Five Leadership Competencies
Five Leadership Competencies
Five Leadership Competencies
Success is based on ones ability to see the future and act decisively upon it.
Whether your firms transition to new leadership is five years, ten years or twenty years out, to succeed with leadership succession, every company needs to strengthen five major leadership competencies. This white paper lays the preliminary groundwork for the learning the skills that support leadership succession, as well as the development of key employees, high-potential employees, and the next-generation team. Right now, more people are retiring from their own businesses than ever before. At the same time, the next generation of business owners the thirty-five to forty-four year olds is fifteen percent fewer in number than those they are replacing. Scary? Yes and no. For owners who are retiring (or who want to retire), the situation is a challenging one, but one that holds surprisingly good potential for outcome. These advancing entrepreneurs effectively managed will be forty-four percent more profitable and fifty percent more productive. The Corporate Leadership Council surveyed eight thousand leaders who report that people management skill is the most important attribute of effective leaders. Well-managed talent also typically produces fifty percent more client loyalty. Finding and keeping the right people to lead a company into the future frequently requires new skill sets. Management often overlooks staff with true entrepreneurial qualities and potential because young entrepreneurs do not always play by the rules. Using the Myers Briggs Temperament Instrument (MBTI), we are able to help key people identify natural entrepreneurial strengths. Once identified, setting entrepreneurs on their success path will reap great benefits for the company. Doing so, however, involves an investment of time, energy, and resources. These energetic and ambitious individuals will need focused mentoring, training, and coaching. The long-term payoffs are critical and significant. These entrepreneurs will become fully committed to the business and will be the key players in the business growth. People, especially talented people, are any business most expensive resource. They are
2009 Sandy Blaha, David Rippe 2
The Five Leadership Competencies Conducting Difficult ConversationsThe First Leadership Competency
Weve all had to face challenging issues and have had to conduct difficult conversations. Most, if not all of us, have tried to avoid confronting a coworker, peer, or subordinate. Avoidance seldom works out. In fact, the problem only gets bigger and unwieldy for everyone involved. When it comes to succession planning it is crucial to face some hard truths. So, what are some of those difficult conversations that are typical in the move from the first to the second generation? Imagine the current stockholders as the hub of a wheel. The entire company has revolved around this particular owner or a set of owners. As high potential talent matures, they start to look at each other, noticing for the first time what kind of decision-making, people skills, and judgment the other people around the table have. They might ask, How do I feel about being a future partner with these people? Answering this question might prove to be a difficult conversation. These new leaders must be able to conduct all sorts of difficult conversations about their roles in working together, their responsibilities, and the expectations they have of each other. Next generation leaders also need to be able to make controversial business decisions at times to help ensure the health of the company. Many techniques are available to improve skills in this area. One highly recommended method is the creation of a study group with key employees using the book, Crucial Conversations. This material can be used in both your personal and professional life. It teaches you how to: Stay focused on your goals even when emotions run strong; Increase awareness of warning signs that a conversation is about to take a turn for the worse; Make it safe to talk about almost anything; Create healthy dialogue even when you feel scared, angry, frustrated or hurt; Say potentially hurtful things in a way that minimizes defensiveness;
Weve facilitated Crucial Conversations workshops as authorized instructors to our clients over the years. Many have stated that it is the single most powerful and effective thing they have ever done for their company. It is an essential tool. Once you have mastered how to conduct difficult conversations and learn to use it effectively with the other four competencies it is a proven, powerful process for aiding transition.
