Leadership in High Performing Cultures

An Empirical Analysis in German Consulting Practice


Master's Thesis, 2019
126 Pages, Grade: 1,0

Excerpt

Table of Content

Table of Content

List of Abbreviations

List of Figures

1. Introduction
1.1 Background
1.2 Problem Discussion
1.3 Purpose of the Research

2. Frame of Reference
2.1 Succeeding in the 21st Century
2.1.1 The New Organization
2.1.2 The New Skillset
2.1.3 The New Leader
2.1.4 Relevance and resume for research
2.2 Modern Leadership
2.2.1 The Modern Leader
2.2.2 Modern Leadership Behavior
2.2.3 Leadership and Talent Management
2.2.4 Relevance and resume for research
2.3 Fundamentals of Leadership Theory
2.3.1 Defining Leadership
2.3.2 Leadership Strategy
2.3.3 Effective Leadership
2.3.4 Relevance and resume for research
2.4 Essentials of Leadership
2.4.1 Leadership Concepts and Styles
2.4.2 Pyramid of Leadership
2.4.3 Leadership of Knowledge Workers
2.4.4 Relevance and resume for research
2.5 Leadership in Consulting
2.5.1 Research on Consulting
2.5.2 Culture and Leadership
2.5.3 Relevance and research for research
2.6 Conclusion to frame of reference

3. Methodology
3.1 Theory of Qualitative Thinking
3.2 Research Design
3.3 Research Method
3.4 Sampling Strategy
3.5 Data Analysis
3.6 Research Quality
3.6.1 Reliability
3.6.2. Confirmability
3.6.3. Transferability
3.6.4. Credibility

4. Empirical Findings
4.1 Results to Exploratory Questions (Q1)
4.2 Results to Succeeding in the 21st Century (Q2)
4.3 Results to Modern Leadership (Q1/Q2)
4.4 Results to Fundamentals of Leadership Theory (Q1)
4.5 Results to Essentials of Leadership (Q1)

5. Interpretation of Empirical Findings
5.1 Definition of Leadership in Consulting (Q1)
5.2 Challenges and Requirements for Successful Leadership in Consulting (Q2)

6. Conclusion
6.1 Research Questions and Purpose
6.2 Contribution and Implications
6.3 Outlook and Limitations

Bibliography

ITM – Integral Total Management

Appendix. X

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

List of Figures

Figure 1: Leader transition in two steps and five dimensions – McKinsey & Corporation

Figure 2: Author’s own illustration – Compression of deliverables from literature research and transfer to thesis

Figure 3: VOPA-model for agile leadership

Figure 4: Leader vs. Manager

Figure 5: Leadership effectiveness in digitalization

Figure 6: The ten capabilities that matter most for leadership and talent management

Figure 7: Author’s own illustration – Compression of deliverables from literature research and transfer to thesis

Figure 8: Management contrasted to leadership

Figure 9: Timeline showing the approaches to leadership

Figure 10: Determinants of business success

Figure 11: Evaluation of Leader

Figure 12: Emotional intelligence

Figure 13: Outcomes used to assess leader effectiveness

Figure 14: Author’s own illustration – Compression of deliverables from literature research and transfer to thesis

Figure 15: Competence-catalogues for leaders

Figure 16: Relevant competencies of a leader depending on his hierarchical level

Figure 17: The three pillars of leadership

Figure 18: General principles for organizational design in sales

Figure 19: General organizational design in sales

Figure 20: Author’s own illustration – Compression of deliverables from literature research and transfer to thesis

Figure 21: Consulting research as branch of social sciences research on consulting

Figure 22: Systematization of external consulting services

Figure 23: Rationality related consulting types

Figure 24: Personnel leadership

Figure 25: Author’s own illustration – Compression of deliverables from literature research and transfer to thesis

Figure 26: Author’s own illustration – Compression of deliverables from literature research and transfer to thesis

Figure 27: 13 pillars of qualitative thinking

Figure 28: Research design in qualitative social sciences

Figure 29: Research design in qualitative social sciences

Figure 30: Process model of problem-centered interview

Figure 31: Interview guideline

Figure 32: Sample for primary data research

Figure 33: Analysis framework primary data

Figure 34: Empirical data

Figure 35: Empirical data

Figure 36: Empirical data

Figure 37: Empirical data

Figure 38: Empirical data

Figure 39: Empirical data

Figure 40: Empirical data

Figure 41: Empirical data

Figure 42: Empirical data

Figure 43: Leadership Model Consulting and Interdependencies

Figure 44: Leadership Model Consulting and Interdependencies

Figure 45: Implication for Practical Transfer

Figure 46: Implication for Practical Transfer

Figure 47: iJourney

1. Introduction

Chapter 1 introduces the topic of this research by providing background information. Thereby, the relevance and problem statement of the study are highlighted, which qualifies the topic to be discussed. The chapter concludes with the formulation of the research questions.

