Leadership isn’t working….

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Published by
Jan Hills
March 19, 2018

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Could it be because of a refusal to appoint the best rather than the usual?

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Leadership is for many organisations a top priority say CEO’s. In 21st– century it’s no longer considered responsible, ethical or profitable to just keep on running things the way they always have been. Leading an organisation today is much more challenging: markets are changing rapidly, new ideas and new competitors are springing up, and customers have different expectations.

And on top of all this, social media and the accessibility of information mean a leader is no longer a nebulous name in the annual accounts but a person who is in the public eye and who will be called out for what is judged to be poor behaviour.

Think of the most notorious cases of corporate mismanagement of recent years, and how closely the values and management styles of their high-profile leaders are associated with their organisation’s transgressions: Martin Winterkorn and the Volkswagen emissions scandal, Sepp Blatter and the culture of corruption at FIFA, Travis Kalanick at Uber, Philip Green at Britain’s Arcadia…

It begs the question “Are we appointing the most capable leaders? ” dots

The data from the Catalyst research showed that talent management professionals and senior leaders collude, all be it inadvertently, to perpetuate the appointment of leaders who are substantially the same as the current leadership.

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The same old…

A report by Annika Warren for Catalyst on talent management systems found that organisations’ leadership frameworks and talent management processes are designed in ways that both reflect and continue to support stereotypes of leaders. The result is, even today, they disadvantage women and men who do not exhibit a traditional masculine style of leadership, creating a vicious cycle in which traditional men continually dominate leadership positions.

The data from the Catalyst research showed that talent management professionals and senior leaders collude, all be it inadvertently, to perpetuate the appointment of leaders who are substantially the same as the current leadership.

The report describes a vicious circle starting with senior leaders wanting frameworks and promotion criteria to be consistent with what they are comfortable with and that is stereotypical masculine descriptions of high potential and leadership. This need for comfort (this is the brain’s certainty bias at play) is further compounded, the report says, by HR professionals who implement these wishes rather than challenging them and fail to put in place enough checks and balances.  Even where frameworks are de-biased the informal processes which override the formal and result in bias decisions being made.

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Despite competency frameworks and talent processes being in place rarely do the explicit statements of what it takes to get promoted and be a leader match the implicit decision-making

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What current leaders look for in future leaders

Senior leaders favour candidates and definitions of high potential that mirror the traits of the current leadership team. Given most leadership teams are made up of men and most of those men behaviour in stereotypical ways expected of male leaders this effectively maintains the bias against women and leaders who favour a different style.

Despite competency frameworks and talent processes being in place rarely do the explicit statements of what it takes to get promoted and be a leader match the implicit decision-making, which leaves employees looking to senior leader role models for cues. Most businesses have male-dominated senior leadership teams, which makes masculine norms more likely to be conveyed by role models. Not surprisingly, employees in most organisations perceive the masculine leadership traits being displayed as those most valued in the organisation.

The Catalyst research shows that when left to their own interpretations, men and women resort to gender stereotypes to define characteristics of effective leaders. This finding is consistent with implicit bias tests. Stereotypes of leadership are so embedded even feminists define leadership using masculine traits.

And HR talent managers certainly do too. The research found talent managers define leadership in stereotypical masculine terms. And competence frameworks and promotion criteria tend to favour these traits both in their formal descriptions and informal application.

One of our 26 year-old female survey respondents from Eastern Europe told us that in her organisation: “There is a promotion bias towards males… most senior members of the firm are male and [this] limits the ability to have a champion or mentor who can fight for opportunities [for you].”

To compound this issue, research by McKinsey found 93% of companies said they had clear criteria in performance evaluations only 57% of employees recognised this. Research on performance feedback and evaluation finds women still have to outperform men and are criticised for having typical feminine leadership traits and if they have adopted typical masculine traits are also penalised. There is also evidence that women receive more personal feedback, vaguer feedback and less feedback directed at performance improvement or career strategy. In particular women lack advice and opportunity to get experience in the essential skills for senior leadership that is business, strategic and financial skills and experience. And whilst there is less research on the impact for non-traditional male leaders there is evidence they suffer similar issues.

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Catalyst indicates that “No matter how women choose to lead, they are perceived as ‘never just right…’ If women business leaders act consistently with gender stereotypes, they are considered too soft. If they go against gender stereotypes, they are considered too tough.”

dots How do women lead?

Management Research Group (MRG) has studied behaviours and competencies in 13,100 leaders from more than 15 countries and found that women place more emphasis on three clusters of skills:

  • Behaviours that support transparency and connection: including enthusiasm, feedback, communication, and empathy
  • Accountability and results: including goal attainment, leadership responsibility and the willingness to be forceful
  • Execution: being organised, attending to details, and following up to ensure implementation is on track.

By contrast, men believe leadership is about:

  • Thinking strategically: contemplating both conservative and innovative options, and acting independently
  • Being cooperative, asking for assistance, and delegating to others
  • Persuading others to endorse their ideas and proposals.

These are all important leadership competencies, and it’s clear that any leadership team will be stronger if it embraces all of them. But if the frameworks to identify and select future leaders are defined by men, then women and their skills will continue to be under-represented.

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Zenger Folkman has analysed feedback on nearly 16,000 male and female leaders worldwide and found that women were rated 3% higher on overall effectiveness, compared with men.

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What makes an effective leader?

But which “brand” of leader is most effective? When you look at the data it’s hard to understand why traditional men continue to dominate leadership when women (and men with ‘feminine’ skills) actually out-perform them.

Assessed for competency by their bosses, their peers and their direct reports, women were rated higher than men on twelve out of the twenty-two skills measured by MRG. Including various forms of interpersonal effectiveness and credibility, and the two overarching leadership skills: overall effectiveness and future potential.

Men scored equally with women on seven and were rated higher than women on just three leadership competencies: business aptitude, financial understanding, and ability to see the big picture. (Note: the criteria for promotion commonly cover many skills, but these are usually set as the key determinants for promotion.)

Not convinced? Let’s look at a larger data set.

Leadership development consultancy Zenger Folkman has analysed feedback on nearly 16,000 male and female leaders worldwide and found that women were rated 3% higher on overall effectiveness, compared with men. (This may not seem an impressive advantage, but on a sample of this size it is statistically significant.)

This is powerful evidence of how stereotypes override evidence of actual effectiveness: the media and myths override the facts. Women take heart: not only can you do it, you are doing it.

What’s more, women appear to have a valuable ability to keep improving. According to Bob Sherwin, COO of Zenger Folkman, women’s significant improvement after the age of 40 can be attributed to achievements in a competency called “Practicing Self Development,” which is a measure of the extent to which people ask for feedback and make changes based upon it. Men get worse at doing this as they get older.  Women get better at it.

The bottom line…

A 2016 study by the Peterson Institute for International Economics and EY analysed results from 21,980 publicly traded companies in 91 countries and found that having women in at least 30% of leadership positions adds 6% to net profit margin.

According to McKinsey, companies across all sectors with the most women on their boards of directors consistently outperform those with no female board members – by 41% in terms of return on equity, and by 56% in terms of operating results.

Maybe like the pay gap the requirement to report how leaders are appointed and their performance measured by not just the boss is the way forward. Companies were named and shamed on their pay figures and whilst it’s too early to tell if change will happen there is energy and noise about it which is hard for organisations to brush aside.

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