The key skills and attributes of an effective leader

What makes an effective leader?

It’s a question that can elicit an endless number of answers.

There are many effective leadership styles seen across various industries, including financial services. We see evidence of starkly different leaders producing successful outcomes in various contexts. Yet, there are key skills and attributes that are common among the most effective leaders.

In this blog, we explore the top five themes of leadership competencies, the key skills and attributes needed to be an effective leader, and what it means to be a leader. We consider that although not every person is a natural born leader, we can learn how to become more effective leaders by actively improving the skills and attributes required for effective leadership.

What is leadership?

Leadership can be defined in a myriad of ways. When you ask various people to define what leadership means to them, chances are, no two definitions will be the same. What makes a good leader is both objective and subjective. It is objective in that there are key behaviours that most, if not all, effective leaders exhibit. It is also subjective in that what looks like effective leadership to some, does not look as such to others.

For example, the late Steve Jobs pioneered the Apple empire, now with a market capitalisation value of over $2 trillion. To many, Jobs is celebrated for his remarkable leadership. He was a visionary who surrounded himself with smart and like-minded people, inspired others and had ridiculously high expectations. To others, Job’s leadership style was not one to emulate due to his unconventional manner and headstrong approach, nevertheless he was a very successful entrepreneur.

So, if we can’t look to a single example or person as the demonstration of what an effective leader looks like, what do we look to?

Let’s start with a definition of the word “leadership”, specifically organisational leadership. Among the copious number of definitions scattered across the world wide web and the numerous leadership texts available, here is one definition that shone relative to others:

“Leadership is as a set of behaviours that leaders exercise to influence organisational members to achieve a higher alignment on the direction that the organisation is taking, to achieve a better execution of the strategy, and for the organisation to continuously renew itself.” - Claudio Feser, Senior Partner at McKinsey & Company[i]

By this definition, leadership is more than just a set of capabilities (or skills); leading others requires certain behaviours (or attributes) to do so effectively. As Nicolai Nielsen, Associate Partner at McKinsey & Company has said “leadership is highly contextual, so it is about behaviours…those behaviours are based on the context”. It is a combination of these skills and behaviours displayed in different leadership scenarios – and covered in more detail later in this blog – that lead to successful outcomes.

In saying this, leadership is not just about the title. There are many leaders within organisations who are yet to receive the formal title of a “leader”. There are also those with leadership titles who assume the role of people managers and are yet to demonstrate the behaviours of a true leader.

The difference between a manager and a leader

Managers and leaders can often get confused as being one and the same. All leaders are managers. However, not all managers are leaders. The two roles require several common traits to be effective, however managers need to acquire additional capabilities to become true leaders.

There are several key shifts managers need to make to become leaders[ii]:

The shifts required to move from being an effective manager to an effective leader introduce us to a few of the traits required for effective leadership. However, let’s take a step back for a moment and first look at the broader themes of leadership competencies.

Top five themes of leadership competencies

As part of a study conducted by Dr Sunnie Giles – executive coach, leadership development consultant and organisational scientist – and shared with the Harvard Business Review, 195 leaders from over 30 global organisations were surveyed and asked to choose the 15 most important leadership competencies.

Grouped into five major themes, respondents concluded that an effective leader[iii]:

Has strong ethics and creates a safe environment – they have high ethical and moral standards and clearly communicate expectations so employees feel safe rather than threatened.
Empowers others to self-organise – they provide clear direction, delegate, and give employees space to manage their own time to meet the communicated goal.
Supports efficient learning and new ideas – they encourage learning, admit when they are wrong and provide a safe to fail environment.
Nurtures the growth and development of employees – they support the development of future leaders and are committed to the growth of the people they lead.
Encourages connection and belonging among employees – they communicate openly and cultivate a team approach through connection.

Now that we know the major themes of leadership competencies, let’s break it down and focus on the key skills and attributes Hall Advisory considers to be important for effective leadership.

Skills of an effective leader

In addition to the prerequisite of relevant industry and organisational knowledge, effective leaders possess the following skills:

Stakeholder management – manages the needs and expectations of various stakeholders impacted by the organisation’s business activities. Stakeholder interests are often competing in many business contexts; effective leaders know how to address each interest without compromising the organisation’s mission.
People management – an understanding of the different work styles of the people they lead, as well as the ability to engage, motivate, nurture growth, and optimise talent within teams.
Change management – the ability to lead in times of change or transition by preparing, equipping and supporting others to successfully adopt change and continue to deliver organisational outcomes.
Relationship building – connects with others to build and sustain productive working relationships, fostering positive collaboration internal and external to the organisation.
Negotiation – can reach a beneficial agreement with another party through communication, strategy, persuasion, cooperation and the ability to influence others.
Communication – conveys information to others in a clear and simple manner that is appropriate for the audience.
Conflict management – can identify, manage and resolve conflict in a productive manner, resulting in constructive outcomes.

Though valuable, the above skills should be viewed as the bare minimum of required leadership competencies. Like effective directors, to truly be an effective leader also requires several behavioural attributes that enable successful and positive interactions with others.