1.1 Background

Development Dimensions International (DDI) began to research on the topic of leadership in 1999 and conducted one of the most expansive leadership projects ever in history1. In their report, dozens of practical, evidence-based recommendations, ranging from digital transformation, purpose, culture to gender and generational diversity, are summarized, integrating data from 25.812 leaders and 2.547 HR professionals across 2.488 organizations, spanning more than 1.000 C-level executives and 10.000 high- potential employees including 54 countries and 26 major industry sectors2. In their study, 25 findings about the state, context and future of leadership are identified across six overall dimensions3:

- Leaders at the Core (Leadership & talent on top agenda for CEO’s)
- Digital & Data (Digital and Data accelerate the need to build capabilities)
- Growth & Potential (Robust learning and growth engines for future leaders)
- Leader Diversity (Advancing gender and generational diversity in leaders)
- Cultural Drivers (Powerful forces that will disrupt)
- The HR Opportunity (HRs influence to deliver on this strategic agenda)

Each of these dimensions holds several recommendations and key data that describe leadership challenges and implications. In total, some overarching trends emerge as consistent guiding principles flowing into all aspects and dimensions and therefore can be highlighted as follows4:

- Digital reshapes the workforce – The influence of digital has been found in nearly every facet, showing that digitally advanced leaders outperform their peers
- Data’s power extends beyond the numbers – Heavy influence of data and analytics on business’ human side, namely agility, fairness and inclusivity
- Culture looms crucial – Leadership strategies fail without solid cultural cornerstones such as purpose, coaching, safety, diversity and generational views
- DIY is DOA – Leaders who fail to adopt a collective, shared and team-centric view won’t thrive
- The potential pool swells to a lake – Organizations that accelerate leadership talent prove to be financially more successful and employ more women at leader level
- HR navigates a challenging road ahead – HR’s own digital readiness is lacking and needs to be addressed immediately

Each identified dimension of this research by DDI shows some of the most significant challenges and opportunities ahead for the broad topic of leadership. In its core, some cornerstones of this research are addressed when researching on leadership in Consulting: Digitization, Data, Culture, Style, Talent, and HR. All these aspects have a deep influence on how leadership is perceived and should be anchored strategically within an organization. Regarding the scope and research aim of this paper, another crucial axes comes into play that has so far not been addressed scientifically: Industry-specifics as in the example of Consulting. Specialties in terms of organizational-setup, a high degree of knowledge-workers, leading in distance and usually attracting top talent besides technology and investment-banking firms, characterize this field and reshape the way of how leadership should be researched in this particular context. Therefore, an in-depth literary review and a qualitative study with industry experts (n =10) has been conducted in order to identify leadership-criteria in Consulting and address the research questions of this paper.

1.2 Problem Discussion

Leadership is a crucial success factor for corporations and therefore also of high interest within the scientific community. Bruch et al. (2012) postulate that in an uncertain and volatile corporate environment, success depends on leaders within a firm that recognize, direct and lead change throughout the whole corporation on every level of the value chain5. Corporations that do not implement leaders and rely on managers that only monitor and optimize existing business models, will fail. Knowing the fact that Leadership has a tremendous impact on employee satisfaction, performance, commitment and fluctuation, underlines the fact that this topic is of particular interest, independent of the company size or industry6. Currently, leadership is on top-level and CEO-agenda, having a major impact on business performance. Many examples have shown outstanding and miserable leadership from business to sports or politics7. Current discussions are based on trends, best practices, leadership performance, assessments or measurements, but three dimensions can be researched in general, when dealing with leadership on a scientific basis8:

- Leadership personalities and competencies
- Leadership of employees and teams
- Leadership of corporations

This research addresses each of these elements and dimension from different angles and perspectives, both from an academic and practical point of view. With regard to the Consulting Industry, no research has been conducted yet and a potential gap is identified. Therefore, this paper addresses the field of leadership within German Consulting practice through a qualitative empirical analysis and in-depth literary review. Challenges and problems that occur in this industry are for instance highly skilled workers, new generations floating the market, shortage in supply and demand of talent, project-based work, and few touchpoints with management by consultants in a highly complex environment with different structures internally & at the client site.

1.3 Purpose of the Research

The purpose of this research is to investigate challenges and requirements for leadership in a high performing culture based on the example of Consulting. The following research questions give evidence related to the aim of this research:

Q1: How can leadership in Consulting be defined?

Q2: What are challenges and requirements for successful leadership in Consulting?

The investigation of leadership in Consulting has not been addressed entirely within the scientific community so far and demonstrates a potential research-gap. Therefore, existing scientific theories (chapter 2) such as leadership theories, capabilities, skills and effects on an organization are relevant to the frame of reference and the empirical analysis. Consequently, this research provides a significant contribution to existing research and targets a relevant contribution in terms of practical advice for leaders and managers in the Consulting industry faced with leadership challenges and responsibilities.

2. Frame of Reference

The frame of reference outlines the theoretical background of leadership and Consulting through an in-depth research on all relevant databases, journals and literature. Existing theories are discussed to build the basis for the empirical research and semi-structured questionnaire with industry experts.

