The Extraordinary Leader

Turning Good Managers

into Great Leaders

Presented by Jack Zenger and Joe Folkman

2

The Extraordinary Leader Research • The last two years were spent researching the

impact of leadership performance and the key behaviors that make great leadership possible

• The source of our insight – hundreds of thousands of 360 assessments done over the past 10 years

• Our approach – lead with the data• The result – New insights that fundamentally

change our philosophy and approach

3

Insight 1

• Great Leaders Make a Great Difference.

4

Impact of Leadership Effectiveness on *Turnover

19

14

9

0

2

4

6

8

10

12

14

16

18

20

Bottom 30% Middle 60% Top 10%

More effective leaders have lower turnover.

Relationship between *Turnover and Leadership Effectiveness

Av

era

ge

Per

cen

t T

urn

ove

r

Leadership Effectiveness

* Results from a large insurance company

5

Impact of Leadership Effectiveness on *Net Income

Net

Inc

ome

More effective leaders generate higher income.

-1176454

2384588

4516974

-2000000

-1000000

0

1000000

2000000

3000000

4000000

5000000

Bottom 10% Middle 80% Top 10%

* Results from a large mortgage bank

6

Impact of Leadership Effectiveness on *Perceptions of Customer Satisfaction

Per

cept

ions

of C

usto

mer

S

atis

fact

ion

PC

TL

More effective leaders have more satisfied customers.

39

49

68

0

10

20

30

40

50

60

70

Bottom 20% Middle 60% Top 20%

* Results from a large high technology company

7

Impact of Leadership Effectiveness on *Employee Satisfaction/Commitment

Results from a large high technology companyLeadership Effectiveness Percentile

Em

plo

yee

Sat

isfa

ctio

n

90th

- 1

00th

80th

-89

th

70th

- 7

9th

60th

- 6

9th

50th

- 5

9th

40th

- 4

9th

30th

- 3

9th

20th

- 2

9th

10th

- 1

9th

1st

- 9t

h4.8

4.6

4.4

4.2

4.0

3.8

3.6

3.4

3.2

Poor LeadersCreate

Dissatisfaction

Good Leaders Have an

Adequate Impact

Great LeadersMake a Great

Difference

8

Implications

• The relationship between performance outcome and leadership performance is not incremental (e.g., sometimes it takes a substantial change in leadership performance to impact the outcome)

• Good leaders achieve substantially superior performance outcomes than do poor leaders

• Great leaders achieve significantly better performance outcomes than good leaders

9

Insight 2

• Current approaches to development primarily focus on fixing weaknesses

10

Focusing Development on Weaknesses Works Well When . . .

Fatal Flaw

1 2 3 4 5

P

O

N

M

L

K

J

I

H

G

F

E

D

C

B

A

. . . people have fatal flaws

Strong negative data on an issue can cripple a person’s leadership effectiveness

11

Focusing on weakness works well when….

Fatal Flaw

1 2 3 4 5

P

O

N

M

L

K

J

I

H

G

F

E

D

C

B

A

. . . people have fatal flaws

Strong negative data on an issue can cripple a person’s leadership effectiveness

What Causes Leaders to Fail

• An inability to learn from mistakes and develop new skills

• Interpersonal ineptitude

• Being closed to new ideas

• A failure to take responsibility for results

• Not taking initiative

12

If someone is average at everything, what is the effect of focusing on lower scores?

Typical Approach to Development

• Evaluate current level of effectiveness

• Identify areas of strength and weakness

• Create an action plan to improve areas of weakness

Averageat Everything

1 2 3 4 5

P

O

N

M

L

K

J

I

H

G

F

E

D

C

B

A

Will fixing one or two less-positive issues have a dramatic impact on leadership effectiveness?

13

What Does Performance Improvement Mean to Most People?

