Editor’s Note: This is the first article in our Jack Bucalo series “Making a Leader.” Join HR Exchange Network to receive our newsletter and access all of our content, including articles, columns, videos, reports and more.
If you asked 100 business people regarding their definition of leadership, you would probably get 101 different definitions – the person from Harvard would probably have two. Years ago, we had the same problem with the definition of management until the American Management Association contracted with Louis A. Allen, President of Louis A. Allen Associates of Palo Alto, CA, to conduct an empirical and pragmatic research study to define the term in great depth based on how successful managers and executives think and act.
The study findings, published in his 1964 McKinsey award-winning book entitled “The Management Profession”, Lou Allen identified, classified and defined the four primary functions of management – planning (including setting objectives), controlling, organizing and leading – and the associated activities for each function, along with a multitude of validated management principles that guided the implementation. As a result of this systematic and detailed study, the term management was defined in great depth based on pragmatic research findings rather than theory. Therefore, from that point in time onward, it left everyone in the business world with a common understanding of what management was and, equally important, what it was not.
Now, let’s fast forward to today and the term leadership. If you Google the term, you get 500,000,000 results. If you Google the term leadership qualities, you get 90,000,000 results. If you Google the term leadership styles, you get 19,700,000 results. When you read many of these leadership articles and discussion topics, it highlights the fact that the business world has a very similar problem to the one it faced regarding the term management years ago. Isn’t it time that some business association, business research association, leadership institute or university assumed the tough task of conducting a detailed empirical research study on this topic with the goal of defining leadership in the context of the real business world, along with all of its functions, activities, principles and skills, in a manner similar to the AMA study mentioned above?
Though there are many valid reasons for developing such a definition, here are some of the main ones. First, there is no commonly-accepted, empirically-researched detailed definition of leadership from a business perspective. Second, with a common definition, all published articles and academic research on leadership can be properly evaluated when placed into the total context of all the other aspects of leadership. Third, most written articles on leadership today tend to deal with the interpersonal aspects of it, or the so-called “soft” skills, without much consideration of the management, operational, strategic, financial, and external market aspects of it, or the so-called “hard” skills. Fourth, when considering the myriad of qualifications for any line management executive position, most CEOs and line executives tend to give much more consideration of the required “hard” skills in comparison to the “soft” skills by a ratio of 80% to 20%. Fifth, and perhaps most important, if most of the published articles or research papers on leadership concentrate almost exclusively on the “soft” skills, rather than a proper balance of both skills together, most CEOs and line executives will continue to disregard them because they do not take into account the practical reality of the “hard” skills which they feel are most predictive of future success. Lastly, it should be kept in mind that the ultimate customer for all business leadership articles and papers is the CEO and line executives.
Now, here’s the hard truth that all leadership-oriented organizations must deal with. As long as investors and the stock market hold the Boards and top management of any private or public company accountable for achieving certain financial and operating objectives over the short and long term, the practical reality of today’s business world is that business leaders must have BOTH technical “hard” skills and leadership “soft” skills in the proper ratio. Organizations that currently teach only the leadership “soft” skills have been kidding themselves for decades as such programs have continually failed in the eyes of their customer – the CEO and top line executives.
When cataloging the “hard” skills in any future study, here are some groups of skills that might be considered. The first one would be the management skills of planning, leading, organizing and controlling. The second one would be the operational skills of Marketing, Sales, Operations, Engineering & Research, Manufacturing, etc. The third one would be financial skills such as Income and Cash Flow Statement and Balance Sheet knowledge. The fourth one would be business strategy skills including visionary thinking, market evaluation and customer needs, product development, strategic planning, capital planning, Board and external market management, corporate culture, technology trends, executive management requirements, among others.
Any common definition leadership will go a long way in helping us understand the proper balance of knowledge and skills that are necessary to be a successful executive and leader in today and tomorrow’s business world. Once leadership is properly defined and accepted by the business world, all future published articles and research studies can be more properly evaluated for their importance and relevance in light of the totality of the required leadership “hard”/”soft” skills mix, while greatly encouraging the design of more pragmatic leadership development programs which deal with both sets of skills together.