2.1. Succeeding in the 21st Century

2.1.1 The New Organization

Deloitte’s Human Capital Trend Reports portray a clear picture of how businesses, ecosystems and in particular the workforce is ever changing and ahead of tremendous changes of how organizations are designed, culture is shaped, employee learning is shifting, HR technology and people analytics are on the rise and leadership is awakened in an increasingly complex marketplace (2016)9. In 2017’s report, Volini and Walsh describe an age of disruption, where business and HR leaders rewrite the rules for organization, recruiting, development, managing and engaging the 21st century workforce in a dramatically changing digital, economic, demographic and social landscape10. Walsh and Volini describe the change on two axis11: First, the workforce is changing (globalization, digitization, automation, diversity). Second, business expectations, needs and demands change faster than ever before in industry. From an HR and strategic point of view, both author’s see this new playground rather as a chance than a threat. Leading HR practices who redesign organizational requirements (platforms, processes, tools) will strive and create ever-lasting value for both, the organization and the HR department12. In 2018, Kaji, Edelmann et al. postulate another shift13: the rise of the social enterprise. The core of their argumentation is that organizations are no longer assessed based only on traditional metrics such as financial performance, or quality of products and services, rather they are increasingly judged on the basis of their relationship with workers, customers, communities and their impact on society. They see core challenges in the new organization and economy, to build relationships with all relevant stakeholders (customers, employees, politics) and not purely focus on shareholder value any more14. This challenges business and HR leaders to enhance collaboration, build trust and credibility, primarily to attract and retain talent. For these reasons and in correlation with this research paper, one could argue that leadership on the aforementioned parameters is more important than ever before and has to be embedded throughout the whole corporation, regardless of the industry or profession, as it becomes a basic need. Kaji, Edelmann et al. compress and define it in a form of a mission for the 21st century organization15: A social enterprise combines revenue growth and profits with the needs to support environment and stakeholder network and actively listen, invest and manage trends, which will further shape the world. They embed this new kind of organization in a picture of a citizen who serves as a role model, internally and externally. If you put this into context of leadership, it even could mean to widen leadership enablement and future top talent training in order to have the right workforce in place that can transmit this picture internally and externally to relevant stakeholders and therewith deposit on the corporate value. Especially, as people today seem to have less trust in political and social institutions and require their employer or business to fill the gap and become role model16.

Ten trends will build the basis for the new organization, according to Deloitte (2018)17:

- Teams leading teams (top executives play as a team while also leading their functional teams)
- The workforce ecosystem (new workforce segments such as freelancers become important and need to be addressed through the right culture and leadership as approx. 50% of surveyed companies expect an increase in freelancers that make up their workforce)
- New rewards (employees ask for more personalized and individual reward such as fair and open payment, while only 8% of surveyed corporations report that they are effective in this)
- From careers to experience (Instead of steady progression on a career-pathway, leading companies shift to empower workforce to manage their own career, while only 1/3 of surveyed corporations seems to be on track)
- Aging workforce (Partnering with older workers to develop new career models and address societal issues or pensions become inalienable)
- Social impact (Engagement with stakeholders on diversity, gender pay equity, income inequality or immigration can lift brand value while failure to engage can destroy reputation although currently only 1/5 issues it as top priority)
- Well-being (Employees demand expended benefits offering for physical, mental or financial health, although big gaps remain between what workforces value and what companies deliver)
- AI, robotics and automation (To be able to maximize the potential value of these technologies, tremendous demand for skills such as complex problem-solving, cognitive abilities and social skills emerge as the greatest opportunity is not redesigning or automating routine work, but to rethink work architecture)
- The hyper-connected workplace (Almost 2/3 see growth in work-based social media and predict an increase in instant messaging, although these tools migrate from personal life to the workplace)
- People data (The increase in data availability and the advent of powerful analytics tools generates rich opportunities but also risks in terms of employees, customers and society trough a lack of policies and security safeguards)

With regard to the new organization, Kuehl (2018) takes a firm stand to the ever-returning debate about democratization of corporations (e.g. agility, agile organizations) which needs a critical reflection with regard to the macro-economic and comprehensive trends of Deloitte18. In the 70’s, Alvin Toffler postulated the concept of the flexible firm, which requires a stronger involvement of workers, following the waves of lean management and business process reengineering in the 90’s and lately as a secret of success for the new economy, internet startups and agile organizations19. Kuehl debates about democratizing corporations and explains the fundamental idea of representatives as follows20: Employees should not only be motivated by financial incentives any more, rather being involved in decision-making and thereby deeper identify themselves with the product and corporation. Kuehl states that mainly famous pioneers postulate “money is not the main motivator”21 and work climate, identification and self-organizing should be on top of the agenda. Personal interest, identification with products and services and intrinsic motivation obviously lead to better outcomes22. The author criticizes that corporations will lose transformation-ability when employees start to challenge decisions and only accept processes that are in scope with their personal belief and identification, which is a big risk. They will lose change ability and only money can act as a “flexibility enabler”23 for employees to switch positions or responsibilities. He argues that hierarchies are highly important and organizations should not be designed too flexible and agile as power distribution hinders speed and flexibility.

In order to put it in context, it is important to understand that besides the multiplicity of trends occurring (e.g. Deloitte), clear, hierarchical structures within an organization hold their significance. Especially, with respect to the topic of leadership, as a key enabler to deal with all these environmental changes, opportunities and threats in a form that enables executives to transfer messages to their workforce in a way that safeguards transformation regardless of upcoming trends such as agile teams. Power and leadership will never come out of trend and hold their weight (Schein)24.

2.1.2 The New Skillset

As new technologies are developing at an unprecedented rate, they lead to wide-ranging changes to jobs, tasks and skills required in various sectors and industries. In addition, labor mobility, demographic change and talent needs change the nature and quality of work, stated by the World Economic Forum (2018)25. According to Zahidi et al., the future of work in 2030 will change rapidly, summarized by three core variables26:

- Rate of technological change and impact on business model (AI, robotics, Data Analytics)
- Evolution of learning among current and future workforce (Acquisition of relevant skills)
- Magnitude of talent mobility across geographies (job growth areas and potential requirement for mobility)

Bhalla et al. (2017) analyzed the global workplace for over decades and identified twelve force in four main areas that trigger exponential changes in the way organizations function27. As some leaders already incorporate and analyze these trends, laggards may fall short if they do not understand the strategic scope of changing working environments28:

