February 2016

Identifying and building leadership capability

  • By Peter Zarris, CEO, Opic and Co-founder and Co-chair, International Congress of Coaching Psychology and Graeme Bye, Organisational Psychologist and Senior Consultant, Opic Group

The key to developing a high-performing organisation

One of the great challenges of all organisations is the identification, development and retention of future leaders. An enormous amount of research has been conducted on leadership over many years, and increasingly it is understood to be a crucial component of a highly effective organisation.

The challenge has always been to:

  1. define leadership from the perspective of how leaders help organisations achieve success
  2. understand how leaders can be identified and developed
  3. comprehend how leadership can help organisations be successful and drive performance.

Another important issue is whether there is a difference in leaders between industries that are understood and identified. This article will seek to link existing research on leadership capability and high performance organisations (HPO) to the capabilities of mining executives. Specifically, it will look at how mining executives differ from their counterparts in other industries and what implications this has for the priorities of mining companies, as well as how this compares to the research on creating an HPO. This article will also present a model for leadership (the Executive Capability Framework – ECF) and link it to both the research on HPOs and how leaders can contribute to the creation of HPOs.

Secondly, it will compare mining executives to non-mining executives and seek to understand what characteristics are peculiar to mining and how they either hinder or enable the creation of HPOs. Ultimately, it will ask the question of whether mining executives have all the tools needed to create a highly effective organisation or if it can be developed.

In seeking to understand the value of leaders, much of the research has historically focused on leadership from the perspective of individual values or qualities. The problem with this approach is that leadership can be defined in a variety of ways, so we can accommodate different leadership styles and personalities.

To identify and develop leadership capability, we need to align our interests with the tasks that leaders are set – effectively managing the internal and external resources of an organisation in order to achieve shareholder value.

In short, understanding leadership within organisations requires knowing what high performance is within an organisation, and therefore what a leader needs to be able to do, as well as what qualities they should possess to effectively undertake the role and achieve the requisite shareholder value that is central to the role.

What is a high-performing organisation?

There have been myriad papers written on what comprises a high-performance organisation, and more broadly several theories around this.

What is surprising about the research is that the findings are similar in the main. To illustrate this, some research conducted by the Gulf Cooperation Council (GCC) and Gallup came to the following conclusions about a high-performance organisation.

The crucial components of a high-performance organisation

Gallup analysed data from more than 30 000 employees in the GCC region from organisations in the oil and gas, banking and finance, property development, tourism and telecommunications sectors. This analysis revealed six crucial components that determine a company’s ability to create a high-performance culture – one that improves top- and bottom-line business metrics.

1. Implement an effective performance management process

Unfortunately, too many companies continue to rely on rigid, archaic management models. The region’s leading businesses, by contrast, create performance management processes that:

  • use a merit-based system to differentiate between high and low performers
  • clearly define standards and expectations at the individual, team, departmental and organisational level
  • develop transparent reward systems
  • articulate shared goals and objectives.

These elements don’t just bring an increased level of equity and inclusivity to the company; they also have a direct impact on shaping the organisation’s culture.

2. Create empowerment and authority

Gallup’s research found that empowerment and authority are lacking in companies where trust and accountability are weak or absent. In organisations where trust and accountability are strong, empowered employees are more likely to:

  • recognise and respond to changing information from the marketplace
  • develop innovative ideas to meet market demands and stay ahead of the competition
  • connect with customers to create a branded experience.

3. Increase leadership capability at all levels of the company

Gallup’s research showed that companies with the highest levels of employee engagement share a common mission and purpose, from the top of the business to the bottom.

Their leaders are accessible and visible who:

  • inspire employees with consistent and regular communication – both company-wide and individually – about the organisation’s future
  • connect today’s work, initiatives and changes with where the business is heading
  • provide employees with a unified message that bolsters the company’s mission, showing employees how to live that mission
  • inspire trust and respect throughout the organisation
  • involve all employees in developing strategy, especially field experts and high-potential future leaders.

The real vision of the company begins to crystallise only after leaders create organisation-wide buy-in from and engagement among employees.

