Leadership Transitions: Differences Across Leadership Levels 25 June 2013 Leadership Transitions: Differences Across Leadership Levels Joy F. Hazucha Copyright © 2011 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved. 1

The Korn/Ferry Leadership and Talent Consulting family Mission Vision Better leaders, Better world Premier global provider of talent management solutions that accelerate leadership effectiveness and maximize business impact 2 © 2008 PDI Ninth House. All rights reserved.

Global Footprint MADRID MEDELLIN AMSTERDAM ATHENS MELBOURNE ATLANTA MEXICO CITY MIAMI MILAN MINNEAPOLIS MONTERREY MONTREAL MOSCOW MUMBAI MUNICH NEW DELHI NEW YORK NORTHERN VIRGINA OSLO PARIS PHILADELPHIA PRINCETON QUITO RIO DE JANEIRO SAN FRANCISCO SANTIAGO SAO PAULO SEOUL SHANGHAI SINGAPORE STAMFORD SYDNEY TAIPEI TEL AVIV TOKYO TORONTO VANCOUVER VIENNA WARSAW WASHINGTON, DC WELLINGTON ZURICH AMSTERDAM ATHENS ATLANTA AUCKLAND BANGALORE BARCELONA BEIJING BOGOTA BOSTON BRISBANE BRUSSELS BUDAPEST BUENOS AIRES CALGARY CARACAS CASABLANCA CHICAGO COPENHAGEN DALLAS DUBAI DURANGO FRANKFURT GENEVA GUANGZHOU HAMBURG HELSINKI HONG KONG HOUSTON IRVINE ISTANBUL JAKARTA JOHANNESBURG KIEV KUALA LUMPUR LIMA LONDON LOS ANGELES LYON

Research on differences between levels Agenda Research on differences between levels Implications for your organizations Copyright © 2011 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

Transitions Across the Leadership Pipeline Copyright © 2011 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

Leadership Transitions The ‘Stats’ Fewer than 36% of executives hired from outside the organization will succeed (Bradt, Check & Pedraza , 2009) Up to 40% of internal promotions find the transition a challenge; 20% rate it a downright disappointment (rhr research) 8% of new managers continued to operate more as individual contributors than leaders (concept reserve)

Transitions in the ‘Danger Zone’ Why? Peter Principle; high performers who have been misidentified Never learned how to manage transition process Lack of support for big stretch assignments Lack of clarity around expectations Radically different success factors in new role—they don’t naturally occur

The Transformation Trilogy Need to understand what to Add On, Preserve, and Let Go Add On Preserve Let Go The Transformation Trilogy — Arthur Freedman, 1998

Whole Person Assessment: Compare Levels on Each 4. Behaviors and Skills: Skills and behaviors that can be applied on the job 3. Knowledge, Experiences: Relevant experiences and track record 1. Traits, Aptitudes, & Derailers: Behavior tendencies and abilities 2. Motivators, Interests, & Values: Career goals, What interests and engages them More observable Easier to develop Less observable More difficult to develop

Methodology overview: Looked at 30,000+ leadership assessments Determined leadership level at time assessment Contrasted each level to the ones above and below Isolated the attributes that reliably differentiate each level Replicated across samples, reliably classifies into correct level Copyright © 2013 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

1. Motivators: Data Collection Career History Questionnaire: inventory used as pre-work for in-depth assessments – asks leaders to rank order their top 5 motivators from a list of 19 Data collected from over 17,000 leaders from 2006 To 2011 Leaders represented a variety of industries as well as geographies Categorized into 4 levels of leadership Copyright © 2011 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

19 Motivators: Choose top 5 Advancement opportunities (promotions) Fast-paced environment with lots of change Friendly workplace with good relations with coworkers, vendors, and/or clients Sense of personal accomplishment Hard-driving, performance-based culture Autonomy in carrying out my responsibilities Belief in the mission of the organization Expert or authority status Fair and consistent managers Influence on the direction of the organization Monetary compensation Opportunity to be creative Responsibility for the performance of others and the results of the unit Stimulating, challenging work Training or development opportunities Variety in job duties Visibility and recognition Working in a stable job with little change Work-life balance Copyright © 2013 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

US Leader Motivators by Level High correlations between profiles -> more similar than different for all management levels. But the correlations go down with distance (first to senior is the lowest) Correlations between level profiles US mid funcbus senior first 0.94 0.86 0.79 mid 0.97 0.91 funcbus 0.98 Copyright © 2010 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

Preserve Across Levels Motivators Lower Level Senior Level Self Focused Motivators Influence Drives Advancement Influence on Organization Decisions Friendly Workplace Responsibilities for Others Development Opportunities Performance Based Culture Work-life Balance Belief in Organizational Mission Preserve Across Levels Achievement Drives Stimulating, Challenging Work Personal Accomplishments Monetary Compensation