High-potential people need to learn how to empower their teams to step up with them. As individuals in a company rise to meet new opportunities, they must delegate more effectively to the people behind them, letting go of some of their duties and providing new opportunities for others. To key employees, this process is analogous to walking through an open door. Imagine that an owner has built a doorway to the future and feels that he has invited the key and high-potential people through that doorway. The owner is standing on the other side, inviting the next generation to walk through that doorway and meet him. Remember, the owner himself was a self-starter and entrepreneur; that is what he did to start the company. But the next generation is within the owners company, and that generations experience and qualities will be different from the owners. Notice that the doorway discussed above, built by the owner, looks very different to the people on the other side. The key people and the high-potential employees are on the other side of the doorway, and some of them are saying, What doorway? When did you build a doorway? Others are saying, Why did you lock the door? Still others are saying, I see the doorway. I see the way through the doorway, but theres a jungle on the other side. Are you going to give me a machete so I can create my own pathway in the jungle? To combat the many types of perceptions, the owner must make sure that each person first sees the doorway. Then each person must have the experience of the open doorway, accomplished by empowerment, handing each one the tools they will need (the machete skills, experience, training and mentoring) as he or she goes through the door. Then employees can get through that jungle on the other side, and create their own pathways into the future. The hesitation process also has to do with trust. An owner, to let go, must trust that the next generation will care for the business and the company the way he has. The next generation must learn to behave as the safety net, allowing nothing to fall through. The owner has spent a lifetime building the reputation of the company and does not want to risk its reputation in any way.
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The Five Leadership Competencies Developing a Cohesive Vision for the Futurethe Fifth Leadership Competency
What is the power of an understood and inspiring vision of the companys future, and what happens without it? The same question can be asked of the next-generation team: What happens if they do not have a unified, understood, and inspiring vision? How do they step into leadership without it? The power of the owners vision is cohesion and alignment, and once everybody sees the same picture, it is amazing how quickly visions come to fruition. In one case, the last founding partner in a company was transitioning out, with seven new incoming stockholders. In retreats and strategic planning sessions, they identified a goal to reach twenty percent profitability for the first time in the history of the company (previously, profitability had not been a focus of the company). For one year, the nextgeneration team met every month to look at their financials. That year, the company met its profit target goal for the first time. Why did that happen? Because the company created a vision, structured a process and worked it. By setting the goal of becoming a profitable company, they committed to attain industry level profitability. They still loved their craft and now focused on loving the business as well. These same individuals came away from the retreat with a newly named managing partner and a new chief financial officer. Together with the marketing/human resources partner, they formed the new executive team. Because the team was able to significantly increase the profitability of the company (which also helped fund the ownership buyout), and had taken on the day-to-day management of the company, it became easy for the founding partner to reduce his work to halftime and begin the careerculminating work he had envisioned for himself. Another company created the vision to move from renovating hospital suites to
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Summary
So there you have it, The Five Leadership Competencies: Secrets to Successful Leadership Succession. Again, it doesnt matter whether your firms transition to new leadership is five years, ten years or twenty years out, to succeed with leadership succession, every company needs to strengthen these five major leadership competencies. 1. 2. 3. 4. 5. Conducting difficult conversations Letting go Coaching and mentoring Strategic Planning Developing a cohesive vision for the future
This white paper only scratches the surface of the myriad considerations and complexities of succession planning. But it does layout the basic learning skills required to develop key employees, high-potential employees, and the next-generation team.
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We are available to assist you in your succession planning transition. We offer a robust array of workshops, webinars, seminars, audio CDs, books and resources as well as consulting and coaching, including: Define and Leverage Your Personal Leadership Style Failsafe Exit Strategy The Leadership Mindset Stepping Stones: 5 Essential Steps for Transition Success The Fine Art of Delegation: Tangible Skills for Leadership Growth & Sanity Mastering the Rockefeller Habits executive workshop Crucial Conversations In addition, we offer a number of valuable free resources on our website at www.sandyblahaperformanceconsulting.com.
About Us
Sandy Blaha, president of Denver-based Sandy Blaha Performance Consulting, is an Exit Planning company that increases the wealth and success of owners, individuals, teams and companies engaged in legacy ownership and leadership transition projects. We focus on strategy, organizational structure, leader development, capacity building, executive and team coaching, execution discipline and on maximizing your return on your investment. Sandy has worked with owners and senior executives nationwide to help them leverage their roles to their highest and best uses, develop effective management teams, and to develop exit strategies, plan for retirement, and insure their companies legacies using effective delegation. We also work with high potential personnel to fully develop their capabilities and align their strengths with the companys direction and key measures of performance. Sandy is also an accomplished and highly sought after speaker, including frequent presentations at industry conferences such as the American Council of Engineering
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