Leading Growth: Why Existing Leadership Models Miss the Mark
To stay ahead of the curve in high-growth markets, new perspectives on human capital are needed to effectively capitalize on this growth. James Eyring recounts his experiences with a highly effective "growth leader" and offers some insights into the critical competencies that contributed to this success.
A few years ago, I was coaching a Europe-based business leader named Michael. Michael had decided to move to Asia to start a new job in a new company. Although he had experience managing a similar sized team in Europe, he was attracted by the opportunity of moving to Asia to grow an existing business for a large MNC.
Over breakfast one morning, we talked about his new team of 8 people, the challenges he might have in leading in his new company, his move to Asia and his growth goals. Although Michael had not started yet, he wanted to grow his team’s monthly revenue 300% per year. He felt that the team had a very small slice of a very large market pie and wanted to increase its share of the market.
To achieve his growth goals, he knew that he had to address a number of challenges, including strengthening his go-to-market strategy, supply chain, internal processes, risk controls, team capability and gaining support within the company to do things differently. Michael had a big task ahead, but was excited about the opportunity and felt he could do it.
The big question was…could he address these challenges in a new job, in a new region, in a new company AND get the growth he wanted as a leader? This is a potent combination of challenges to overcome in the first year on the job.
Most competency models of leadership would prescribe a few key behaviours for him to demonstrate to get this done. For example, many models include areas such as:
- Setting a Direction: Analysing the current situation, creating a vision and strategy
- Leading Others: Influencing others, coaching and developing his team
- Doing it the Right Way: Having integrity, building relationships, demonstrating EQ
These models are based on what good leaders do on-the-job, but are primarily based on leaders in slower growth markets. In a high growth situation, these models may be insufficient. To enable growth, leadership models should be based on what high growth leaders do.
Research on growth leaders shows a number of key differences in how these leaders think, lead others and drive the business. Based on this academic research (e.g., MacKenzie, Podsakoff, & Rich, 2001; Rosing, Frese, & Bausch, 2011), as well as Organisation Solutions’ research on successful growth leaders in emerging markets, we have created a Growth Leader Potential framework. This model goes beyond competencies, and measures leader abilities, practices and experiences.
Over the last couple of years, Michael has demonstrated and developed many of these areas. Below are a few examples of this within our Growth Leader Potential framework:
The first risk is that these leaders may be setting unambitious, safe targets. The second risk is that you do not know how these leaders will react when they do fail.
Individual Capacity for Growth
One of the key differentiators for growth leaders is resilience. This has to do with how the leader deals with setbacks and failure. Michael had a number of setbacks, including trading losses, process failures and team conflict. He maintained his energy through each of these challenges because he saw each setback as temporary, he engaged his team to solve the problems and he kept his own energy reserves high (Michael goes to the gym each morning before work). Because of his reactions, he addressed the root causes of each problem he faced. In doing so, he set the team up for even higher future performance. Most companies don’t want leaders who suffer setbacks, which results in two risks. The first risk is that these leaders may be setting unambitious, safe targets. The second risk is that you do not know how these leaders will react when they do fail. With high growth, you have to expect problems, and have leaders that can manage through them.
Leading Others for Growth
Many organisations look for leaders who have positive relations with other departments. However, growth puts pressure on the organisation. In Michael’s case, support functions wanted him to slow his rate of growth. Michael kept the pressure high, but worked with the departments to procure and allocate resources to support his growth. He built relationships, but also demanded support for his growth agenda. Growth leaders put pressure on other teams, which may make their relationships more strained at times.
Driving Business Growth
Most growth leaders pursue many small opportunities and grow these into larger revenue opportunities as they show promise. Michael had his whole team pursue different products, suppliers and customers. As small opportunities became successful, he quickly ramped these up into new businesses. He innovated with his customers, but kept his risk low by focusing on small transactions until they were proven. Often, companies increase their growth expectations for a business unit, usually because markets elsewhere are not growing as fast as expected. Growth leaders are able to meet these challenges because they already have multiple opportunities in the testing phase. Leaders with more static strategies find themselves unable to meet new demands or sudden changes in the marketplace. They simply don’t have options available when the market or demands change.
Michael demonstrated these and other Growth Leader Potential capabilities. The true test though is in the results…did he achieve high growth? In this case, he grew his business by over 700% per year for the last 2.5 years and is now one of the largest trading firms for his commodity in the world. His team has grown significantly and he now has multiple layers of management beneath him. Moreover, he has plans to continue rapid growth in the coming years.
Although most companies would be excited by a result like this, they are not likely to achieve it by continuing to use existing leadership models. If your company wants to select and develop growth leaders, re-examine your company practices, including:
- Leadership Models. Understand what growth leaders do to achieve rapid growth. Integrate this into your expectations for leaders, your leadership framework, competencies and 360s.
- Potential Assessment. Use potential assessment tools that reflect a Growth Leader profile as well as the specific needs for your industry and leadership roles. Avoid relying on only manager ratings or one-tool assessments that are used across industries and job levels to measure generic potential.
- Accelerated Development. Integrate growth projects or assignments into your high potential programmes and executive coaching efforts. High growth requires leaders to stretch their skills in new ways, and this can only be done through experience.
MacKenzie, S., Podsakoff, P., & Rich, G. (2001). Transformational and transactional leadership and salesperson performance. Journal of the Academy of Marketing Science, 29, 115–134.
Rosing, K., Frese, M., & Bausch, A. (2011). Explaining the heterogeneity of the leadership-innovation relationship: Ambidextrous leadership. Leadership Quarterly, 22, 956-974.
The Growth Leader Potential framework is copyrighted by Organisation Solutions and is used here with permission.