Developing Leaders and Organizations for Breakthrough Results
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The Leadership Competencies That Truly Matter in Today's Challenging Times

Since the mid-1990s, interest in leadership has skyrocketed throughout the corporate world. The recent economic crisis has done nothing but intensify the interest and the need for exceptional leadership. It is increasingly viewed as one of the most important keys to organizational growth and change and creating and sustaining competitive advantage. It may be even more key to survival and recovery during these challenging economic times. The economic crisis has clearly and measurably shifted the context. Customers are more difficult to get and keep, profit margins are slimmer, cutting and managing costs is more critical and many employees are living in a constant state of anxiety, stressed by worry about their jobs and over worked. So, what's a leader's role in these challenging times and even more importantly, for our purposes in this article, what competencies do our leaders need in order to be successful and help drive the change that will prepare us for the recovery and beyond? Clearly, we must understand how to align skills and decisions with desired business results, but even before taking that step we need to understand the basic competencies that truly matter now and then build from there.

Let's look at three sources of data and insight that will help us understand the critical competencies required for success in today's challenging marketplace. The first is a major new study conducted by i4cp in partnership with the AMA in August of 2009 in which they solicited responses from over 6000 managers and senior leaders in a wide range of industries on the question of what's a leader's role in these trying times, and what competencies do leaders need to succeed. They found that three competencies clearly came out on top:

  • Knowing the business
  • Knowing the customer
  • Ability to execute strategy

It's clear that in tough times, companies need leaders who are capable of the nitty-gritty details and none of the details are more important than knowing the customer. They also need to act on this knowledge, and that means excellent execution of the strategies that serve those customers. They found that, while these three competencies were the most critical today there were three additional ones that characterize the most successful leaders in their organizations currently. These were:

  • Building good relationships
  • Good communication skills
  • Creating an environment of trust and respect

The second research study we'll examine was recently conducted by the Center for Creative Leadership and was completed in June of 2009. They found that while financial and operational decisions are taking priority over talent management in the short-term, today's challenging times also underscore the importance of effective leadership over the longer term. Layoffs, early retirements, and dramatically changing market realities are adding another layer of complexity to companies' understanding of what they need in terms of talent. Predictably, the study showed that crucial skills in today's organizations are insufficient for meeting current and future needs. Among many other findings and recommendations, the study contributors found that there are the "top five" competencies that are lacking to meet today's immense challenges. They label this as "the current leadership deficit." The five competencies are:

  • Inspiring commitment
  • Strategic thinking and planning
  • Leading people
  • Managing change
  • Developing employees

The third and final research we'll include in our analysis of critical leadership competencies is a seminal work done by George Klemp from Cambria Consulting who is one of the true thought leaders in the area of conceptualizing, identifying and utilizing competencies. George identified the common elements among leadership competency models in 42 top global companies. He set out to discern whether there was a set of leadership competencies that could be termed "universal" as distinct from those that represented situational models. He found six key competencies or practices which he identified as "Top Leadership Practices" including the following:

  • Develop people
  • Get results
  • Focus on the customer
  • Communicate
  • Build business relationships
  • Set vision and direction (strategy)

So, what can we learn from a quick review of these three studies of leadership competencies and what does it suggest that we should be focusing on in today's crazy environment? It's rather interesting and instructive to note that all three studies identified five competencies that can be used to amplify what's critical in today's context while necessary over the long run as well. They include:

  • Understanding and focusing on the customer
  • Setting and executing strategy
  • Building relationships
  • Communicate
  • Developing People

It seems clear that these competencies reflect what is urgently needed to succeed in challenging times; understand and focus on the customer, be absolutely clear about where were going, build relationships within the organization and externally, communicate with stakeholders constantly and develop people to support them in meeting today's challenges and prepare them the future.