Differentiating Executive Leadership and Management Competencies

Within organizations, the skills required of leaders shift between managerial and executive levels. An executive is not simply the best manager. The attributes that lead to successful executive leadership performance overlap with managerial skills but there are distinct profiles for each. Many leadership books fail to recognize this difference; however, some leading companies such as GE have clearly distinguished the requirements at each level in their organization. Noel Tichy in his book on The Cycle of Leadership provides a clear explanation of differentiating skill sets needed at each level of leadership. The infamous Peter Principle results from advancing leaders into levels of leadership that do not match their competence. XBInsight has separate job categories for management through the director level and one for senior executives. This paper describes the differences we see in profiles between managerial and executive-level leaders.

Strategic leadership is characteristic of executive leadership positions and requires broad thinking, guiding the actions and decision-making processes for the organization as a whole. Strategic leadership competencies involve flexibility, the acquisition, and application of new information, monitoring the environment, as well as leading and persuading all organizational members with a clear sense of responsibility for what is best for the enterprise. Strategic leaders must be willing to learn, recognize and assimilate new information and apply it to organizational strategy. Effective strategic leaders not only tend to internal organizational issues but also understand and scan the external environment for factors that could affect the organization’s performance and functioning.

Equally important for organizational success are the competencies required for management. Management competencies that appear at the director level are leadership skills focused on execution more than the creation of strategy. These include competencies such as the ability to gather, monitor and distribute information. At a management level, individuals must supervise, lead and coach groups of employees and ensure the coordination and completion of day-to-day tasks within the organization. Additionally, management functions keep the organization running and operating by manufacturing and developing products/services, meeting customer-driven needs, and guiding organizational members. While management and strategic leadership competencies serve different functions within the organization, they are both required to ensure survival and growth.

Competency Differences by Job Profile

Job Profiles based on the competencies of XBInsight display a pattern of results consistent with the leadership literature. An advantage to the XBInsight system is that all competency profiles are built based on job categories as well as specific job titles. This allows the system to compare candidates to what is relevant for the work rather than to an overly generic standard. Below are examples of two Job Profiles for an executive leadership position (i.e. VP of Sales) and a management position (i.e. Sales Manager). Hiring managers completed job analysis surveys resulting in the following Job Profiles.

* # correspond to rank order of highest 12 competencies

Within the XBInsight system, the job profile of VP of Sales is one example of an executive category job that clearly exhibits strategic leadership competencies. This profile suggests the importance of an ability to learn, acquire and apply new information all of which are evident in the highly ranked competency of one’s ability to develop and apply organizational strategies and seize opportunities. Another strategic competency of this position is the ability to change and demonstrate flexibility and resilience. Executives in this position must bring a strategic business perspective. Finally, it is clear from the profile that it is necessary to lead by listening actively, leading courageously, establishing credibility, and exuding an executive presence.

On the other hand, the profile of Sales Director relies more on management competencies. This position requires managing the basic day-to-day operations that are critical to the organization’s ability to function. Managers must demonstrate an ability to attend to daily operations by building customer loyalty, striving for results and holding others accountable. Directors must have exceptional interpersonal skills to build rapport, establish credibility, develop and maintain relationships, persuade and influence, as well as coach and develop others. This job profile suggests that effective Directors will exhibit business skills to manage work and also display some of the executive competencies.

The XBInsight differentiates between levels of leadership because when there is a singular approach these vital differences are lost. This can cause missteps in determining who to promote or in developing managerial talent for higher-level roles. It is not just what worked in the past. A shift is required.

Competency Profiles

Similarly, based on reports derived from participants completing the XBInsight System, a consistent pattern of competencies was found when comparing executive and management job groups.

Competencies Higher for Executives in the Study:

• Strategic competencies ability to initiate and lead change; encourage and promote flexibility; anticipate change; drive organizational learning; see the bigger picture; scan and monitor organizational environment; envision continuous organizational future; system perspective
• Absorptive capacity or the ability to acquire, recognize, and apply new information
• Develop and apply strategy; maintain strategic business performance
• Adaptive capacity or the ability to change and be flexible
• Recognize growth opportunities; demonstrate flexibility and resilience; drive innovation; lead courageously
• Managerial wisdom (perceive variation in the environment)
• Recognize growth opportunities; seize opportunities
• Demonstrate strategic ability to lead and influence the organization with integrity and respect
• Inspire others; supervise effectively; exude executive presence; establish trust and respect; display fairness and objectivity; navigate politics; display empathy; listen actively; hold people accountable

Competencies Higher for Managers in the Study:

• Manage day-to-day operations, interacting with people
• Maintain order and accuracy

Competencies High for Both Executives and Managers:

• Exhibit a positive and optimistic perspective [Maintains optimism]
• Committed to communicating and promoting organizational values across the organization [Communicates core values]
• Exhibit exceptional presentation skills [Delivers compelling presentations]
• Interested in employee development and learning [Coaches and develops others]
• Manage Risks
• Strive for results and enjoy winning [Enjoy winning & Strive for results]

Strategic leadership (i.e. executives) requires an individual to continually acquire and apply new information, to manage knowledge, to be flexible and promote organizational change, to consider and scan the environment outside of the organization, and to serve as a trustful and respectful organizational leader. Consistent with expectations, successful executives completing the XBInsight System clearly demonstrate strategic leadership abilities and behaviors. Specifically, they exhibit an absorptive capacity, as they are able to acquire, recognize and apply new information as it becomes available to the organization. Additionally, the executives demonstrate an adaptive capacity (i.e., the ability to be flexible and change) while maintaining an awareness and understanding of the impact of the environment outside of the organization. The executives are able to lead and influence individuals within the organization with dignity and respect. On the other hand, managers completing the XBInsight System exhibit more management competencies in that they are able to keep operating smoothly as they consistently maintain order and accuracy.

Interestingly, across executive (i.e. strategic leader) and management job types, there are several similarities across the competencies, suggesting the presence of several foundational leadership competencies:

• a positive and optimistic perspective
• effective communication
• promoting organizational values, striving for results
• demonstrating an interest in others

These competencies are important factors of effective leadership at all levels. By tuning into both the similarities and distinctions, organizations can identify growth opportunities for individuals seeking to move from management to executive positions. In the context of XBInsight, understanding the differences between these two sets of competencies enables a greater understanding of how managers might be developed.

Take for example Sam and Pat who both are considered to be effective leaders within their organization. Sam, as an executive, is regarded as an effective strategic leader, maintaining and communicating broad organizational goals. Sam effectively communicates the vision of the organization, plans for long-term development and success, and navigates financial and marketplace challenges. Sam is also praised for his ability to gain the trust and support of organizational members in times of stress and change. On the other hand, Pat, as a director-level manager, focuses on ensuring that the organization maintains appropriate levels of product development and production, as well as through aligning functions and tactics to meet the needs of the customers. Pat also effectively leads first-line managers by helping them to achieve functional goals and build effective teams. While both Sam and Pat are considered to be superb leaders, the competencies responsible for their high performance are different. This has important ramifications for selecting and developing leaders. The best Director may not be the best choice for the executive position. Sam will need to develop the competencies for development if he is interested in pursuing an executive leadership role.

Conclusion

The data from the profile system is corroborated by the performance of the participants. It is clear that there is a qualitative difference in the competency make-up of management-level positions such as Director and executive leadership positions such as Senior VPs. It is critical that organizations assess and develop for these differences in order to avoid staffing mistakes at the top where they are most visible and costly. For more information on differentiating competencies by job type, contact us.