Leadership Competencies

3/1/2008
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SHRMs Competency Model identifies what it means to be a successful HR professional
across the performance continuum, around the globe, from early to executive career levels. The
competency model and the resources developed based on the model provide the foundation for
talent management throughout the HR lifecycle.
Introduction
Leadership competencies are leadership skills and behaviors that contribute to superior
performance. By using a competency-based approach to leadership, organizations can better
identify and develop their next generation of leaders.2 Essential leadership competencies and
global competencies have been defined by researchers. However, future business trends and
strategy should drive the development of new leadership competencies. While some leadership
competencies are essential to all firms, an organization should also define what leadership
attributes are distinctive to the particular organization to create competitive advantage.
Essential Leadership Competencies
A focus on leadership competencies and skill development promotes better leadership.3 However,
skills needed for a particular position may change depending on the specific leadership level in the
organization. By using a competency approach, organizations can determine what positions at
which levels require specific competencies.4 Researchers at the Center for Creative Leadership
have identified some essential leadership competencies that are consistent among organizations.
They divide the overall structure into competencies for leading the organization, leading the self
and leading others in the organization (see Figure 1).
When selecting and developing leaders, HR professionals should consider the competencies that
the individual possesses and compare those to the ones that need further development for success
in a leadership role. By looking at his/her current competencies and comparing those to the skills
necessary to fill a leadership position, organizations can make better informed decisions in hiring,
developing and promoting leaders.5
Figure 1: Leadership Competencies
Leading the organization:

managing change

solving problems and making decisions

managing politics and influencing others

taking risks and innovating

setting vision and strategy

managing the work

enhancing business skills and knowledge

understanding and navigating the organization

Leading the self:

-

demonstrating ethics and integrity

displaying drive and purpose

exhibiting leadership stature

increasing your capacity to learn

managing yourself

increasing self-awareness

developing adaptability

Leading others:
-

communicating effectively

developing others

valuing diversity and difference

building and maintaining relationships

managing effective teams and work groups

Source: Adapted from McCauley, C. (2006). Developmental assignments: Creating learning

experiences without changing jobs. Greensboro, N.C.: Center for Creative Leadership Press.
Permission granted from the Center for Creative Leadership to republish CCL's Model of Leader
Competencies.
Global Leadership Competencies
Developing successful global leaders is a competitive advantage for multinational organizations.6
In addition to essential leadership competencies, global leaders face special challenges that require
additional competencies. To clarify, a global leader is commonly defined as someone that
cultivates business in a foreign market, sets business strategy at a global level and manages
globally diverse and diffused teams.7 According to a Conference Board research report, 73% of
managers agree that domestic business leadership and global leadership differ in the skills
required. Some of the challenges that global leaders may face are managing a diverse group of
employees and business processes; adaptively approaching problems and challenges; adjusting to
new values and cultures; and adapting to different types of business and personal stressors.8
To address the unique challenges of global leaders, researchers have identified global leadership
competencies that can contribute to success. Among these global competencies, developing a
global mindset, cross-cultural communication skills and respecting cultural diversity are
paramount to succeeding in the global workplace.9 Morgan McCall and George Hollenback
studied successful global leaders and developed a list of common competencies specific to the
global leader (see Figure 2).10 HR practitioners can use global leadership competencies to support
the development of leaders and thus the overall global business strategy.
Figure 2: Global Executive Competencies
Open-minded and flexible in thought and tactics
Cultural interest and sensitivity
Able to deal with complexity
Resilient, resourceful, optimistic and energetic
Honesty and Integrity
Stable personal life
Value-added technical or business skills