Attributes of an effective leader

An effective leader is more than the skills they possess. It is also about the attitudes and mindsets the leader brings to their role in leading others. To provide some colour to the type of attributes required to be an effective leader, we have gathered quotes from several prominent leaders who have done the work and proven their leadership capability:

“Ability to change, hard conversations, feedback, problem solving, ethical decision making, recognition, resilience, and all of the other skills that underpin daring leadership are born of vulnerability.”- Brene Brown[iv]

“A great leader’s unique achievement is a human and social one which stems from his understanding of his fellow workers.” - W.C.H. Prentice[v]

“Leadership isn’t a popularity contest. There will always be someone ready to criticise and condemn you, but part of being a leader is taking a stand on things that matter. … It’s about stepping up, finding your unique style, building constructive relationships, making the tough decisions and being courageous.” - Michelle Gibbings[vi]

“Great leaders truly care about those they are privileged to lead and understand that the true cost of leadership privilege comes at the expense of self-interest.” - George J. Flynn, Lieutenant General, U.S. Marine Corps (Ret.)[vii]

Vulnerability, resilience, courage, authenticity, and selflessness. These are only a few of the attributes great leaders of our time believe to be essential to effective leadership. In addition to these, Hall Advisory considers the following attributes to be important:

Emotional intelligence and empathy – the capacity to be aware of and understand their own emotions, and those of others, and respond through effective interpersonal communication.
Self-awareness – has accurate knowledge of their strengths, weaknesses and behavioural responses and seeks to improve.
Courageous – is willing and effective in having the difficult but necessary conversations in respect of performance and behavioural issues. Takes action in respect of any bullying and harassment occurring within their organisation.
Gives and receives constructive feedback – is comfortable giving and receiving feedback that is supportive and identifies actionable solutions, avoiding defensiveness or reclusivity.
Encourages authenticity – enables others to bring their whole, genuine selves to the workplace.
Decisiveness – the ability to make efficient and informed decisions under pressure-filled scenarios.
Flexible and agile – can navigate through uncertain and changing environments and adapt their leadership style accordingly.
Strategic and tactical thinking – the ability to articulate a strategic vision or mission to others and determine the necessary intermediate steps to achieve that vision.
Strategically directed focus – appropriately balances their focus and attention through the strategic optimisation of risk, performance and reward.
Fosters creativity and innovation – cultivates a safe environment for their team to experiment, share new ideas and continuously improve.

How to acquire leadership skills and attributes

Comparing your existing skills and attributes against the list of those required to be an effective leader can be slightly overwhelming. You may have identified gaps that you would like to close for yourself or for your organisation’s leadership team. This poses the question – can effective leadership be learned?

The answer is – not always in a traditional sense. Professional development and executive education programs are a great start and effective ways to acquire the skills for effective leadership. However, those skills and the behavioural attributes needed to lead effectively are developed in practice. It is through experience that leaders grow and become better leaders. They learn how to communicate better, empathise with others, make quicker decisions, increase self-awareness, manage conflict more effectively, become more agile, adopt a more strategic mindset, and improve how they give feedback.

Rather than “practice makes perfect”, think “practice makes progress”. It is important that organisational leaders continue to seek growth and improvement not only for their sake but especially for the sake of their organisation, its culture and performance. As we say, risk culture starts with leadership. Leaders are role models who set the tone for the rest of the organisation. Therefore, effective leadership is crucial for any organisation, financial services or otherwise.

How Hall Advisory can help

To help strengthen your organisation’s leadership, Hall Advisory provides the following services:

Risk culture assessments with a focus on pillar 1 of Hall Advisory’s five pillar model – risk leadership – and a necessary focus on the strategic optimisation of risk, performance, and reward. Assessments include:
- A review of existing risk culture frameworks.
- Issuing a risk culture survey across all levels of the organisation.
- Interviews and workshops with selected directors, executives, and staff.
- Assessment of collated results to identify strengths and weaknesses of the organisation’s risk culture.
- Recommendations to improve risk culture, focusing on areas for improvement.
Independent reviews of bullying and harassment issues, including assessing how they may stem from leadership and culture and identifying opportunities for organisational improvement.
Specialist personnel to fill transitional executive and management positions, including Acting Chief Risk Officer and Chief Compliance Officer appointments.

Contact us for a confidential, no-obligation conversation about how we can support your organisation’s leadership and risk culture.

References

[i] S London (host), 28 February 2019, ‘What is leadership: Moving beyond the C-Suite’, McKinsey Podcast, McKinsey & Company [Podcast], https://www.mckinsey.com/featured-insights/leadership/what-is-leadership. [ii] M Watkins, ‘How managers become leaders’, Harvard Business Review Magazine, June 2012, https://hbr.org/2012/06/how-managers-become-leaders?registration=success. [iii] S Giles, ‘The Most Important Leadership Competencies, According to Leaders Around the World’, 15 March 2016, Harvard Business Review,https://hbr.org/2016/03/the-most-important-leadership-competencies-according-to-leaders-around-the-world. [iv] Brene Brown, Dare to Lead, p.43, 2018. [v] W C H Prentice, ‘Understanding Leadership’, Harvard Business Review Magazine, January 2004, https://hbr.org/2004/01/understanding-leadership. [vi] Bad Boss, Michelle Gibbings, p.136, 2020. [vii] George J. Flynn, Lieutenant General, U.S. Marine Corps (Ret.), Leaders Eat Last (Foreword), Simon Sinek, 2017.