2. Personality by Level Copyright © 2013 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

Consideration of Others Personality: Preserve Preserve Individual Contributor First-level Leader Mid-level Leader Business Unit Leader Senior Executive CONSISTENT Self-Confidence Emotional Control Consideration of Others Responsibility 16 16

Let Go Personality: Let Go DECLINING Micro-Managing Attend to Detail Individual Contributor First-level Leader Mid-level Leader Business Unit Leader Senior Executive DECLINING Micro-Managing Attend to Detail Passive-Aggressive Keep People Happy Independence 17 17

Add On Personality: Add On INCREASING Energy Adaptability Influence Individual Contributor First-level Leader Mid-level Leader Business Unit Leader Senior Executive INCREASING Energy Adaptability Influence Risk-Taking Optimism Vision 18 18

Personality Twist: Add On, then Let Go Copyright © 2013 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

Create a Negative Environment Handle Conflict Poorly Create Distrust Derailment Lack Self-Insight Poor Relationships Create a Negative Environment Handle Conflict Poorly Create Distrust

Personality Summary Summary Business Unit Leader ADD ON: LET GO: Strategic, trusting, idea generator, optimistic Acting independently Managing Managers (Mid-Level) ADD ON: LET GO: Influencer, energetic, executor, risk taker Attending to daily details Managing Others (First Level) ADD ON: LET GO: Willing to give direction, depends on others Needing to be liked

3. Experiences by Level Copyright © 2013 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

Lower Level Senior Level Experiences to Accelerate Transitions Lower Level Senior Level Difficult Staffing Situations Strategy Development Financial Management Critical/Visible Assignment Interpersonal Challenges High Risk Situations Support Function Experience Critical Negotiations Inherited Problems External Relations

Problem-Solving and Personality Note: Experience Differences much larger than Personality Problem-Solving and Personality Experience Copyright © 2013 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

4. Skills and Competencies Responses to The PROFILOR® from 8,000+ leaders across the globe: The PROFILOR® 360◦ feedback tool used for development purposes Feedback collected from sources including Manager/Boss perspective Boss Ratings of leaders from 4 levels Importance of each competency Skill level on behaviors -> competencies   Skill Importance Model Nlow Nhigh Sr Exec 952 1,014 1,007 1,008 BUL 1,232 1,292 1,288 1,290 MLL 2,572 2,603 2,586 2,589 FLL 3,119 3,249 3,232 3,239 Level Copyright © 2011 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

Ratings of Importance Thought Leadership Results Leadership Critically Important More Important at lower levels Adaptability (Self) Communication (People) Structure the Work – Plans (Results)   Critically Important at all levels Judgment (Thought) Structure the Work- Execution (Results) Drive for Results (Results) More Important at Higher Levels Building Talent (People) Engage and Inspire (People) Influencing (People) Strategy (Thought) Trust (Self) Similarities High Importance across levels Analysis/Judgment Structure the Work- Execution Drive for Results (MLL is close to threshold) Low Importance across levels Global perspective- I used global norm groups which were equally weighted for NA, Asia, and Europe samples so odd that global is rated low. Global is not seen as important which coincides with previous PDI research showing that even in Global companies the Global competency comes out low on importance. Differences Highly Important at certain levels Sr Exec: Talent, Trust (other levels close to threshold too) BUL: (Drive for Results is very high) MLL: Customers FLL: Communication Other competencies close to threshold across all levels are Collaboration and Trust (People and Personal) All levels are required to make good decisions, execute, and drive for results (Thought and Results) At higher levels, the more complex People and Thought competencies tend to become more important All 4 Leadership Superfactors are important across leadership levels (Thought, Results, People, Personal) Most critical at all levels: Judgment, Structure the Work-Execution, Drive for Results [thought and results leadership] Increasing Importance with higher leadership levels: Talent, Engage and Inspire (though doesn’t reach the cutoff the pattern is still strong) Other interesting trends: 4-5 competencies are really important for each level and they have some similarities and some differences Similar: Analysis/Judgment, Structure-Execution, Drive for Results Uniquely important to Sr Exec: Talent, Trust (though other levels are close to threshold as well) BUL: (Drive for Results is really high) Strategy & Influence tend to get more important Least important (even for global companies): Global Thought Leadership Results Leadership People Leadership Personal Leadership