- Demand for Talent (Technological and Digital productivity increases and requires best talent and skills)
- Supply of Talent (Demographic changes and shifts in geopolitical and economic power distribute resources and puts emphasis on diversity and professional purpose)
- Way of Working (Leaders will function with more fluid boundaries internally and externally and speed, agility & digital skills need to continuously be developed and adopted)

Prof. Dr. Heike Bruch et al. (2016) argues with mega-trends being the main disruptor29. Globalization, Digitization, increasing dynamics and speed as well as changing values of the workforce influence work on all levers of a corporation. Her study in cooperation with University of St. Gallen identified important prerequisites to become successful:

- Only ¼ of surveyed corporations makes use of new forms of work
- New forms of work hold a statistically proven effect on corporation performance, growth and return on invest (ROI), although only the top 10% achieve it so far
- Leadership with vision & inspiration, trust culture, flexible structures and self- competence are prerequisites to become successful in Work 4.0

Bruch describes increasing flat and network-like organizational forms where “Command and Control” leadership style will not work30. An increasing mobile workforce (e.g. home office or high onsite-working with clients in Consulting) requires a shift in mindset of leadership in the scope of control, trust and influence31. The progress in information technology, increasing speed and complexity lead to challenges and risks in planning and forecasting and require new forms of cooperation and autonomous working. The corresponding leadership culture and structure of the corporation is an important element to drive the change, helping employees identify with corporate values, services and products and as the basis for innovation, motivation and performance32.

Bughin et al. (2018) discuss the topic of skill shift automation and the future of the workforce within their discussion paper of McKinsey Global Institute33. From their point of view, especially automation and artificial intelligence change the nature of work, demand for workforce skills and how work is organized34. They quantified 25 core workplace skills today and in the future for the United States and five European countries on five sectors:

- Strongest growth in demand for technological skills (+55% by 2030)
- Demand for social and emotional skills, e.g. leadership (+24% by 2030)
- Continuous learning and shift to more cross-functional and team-based work
- Competition and wages for high-skilled workers will rise and reduce middle-wage jobs
- Almost 50% of surveyed corporations want to take the lead in building the workforce of the future

Kuehl (2016) articulates his position on Work 4.0 in the journal of “Wirtschaftspsychologie 2/2016” as follows35: On the very basis, the “principal agent theory”, which still has high importance in understanding the structural components of product-, work- and capital-markets, comprises the aspect of acquiring labor but still holding risk in translating it into performance and outcome36. From his point of view, the conflict, regardless of technological advances such as artificial intelligence or automation, stays the same. The core value is in translating purchased working power in output through a principal. Kuehl does not provide any suggestions, so a potential lever and solution for this problem could be leadership in order to increase team performance and outcome for the corporation (with your existing assets, the workforce).

Ternès et al. (2018) describe two scenarios for the future world of work37: The job market will separate into the two blocks: “simple work” (decrease through automation and standardization, e.g. AI) and “new working models” (new professions through requirements of digital transformation), which is in accordance to Bughin, Bruch and Bhalla. As a key skill or competence, Ternès lists willingness to change, dealing with complexity and uncertainty as well as self-management, lifelong learning and comprehensive thinking38. Ternès places HR as strategic partner for the fundamental shifts in working environment and provides the example of Continental that leads this change through renaming their corporate HR department from “Human Resources” to “Human Relations” in order to underline HR as valuable partner and strategic advisor39. Especially with regard to the highlighted trends and shifts in chapter 2.1.2, HR should reposition itself as a multitude of tasks can be automatized and deeper leadership and guidance is required in strategic topics such as talent-management or technological-skill- adoption40. In scope of this research paper, HR should analyze, provide and strategically embed the topic of leadership within division-, department- and team heads, in order to make them aware of issues and changing forces in the marketplace and can adapt their leadership style and strategy accordingly.

2.1.3 The New Leader

As outlined in chapter 2.1.1 and 2.1.2, CEOs in the 21st century operate in an unprecedentedly dynamic environment, where besides just having the best and most profitable product or service a long list of external and internal factors have an impact and need to be carefully taken into consideration. Lesser et al. (2018) have identified five components that could help and refine CEO leadership and call it an “algorithm”41:

- Defining and communicating a grounded point of view
- Sequencing execution moves to stretch, but not overwhelm, the organization
- Proactively orchestrating the stakeholder ecosystem
- Mobilizing the organization
- Handing over a self-revitalizing company

The research assessed hundreds of CEOs along the three dimensions “Great Company” (competitive positioning), “Great Stock” (shareholder return) and “Great Legacy” (future prospects), whereby only 1/5 seem to be successful42. What is very interesting, also in context of this research paper and leadership, is the spoken vocabulary, used by more successful CEOs. Lesser et al. call it “biological thinking”, rather than “mechanical thinking”, which is, with regard to leadership, very important to understand in terms of their communication with stakeholders (e.g. employees)43. If you put this in context with the high uncertainty (chapter 2.1.1, 2.1.2) and Consulting business, Keller et al. (2018) provide a successful transition plan for new leaders44:

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: Leader transition in two steps and five dimensions – McKinsey & Corporation45

It is important to understand that Consulting is characterized by multiple and steady changes (e.g. responsibilities, practice leads). If leaders understand these five dimensions, they can set-up and drive their leadership-agenda and messaging easily. Robey et al. (2016) puts emphasis on digital transformation and its impact on new leadership, corporate culture and talent through a discussion with Ashwin Nathan (CMO, PepsiCo) and John Palmer (VP, AT&T) and defines a bunch of questions every leader should ask himself, no matter the industry46:

- How is the pace of change redefining the qualities of a good leader?
- Is the current management team prepared for these shifting dynamics?
- Will the current organizational structure support a digital strategy?
- How does the current organizational culture need to change to encourage learning and innovation?
- Does the board have an understanding of opportunities and threats digital presents?

