organizations, and the use of technology in HR processes. Key findings from the report are listed below:

Download the 2012 Global Assessment Trends Report

Multitasking Ability

admin — Mon, 13 Feb 2012 03:23:08 +0000

The Multitasking Ability test is a measure of one’s ability to adeptly work on more than one task simultaneously, while maintaining efficiency and effectiveness when interrupted or switching between tasks.

This test is a face-valid, split-screen simulation that is designed to assess multitasking ability. It captures the dynamic nature of the working environment by presenting the candidate with multiple types of items in a timed format. Candidates will be required to complete problem-solving items that are presented on one side of the screen, while at the same time attending to emails that are presented within an email inbox on the other side of the screen.

Time Recommended: 15 – 25 minutes (for non-timed tests)
Number of calls available: 6, 11, 12, calls and 10-minute timed versions
Number of Sittings: One
Designed for Unproctored Environment: Yes
Question Format: Call Center

Knowledge, Skills, Abilities, and Competencies Measured:

This test measures multitasking ability; the ability to shift back and forth between two or more activities. The two activities included in this test are tasks which require general problem solving ability and tasks which require reading and retention of information presented in an email format.

Download complete information sheet & sample report on Multitasking Ability

Call Center Basic Simulation

admin — Thu, 09 Feb 2012 10:34:02 +0000

The Call Center Basic Simulation tests measure a candidate’s speed and accuracy at listening and entering information in a simulated call center environment. It consists of two practice calls, and 6, 11, or 12 scored calls (depending on the version of the simulation). For each call the candidate must enter the appropriate information for 10 total fields. These fields include: first name, last name, company, address, city, state, zip, telephone number, fax number, and e-mail address. Different actors are used in each call, and the accent of the caller is varied across calls.

Time Recommended: 15 – 25 minutes (for non-timed tests)
Number of calls available: 6, 11, 12, calls and 10-minute timed versions
Number of Sittings: One
Designed for Unproctored Environment: Yes
Question Format: Call Center

Knowledge, Skills, Abilities, and Competencies Measured:

The Basic Call Center Simulation tests measures the following areas:

Calls Per Hour Rate
Number of Repeats
Number of Correct Fields
Number of Incorrect Fields
Average Errors Per Call
Gross Keystrokes Per Hour
Gross Keystrokes Per Minute
Time Taken

Download complete information sheet & sample report on Call Center Basic Simulation