Building a Leadership Culture

Have you ever wondered what makes some company's leadership so strong and others so weak?  Well, the CEO plays a key role.  Not the CEO's ability to perform, but rather the CEO's ability to set leadership strategy.

What can your organization do to avoid the risks associated with inadequate leadership and better prepare its current and future leaders for changes that are yet unforeseen? Every leader is aware of the value of a well-defined business strategy. Few, however, give thought to the leadership that will be required to implement strategies that call for changes in the direction or capabilities of the organization. Without proper leadership, even the best and boldest strategies die on the vine, their potential never realized.

So what should be considered when looking at organizational leadership?  The first step is making sure that leadership strategy is driven by business strategy and then specifying the specifics.  Some key things to consider, are as follows:

Quantity:  The quantity of leaders needed, based on current and projected positions, as typically shown on an organizational chart.

Qualities:   The qualities desired of the leaders, including demographics, diversity, background, and experience level. 

Skills and Behaviors:  Essentially, the skills, behaviors, knowledge, competencies, and abilities needed to implement the business strategy and create the desired culture. This includes general behaviors required of all leaders as well as specific behavioral competencies by level or function. 

Collective Leadership Capabilities: These are the capabilities that are required of leaders when acting together in groups and across boundaries to implement strategies, solve problems, respond to threats, adapt to change, support innovation, etc.

Desired Leadership Culture:  These are the leadership practices in use, such as collaboration across boundaries, engagement of employees, accepting responsibility for outcomes, creating opportunities for others to lead, developing other leaders, learning how to learn, adapting to change. etc.

Leadership is not just having the right number of bodies, it is what those bodies do and how they relate to one another that matters. A leadership strategy makes explicit how many leaders we need, of what kind, where, with what skills, and behaving in what fashion individually and collectively to achieve the total success we seek.

The Key Drivers are the choices that leaders make about how to position the organization to take advantage of its strengths, weaknesses, opportunities and threats in the marketplace. They are the things that make a strategy unique to one organization as compared to another and dictate where tradeoffs will be made between alternative investments of resources, time and energy.

For example, becoming more Innovative requires:

• Greater interdependence among leaders to create more effective collaboration across functions in bringing new products to market.

• The need to increase leadership involvement across functions in gathering consumer insights and translating these into profitable ideas for new products.

• Anticipating capital, space, talent implications of a rapidly expanding product portfolio.

• The need for cultural change to create a spirit of innovation versus a culture of risk aversion at top levels of the organization

Another example is becoming more Customer-Focused, which requires:

• Need to develop and implement new processes for understanding customer experiences and translating them into improved business practices.

• Creating solid linkages across the organization at all customer touch points, so that the customer experiences a seamless relationship

• Need to understand the needs of different customer segments and movinge beyond "one size fits all" approach

• Instilling a culture of customer priority and customer care

These are just some examples of how key drivers like innovation, and customer-focus, impact the leadership needs.

In creating a leadership strategy, failing to be as detailed as possible in describing the leadership culture that is required to implement the business strategy will lead to oversights later in the process that erode strategy implementation and interfere with effective performance. For example, if collaboration across boundaries is not called out clearly as a requirement in the new leadership culture, strategies that depend upon inter-unit or cross-functional collaboration are likely to run into stiff resistance from leaders who place more emphasis on optimizing the results in their own area than on helping the enterprise to succeed. Once again, it's not how many leaders are in place; it's what they actually do that determines whether the organization succeeds or fails.

No matter what stage your business is at, putting in place a leadership strategy that aligns with your business strategy, will impact your success and differentiate you from the competition.   

"When you're a manager, you work for your company. When you're a leader, your company works for you." 

- Stan Slap

Jayne McQuillan, CPA, MBA, CEPA is a strategic management consultant, and the owner of Journey Consulting, LLC, in Green Bay