How you want to measure leader skills
How to measure leadership competencies
To measure leadership competencies, you must first define leadership. This isn’t as straightforward as it sounds — there is no one clear definition. However, most sources talk about the soft skills required to influence, motivate and develop people in order to maximise performance. Examples include a focus on results, the ability to direct, manage conflict, confront poor performance, recognise good performance, develop, and motivate others to build high performing teams.
While the use of 360 degree surveys is becoming more common, this isn’t what I’m talking about. It is rare for the colleagues of a frontline or middle manager to consistently observe how that manager interacts with their people. What’s needed is a 360 degree feedback process that enables feedback from a manager’s direct reports along with self-evaluation, and guidance in the development of a Leadership Improvement Plan from their immediate manager.
The other necessary element is a set of customised questions, rather than one-size-fits-all. At a more senior level, a common set of questions may make sense, but, in reality, frontline and middle managers operate in a diverse range of settings — retail stores, contact centres, distribution centres, field forces, back-office processing, manufacturing and much more. While the practices of effective leadership are common, the actual translation of those into everyday activity is affected by the type of work team members perform, the physical environment and the geographical distribution of the team.
There are multiple levels of leadership measures:
what the leader does do to influence, motivate and develop people;
how successful the leader is at influencing, motivating and developing their people in terms of the resulting:
employee engagement;
discretionary effort and productivity; and
performance outcomes in terms of business profitability and growth achieved by employees and workgroups.
Productivity and performance measures
The primary measure of the effectiveness of a frontline or middle manager’s leadership is the productivity or performance of their workgroup. The advantage of this measure is that it’s available for virtually every team. The data is a clear indicator of the success of the workgroup and, by extension, the success of that group’s manager.
However, this isn’t particularly useful for improving the leadership skills of frontline and middle managers. The difficulty with just measuring the overall productivity and performance of a workgroup is that it provides no data on what the leader has done and hasn’t done; where they are strong or weak. Without this information it’s impossible to manage and develop their leadership capability.
Measures of discretionary effort
One of the keys to managing the performance of employees is triggering discretionary effort — getting them to go the extra mile for the organisation. People constantly make choices about their work, like the range of tasks they take on, how fast they work and how well they work (which includes quality, care, innovation and delivery).
People are more likely to engage in discretionary effort when they feel motivated, are satisfied with their job and committed to their work, workgroup and organisation. The leadership activities of frontline managers play a pivotal role in triggering discretionary effort.
Unfortunately, discretionary effort is difficult to measure. However, levels of productivity and performance and levels of employee motivation, which can be measured using employee-engagement surveys, are measures which provide a clear indication of discretionary effort, meaning that measuring it is unnecessary.
Measures of employee engagement
Employee engagement indicates how successful organisations and business units are at influencing, motivating and developing their people. This is simply a new term for employee commitment, or employee motivation.
A growing number of organisations now measure employee engagement and for good reason — there is now considerable evidence that high employee engagement generates higher employee productivity, business unit performance and profit; along with lower shrinkage, accident rates and employee turnover.
Employee engagement is a very useful measure for identifying performance improvement opportunities, particularly when used in conjunction with trends in both organisational and workgroup productivity and performance. It’s also useful for measuring organisational leadership. Employee engagement, however, is a poor direct measure of leadership. For example, in one common employee engagement survey there are 60 questions phrased as statements. Only six of them directly refer to the employee’s immediate manager while 30 of the statements refer specifically to the organisation.
Clearly the activities of frontline and middle managers have an impact on employee engagement, but so do many organisational and management activities. It’s difficult to understand the level of leadership activity and capability of individual managers by just using employee engagement data. The problem is that employee engagement results are not personal. They are perceived by managers as more reflective of the organisation and business unit than themselves, so there is little incentive to improve. The best measure of the cultural operating system is leadership activity that drives employee commitment. To manage leadership activity and capability, you need specific data on what they do consistently. The best people to tell you this are their direct reports.