Human Capital & Careers

People Skills Deserve More Respect

A survey finds that 35 percent of internally hired leaders fail, usually because of a lack of interpersonal skills, and that companies with strong ...
Lisa YoonMarch 8, 2006

The quality that leaders respect most in other leaders is the ability to bring in financial results, according to a recent report by talent-development consultancy Development Dimensions International. In DDI’s fourth annual survey, nearly 5,000 “leaders” and human resources representatives around the world ranked decision-making ability second and vision for success third among qualities that garner their respect.

Notably, people skills and the ability to mobilize a team ranked lower, and ethical behavior was close to the bottom.

Do these responses suggest that all the people-focused talk in recent years — of emotional intelligence and people as “a company’s greatest asset” — has been lip service? Is the “people side” of leadership just a soft topic that “real” leaders don’t have time to address?

On the contrary: Considering the survey’s other findings, it may be that there’s a gap between the kinds of leaders who win respect and the kinds who actually succeed.

For instance, 35 percent of internally hired leaders fail, according to the HR professionals who responded to the survey, usually because of a lack of interpersonal skills. “If you promote internal candidates and only base the promotion on their ability to get the numbers,” says Paul Bernthal, a manager at DDI, “you don’t adequately support them and help them become better managers of people.”

DDI also reported that companies with companies with strong leader-development programs enjoy better business results. These companies had an return on equity of 7.03 percent, compared with -7.37 percent for companies that had no such program; an profit margin of 5.27 percent, compared with -11.76 percent; and operating cash flow averaging 5.87 percent of net sales, compared with -9.29 percent. (All figures are on an industry-adjusted basis.)

According to Bernthal, the gulf in the survey results — between the importance of people skills to financial results and the respect that executives have for leaders who can bring in the numbers — may lie, in part, in how the question was phrased. Respondents “were only allowed to choose one quality from the list of what they respect in a leader,” he explains. “If you’re forced to choose, it’s interesting what comes out” — but perhaps not surprising, since after all, companies are in the business of producing profits. Bernthal interprets the responses regarding most-respected qualities as an admission of that fact.

That’s only a partial explanation, however; “people skills” wasn’t simply absent from the top of the list, it was near the bottom. Many leaders, it seems, simply don’t take the personal side of leadership equation as seriously as they do other factors. “I’m not terribly surprised that that’s what organizations are still thinking,” says Cile Johnson, a manager at the Center for Creative Leadership, regarding the respect for bringing in the numbers. “Organizations are still placing high value on ability to meet financial targets.”

They should. But executives must also make the connection between their respect for financial performance and what’s driving it. “It’s about leaders taking the time to dissect what’s most important in order to get those numbers,” Johnson maintains.

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