This philosophy for improvement is reinforced by:• Educational experience• Performance management approaches• Culture

Fixing Weaknesses

14

Impact of Leadership Effectiveness Without Any Perceived Strengths

34

0

10

20

30

40

50

60

70

80

90

100

Average Percentile

Score

0 1 2 3 4 5

Number of Strengths

15

Impact of One Strength On Overall Perception of Leadership Effectiveness

34

64

0

10

20

30

40

50

60

70

80

90

100

Average Percentile

Score

0 1 2 3 4 5

Number of Strengths

16

Three Strengths Raises Leadership Effectiveness to the 81st Percentile

34

6472

8189 91

0

10

20

30

40

50

60

70

80

90

100

Average Percentile

Score

0 1 2 3 4 5

Number of Strengths

17

Insight 3

• Powerful Combinations

18

Characteristics of a Great Basketball Player

Height

Speed

Tall & Slow

Tall & Fast

Short & FastPowerful

Combination

19

Impact of Drive for Results and Interpersonal Skills

9 13

66

0

10

20

30

40

50

60

70

InterpersonalSkills

Drive forResults

Drive forResults and

InterpersonalSkills

% o

f Le

ader

s at

90t

h P

erce

ntile

What is the impact of being highly competent at driving for results and with interpersonal skills?

20

Insight 4

• Not all behaviors are created equal – some are more noticeable and leverage more improvement than others

21

Conventional Wisdom Versus Actual ResultsConventional Wisdom

Effective executives are prompt for meetings and appointments.

Actual ResultsThe best executives are no more likely to be on time than the worst executives.

Rarely late for meetings/appointments

Best Worst

22

The Research

• Compiled a data set of 200,000 evaluations on 20,000 people

• Contrasted the highest performing 10% to the lowest performing 10%

• Found the behaviors that best differentiated between the best and the worst

• The behaviors not only told us what high performers did right, but also what the low performers did wrong

23

Differentiating BehaviorsLeading Change

• Developing strategic perspectives • Championing change • Connecting outside world – networking

Character• Displaying high integrity

and honesty

Interpersonal Skills• Communicating powerfully

and prolifically• Inspiring/motivating others

to high performance • Building relationships• Developing others• Collaboration and

teamwork

Driving For Results

• Drive for results • Establish stretch goals• Taking responsibility

for outcomes/initiative

Personal Competence • Technical and professional expertise• Solving problems and analyzing issues• Innovation• Practicing self-development

24

Insight 5

• The non-linear approach to development may be the most helpful way to develop strengths

25

Is the best strategy changing a direct, heads-on, linear approach?

Current Approach to Change Plans

CurrentPerformance

People question ability on technical expertise

Desired Future

Performance

People have confidence in technical expertise

MoreBetterFasterSmarter

26

The Problem with the Direct Approach is That Often “You Can’t Get There From Here”

Navigating behavioral change is not especially different from geographical navigation.

27

How Competency Companions Create a New Path to Development

GreatTechnicalExpertise

PoorTechnicalExpertise

Gre

at S

kills

on

Dif

fere

nti

ato

r

Po

or

Ski

lls o

nD

iffe

ren

tiat

or

StrongInterpersonal

Skills

WeakInterpersonal

Skills

BehavioralBuddy

HighStandards ofExcellence

LowStandards ofExcellence

BehavioralBuddy

Differentiator

28

How Do You Build Trust?

Competency Companions• Considerate of others• Open, friendly style• Non-competitive internally• Listen• Use candor

29

Totally New View of Competencies:

• Not independent of each other (coil spring mattress)• Highly interdependent—each statistically linked to 8

others• High score on one apparently lifts many others with it,

like a giant tent pole• This explains need to have strengths in different areas

30

Insight 6

• Change Requires Practice

31

Change Requires Practice

• Frequently, people underestimate the difficulty of some behavioral changes.

• A key to developing a new skill is finding a way to practice prior to getting in the game.

32

Summary• Effective leadership can impact bottom line results• Good leaders achieve more than poor leaders but

great leaders can produce a 2X impact on many outcomes

• If you have a fatal flaw, fix it• Building leadership strengths will substantially

influence the perception of leadership effectiveness• Not all behaviors are created equal – some are more

noticeable than others• Non-linear development is a new approach to change

that provides a unique path to developing strengths• To become extraordinary, leaders must practice

leadership