Demonstrates competency to a great/very great extent Ratings of Skill Demonstrates competency to a great/very great extent 5 = to a very great extent 4 = to a great extent Values greater than 4 were considered high ratings for these analyses 3 = to some extent 2 = to a little extent 1 = not at all Mean ratings were high overall Similarities: Demonstrated to a great/very great extent at all 4 Levels Trust Demonstrated to a great/very great extent for specific levels Sr Exec = n/a BUL = Drive for Results, Engage & Inspire MLL = Customers, Drive for Results FLL = Drive for Results, Engage & Inspire, Relationships Sr Exec tend to score the lowest across competencies. Talent rated lower as you increase levels. Thought Leadership Results Leadership People Leadership Personal Leadership Copyright © 2011 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

Development Priorities Matrix Lower Importance (from PROFILOR) Higher Importance (from PROFILOR) Higher Skill (BOTH in PROFILOR & Assessments) Lower Skill Primary Strengths Primary Development Needs To provide additional verification of the higher and lower skill ratings, we looked at rank orders of competencies from high to low skill in both Profilor and in PDI NH Assessments Database. Included the competency in the importance x skill matrix above if the competency was higher skill in BOTH Profilor and Assessments data or lower skill in both databases. Critical & Performing Very Well = Key Strengths! Sr Exec = Trust BUL = Drive for Results MLL = Customers Critical & Performing Less Well = Key Vulnerabilities! The same pattern showed up for ALL levels Structure the Work: execution Additionally, for Sr Exec, Talent is rated Critical but has the lowest rated skill level of any competency. Hidden Weakness: Sr Exec & MLL = Financial Additionally, for Sr Exec, Global is rated much less important, and the skill level is also low. If this is not seen as important for individual jobs at any level, how will an organization succeed globally? Key Vulnerabilities At All Levels Structure the Work/ Execution Additionally, Talent becomes more important as level increases, but people are rated less well on it as level increases, which means the vulnerability on this increases with level. Copyright © 2011 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

Development Priorities Matrix Lower Importance (from PROFILOR) Higher Importance (from PROFILOR) Higher Skill (BOTH in PROFILOR & Assessments) Lower Skill Secondary Strengths Sr Exec: none BUL: Trust MLL: Trust Drive for Results Primary Strengths Sr Exec: Trust BUL: Drive for Results MLL: Customers Secondary Development Needs Sr Exec: Global Financial Structure Work-Plans Courage BUL: Talent MLL: Financial Primary Development Needs Sr Exec: Drive for Results Talent Structure Work-Execution BUL: Structure Work-Execution MLL: Structure Work-Execution To provide additional verification of the higher and lower skill ratings, we looked at rank orders of competencies from high to low skill in both Profilor and in PDI NH Assessments Database. Included the competency in the importance x skill matrix above if the competency was higher skill in BOTH Profilor and Assessments data or lower skill in both databases. Critical & Performing Very Well = Key Strengths! Sr Exec = Trust BUL = Drive for Results MLL = Customers Critical & Performing Less Well = Key Vulnerabilities! The same pattern showed up for ALL levels Structure the Work: execution Additionally, for Sr Exec, Talent is rated Critical but has the lowest rated skill level of any competency. Hidden Weakness: Sr Exec & MLL = Financial Additionally, for Sr Exec, Global is rated much less important, and the skill level is also low. If this is not seen as important for individual jobs at any level, how will an organization succeed globally? Key Vulnerabilities At All Levels Structure the Work/ Execution Additionally, Talent becomes more important as level increases, but people are rated less well on it as level increases, which means the vulnerability on this increases with level. Copyright © 2011 Personnel Decisions International Corporation, d.b.a. PDI Ninth House. All Rights Reserved.

Preserve Across Levels Most Important Competencies Lower Level Senior Level Adaptability Build Talent Communication Engage & Inspire Influence Strategic Thinking Trust Preserve Across Levels Judgment Structure the Work Drive for Results

The Five Agendas of a Leader: Framework for Transitions and Engagement Leadership Agenda Identify core values and principles Set the tone for leadership Demonstrate organizational savvy Engage and inspire others Leadership Business Agenda Define strategic priorities Understand and leverage key business drivers Outline short-term and long-term action plans to accomplish significant results with speed and quality Relationship Agenda Establish positive working relationships with important stakeholders Proactively network and build relationships to ensure long-term success Business Relationship Personal Personal Agenda Clarify life goals and values Balance work life with family, health, and fitness, and other priorities Maintain motivation and focus Learning Learning Agenda Identify key strengths and weaknesses Establish development plans to build capabilities where needed Learn from experience

Developing leaders can help: Implications Focus on motivators, style, competencies & experiences to develop leaders Some attributes matter more at specific levels of leadership (influence, risk taking, strategy) Some attributes matter at all levels of leadership (achievement drive and results) Developing leaders can help: Place more time and focus on important areas that might otherwise be ignored Learn and intentionally use helpful tools and frameworks Seek relevant experiences and feedback Identify colleagues with complementary strengths

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