By Fabiaan van Vrekhem, Managing Partner, and Stefan Peetroons, Management Consultant, at Accord Group Belgium

This blog post was first published on the AESC BlueSteps Executive Career Insider Blog

This article portrays the essence and purpose of leadership: the conscious awareness (essence) required to create value (purpose).

The essence of leadership: conscious awareness

While organizations previously expanded their market position gradually over time, they now operate in a context where changes occur at constantly increasing rates. Disruptive business models shake entire sectors to their foundations. The network economy, where nearly everything is available to nearly everyone, imposes a new requirement on leaders. This requirement is at the heart of leadership; it has to do with the awareness needed to adapt to increasing complexity. And it has to complement the other qualities that we look for in leaders: knowledge and experience, interpersonal skills and personality. According to Elliot Jaques, a Canadian psychoanalyst and organizational psychologist, a person’s ability to handle complexity is based on their level of capability. As complexity increases, it poses new challenges for decision-making and understanding of what is going on around us.

The purpose of leadership: value creation

All leaders – from team leader to CEO – create mental models of their environment. But they don’t look through the same lens. On the whole, we can identify six levels of leadership, six types of leaders who have a different level of consciousness, and will develop strategic plans, initiate actions and create value for their organization from a different (more or less complex) perspective:

1. Solution leaders
2. Best practice leaders
3. Strategic development leaders
4. Transformational leaders
5. Global leaders
6. Captains of society

Solution leaders are aware that people have perceptions and give meaning based on their knowledge, values and desires. They approach the client not just from their own perception, but realize that perceptions exist on their own and can be used to make a difference by serving individual client needs. When assigned to a new managerial role, they will look for means to optimally respond to the client demands and their underlying norms and wishes. Their actions will be focused on client satisfaction; offering a solution to the individual client’s need is the main focus. Typical terminology includes customer service, quality criteria and solution selling. Solution leaders will principally not anticipate new methods to address market segments differently or more effectively because their focus is on tangible perceptions. They will be most successful in organizations where the leader’s role is to maintain the overview, manage the process and strive for optimal results by reaching higher service levels for individual customers.

Best practice leaders are consciously aware that perceptions are situational and thus can vary depending on the circumstances that are taken into account. By consequence, they will look at how the optimal way to fulfil the needs of certain market situations or segments. Best practice leaders will give products or services a recognizable space that is differentiated from competitors. When assigned to a new managerial role, they will look for the weakest links and focus on optimizing these links to improve performance in specific situations. Their actions will be aimed at improving efficiency by reducing costs and increasing revenue. Typical terminology includes operational excellence, cost reduction and market penetration. Best practice leaders will not anticipate the changing business context, because they focus on what is present and try to make the best out of it. Profit maximization is the most important drive. They will be most successful in organizations where the focus lies on maximizing resources within a given context.

Strategic development leaders are consciously aware that needs vary according to the way we give meaning to context. Physical and emotional contexts (among other contexts) are two different things and so are the needs, norms and circumstances linked to it. They focus on how contexts will evolve, and on how one can create totally new experiences for their clients that are better adapted to certain contexts. When assigned to a new role, they will seek new growth perspectives by looking for new methods, concepts or systems that respond to upcoming changes by looking at other contexts. Strategic development leaders’ actions are not principally aimed at improving efficiency (reduce costs and increase revenue), but at anticipating trends, developing new products, services or markets, and maximizing the value for the customer. Typical terminology includes customer loyalty, differentiation and experience economy. Of course, they do continue to develop best practices to optimize efficiency, but they will contribute the most in companies where the existing product/service portfolio has limited growth potential and leaders have to tap new sources of growth.

Transformational leaders are consciously aware that their activity is interconnected with the role they play in the life of their stakeholders. Consciously shaping the role they want to play enables them to reflect about who they want to be for whom, how to best fill this role and how to utilize the company’s existing competencies to create new business models and experiences that are even closer to the client’s desired lifestyle. In doing so, new activities become visible from where growth can be realized. Transformational leaders will be most successful in organizations where strategic product, service or market development has become insufficient to realize growth ambitions. Their strategic intent will be aimed at providing the company with a new identity or reputation, or when there is a need to expand the role beyond the existing contexts managed.

Global leaders are consciously aware that roles are created based on what one considers valuable and thus on the proper values or drivers. They are aware that the role they play can be determined by the values to which it contributes. The purpose shifts from fulfilling their own ambitions to fulfilling the values of others or what others consider meaningful. When elected to take up an executive role, they will shape new products, services, systems, concepts, business models and roles with the aim to respond to what will be considered meaningful in the future. Global leaders will be most successful leading corporations, looking for political, economic, social or technological shifts that might influence what people will consider valuable in the years ahead.

Captains of society are consciously aware that what is valuable to one can only be sustainable as long as it does not have a negative impact on what others consider valuable. Their purpose is to build or contribute to the creation of sustainable ecosystems. When elected to take up a role, captains of society will strive for a balance of the whole and act as a stabilizing or supporting factor so that every individual can live according to his or her own purpose, while respecting the values of others. Their actions are aimed at adapting the business strategy in order to meet societal needs, minimizing environmental impact and improving social development. Captains of society will be most successful leading global institutions or in philanthropy where they can contribute to society, for current and for future generations.

Why leadership assessments matter

Leadership assessments are growing in popularity among businesses worldwide to assist in executive search and selection processes, succession planning or leadership development. When performed properly, these assessments always bring return. The investment is negligible compared to risk of failure or misfit. But is what we traditionally measure still appropriate?

Considering the levels of complexity in organizations, and the levels of consciousness of every individual, it’s imperative to align the level of complexity that has to be managed with the level of consciousness required to deliver at that level. This is essential when assigning people to leadership roles, especially in today’s dramatically reconfigured world. When hiring or promoting a manager to a leadership position, building a leadership team or developing a leadership pipeline, having insight into both the required leadership level as well as the “conscious awareness” of the leader to deliver at that level will avoid costly mistakes.

A leader’s level of consciousness will characterize their intellectual comfort zone, defined by what they perceive and will take into account when making decisions. The manager’s current level of leadership will determine the value they will be able to create for the company. It will also indicate the leader’s growth perspectives to take on more senior positions over time, as his or her conscious awareness will continue to evolve.

Given that the appropriate level of consciousness constitutes an essential part of leadership, but differs from person to person, it stands to reason that leadership assessments are indispensable tools to minimize the risk of managerial miss-hires. Complemented with the required knowledge and experience, the personality that fits the role and the values that fit the organization, the right leadership role will bring out the best out of people.