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Five capabilities of centered leadership

Published on 03/02/11 at 12:11pm
Joanna Barsh, Josephine Mogelof and Caroline Webb

The business environment has become more demanding: the global financial crisis and subsequent economic downturn have ratcheted up the pressure on leaders already grappling with a world in transformation.

At McKinsey & Company we conducted interviews with more than 140 leaders, analysing a wide range of academic research in fields as diverse as organisational development, evolutionary biology, neuroscience, positive psychology, and leadership workshops with hundreds of clients to test our ideas.

More than half of the chief executives we have spoken with in the past year have said that their organisation must fundamentally rethink its business model.

Through this research, we distilled a set of five capabilities that, in combination, generate high levels of professional performance and life satisfaction. We described this set of capabilities, which we call ‘centered leadership’.

Five capabilities are at the heart of centered leadership: finding meaning in work, converting emotions such as fear or stress into opportunity, leveraging connections and community, acting in the face of risk, and sustaining the energy that is the life force of change.

A recent McKinsey survey of executives shows that leaders who have mastered even one of these skills are twice as likely as those who have mastered none to feel that they can lead through change; masters of all five are more than four times as likely. Strikingly, leaders who have mastered all five capabilities are also more than 20 times as likely to say they are satisfied with their performance as leaders and their lives in general.

While such results help make the case for centered leadership, executives seeking to enhance their leadership performance and general satisfaction often find personal stories more tangible. Accordingly, as this article revisits the five dimensions of centered leadership - and their applicability to times of uncertainty, stress, and change - we also share the experiences of a  pharma chief executive in a global corporation.

Meaning

We all recognise leaders who infuse their life and work with a sense of meaning. They convey energy and enthusiasm because the goal is important to them personally, because they are actively enjoying its pursuit, and because their work plays to their strengths. Our survey results show that, of all the dimensions of centered leadership, meaning has a significant impact on satisfaction with both work and life; indeed, its contribution to general life satisfaction is five times more powerful than that of any other dimension.

Whatever the source of meaning (and it can differ dramatically from one person to another), centered leaders often talk about how their purpose appeals to something greater than themselves and the importance of conveying their passion to others.

Time and again, we heard that sharing meaning to inspire colleagues requires leaders to become great storytellers, touching hearts as well as minds. These skills are particularly applicable for executives leading through major transitions, since it takes strong personal motivation to triumph over the discomfort and fear that accompany change and that can drown out formal corporate messages, which in any event rarely fire the souls of employees and inspire greater achievement.

Positive framing

Psychologists have shown that some people tend to frame the world optimistically, others pessimistically. Optimists often have an edge: in our survey, three-quarters of the respondents who were particularly good at positive framing thought they had the right skills to lead change, while only 15% of those who weren’t thought so. For leaders who don’t naturally see opportunity in change and uncertainty, those conditions create stress.

When faced with too much stress (each of us has a different limit), the brain reacts with a modern version of the ‘fight, flight, or freeze’ instinct that sabre-toothed tigers inspired in early humans. This response equips us only for survival, not for coming up with creative solutions. Worse yet, in organisations such behaviour feeds on itself, breeding fear and negativity that can spread and become the cultural norm.

Connecting

With communications traveling at warp speed, simple hierarchical cascades - from the chief executive down until the chain breaks - are becoming less and less effective for leaders.

For starters, leaders depend increasingly on their ability to manage complex webs of connections that aren’t suited to traditional, linear communication styles. Further, leaders can find the volume of communication in such networks overwhelming. While this environment can be challenging, it also allows more people to contribute, generating not only wisdom and a wealth of ideas but also immeasurable commitment. The upshot: chief executives have always needed to select exemplary leadership teams.

Increasingly, they must also be adept at building relationships with people scattered across the ecosystem in which they do business and at bringing together the right people to offer meaningful input and support in solving problems.

Engaging

Of survey respondents who indicated they were poor at engaging - with risk, with fear, and even with opportunity - only 13% thought they had the skills to lead change. That’s hardly surprising: risk aversion and fear run rampant during times of change. Leaders who are good at acknowledging and countering these emotions can help their people summon the courage to act and thus unleash tremendous potential.

But for many leaders, encouraging others to take risks is extremely difficult. The responsibility chief executives feel for the performance of the entire organisation can make the very notion of supporting risk taking extremely uncomfortable. What’s more, to acknowledge the existence of risk, chief executives must admit they don’t, in fact, have all the answers - an unusual mind-set for many leaders whose ascent has been built on a virtuous cycle of success and self-confidence.

Managing energy

Sustaining change requires the enthusiasm and commitment of large numbers of people across an organisation for an extended period of time.

All too often, though, a change effort starts with a big bang of vision statements and detailed initiatives, only to see energy peter out.

The opposite, when work escalates maniacally through a culture of ‘relentless enthusiasm’, is equally problematic. Either way, leaders will find it hard to sustain energy and commitment within the organisation unless they systemically restore their own energy (physical, mental, emotional, and spiritual), as well as create the conditions and serve as role models for others to do the same. Our research suggests sustaining and restoring energy is something leaders often skimp on.

While stress is often related to work, sometimes simple bad luck is at play, as Jurek Gruhn, president of Novo Nordisk (US), can attest.

Nine years ago he was diagnosed with type I diabetes. Working for a leader in diabetes care, Jurek was no stranger to the illness and, along with his optimistic spirit, his no-nonsense orientation became a deep source of energy: “My first reaction was, ‘you may have type I diabetes, but you could also have a lot of other diseases that are much worse.’” So, he told us: “I went to the hospital for two or three days of testing and then went back home. We had our Christmas break. After that, I was back in the office. My wife, who is a physician, said to me, ‘That was a quick process!’ I basically took on my disease as a task.”

Jurek realised that one key to living a normal life with the disease is to embrace life, at work and at home. “A healthy lifestyle is important. I have five kids: my oldest daughter is 25, and my youngest is six. Sometimes they completely drain my energy, but they can energise me a lot. And now I feel healthier because I have also changed my lifestyle; I eat breakfast now every day, I exercise much more, and I started rock climbing on a regular basis.”

Everything improved - his physical condition, mental focus, emotional satisfaction, and spirit. He even learned to face what drained him most - unhealthy conflict at work - by addressing it directly and quickly, much as he handled his diabetes.

Centered leadership is a journey, not a destination, and it starts with a highly personal decision. We’ll leave you with the words of one executive who recently chose to embark on this path: “Our senior team is always talking about changing the organisation, changing the mind-sets and behaviour of everyone. Now I see that transformation is not about that. It starts with me and my willingness and ability to transform myself. Only then will others transform.”

Joanna Barsh is a director in McKinsey’s New York office, Josephine Mogelof is a consultant in the Los Angeles office, and Caroline Webb is a principal in the London office. Originally published in McKinsey Quarterly, www.mckinseyquarterly.com. Copyright (c) 2010 McKinsey & Company. All rights reserved. Reprinted by permission.

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