Source: McCall, M., & Hollenbeck, G. (2002). Developing global executives: The lessons of
international experience. Boston, MA: Harvard Business School Publishing.
Business Trends and Strategy Drive New Leadership Competencies
According to the 2008 SHRM report, Changing Leadership Strategies, the rise of competition
caused by the knowledge economy and globalization will bring significant changes in the
leadership strategies for organizations. 11 Given the future business environment trends,
researchers agree that the most important leadership competencies will include effective change
management, developing talent/teams and being an effective collaborator/network builder.12 In
fact, since competencies should be driven by future business strategy, it is important to consider
the major business trends of the future.13 The Center for Creative Leadership (CCL) identified
some future business trends that will affect the leadership skills needed to support business (see
Figure 3).
In addition to looking at future business trends to shape the development of leadership
competencies, organizations must also look to the specific strategy and preferred business results
of the particular organization. By creating competency models that reflect the future strategy of
the business and the important results to stakeholders (i.e., customers, shareholders, investors),
organizations can successfully create a leadership brand.14 Dave Ulrich and Norm Smallwood
define a leadership brand as "a reputation for developing exceptional managers with a distinct set
of talents that are uniquely geared to fulfill customers' and investors' expectations."15 Researchers
have found that when investors have confidence in the leadership talent of an organization, share
price will increase.16 By creating a unique leadership brand via leadership competencies that
produce results to stakeholders, organizations gain a competitive advantage.
Figure 2: Global Executive Competencies
Open-minded and flexible in thought and tactics
Cultural interest and sensitivity
Able to deal with complexity
Resilient, resourceful, optimistic and energetic
Honesty and Integrity
Stable personal life
Value-added technical or business skills
Source: McCall, M., & Hollenbeck, G. (2002). Developing global executives: The lessons of
international experience. Boston, MA: Harvard Business School Publishing.

Literature and Research

The Leadership Skills Strataplex: Leadership Skill Requirements across Organizational Levels17
The authors of this article conceptualized and empirically tested a strataplex model for leadership
skills. Leadership skills are divided into four broad categories: cognitive, interpersonal, business
and strategic. The "strataplex" model refers to how the four categories of skills vary based on
respective management levels in an organization. The researchers tested the model on more than
1,000 new, midlevel and senior managers. The results showed that higher levels of management in
the organization required greater leadership skills. The most important skill across all the levels of
leadership was cognitive skill. This skill is thought to be the basis of all leadership skills because it
encompasses the ability to acquire new knowledge and learn new ways of solving problems.
Interestingly, business skills and strategic skills were the two most important skills to acquire
when moving into high levels of leadership. This research is important because it empirically
demonstrates that leadership skills do differ at different management levels on the career ladder.
Most importantly, business acumen and strategic skills must be acquired to be effective at the
higher levels of management/leadership. HR professionals should take into account the change in
competencies required as managers move into higher level leadership positions.
Managers' Justice Perceptions of High Potential Identification Practices18
High potentials are often regarded as the possible future leaders of an organization. Consequently,
the process of identifying high potentials is very important to both succession planning and
leadership development practices in an organization. The purpose of this research was to identify
the various processes that organizations are using to identify high potential leaders and how the
employees perceive the fairness of the process. Researchers distributed a survey at a leadership
conference to leaders from a variety of organization sizes and industries. The survey asked
questions about the high potential identification process as well as the perceived fairness of the
process. The findings revealed that competencies were used to identify high potentials 69% of the
time. The most important competencies used to identify high potentials were orientation toward
results, communication skills, adaptability, strategic skills and ability to make decisions.
Additionally, the survey found that the high potential identification process, the communication of
the process and evaluation were all significantly related to feelings of perceived fairness. This
example illustrates how leadership competencies can be used in the workplace. A fair process for
identifying high potentials, such as a competency approach, may lead to higher perceived fairness.
Transformational Leadership and Market Orientation: Implications for the Implementation of
Competitive Strategies and Business Unit Performance19
This article explores the relationship between competencies of the organization and firm
performance. The researchers hypothesize that competitive strategies link organization
competencies to firm performance. Specifically, this study investigated the link between
transformational leadership as an organizational competency and the competitive strategies of

marketing differentiation, innovation differentiation and low-cost strategies. These competitive

