6

Effective Leadership
Things We Know About

Ryne A. Sherman

T
he fate of any organization is critically
dependent upon its leadership (Hogan, 2007).
Organizations with effective leaders repeatedly
outperform organizations with ineffective leaders.
Economists estimate that CEOs account for between
17-30% of the variance in firm financial performance
(Quigley & Hambrick, 2014). However, organizations
are notoriously bad when it comes to identifying
effective leaders. In fact, a 2017 Gallup Poll found that
85% of the global workforce is either not engaged or
actively disengaged at work, and that is the result
of poor leadership (Gallup, 2017). There are many
reasons for the persistence of bad leadership, but
three of them stand out among the rest. First, when
choosing leaders, organizations succumb to the allure
of charming employees who are skilled at playing
corporate politics to advance their own careers.
Second, organizations tend to rely more on gut and
intuition when it comes to staffing decisions, rather
than making decisions grounded in science. Third,
organizations don’t know what competencies are
required to be an effective leader.
So, what does effective leadership look like?
Unfortunately, you won’t find the answers in the
leadership section of your local bookstore; those
shelves are filled with personal and historical
anecdotes that don’t generalize beyond their
specific situations. The systemic and scientific
study of leadership effectiveness, on the other
hand, has identified common competencies of
highly effective leaders. In this article, I describe
the six scientifically supported competencies of
effective leaders.

So, what does effective leadership look like? Unfortunately, you won’t
find the answers in the leadership section of your local bookstore; those
shelves are filled with personal and historical anecdotes that don’t
generalize beyond their specific situations.

© 2020 Hogan Assessment Systems Inc. All rights reserved.

6 Things We Know About Effective Leadership

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Integrity. Effective leaders Technical Competence. Humility. Effective
have integrity. Integrity Effective leaders have leaders are humble.
builds trust. Trust is the technical competence Contrary to popular belief,
foundation for every relationship. in at least some aspects of the the most effective leaders are
If you don’t trust your spouse, organization. Nobody expects a not charismatic and charming.
divorce is inevitable. If you don’t leader to know everything, but Humble leaders give credit to
trust your business partner, your they ought to have some technical their team, listen to feedback
business is doomed. If you don’t knowledge of whatever they are from others, and accept
trust your boss, you might as overseeing. Science professors responsibility for their team’s
well start updating your resume. want their Dean of Science to be a failures, instead of blaming
Effective leaders build trust scientist, as opposed to an expert in others. People want to work—and
by keeping their word and not contemporary literature. Designers will work—for humble leaders
playing favorites. want their director to have formal who create environments where

2
training in design principles. Football their accomplishments are
Good-Decision Making. players want their coach to have had recognized and appreciated.

6
Effective leaders make experience playing football. Having
good decisions in a technical competence gives the Ambition. Effective
timely fashion. This does not leader credibility. No one will listen leaders are fiercely
mean they always make the to a leader who lacks credibility. competitive and

4
right decision. It means that persistent. Do not be fooled into
they base their decisions on Vision. Effective leaders thinking humility means a lack
the best data available and provide a vision for the of passion. The most effective
don’t spend unnecessary time future. Team members leaders are deeply competitive.
and energy overthinking those want to know where the Most critical though is their
decisions. Ineffective leaders organization is headed and how we competitiveness regarding their
tend to make decisions that are going to get there. Providing a team’s success. They want their
are irrational or illogical and/ vision gives the team purpose in team to succeed above all else,
or make decisions very slowly. their work and creates buy-in. All and they are willing to sacrifice
Both drive their teams crazy, other things being equal, teams personal glory, accolades, and
and lead to dissatisfaction and that have a purpose will be more rewards if it results in their
disengagement. motivated and more productive. team winning.

Although we know that these six competencies are critical for leadership Organizations
effectiveness, bad leadership is still the norm (Chamorro-Premuzic,
that have adopted
2013). This is, unfortunately, the case because organizations tend to do
a poor job of selecting their leaders. Even today most leaders are chosen scientifically
for political reasons or on the basis of an in-person interview; situations validated assessments
where charm and sociopolitical skill are critical. The only remedy for leadership are
for ineffective leadership is scientifically validated assessments for seeing increased
leadership selection and development. Organizations that have adopted
worker engagement
scientifically validated assessments for leadership are seeing increased
worker engagement and productivity, as well as decreased turnover.
and productivity, as
Leadership drives organizations and personality drives leadership. well as decreased
Effective leadership begins with effective personality assessment. turnover.

Chamorro-Premuzic, T. (2013). Why Do So Many Incompetent Men Become Leaders? Harvard
Business Review. Retrieved from: https://hbr.org/2013/08/why-do-so-many-incompetent-men
Gallup (2017). State of the Global Workplace. Gallup. Retrieved from: https://www.gallup.com/
workplace/238079/state-global-workplace-2017.aspx
Hogan, R. (2007). Personality and the Fate of Organizations.
Quigley T.J., Hambrick D.C. (2014). Has the “CEO Effect” Increased in Recent Decades? A
New Explanation for the Great Rise in America’s Attention to Corporate Leaders. Strategic
Management Journal.