4. Develop a customer-centric strategy

The true test of whether a company’s leaders have successfully created a customer-centric strategy is how well they can connect their company – their brand, people, mission and purpose – with their customers and the community. Gallup’s research shows that organisations who accomplish this goal are more likely to stand out in an increasingly congested marketplace.

While many mining companies don’t directly associate with the idea of a customer-centric strategy, it can influence the organisation’s brand and staff commitment to such a brand.

5. Increase communication and collaboration

Gallup’s analysis shows that companies must improve their communication and collaboration if they are to succeed.

The most engaged organisations in the region overcome this challenge by:

  • selecting leaders and managers who have the potential to be top performers based on the right balance of talent, skills, knowledge and experience
  • ensuring that leaders and managers understand their role in the communication process, both within the company and with external audiences
  • scheduling regular and open one-on-one conversations to disseminate and individualise key messages and following up as needed to ensure employees understand and absorb those messages
  • using a collaborative approach to resolve problems and pursue opportunities as a team and across departments and divisions, which is key to developing and maintaining high levels of responsiveness and quality
  • creating strong levels of trust among a diverse workforce, which is particularly crucial in a region where many may be working without citizenship or lack a sense of community or belonging.

6. Enhance training and development

Gallup’s research suggests that the region’s most engaged organisations recognise that setting up their employees for success is vital to ensuring continuous improvement and growth – both for employees and the company.

These companies don’t relegate employee development to managers. Instead, they view talent as a corporate asset and support it at all levels. This ensures that high-potential employees have greater internal mobility and opportunity; it also prevents ‘talent hoarding’, which frustrates employees who find themselves at a career dead end.

The most pertinent aspect about this research is what it implies about the capabilities required of leaders. In other words, what do leaders require to enable such an organisation and do they have the capacity (or capability) to do this?

This leads us to the next question: what indeed are the common characteristics of leaders?

The historical research

Opic undertook a detailed evaluation two years ago of the specific capabilities that commonly characterise leadership positions. This was to review research initially conducted in 2002 to upgrade the predictive model of leadership so that it reflected the central question: what leaders must do to be able to create a high-performance organisation.

Furthermore, this paper not only looks to the initial research of a leadership framework for leaders, but extends it into an examination of mining industry executives to evaluate how they differ (if indeed they do) with non-mining executives, and what implications this has for mining organisations.

The original research into leadership conducted by Opic and the recent research presented at International Mining and Resources Conference (IMARC), compared Opic’s capability data for executives in general to that of mining executives.

The results of the analysis support the initial ECF and reveal five clear capabilities that distinguish executive requirements from more expert knowledge-based roles.

1. People leadership

The capability to manage performance, develop staff, give feedback and deal effectively with both conflict and stress. It also relates to the capacity to communicate broadly, and is a key predictor of making successful transitions into executive roles.

2. Driving results (results orientation)

The capability to focus on and drive improvements and innovation and communicate new initiatives. Driving results appears to be a hybrid of the original business development and strategic orientation scales. In modern leadership it shows a need to focus strategically on opportunities and drive them accordingly.

3. Business development / business partnering

The capability to identify new business opportunities and balance these with client relationships. This data appears to originate from professional services and broader product sales-focused organisations; however, a key characteristic of all executive roles is the ability to deal with a competitive environment and the capacity to drive business results accordingly.

4. Strategic commercial orientation

The capability to apply a pragmatic commercial focus to the strategic opportunities within an organisation, including understanding the
‘bigger picture’ and linking this
to strategic market opportunities with a commercial focus. The emergence, therefore, of an ability to think strategically and commercially is a distinguishing factor of effective leaders.

5. Strategic- or broad-based influencing

The capability to manage relationships, network with stakeholders, deal with conflict and maintain an awareness of one’s impact on others. The influencing construct continues to be one of the key differentiators for people seeking to make a transition into leadership roles.

The conclusion at the time was that further research needed to be undertaken via specific industry type. As a result, Opic has compared the common characteristics of mining executives to the broader executive group. The results are interesting (although perhaps not surprising) and have major implications on the future selection and development of mining leaders.