These questions are in a larger sense, not specifically aligned to the sole topic of leadership, but are the basis of what we have learned from the dynamics in the new organization (chapter 2.1.1) and work 4.0 (chapter 2.1.2). According to Robey, leaders must be prepared for continuous exploration of digital trends and reassessment of talent strategies, attraction and retention47. With their power to influence culture and talent (especially important within Consulting as people are the sole key asset), they are critical for helping the corporation in this new era. Feser (2015) discussed whether leadership is timeless or needs to be adapted to changing times48: The ability to lead is strongly linked to personality and character as several studies suggest that open-minded people tend to be stronger leaders, plus research suggests that leaders who are self-aware are up to four times more effective in managing change, which becomes a fundamental skill in the 21st century. In addition, Kienbaum stresses the importance of willingness to change and learn for leaders49.

Thakkar et al. (2018) also deal with the increasing complexity and the future of leadership. They argue that leadership is not about an individual at the top of a pyramid anymore but a collectivized spread across a wide base of topics50. Unlike the past, when leadership meant exclusive elites, mostly men, who controlled knowledge and information, we can now access (e.g. internet) information on our own and have a total different perspective and expectation on leaders51. The traditional evolution of leadership being transformational – trust-based – to transactional – performance based – to customer centric – satisfaction based to people centric – delight based – is now at the stage of incorporating all these elements to the exponential growth of technology52. At the end of the day, leadership will be about character, morals, trust, communication, vision, values and passion and the key is to understand the ever-changing environment and its impact on the workforce, while adapting leadership style to aim at motivating, inspiring and gaining productivity from the organization.

2.1.4 Relevance and resume for research

Chapter 2.1 deals with the 21st century playground in order to settle the foundation and understanding of current forces and trends that affect any leader regardless of the industry or role. Therefore, the author has conducted an overview of all relevant deliverables within this chapter into a table:

Abbildung in dieser Leseprobe nicht enthalten

Figure 2: Author’s own illustration – Compression of deliverables from literature research and transfer to thesis53

With respect to this research, leaders in Consulting need to be aware of the shortage in supply and demand of talent and know all relevant trends and forces in order to adapt their leadership style in this new era.

2.2 Modern Leadership

2.2.1 The Modern Leader

More than 75% of relevant decision-makers are convinced that current, environmental factors such as technological advances, disruptive business models, new generations and other factors lead to a change in leadership-culture for this new economic playground54. Fischer et al. (2017) argue that culture is of high importance, as already Peter Drucker stated, “Culture eats strategy for breakfast55 ” and has to be anchored within the corporate values as the DNA of a corporation. Leaders in the 21st century are confronted with two tasks56: Clarification, whether corporate values fit the changing environment & development of conceptual approaches and processes that encourage cultural change within the organization. Moreover, Fischer et al. postulate that agile leadership styles, mainly expressed through a failure-culture and trust towards the employee, help corporations to hit 5x higher margins than those who do not apply this culture57. For Fischer, leadership 4.0 means trust, which is incorporated through four characteristics58:

Abbildung in dieser Leseprobe nicht enthalten

Figure 3: VOPA-model for agile leadership59

Empathy is a grounding element, which means leaders have to show interest in every individual beyond his job role, especially in critical phases. Command and control will not work anymore according to Fischer, as leaders have to ask fundamental questions instead of answering them through lectures. Knowledge is created and shared throughout dialogues, which leads to trust as basic instrument. With increasing complexity, future leaders participate instead of instruction and control and are regarded as pioneers for innovation, ideas and new methods. Dr. Buhse consolidates these characteristics in his model of “VOPA+” (figure 3) as a response to what is called “VUCA”-environment (Volatility, Uncertainty, Complexity, Ambiguity)60. Fischer and Engels argue that leaders require adoption of different methods and styles, according to the situation, e.g. creation of a new business field requires other methods than increasing efficiency of a stable business unit. They also come up with a long-discussed comparison of manager vs. leaders and summarize the roles as follows:

Abbildung in dieser Leseprobe nicht enthalten

Figure 4: Leader vs. Manager61

Kienbaum conducted a survey in accordance to what Fischer et al. have conceptualized: The art of leadership in the digital era62. Dettmers and Diestel postulate a fundamental disruption in leadership, mainly driven through digitization, regardless of industry or size of the corporation. They point out leaders as tipping point for failure or success in this new era and rise questions such as “which leadership style has an influence on innovation, motivation or job satisfaction?”63. Their survey results (methodology: multiple regression) recapped64:

- Transformational, strategic and ethical leadership style are preferred and increase job satisfaction + decrease fluctuation (vs. transactional, laissez-faire)
- Huge gap between self-perception and external perception of leadership style
- Work engagement and commitment are increased through ethical and transformational styles
- Digital leadership is leading to more innovation and achieved through strategic and transformational styles

On top of these empirical results, Bruch et al. describe four factors of success in the new working environment, which can be understood as requirements to the propositions of Fischer, Dettmers et al.65:

- Inspirational and goal-oriented leadership and vision (especially when employees are less on-site e.g. Consulting)
- Trust-based culture (positive leadership relation, supporting environment)
- Self-competence of workforce (social skills, dealing with stress, identification)
- Flexible structures (organization design, flat hierarchies, flexibility)

Böck et al. summarize it into a proposed model through their exploratory study (n=12), which holds high reliability in the context of this paper66 (figure 5). If you compare all insights of Fischer, Dettmers, Bruch et al., three dimensions are mandatory to be understood when dealing with the modern leader: Leadership behaviors (e.g. Dettmers et al.), Leadership styles (e.g. Fischer et al.) and leadership skills (e.g. Bruch). The topic of digitalization is currently discussed within the academic community. Nevertheless, these three basic directions build the framework in order to understand basic, underlying principles.

