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7 of the Most Important Leadership Competencies



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It can be a challenge to lead organizations effectively due to several underlying factors, including changing demographics, resource constraints, precarious jobs, increased pressures for impact and accountability, and more. These things make it vital to understand leadership competencies for the future. Organizations need to put in the work needed to strengthen communities through leaders of tomorrow. These are leaders that demonstrate the following seven key competencies.

1. Co-Creation

Being a leader means being a co-creator. This is the ability to build strong, adaptive and diverse organizations with clear visions, missions and values. You develop relationships and trust with your team members as a means to become more effective and find your own leadership style. If you succeed in this, it is reasonable to assume you’ll see an improvement in employee performance and morale.

Co-creators develop the building blocks needed to form nations, policies, and cultures with and by those they lead. They are the facilitators driving organizations and the catalysts of shared success. According to my friend David Nour, co-creation allows leaders to provide opportunities for the development of great ideas and ultimately take part in the outcomes. In his book, Co-Create: How Your Business Will Profit from Innovative and Strategic Collaboration, he talks about how taking credit for outcomes can be antithetical to the success of teams. Instead sharing successes and failures through strategic collaboration, brings more innovation and profit.

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2. Systems Thinking

A systems thinker is a leader who anticipates change, assesses data, and develops strategies. The ability to think logically is a vital component of effective leadership. It helps to establish a solid foundation for the development of leaders. In the Journal of Leadership Education, John Ricketts found a positive relationship between critical thinking ability and leadership effectiveness. Thinking deeply about the secondary effects of your behaviors and actions, brings about a greater self-awareness and ultimately unleashes the productivity of everyone around you. 

My mentors Art Kleiner and Peter Senge taught me an incredibly valuable skill – the ability to discover all variables affecting behaviors in a system to create a behavior over time chart. You identify every single variable affecting a decision, and then show their interrelationships. Variables that have a direct relationship are given an “s” for “same” which will increase its value. And, variables that have an indirect are given an “o” showing that increasing one of the variables will reduce the other. 

For example, if the problem is about ice cream and its effect on diabetes, there are three potential variables. Hunger, Eating, Ice Cream and diabetes. As you hunger, you want to eat more (same direction or “s”). As you eat more ice cream, it’s reasonable to assume you will get more diabetes (same direction or “s”). Therefore you have a reinforcing system of negative behavior. The way to break this system is to create a variable that has the opposite effect on eating behavior – like making a healthy choice. As you make a healthy choice, you reduce ice cream (opposite or “o” relationship), and thus you will have less diabetes.

These same tactics can easily be applied to decision making for leaders. By understanding what affects your behaviors have on the larger system, it will be easier to make the right decisions and get the best possible outcomes.

3. Mentoring

Mentors are leaders who always support their followers or subordinates. Additionally, they trust people and are empathetic towards them. Mentors prioritize the development of other leaders who can step in and take charge if needed.

A mentor looks to improve the world by helping people grow and by encouraging them to support others.  A study in the Journal of Leadership and Organization Studies, found that employees benefit significantly from mentoring, and “Employee opinions about mentoring are reported as uniformly positive.”

“Outstanding leaders go out of the way to boost the self-esteem of their personnel. If people believe in themselves, it’s amazing what they can accomplish.” – Sam Walton

4. Storytelling

Storytellers communicate the mission and vision through honest and compelling stories. Leaders must understand the foundations of good storytelling. Although there is no magic recipe for telling a good story, there are certain rules for storytelling that every leader should follow. This includes:

  •   Telling the story as if you were talking to a friend
  •   Making the story people-centric
  •   Focusing the story on conflicts and their resolution
  •   Staying humble while telling the story

A study in the Social and Behavioral Sciences journal finds that when used appropriately, storytelling can help a leader to communicate their thoughts to subordinates, share their expertise, develop a common mission, and peacefully settle disputes.

5. Innovation Mindset

Having an innovation mindset requires curiosity and a hunger for learning. Leaders with an innovation mindset encourage experimentation and risk-taking. Innovative leaders are visionaries with great ideas who inspire and encourage others to turn those ideas into reality. Generally, an innovative leader simply recognizes a brilliant idea—typically conceived by a subordinate—and envisages the direction that would lead to the realization of that idea. Most leaders see innovation as the greatest driver of change within organizations in the future. What does that mean for future leaders? Future leaders must be innovators.

6. Relationship Building

Leaders who are great at relationship building, promote learning and change within organizations. They are good at developing relationships, networks, and partnerships. The purpose of this is to further the organization’s mission and impact as well as share knowledge and ideas across the organization.

Relationship builders offer input in their areas of specialization while linking subordinates with those on the team or within the company who can best meet their individual needs. In a HBR article, “Managers Can’t Be Great Coaches All by Themselves, they must be connectors,” the author lists four different types of managers and ranks ‘connectors’ as the best amongst them.

Relationship building requires a deep understanding of others, and the ability to give what is needed, and ask for what you need one hundred percent of the time. Relationships are two ways – so the best relationship builders begin by getting to know the other person’s needs fully, and then giving what is needed to formulate a strong bond and trusting relationship.

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7. Steward Leadership

Steward leaders direct, manage and protect the human capital and financial resources of an organization. They serve as trustees for organizations—large and small—that want to grow and change. Stewards must stay true to their organization’s long-term vision while pursuing short-term goals that are consistent with the organization’s core values.

A common topic of discussion amongst the top brass of organizations is how to move towards the vision of a future leader? The seven leadership competencies defined above provide a framework that organizations can build upon to create the leaders of the future.

Louis Carter, MA, is founder and CEO of Most Loved Workplace, Best Practice Institute, Results Based Culture and the author of more than 10 books on best practices in leadership and management, including Change Champion’s Field Guide, In Great Company and Best Practices in Talent Management. He is voted as one of Global Gurus Top 10 Organizational Culture gurus in the world and is one of the top advisers to C-level executives, helping them and their organizations achieve measurable results. You can follow Louis on Twitter at @louislcarter.

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