Academic journal article The McKinsey Quarterly

Young Lions, High Priests, and Old Warriors

Academic journal article The McKinsey Quarterly

Young Lions, High Priests, and Old Warriors

Article excerpt

Calibrating the amount of leadership you need

New metric: effective leadership days

The "algae" phenomenon

Effective leadership is about corporate capacity - not personal achievement

What prevents most organizations from going beyond the ordinary is insufficient leadership capacity. Reining back aspirations, settling for longer, easier deadlines, and hiring unproven talent from elsewhere may seem the only solutions for under-led organizations. But there is another way. CEOs who think specifically about leadership capacity stand a far better chance of getting their organizations to push through the barriers of normal performance.

Faced with unprecedented challenges in the marketplace, most senior executives today are busy changing direction, rebuilding capabilities, right-sizing their workforce, and reengineering operating processes. Like the skipper of a champion sailing team, they are trying to make their ship sail better than ever before. Many of these executives will fall short of their aspirations, and a good number, despite valiant attempts to steer a course, will find themselves drifting with the tide.

Rarely will the problem be poor strategy or the lack of a sound implementation plan. Most often, it lies in a mismatch between the leadership capacity available in an organization and the scale of the task at hand. Most companies simply do not have the quality or quantity of leaders they need for the challenge they face.

The leadership training programs that flourish in many companies are not the answer. Though helpful in stimulating individuals to become better leaders, they seldom address the leadership dynamics of whole organizations, the issue at stake here.

Fortunately, there is good news for CEOs. Proven ways do exist to build leadership capacity quickly. And those who take the time to assess and develop the leadership capacity their business needs will find themselves well down the road toward extraordinary performance.

Dangerous assumptions

Compared with the time and effort lavished on strategy, benchmarking, and implementation planning, relatively little attention is paid to doing something explicitly designed to ensure adequate leadership. Key questions are overlooked. Who has the skills to drive individual initiatives? Can these people be released from their regular jobs? How will they be replaced? What risks are we prepared to take to stretch people and give them a chance? Above all, will those chosen to take on leadership roles be up to the challenge?

Executives often make the following dangerous assumptions:

1. They assume that leadership is a given. When a CEO concludes that the current leadership is too few in number or already overstretched, the instinctive response is to allow more time for implementation, accept a gentler pace, and/or shoot for less ambitious targets. But in an unforgiving marketplace, such compromises are seldom good enough.

One manufacturing company extended its deadline for competitive parity in quality and cost in one of its product families by two years because "managers are already going as fast as they can." While it moved forward at a "more reasonable" pace, the competitive gap widened. Two years later, the entire product family collapsed, causing plant shutdowns and thousands of job losses.

2. Another mistake is to assume that leadership exists only at the top. Some CEOs think that leadership capacity is simply what their direct reports can handle. Their tendency is to load more and more tasks onto the top team - most of whose capacity is already occupied in setting a direction, delivering short-term results, and ensuring the integrity of corporate governance. Horsepower is lacking: a three-ton truck cannot be driven by a lawnmower engine. Eventually, under-led efforts get bogged down, at great cost to morale and performance.

3. Managers also often assume that imported leadership provides instant capacity. …

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