Abbildung in dieser Leseprobe nicht enthalten

Figure 5: Leadership effectiveness in digitalization67

Grabmeier concludes ten demands for a modern leader through a qualitative and quantitative study (n =400, INQA study)68:

- Flexibility and Diversity
- Process-oriented culture vs. goal-oriented culture
- Network-structures and collective intelligence for new market dynamics
- Hierarchy is dead – Openness
- Cooperation
- Personal Development and Coaching
- Autonomy and appreciation as main motivator
- Decreasing boundaries between societal and corporate issues
- Paradigm shift in leadership culture driven through leaders
- Self-reflection of leadership culture

Schäfer concludes that autonomous working, freedom, transparency and collaboration characterize leadership 4.069. She underlines the importance for awareness of these factors, particularly with the new generations Y and Z. Also in accordance with the scope of this research paper, all aspects can be transferred to the sphere of Consulting, where teams usually work on a project-base with one project lead and potentially a supervisor who is not at the client site. Therefore, the criteria of trust, autonomy and collaboration are essential.

2.2.2 Modern Leadership Behavior

Chapter 2.2.1 deals with how environmental factors such as VUCA have an impact on new leadership. Besides these underlying patterns, it is important to understand what drives outcomes, team performance and how managers have to change their styles, skills and behaviors to stay ahead. Gregersen (2018) conducted a study with leading corporations such as Apple, Amazon and Google and differentiates five skills that differentiate innovative leaders and their behavior from their peers70:

- He asks the right questions
- He observes the world as an anthropologist
- He establishes associative connections
- He builds new networks
- He experiments

Gregersen puts problem-oriented thinking in the center of his argumentation. From his point of view, leaders have to be open to failure, ask themselves the right questions, be critical and think of all new disruptions and technologies rather from a point of view whether these opportunities solve problems at the corporation or just produce projects71. For Gregersen, this is future leadership and leading management as more than 90% of CEOs plan to invest in leadership-development, as it is the single most important human- capital issue their organizations face72. Empirical studies also have shown that good leadership is a critical part of organizational health, which is an important driver for shareholder value, although most corporations still struggle to identify which sort of leadership behavior should be encouraged73. Feser conducted a study with a comprehensive list of 20 distinct leadership traits (n=189.000 in 81 organizations around the globe) to assess how frequently certain kinds of leadership behavior are applied within the organizations. The sample was then into organizations whose leadership performance was strong (top quartile) and those that were weak (bottom quartile). The result shows that four of 20 possible types of behavior explained 89% of the variance between strong and weak organizations in terms of leadership effectiveness74:

- Solving problems effectively (key behavior for decision making)
- Operating with strong results orientation (developing and communicating a vision, setting objectives and strong result orientation)
- Seeking different perspectives (monitor trends affecting the organization, encourage idea contribution, differentiate between important and unimportant issues)
- Supporting others (emotional intelligence, authenticity, inspiration, trust)

Feser argues that leadership styles and behavior are not adaptive and depend upon the business situation or context. Nevertheless, these four traits are a set of “core leadership behavior that will be relevant to most companies today75 ” and should be in target when investing in leaders. When putting these empirical results into the context of this research, both Gregersen and Fesers’ results can be taken as orientation for leadership in Consulting. What is positive is that Gregersen outcomes already demonstrate a set of skills/behaviors that are indispensable for consultants: Asking the right questions, building networks and experimenting. On top of that, problem solving, operating result- oriented and seeking different perspectives are key-abilities a consultant has to adapt in his work with clients. What becomes interesting is how far leaders, managers or supervisors are communicating these traits in both recruiting-phase and on-job. They should monitor these capabilities and invest their trainings in this scope, as they hold the biggest lever on both team performance and corporate return (profits).

2.2.3 Leadership and Talent Management

Besides understanding current environmental factors (chapter 2.1) and decoding key leadership skills and behaviors (chapter 2.2.1, 2.2.2), it is crucial to mention that in the field of this research, resources are the core asset and therefore the whole topic of talent management from a leadership perspective is key. Bhalla et al. (2015) analyzed a corporation’s maturity in terms of leadership and talent management capabilities and developed a “The Global Leadership and Talent Index”, which is a tool to precisely quantify a company’s leadership and talent management capabilities and could be of high value for this research approach76. Therefore, more than 1.260 CEOs and HR directors at a global scale have been analyzed. What is interesting is the fact that Bhalla et al. argue that the field of leadership and talent management, is relatively undeveloped in the application of data- and evidence-based to value creation, which correlates with the author’s findings from the academic and library research. This 20-question survey places a company at one of six leadership and management capability levels and quantifies revenue and profit gains that companies can get when moving up the index77. To highlight this empirical finding, leadership is not only about a soft skill or style of management guidance, it holds true value for the corporation on the level of profits and margins, so it is necessary on the CEOs agenda, regardless of the industry or branch. Bhalla et al. identified three high-level findings78:

- Leadership and talent management capabilities have a strong correlation with financial performance (talent magnets increased their revenues 2.2 times faster than talent laggards)
- Wide performance spread on leadership and talent management capabilities
- Companies moving up the index will experience a measurable business return
In addition, six categories have been identified for leadership and talent management capabilities79:
- Strategy (Planning leadership- and talent needs over short- and long-term in line with the corporate strategy)
- Leadership and Talent Models (Defining clear leadership competencies (e.g. chapter 2.2.1, 2.2.2) specific to corporate strategy and culture)
- Talent Sourcing (Find leaders internally and externally and tailor employer branding)
- People Development (Nurture people by providing structured development opportunities)
- Engagement (Foster engagement amongst leaders and talents)
- Culture (Take responsibility by adhering corporate values)

In order to put in into context, the author wants to stress the importance of talent management, as proven business performance indicators can be weakened or strengthened through a clear strategy, e.g. translate leadership in initiatives, make leaders accountable for talent management or encourage leaders to foster employees engagement80.

Abbildung in dieser Leseprobe nicht enthalten

Figure 6: The ten capabilities that matter most for leadership and talent management81

2.2.4 Relevance and resume for research

Chapter 2.2 deals with the modern leader, leadership behavior and talent management. All relevant deliverables within this chapter have been conducted into a table:

Abbildung in dieser Leseprobe nicht enthalten

Figure 7: Author’s own illustration – Compression of deliverables from literature research and transfer to thesis82

The digital era changes requirements for future leaders. Nevertheless, clear skills and behaviors hold their significance attract and lead talent. Especially, in the fast-paced environment of Consulting, the relevant skills and behaviors need to be exercised in order to acquire and retain the most important asset: talent.

2.3 Fundamentals of Leadership Theory

2.3.1 Defining Leadership

The termination of leadership is hard to define yet as Laub (2018) is arguing in his work of purpose of leadership83: “It is neither feasible nor desirable at this point in the development of the discipline to attempt to resolve the controversies over the appropriate definition of leadership. Like all constructs in social science, the definition of leadership is arbitrary and very subjective”84. Therefore, Laub develops a typology of the term leadership to provide clear guidelines what leadership is and what leadership is not by highlighting that a clear definition is substantial for research and measurement. In his work, the author brings up seven questions (e.g. what distinguishes a leader from a non- leader, leaders from managers? Is the definition of leader the same as that of leadership?) as well as four criteria which measure a good definition85:

- Clear and specific (too many leadership definitions are vague statements and describe only parts of leadership)
- Differentiate between concepts (what is unique to leadership that identifies it as separate from other concepts?)
- Include essential elements (what are central issues that make leadership what it is?)
- Usable by practitioners as well as by scholars (definition that enables to train leaders in practice and that research questions can be accurately stated)

After discussing the current complexity and ambiguity in defining leadership, Laub provides definitions of leadership terms that can be regarded as starting point but nevertheless should be challenged and reflected critically86: Distinguish the term leader from the position of a leader in order to differentiate between leading and simply holding a role. It can be defined as the action of a person who takes the lead within a given situation. A leader is defined as a person who sees a vision, takes action towards the vision and mobilizes others to become partners in pursuing change. Laub further explains the four essential elements of this definition87:

- Vision (Ability to conceptualize a preferred future and to see what is not readily apparent)
- Action (Personal power applied to doing what needs to be done e.g. move toward a vision)
- Mobilization (Mobilizing people to voluntarily engage and move into leadership process with the leader)
- Change (Outcome achieved as result of intentional action toward the preferred reality)

Furthermore, the term leadership is defined as the intentional change process through which leaders and followers, joined by a shared purpose, initiate action to pursue a common vision88. A follower voluntarily and actively engages in the leadership process by responding to the leader’s initiative to identify shared purpose, vision and action toward change89. In addition, Laub discusses the concept of management since it is one of the key confusion points in the use of leadership terms. Management is regarded as the attainment of organizational goals in an effective and efficient manner through planning, organizing, staffing, directing, and controlling resources, which is less about long-term vision and more about operational goals that must be achieved to move toward the vision90.In order to better differentiate and conclude the definition, Laub provides two formulas and a comparing chart (figure 8)91:

- Leadership (V+A+M = C, Vision + Action + Mobilization = Change)
- Management (P+O+D = S, Planning + Organizing + Directing = Stability)

Abbildung in dieser Leseprobe nicht enthalten

Figure 8: Management contrasted to leadership92

In the scope of this research paper and the area of Consulting, the experts (n = 10) are required for their own definition of leadership & the relevant elements or dimensions within Consulting and these formulas are challenged.

By critically reflecting Laub’s explanations, Harrison (2018) provides a broad scientific literature review of how leadership is defined amongst scholars93. Despite the fact that studies in the field of leadership span several decades, Harrison also builds his argumentation through a differentiation between leadership and management94. The author abstracts the identified definitions through three dimensions: Behavior, Process or Ability, which can be transferred to Böck’s findings in chapter 2.2.195. Besides Mintzberg providing ten managerial roles (e.g. Spokesperson, Figurehead, Negotiator, and Entrepreneur), Kotter’s’ definition is straight aligned to what Laub argues96: Leaders develop a vision and strategies for achieving the vision while managers are involved in planning and budgeting.