strategies are thought to have positive benefits to firm performance.
More than 200 organizations from a range of industries were included in the research sample. The
results showed that transformational leadership was significantly related to market orientation. In
this study, the authors define market orientation in terms of culture. The organization culture
clarifies values and norms that positively contribute to customer satisfaction and worth.
Transformational leaders are thought to impact and help form the organizational culture.
Transformational leadership was also positively linked to marketing differentiation and low-cost
strategies. Further, market differentiation was positively related to firm performance metrics.
Consequently, the competency of transformational leadership was found to have a positive impact
on firm performance through market differentiation. The results imply that one way to advance
market orientation is to develop the competency of transformational leadership. This study shows
that leadership competencies can have an impact on the bottom line of organizations through
competitive strategies. HR professionals can influence firm performance by identifying and
developing key leadership competencies in the organization.
In Closing
Leadership competencies can be used to effectively select, develop and promote leaders in an
organization. Certain factors such as business strategy and future trends should be taken into
account when creating leadership competencies. All business strategies are different and HR
practitioners should use the business strategy, including the global business strategy, to drive the
use of competencies in selecting and developing leaders. By effectively building a unique set of
skills for the organization's leaders, the firm will sustain competitive advantage.
Online Resources
Hay Group: www.haygroup.com
Center for Creative Leadership: www.ccl.org
The Conference Board: www.conference-board.org
SHRM Research Quarterly: Leadership Development: Optimizing Human Capital for Business
Success: www.shrm.org/Research/Articles/Pages/default.aspx
Results Based Leadership: www.rbl.net
End Notes
[1] Society for Human Resource Management. (2007). The 2007-2008 workplace trends list.
Alexandria, VA: Author.

[2] Brownwell, J. (2006, Fall). Meeting the competency needs of global leaders: A partnership
approach. Human Resources Management, 45(3), 309-336.
[3] Mumford, T., Campion, M., & Morgeson, F. (2007). The leadership skills strataplex:
Leadership skill requirements across organizational levels. The Leadership Quarterly, 18, 154-166.
[4] Garonik, R., Nethersell, G., & Spreier, S. (2006, Winter). Navigating through the new
leadership landscape. Leader to Leader, 30-39.
[5] Spencer, S., & Watkin, C. (2006). Potential for what? Retrieved January 4, 2007, from
www.haygroup.com.
[6] Caligiui, P. (2006). Developing global leaders. Human Resource Management Review, 16,
219-228.
[7] Caligiui, P. (2006). Developing global leaders. Human Resource Management Review, 16,
219-228.
[8] Kramer, R. (2005). Developing global leaders: Enhancing competencies and accelerating the
expatriate experience. New York: The Conference Board.
[9] Rosen, R., Digh, R., Singer, M. & Phillips, C. (2000). Global literacies: Lessons on business
leadership and national cultures. New York: Simon & Schuster.
[10] McCall, M., & Hollenbeck, G. (2002). Developing global executives: The lessons of
international experience. Boston, MA: Harvard Business School Publishing.
[11] Society for Human Resource Management. (2008). Changing leadership strategies.
Workplace Visions, 1.
[12] Barret, A., & Beeson, J. (2002). Developing business leaders for 2010. New York: The
Conference Board.
[13] Robinson, M., Sparrow, P., Clegg, C., & Birdi, K. (2007). Forecasting future competency
requirements: A three-phase methodology. Personnel Review, 36(1), 65-90.
[14] Intagliata, J., Ulrich, D., & Smallwood, N. (2000). Leveraging leadership competencies to
produce leadership brand: Creating distinctiveness by focusing on strategy and results. Human
Resource Planning, 23(3), 12-23.
[15] Ulrich, D., & Smallwood, N. (2007, Jul-Aug). Building a leadership brand. Harvard Business
Review, 85(7/8), 93-100.
[16] Ulrich, D. & Smallwood, N. (2007). Leadership Brand. Boston, MA: Harvard Business

School Publishing
[17] Mumford, T., Campion, M., & Morgeson, F. (2007). The leadership skills strataplex:
Leadership skill requirements across organizational levels. The Leadership Quarterly, 18, 154-166.
[18] Jerusalim, R. & Haursdorf, P. (2007). Managers' justice perceptions of high potential
identification practices. Journal of Management Development, 26(10), 933-950.
[19] Menguc, B., Seigyoung, A., & Shih E. (2007). Transformational leadership and market
orientation: Implications for the implementation of competitive strategies and business unit
performance. Journal of Business Research, 60, 314-321.
Project Team
Project leaders: Courtney Ledford, SHRM Research Intern; Nancy R. Lockwood, MA, SPHR,
GPHR, Manager, HR Content Program
Project contributor: Steve Williams, Ph.D., SPHR, Director, Research
Editor: Nicole Gray, Copy Editor
Disclaimer
This article is published by the Society for Human Resource Management (SHRM). All content is
for informational purposes only and is not to be construed as a guaranteed outcome. The Society
for Human Resource Management cannot accept responsibility for any errors or omissions or any
liability resulting from the use or misuse of any such information.
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