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Six Things We Know About Effective Leadership
By Ryne A. Sherman, Hogan Assessment Systems

The fate of any organization is critically dependent upon its leadership.1 Organizations with effective leaders repeatedly outperform organizations with ineffective leaders. Economists estimate that CEOs account for between 17-30% of the variance in firm financial performance.2 However, organizations are notoriously bad when it comes to identifying effective leaders. In fact, a recent Gallup poll found that 85% of the global workforce is either not engaged or actively disengaged at work, and that is the result of poor leadership.3 There are many reasons for the persistence of bad leadership, but three of them stand out among the rest. First, when choosing leaders, organizations succumb to the allure of charming employees who are skilled at playing corporate politics to advance their own careers. Second, organizations tend to rely more on gut and intuition when it comes to staffing decisions, rather than making decisions grounded in science. Third, organizations don’t know what competencies are required to be an effective leader.

So, what does effective leadership look like? Unfortunately, you won’t find the answers in the leadership section of your local bookstore; those shelves are filled with personal and historical anecdotes that don’t generalize beyond their specific situations. The systemic and scientific study of leadership effectiveness, on the other hand, has identified common competencies of highly effective leaders. In this article, I describe the six scientifically supported competencies of effective leaders.

INTEGRITY. Effective leaders have integrity. Integrity builds trust. Trust is the foundation for every relationship. If you don’t trust your spouse, divorce is inevitable. If you don’t trust your business partner, your business is doomed. If you don’t trust your boss, you might as well start updating your resume. Effective leaders build trust by keeping their word, not playing favorites.

GOOD-DECISION MAKING. Effective leaders make good decisions in a timely fashion. This does not mean they always make the right decision. It means that they base their decisions on the best data available and don’t spend unnecessary time and energy overthinking those decisions. Ineffective leaders tend to make decisions that are irrational or illogical and/or make decisions very slowly. Both drive their teams crazy, and lead to dissatisfaction and disengagement.

TECHNICAL COMPETENCE. Effective leaders have technical competence in at least some aspects of the organization. Nobody expects a leader to know everything, but they ought to have some technical knowledge of whatever they are overseeing. Science professors want their Dean of Science to be a scientist, as opposed to an expert in contemporary literature. Designers want their director to have formal training in design principles. Football players want their coach to have had experience playing football. Having technical competence gives the leader credibility. No one will listen to a leader who lacks credibility.

…a recent Gallup poll found that 85% of the global workforce is either not engaged or actively disengaged at work, and that is the result of poor leadership.

VISION. Effective leaders provide a vision for the future. Team members want to know where the organization is headed and how we are going to get there. Providing a vision gives the team purpose in their work and creates buy-in. All other things being equal, teams that have a purpose will be more motivated and more productive.

HUMILITY. Effective leaders are humble. Contrary to popular belief, the most effective leaders are not necessarily charismatic and charming. Humble leaders give credit to their team, listen to feedback from others, and accept responsibility for their team’s failures, instead of blaming others. People want to work — and will work — for humble leaders who create environments where their accomplishments are recognized and appreciated.

AMBITION. Effective leaders are fiercely competitive and persistent. Do not be fooled into thinking humility means a lack of passion. The most effective leaders are deeply competitive. Most critical thought is their competitiveness regarding their team’s success. They want their team to succeed above all else, and they are willing to sacrifice personal glory, accolades, and rewards if it results in their team’s success.

Although we know that these six competencies are critical for leadership effectiveness, bad leadership is still the norm.4 This is, unfortunately, the case because organizations tend to do a poor job of selecting their leaders. Even today most leaders are chosen for political reasons or on the basis of an in-person interview; situations where charm and sociopolitical skill are critical. The only remedy for ineffective leadership is scientifically validated assessments for leadership selection and development. Organizations that have adopted scientifically validated assessments for leadership are seeing increased worker engagement and productivity, as well as decreased turnover. Leadership drives organizations and personality drives leadership. Effective leadership begins with effective personality assessment.

1 Hogan, R. (2006). Personality and the Fate of Organizations.
2 Quigley, T. and Hambrick, D. (2014). “Has the “CEO effect” increased in recent decades? A new explanation for the great rise in America’s attention to corporate leaders.” Strategic Management Journal, Volume 36, Issue 6.
3 Harter, J. Dismal Employee Engagement Is a Sign of Global Mismanagement. Gallup.
4 Chamorro-Premuzic, T. (2013). “Why Do So Many Incompetent Men Become Leaders?” Harvard Business Review.
Hogan
As Hogan’s Chief Science Officer, Ryne is responsible for managing the primary functions within Hogan’s industry-leading research department, including client research, product development and maintenance, and Hogan’s research archive and infrastructure.

Ryne’s previous research in personality psychology focused on the role of personality in career pursuits and workplace performance. He has also researched and experimented with new approaches to personality assessment, including unobtrusive assessment via new talent signals, such as voice prosody, word use, and affective responses to stimuli.