Remember ‘core competencies’? Coined in 1990 by Prahalad and Hamel, the term refers to those abilities a business has that are distinctive and, therefore, a foundation for its strategy.
More recently the word ‘capabilities’ has been applied to those things a business must do well to succeed, even if they are not wholly distinctive. And that’s not just consultants trying to get the Christmas party going by serving old wine in new bottles. These ideas matter, particularly when thinking about leadership.
Make leadership capability central to business survival and success
Although most senior executives agree their firm’s leadership needs improving, the business world seems only now to be treating effective leadership as a true pre-requisite for success. No business will outperform its leaders. Moreover, if success means getting to a new and more ambitious place that demands new leadership skills, behaviours and knowledge, then leaders must not just keep up. They must get ahead of the game. In some cases, a firm’s approach to leadership might even be made distinctive enough to be part of its strategy, not only the means of executing it. But these levels of leadership capability won’t simply emerge; they must be consciously nurtured. Given the levels of change likely in 2018 and beyond, ‘build leadership’ should be permanently on every CEO’s list of New Year’s resolutions.
Use the demands of strategy and change to shape the development of leaders
Only a minority of senior executives think their leadership development programmes have real impact, mostly because the linkages between leadership development and strategy are too loose to drive concrete outcomes. We think too much effort has been focused on ‘leadership fundamentals’ and too little on the special leadership demands arising specifically from each business’s strategy – and the change it implies. For leadership development to pay off, it must be targeted mainly on the needs of the business – the only context in which individual career agendas can then sensibly be addressed. It merits the investment, the rigorous thinking, and the attention to execution that would unquestionably be devoted to other capabilities like, say, ‘digitizing the customer experience’ or ‘running world-class logistics’. Even at Christmas there is no free lunch.
Create an environment that will respond to new leadership ideas and behaviours
If you have money to burn in 2018, run your leaders through an expensive development programme and then drop them back into an unchanged environment. Yes, they’re the ones who will have to change the business, long-term. But for them to gain traction – and to give change its own momentum – firms should selectively modify their organisations to nudge behaviour in the right direction and cultivate the ground for new leadership thinking. If Father Christmas says, ‘Listen up, elves. I have a vision for more innovative toys’ and yet doesn’t provide new tools in the workshop, the people in the pointy hats will be yelling, ‘Nice try, Santa, but no cigar’.
Whether you are leading, developing leaders or simply working at your executive bench, we wish you ‘Season’s Greetings’.