How To Measure The Contribution Of Leaders

Measure Success

More has probably been written on leadership than on almost any other management subject; and organisations across the globe collectively spend hundreds of billions of dollars annually sending their leaders to business schools and leadership programmes.

There are hundreds of leadership theories, all of which are probably apt in the appropriate context. Yet almost all of these focus on the attributes and behaviour of leaders which provide the basis for the selection, development and evaluation of leaders. This is quite appropriate because leadership behaviour is a key ingredient of organisational culture and consequent performance.

In a volatile, uncertain, complex and ambiguous (VUCA) world characterised by disruption and connectivity, leaders face enormous challenges, not least of which is the need to see the world through different lenses and behave accordingly.

One of the greatest challenges is how to evaluate leadership performance. I have had the privilege of visiting top global and South African organisations to engage with them on leadership and talent management. In almost all organisations leadership culture is a key element of their success. However, most of them measure leadership performance through 360 degree assessment or culture surveys and hence the measures are focused on the behavioural aspects of leaders.

While almost all organisations have a business strategy and subordinate strategies for different functions, I have never encountered an organisation that has a leadership strategy or agenda. The value of such an agenda would lie in the ability to set targets and measure concrete performance of leaders on key leadership issues that the organisation wishes to achieve.

Increasingly organisations that are admired by their peers and other stakeholders have a reputation that enables them to attract talent and customers and the confidence of the financial markets.

So what are the items that may be included in a leadership agenda which can be defined and cascaded down to all the different leadership levels of the organisation?

Garnered from experience and analysis of various CEO reports provided by large consulting organisations, the following are some generic, global issues. However, they will be defined according to the context of each organisation and there will be many that are specific to certain organisations only.

Organisational design

In a world characterised by disruption (whether technological or through disruptive business models) and connectivity, organisations need to be agile, innovative and entrepreneurial. This cannot happen where silos and internal rule-driven procedures are the dominant architecture of organisations. The successful organisations of the future will need to be designed holistically, to enable a rapid response to changes in their environment with a leadership culture that encourages networking, collaboration and knowledge generation.

Furthermore, leaders need to create an environment that incubates new business models and innovative practices and products using modern, systems thinking-based processes, such as design thinking.

The contribution of each leader in respect of organisational design can be clearly defined and easily measured.

Diversity

Diversity, in so many spheres, is a global issue. In many cases diversity is a passive affair with issues around diversity dealt with as they arise. Certainly, most admired organisations have a clear agenda on issues such as women in the workplace, managing multiple generations, racial and cultural diversity, and disability and access, among others.

In particular admired organisations create a culture where different perspectives are encouraged, and recognise that innovation occurs when diverse groups connect to develop unique solutions to business issues.

The proactive initiatives that organisations can drive to ensure effective promotion of diversity are quantifiable, and leaders can be measured on their contribution to these initiatives.

New world of work

Technology and new organisational designs can result in huge savings for organisations and motivate people to fulfil their desired lifestyle.

Admired organisations have reconsidered not only the engagement contract with staff, but also the ‘psychological contract’. This is going to be an area of increased focus which leaders will need to embrace and will require different approaches to leadership. In fact, an organisation’s talent may not consist of employees and may, for instance, be a supplier.

Once again, proactive organisations will have practices in place that will benefit the organisation and its talent, and leaders can be measured on their contribution to such initiatives

Sustainability

The sustainability conversation has shifted from photo shoots of CEOs at community or environmental projects to a fundamental understanding of the role of business in society. Traditionally, sustainability projects were allocated to people who sat on the periphery of the business and looked after ‘social responsibility’ from a philanthropic perspective.

In admired organisations, such as Unilever and Woolworths, sustainability is central to strategy and the identity of the organisation. The concept of shared value provides a very different perspective to strategy and organisational identity.

This is a particularly important issue in developing economies where issues such as governance, global inequality, environmental degradation and other factors affecting sustainability are intense.

Leaders can be measured on their contribution to organisation-wide strategies and their leadership contribution to a culture driven by values that talk to sustainability at multiple levels.

VUCA

The business environment is increasingly volatile, uncertain, complex and ambiguous (VUCA).

Leaders need to demonstrate a mindset or mental model that is relevant to such an environment.

This requires the ability to identify issues at the edge of the radar screen that may impact the organisation, and respond rapidly.

It also requires an ability to think differently and apply systems thinking-based problem-solving and leadership practices at a level of the individual or at the level of large systems change. Traditional linear and analytical problem-solving processes will not always be effective in a VUCA world. Rigidity is the antithesis of the mindset of a VUCA leader.

It is not difficult to identify a leader’s application of systems thinking-based initiatives and problem-solving processes which can have a profound impact on organisational effectiveness.

Conclusion

Few organisations have the ability to measure leadership performance. Yet leadership is a key factor in the success or otherwise of the organisation.

A leadership agenda has the potential to align leadership to the business strategy and across all levels and parts of the organisation.

AUTHOR:

Terry Meyer: Strategy and leadership consultant, academic, author, blogger, keynote speaker and part-time faculty member of USB-ED.

SOURCE:     http://www.leader.co.za

IMAGE CREDITS:     http://www.loyalmark.com

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