Mining executive capabilities and implications

Ultimately, the findings did show some significant differences in the make-up of the mining executives in comparison to non-mining executives (Figure 1).

imm1

These differences have specific implications regarding how mining executives go about their work. These can be summarised as follows.

Strengths

  • Forward thinking/planning – as can be expected from operational leaders, planning and project planning is significantly higher than the average.
  • Rule following/safety – the mining executives are significantly higher than the broader population on following and adhering to rules generally – a reflection of their safety focus.
  • Analytical capabilities – mining executives are generally higher than the broader population on both using data and analysing information.
  • Trusting – interestingly, the level of interpersonal trust from the group is higher than the norm, which may reflect the nature of the work.
  • Controlling/directing – mining executives tend to use directive forms of decision-making far more significantly than the broader population.

Lower tendencies

  • Persuasion – mining executives are significantly lower in their capacity to persuade. They tend to rely on expertise rather than buy-in to achieve outcomes.
  • Influence – mining executives are significantly lower in the capacity for persuasion. They tend to rely on the use of expertise rather than promoting ‘buy-in’ to achieve outcomes.
  • Engagement – mining executives tended to be more reserved, and therefore their capacity for maintaining engagement – particularly in remote areas – was lower.
  • Competitive drive – mining executives are less classically competitive, relying more on planning and execution to achieve outcomes.
  • Personal adaptability – the mining executive group tended to have a consistent interpersonal approach, perhaps finding it more difficult to adapt to different audiences.

Having conducted thousands of assessments (in excess of 30 000), the researchers were well aware that there are differences in capability for people interested in certain roles. In short, people attracted to certain roles share common characteristics, primarily because there are common requirements in roles; for example, numerical and financial capabilities in accountancy. Hence, there will always be differences across industries and professions.

While some differences were expected, others were clearly a surprise – in particular the extent of them.

The overall summary of differences between the mining executives group and the broader combined group of executives were as follows.

The most pronounced differences

The starkest differences relate to two key aspects of executive roles where mining executives were significantly lower than general executives. These were in:

  1. strategic influencing (mostly)
  2. the consistency and capacity for mining executives to coach and develop staff – a capacity that consistently appears as a crucial element in the high-performance organisation data
    as outlined.

As can be seen in the comparison data in Figure 2, the mining executives score significantly lower on many of the attributes that our research shows lead to effective influencing and collaboration. This also relates to how effectively or not mining executives are able to deal with the type of interpersonal issues that can affect employee engagement, wellbeing and, ultimately, performance.

imm2

What next?

The implications of the data are not surprising. It confirms the type of characteristics for which executives are both selected and promoted in the mining industry. In short, these are the ability to set clear, well-structured plans, the capacity to ensure safety as a high priority, the ability to analyse information to make decisions accordingly and the ability to set clear direction and maintain control of operations.

The following factors are all in the lower range: the capacity to development staff, particularly develop more than just skills but broader organisational skills; the ability to deal with unexpected changes or challenges of the day-to-day environment; and the broader leadership, in particular the ability to inspire people. The implication of the research is that organisations in the mining industry do not necessarily collaborate consistently, particularly outside of the immediate region.

The question, of course, is whether the industry understands or sees value in developing these sets of skills, and whether the evolution of the industry will assist in developing these skills. Ultimately, coaching (for performance), collaboration and conflict resolution are all developable. Some people need coaching rather than training – but these skills can and have been developed in executives from all industries and disciplines.

The question for the mining industry is: does it matter? And do we see the value of this in terms of growing our industry? The research tells us it can make crucial differences in performance.

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  • Kate Hobbs
    17 Mar 2016 at 11.49am

    I would be interested to know the thoughts of the authors on whether the attributes on which mining executives scored lower than other industries is a contributing factor to the industry’s poor performance in the diversity space. It appears that the factors on which they scored the lowest are those which would allow executives to broaden their thinking on what defines a suitable employee, something that is required to move away from the typical workforce seen in the mining industry to date and take advantage of the opportunities to improve performance that come with diverse thinking.