Leader A succeeds with an inventive, self-motivated team that sparks innovation and creativity. Leader B successfully navigates massive change stemming from a move into new markets. But put Leader A, who is loath to micromanage, at the helm of Team B and things start to unravel. Similarly, put Leader B, who thrives on rigorous protocol, in charge of the free-spirited thinkers of Team A and morale will plummet.
“ An alarming number of companies must deal with newly minted leaders failing at the jobs for which they have supposedly been groomed”
Such mismatches are common across industries, geographies and roles, in almost all organizations. And it’s starting to show. Nearly half of all leaders who move into new roles fail to meet their objectives, and two-thirds don’t adapt quickly enough to meet their goals, according to CEB, now Gartner, analysis. As a result, an alarming number of companies must deal with newly minted leaders failing at the jobs for which they have supposedly been groomed.
What’s going wrong — and what next?
The leadership dilemma stems from two contrasting forces — the digital workplace, which is irrevocably changing how work is done, and the static approach to assessing, selecting and developing the next generation of leaders. Most leadership models assume that the qualities of effective leaders look pretty much the same, leading to jack-of-all-trades candidates with similar backgrounds. But in an environment of greater complexity, collaboration and change, there is a need for more tailored leaders. A solution to this is offered by a large three-year study on what makes a leader effective in today’s work environment. This highlights the importance of the “work context”— looking beyond the responsibilities of a role to consider the unique situations and challenges specific to the leader, team, organization and external environment. Out of hundreds of combinations of work contexts from product, strategy, team and organizational dynamics, 27 contexts matter most to making or breaking leaders’ performance, up and down all levels of the hierarchy. Organizations that consider work context are able to produce leadership predictions three times more accurate, on average, than a one-size-fits-all approach.
“ The trick is to match leaders to challenges for which they are best suited”
Work context should determine how organizations assess the relative merits of leaders, their suitability for a particular role and their performance within that role. The trick is to match leaders to challenges for which they are best suited, and to align leadership development to current and future challenges the leader may face. The four key concepts listed below underpin this context-specific approach to managing leaders.
Context makes or breaks leader success
According to CEB, now Gartner, research, leaders at all levels of an organization navigate an average of seven challenges simultaneously, and nearly 25% face nine or more. As the number of challenges increases, the more likely it becomes that leaders will fall short of their objectives. The data helps explain the high failure rate for leaders in complex roles that involve multiple challenges. Certain challenges are also more consistently difficult for all leaders. Frequent leadership changes, a culture of low support or collaboration, high uncertainty and high-conflict work culture have the strongest negative impact on leader performance. Of the leaders facing all four of these challenges simultaneously, a majority (68%) face performance issues.
Match the right leader to the right challenge
Although contextual challenges can undermine leader performance, it doesn’t by default spell failure for all leaders. In fact, leaders thrive when facing challenges that are suited to their personality and experience.
“ Experience counts for 34% of leader performance”
For example, in situations that call for growth by keeping costs competitive, the best leaders are methodical, organized, detail-oriented and competitive, and thrive on being busy. By contrast, in a work environment requiring creativity and innovation, the best leaders tend to be ambitious, creative, collaborative and optimistic. The ideal traits of a leader completely depend on the challenges they are expected to handle, and organizations that understand this can match the right candidate to the right role.
Attributes and experience count
Personality traits are not the only factor to consider to select the right leader; experience counts for 34% of leader performance. For example, in companies going through mergers and acquisitions, leaders perform better if they have experience with cross-cultural teams and integrating workforces. The bottom line is that as important as it is to match leader traits to the right role, organizations should also look at the candidate’s experience with similar challenges in the past. What’s required is good workforce planning that not only matches leaders to the right kinds of challenges, but also considers whether their prior experience will help them handle challenges in the future.
Leadership roles aren’t all the same
One leader’s role can differ dramatically from another’s, even if they have the same title. A CFO in a fast-growing company has a very different job from the CFO in a company focused on improving profit margins. Leader performance is at its best and the risk of failure is lowest when an individual’s traits and experience are matched to the challenges in a specific role. An objective, data-driven and context-specific approach, instead of the current one-size-fits-all method, can enhance the predictive power of leadership assessment by 300%.