Since Covid-19, leadership looks a little different in corporate finance. Leaders are starting to show new qualities that are important when building a great team. Below you will learn what great leadership looks like now vs. pre-covid, based on a recent study.
As reported by Wall Street Journal on September 17th, 2022 by Rick Wartzman and Kelly Tang.
What Good Leadership Looks Like Now vs. Pre-Covid
What a difference a pandemic makes.
More than two years after the coronavirus began to roil the world, leaders of the best-run companies are displaying new qualities that are essential to building a more caring and empathetic workplace and otherwise thriving in a topsy-turvy environment, according to a study conducted by the organizational-consulting firm Korn Ferry.
These findings, which rest in part on the Drucker Institute’s measure of corporate effectiveness, suggest that “we are perhaps seeing a shift in the behaviors needed” by executives to “navigate their companies through…turbulent waters,” Korn Ferry concludes in a soon-to-be-released paper detailing its research.
“Other companies hoping to emulate these greats,” Korn Ferry adds, “could do well to take a hard look at their own leadership capabilities.”
The Drucker Institute’s statistical model underpins the Management Top 250, an annual ranking produced in partnership with The Wall Street Journal. It is rooted in the teachings of the late management scholar Peter Drucker. The 2021 list was published in December.
In all, we used 34 separate metrics last year to examine 846 large, publicly traded U.S. corporations in five areas: customer satisfaction, employee engagement and development, innovation, social responsibility, and financial strength. These five categories were then rolled up into an overall effectiveness score. We define effectiveness as Mr. Drucker did: “doing the right things well.”
The Korn Ferry analysis draws on more than 20,500 psychometric assessments of individual CEOs and other leaders at 674 of the 846 companies in the Drucker Institute rankings. These assessments were conducted in 2020, 2021 and earlier this year.
For each of the companies where there was a large enough sample, the senior executives’ results were aggregated to create a corporate leadership profile, which was then compared with the Drucker Institute’s scores. From the correlations that emerged, Korn Ferry determined which leadership traits and competencies are most exhibited at those companies that rank highest in the Drucker Institute’s model—both within each of the five corporate performance areas and in terms of total effectiveness.
“Traits” are personality characteristics central to who a person is. “Competencies” are observable skills that come naturally to some but can also be attained and honed with experience.
Korn Ferry 2½ years ago undertook a similar study, which was based on assessments of executives from 2015 through early 2020 and the Drucker Institute’s 2019 scores.
Just as in the first study, among the 20 traits that Korn Ferry tested, “tolerance of ambiguity” had the strongest positive correlation this time with the Drucker Institute’s best-scoring companies. “Trust,” “risk-taking” and adaptability” all remained in the top five, as well.
Given how deep-seated traits tend to be, this isn’t surprising. “It’s not that leaders have changed their spots,” says Stephen Lams, the vice president of data and analytics at the Korn Ferry Institute.
Yet what is striking is how different the competencies were in the most recent study among leaders of the best-managed enterprises. In fact, four of the 30 competencies that Korn Ferry examined in 2020— “builds effective teams,” “drives engagement,” “communicates effectively” and “cultivates innovation”—dropped out of the top five. The only constant was “collaborates.”
The four new competencies in the top five are “global perspective,” “manages ambiguity,” “interpersonal savvy” and “instills trust.”
Mr. Lams and his colleagues believe there is a strong link between these specific competencies and fresh demands that the pandemic has exacted on leaders. Having a global perspective, for instance, has become paramount amid supply-chain disruptions and reduced talent flow across borders that continue to affect many businesses.
At the same time, Covid-19 has brought on all sorts of ambiguities. And while tolerating ambiguity was the No. 1 trait for leaders at the most well-managed companies in both studies, having an ability to manage through the fog has now risen explicitly to the fore.
The other top competencies to surface—showing interpersonal savvy and instilling trust—have become more important with the coronavirus placing employees under new physical and mental strains. Another possible factor, Korn Ferry says, was the murder of George Floyd in May 2020, which prompted many companies to step up their efforts on advancing diversity, equity, and inclusion.
“DEI became top of mind for corporate leaders,” says Veronica Ge, a director at the Korn Ferry Institute. “In the past, they were more of nice-to-haves.”
In his book “Managing in Turbulent Times,” Mr. Drucker pointed out that executives “are not in control of the universe any more than other mortals are.” But they do have a responsibility “for the survival of the organization”—and that requires making crucial adjustments as called for by the situation at hand.
“To manage in turbulent times,” Mr. Drucker wrote, “means to face up to the new realities. It means starting out with the question, ‘what is the world really like?’ rather than with assertions and assumptions that made sense only a few years ago.”
If the latest Korn Ferry study is any indication, those leading the best-managed companies are doing just that.
Based on this study, do you believe that Covid-19 changed leadership styles forever?