Soft Skills in the C-Suite
Ernst & Young research finds high-performing companies putting more emphasis on the development of "softer" attributes in its potential C-level leaders. HR can play a part in helping high potentials develop and master these intangible skills, experts say.
By Mark McGraw
It seems the skill set of the ideal executive is evolving.
That's according to New York-based Ernst & Young, whose recent research found high-performing companies much more likely than their lower-performing counterparts to consider "softer" qualities important for C-level leaders.
In Paradigm Shift -- Building a New Talent Management Model to Boost Growth, Ernst & Young asked 596 CEOs, C-level executives, senior managers and directors what they consider to be the most important attributes a potential C-level leader should possess.
The largest number of executives (47 percent) from high-performing companies -- based on a combination of revenue growth and earnings before interest, taxes, depreciation and amortization -- said they value a potential leader's ability to lead effectively in an international business environment, compared to 37 percent of low-performing companies saying the same. Forty-four percent of executives with high-performing companies said they most desire leaders who can articulate and embody the values and culture of the organization, versus 37 percent of executives from low-performing organizations seeking the same.
Just 21 percent of respondents at top-performing firms said they most value a leader's grasp of financials, with 27 percent of low performers citing a potential leader's financial acumen as his or her most vital asset. Neither group seemed to put a great deal of emphasis on finding C-level leaders who are good risk managers, with 12 percent of respondents from high-performing companies rating risk management as an important attribute, compared to 13 percent of participants from low-performing organizations.
These figures are indicative of top organizations' desire to develop a next generation of leaders with an expanded breadth of experience, says Bill Leisy, global talent management markets leader with Ernst & Young and co-author of the study.
For example, would-be executives "getting international exposure is really important to a lot of companies," says Leisy.
An increasingly global marketplace is a key contributing factor to this particular trend, he says, as new and emerging markets require different cultural competencies.
"It's [a matter of] being able to manage in different cultures. We've seen high performers in, say Brazil, not be effective in another market," says Leisy. "It's knowing what motivates employees in different markets as well as knowing the culture."
In addition, the circumstances of the Great Recession have put increased focus on leaders' ability to manage through tumult here at home.
"One of the important softer skills is being able to not only have [diverse experience] in cultures and transactions, but [being able to] manage people through difficult economic times."
Just as leaders' skill sets are evolving, so too is the way companies approach how they measure and evaluate talent, says Kim Shanahan, managing director of Los Angeles-based Korn/Ferry International's Human Resources Center of Expertise.
"Think of the advances we have made in the assessment and training of athletes," says Shanahan. "We can now determine whether an athlete is more likely to suffer from an injury, whether he or she has the mental capacity to be an effective team player, and whether he or she can handle pressure."
The same is true for evaluating talent in business, she says.
"Many high-performing companies understand they need to look at their talent in a holistic manner, and this includes [seeking] those softer skills that can make or break an executive.
"High-performing companies tend to be more sophisticated in how they view talent," continues Shanahan, "while their lower performing counterparts are focused many times on survival, which can mask some of those critical soft skills."
Indeed, forward-thinking organizations are expanding the definition of what makes an effective leader, says Marie Holmstrom, the Charlotte, N.C.-based director of talent management and organization alignment with Towers Watson.
"Organizations really have two things to work with: They have money and they have people," says Holstrom. "So, leaders have to manage the financial side, but that's only half the equation.
"At its core, the essence of leadership is the ability to influence. By definition, [leaders'] role is not to make the day-to-day operational decisions," she continues.
"Companies have moved away from the 'command and control' decision-making style. Managing day-to-day decisions takes away [leaders'] perspective and capacity to focus. Leaders must lead through others. You don't accomplish that only with technical skills. You have to have [those skills], but to achieve the next level of success, you have to be able to lead through others."
Admittedly, the softer, sometimes-less tangible skills can be tough for HR to identify, and difficult for some would-be leaders to develop and master.
Luckily, HR has a variety of tools at its disposal to help spot leaders who possess such skills, or show the potential to develop them, says Shanahan.
"Assessment and development tools and programs have come a long way over the years," she says. "For example, there is a big investment behind learning agility. When used in conjunction with other assessment tools, one can create a powerful view of an individual, and then tailor the individual's development."
In terms of nurturing the softer skills necessary for today's leaders to excel, HR must have a clear understanding of "what positions need what experience," says Leisy.
"I'm talking about leadership positions, managerial positions, technical roles, etc.," he says. "[HR must ask], 'What type of experience do these positions need for the future?' Then the next level of the discussion becomes 'How do we get them that experience?'
"You start building it into career paths, succession plans and individual development plans, then you globally mobilize the individual – help them gain international experience, give them exposure to transactional as well as transformational and merger and acquisition-type work, put them in a shared-services environment," says Leisy.
"The measurement of [HR's] effectiveness will be on those things in the future – maintenance of the talent pipeline and the retention of high potential [employees], but more importantly, the development of those high potentials, and where they are in the organization."