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What Are the Requisite Leadership Competencies (and Leadership Potentials) of an Effective Leader?

Editor's Note: Take a look at our featured best practice, Leadership Competency Model (25-slide PowerPoint presentation). Behavioral competencies have long been utilized across many organizations to assess the competencies and potential of leaders. The competency models are prevalent due to several reasons--shared vocabulary to express the expectations from people, a basis for performance management planning, clarity [read more]

Also, if you are interested in becoming an expert on Organizational Leadership (OL), take a look at Flevy's Organizational Leadership (OL) Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

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The use of behavioral competencies in appraising the skills and potential of leaders is a norm in organizations large and small.  The competency models are omnipresent owing to several reasons—a shared vocabulary to convey the expectations from people, a basis for Performance Management planning, and a means to express the parameters for career advancement.  However, problems surface when competencies are considered the only factor in evaluating the leaders’ potential.

There are few limitations that bring criticism for the utilization of competency models in assessing leaders’ potential.  These include their extensive reliance on past behaviors rather than future potential where relevant experience is deemed a critical element in establishing a leader’s competence, complexity of execution, and clash of behavioral traits required under various competencies with one another.  These shortcomings and complexities warrant a different approach to assess the leadership potential of executives.

The Leadership Competency Model is a newer, more robust competency assessment framework that not only evaluates the skills and abilities of leaders, but also examines their potential based on psychometric data of global leaders, neuropsychological research, and past studies on successful managers.

The Leadership Competency Model is comprised of 2 distinct elements:

  1. Leadership Competencies
  2. Leadership Potential

First, let’s take a look at the Leadership Competencies.

Leadership Competencies

The Leadership Competencies are learned factors which are attained, developed, change over time, and indicate what a leader is capable of doing.  The leadership competency model encompasses 4 leadership competencies (each of which is further comprised of 2 Core Competencies):

  1. People Leadership
  2. Relationship Leadership
  3. Business Leadership
  4. Entrepreneurial leadership

People Leadership

The People Leadership competency involves 2 core competencies:

  • Inspirational Leadership: That entails establishing leadership impact by projecting confidence, expertise, and authority to energize and motivate people to support you.
  • Execution: Entails driving execution and achieving results through other people by tracking team performance, building and aligning capabilities, and motivating teams.

Relationship Leadership

Relationship leaders develop knowledge and skills to inspire people and develop strategic relationships.  The Relationship Leadership competency involves 2 core competencies:

  • Influence: Entails influencing people with varying perspectives and interests using interpersonal persuasion approaches, and getting their agreement to support key endeavors.
  • Collaboration: Entails creating an ecosystem of team work, by generating support from people across the enterprise, and recognizing and capturing synergies internally and externally.

Business Leadership

At the top maturity level of Business Leadership, leaders develop competencies to set future vision and make decisions that deliver shareholder value.  The Business Leadership competency involves 2 core competencies:

  • Direction: Entails setting clear direction and priorities for cross-functional teams, creating a shared purpose and objective, and keeping teams focused on one vision.
  • Business Judgment: Entails making decisions related to effective resource utilization and maximizing commercial return.

Entrepreneurial Leadership

At the top maturity level for entrepreneurial leadership, leaders champion innovation and build and sustain enterprise capabilities.  The Entrepreneurial Leadership competency involves 2 core competencies:

  • Competitive Edge: Entails driving change by improving existing practices, inspiring new ideas, and creating an ecosystem for people to innovate.
  • Building Talent: Entails building abilities to gain competitive advantage by developing the team and providing opportunities for diverse high performers to grow.

The second part of the Leadership Competency Model framework breaks down the dimensions to Leadership Potential.  These are hardwired or inherent factors which are hard to develop, stable over time and indicate how the person is.  The Leadership Potential has 4 major components:

  1. Change Potential
  2. Intellectual Potential
  3. People Potential
  4. Motivational Potential

Are you interested in understanding more about these 4 Leadership Potentials?  To learn more about developing Leadership Potential, as well as more in-depth discussion on Leadership Competencies, you can learn more and download an editable PowerPoint on the Leadership Competency Model here on the Flevy documents marketplace.

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About Mark Bridges

Mark Bridges is a Senior Director of Strategy at Flevy. Flevy is your go-to resource for best practices in business management, covering management topics from Strategic Planning to Operational Excellence to Digital Transformation (view full list here). Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. Prior to Flevy, Mark worked as an Associate at McKinsey & Co. and holds an MBA from the Booth School of Business at the University of Chicago. You can connect with Mark on LinkedIn here.

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