Nevertheless, besides all available definitions proposed by Laub, Harrison (e.g. Appendix 40-42), it becomes clear that no common sense within the academic community has been established yet. One can rather identify dimensions or parameters that differentiate managers from leaders. Theories for the concept of leadership have developed over time and could be aggregated as follows:

Abbildung in dieser Leseprobe nicht enthalten

Figure 9: Timeline showing the approaches to leadership97

Whereas the early theories like “The Great Man” focuses on heroic individuals, implying that only a few selected can achieve greatness and the “Trait Theory” conceptualizes leadership on the universality of some given attributes, the “Skill Theory” focuses on the abilities of a leader98. While “Behavioral Theory” views leaders based on their actions and behavior, “Contingency Theory” concerns the context of leadership99. Newer approaches beginning in the 1970s are regarded as implicit theories (e.g. servant, charismatic, transactional, transformational) and demonstrate that no unified theory or definition has been established yet in neither academics nor practice100. Different author’s rather discuss skills or abilities that a leader has to develop instead of a theory. Harrison provides different dimensions of skills in his research101:

- Technical Skills (Competencies in a specialized area as well as analytical capabilities)
- Human Skills (Knowledge and ability to work with people)
- Conceptual Skills (Ability to deal with concepts and ideas)
- Business Skills (From accounting to financial management to administration and HR)
- Interpersonal Skills (Empathy, Communication, Motivation, Self-Management, People Management)
- Entrepreneurial Skills (Opportunity Identification and Exploitation)

2.3.2 Leadership Strategy

Besides discussing theoretical approaches and dimensions (chapter 2.3.1), it is important to understand the connection between strategy and leadership and as fundamental components of successful corporate management, regardless of the industry. Hinterhuber et al. (2018) describes five determinants of entrepreneurial/business success102:

- Excellence in leadership
- Strategy
- Tactical measures with noticeable outcomes / execution
- The right workforce
- Luck

[...]


1 Cf. Sinar, E. et al., 2018, Global Leadership Forecast 2018

2 Cf. Sinar, E. et al., 2018, Global Leadership Forecast 2018, p. 1

3 Cf. Sinar, E. et al., 2018, Global Leadership Forecast 2018, p. 2

4 Cf. Sinar, E. et al., 2018, Global Leadership Forecast 2018, p. 54

5 Cf. Bruch, H. et al., 2012, Leadership – Best Practices und Trends, p. 5

6 See https://www.kienbaum.com/de/downloads/die-kunst-des-fuehrens (Accessed 11/05/2018)

7 See http://fortune.com/longform/worlds-greatest-leaders-2018/ (Accessed 11/05/2018)

8 Cf. Bruch, H. et al., 2012, Leadership – Best Practices und Trends, p. 5

9 Cf. Schwartz, J. et al., 2016, Global Human Capital Trends 2016, Deloitte University Press, p. 3

10 Cf. Walsh, B. et al., 2017, Global Human Capital Trends 2017, Deloitte University Press, p. 4

11 Cf. Walsh, B. et al., 2017, Global Human Capital Trends 2017, Deloitte University Press, p. 4

12 Cf. Walsh, B. et al., 2017, Global Human Capital Trends 2017, Deloitte University Press, p. 4

13 Cf. Kaji, J. et al., 2017, Global Human Capital Trends 2018, Deloitte University Press, p. 2-6

14 Cf. Kaji, J. et al., 2017, Global Human Capital Trends 2018, Deloitte University Press, p. 2-6

15 Cf. Kaji, J. et al., 2017, Global Human Capital Trends 2018, Deloitte University Press, p. 2-6

16 Cf. Kaji, J. et al., 2017, Global Human Capital Trends 2018, Deloitte University Press, p. 4

17 Cf. Kaji, J. et al., 2017, Global Human Capital Trends 2018, Deloitte University Press, p. 7-9

18 Cf. Kuehl, S., 2018, Der Mythos des demokratischen Unternehmens, p. 24

19 Cf. Kuehl, S., 2018, Der Mythos des demokratischen Unternehmens, p. 24

20 Cf. Kuehl, S., 2018, Der Mythos des demokratischen Unternehmens, p. 25

21 Cf. Kuehl, S., 2018, Der Mythos des demokratischen Unternehmens, p. 25

22 Cf. Kuehl, S., 2018, Der Mythos des demokratischen Unternehmens, p. 25

23 Cf. Kuehl, S., 2018, Der Mythos des demokratischen Unternehmens, p. 26

24 Cf. Haas, O. (2017), Klassiker der Organisationsforschung, ZOE Heft 01, p. 90

25 Cf. Zahidi, S. et al. (2018), Eight Futures of Work, p. 1

26 Cf. Zahidi, S. et al. (2018), Eight Futures of Work, p. 1

27 Cf. Bhalla, V. et al. (2017), Twelve Forces that will radically change how organizations work, p. 2

28 Cf. Bhalla, V. et al. (2017), Twelve Forces that will radically change how organizations work, p. 2

29 Cf. Bruch, H. et al. (2016), Arbeitswelt im Umbruch, p. 5

30 Cf. Bruch, H. et al. (2016), Arbeitswelt im Umbruch, p. 6

31 Cf. Bruch, H. et al. (2016), Arbeitswelt im Umbruch, p. 6

32 Cf. Bruch, H. et al. (2016), Arbeitswelt im Umbruch, p. 7

33 Cf. Bughin, J. et al. (2018), Skill Shift Automation and the Future of Workforce , p. 2-5

34 Cf. Bughin, J. et al. (2018), Skill Shift Automation and the Future of Workforce , p. 3

35 Cf. Kuehl, S. (2016), Arbeit 4.0: Flexibel, demokratisch und agil?, p. 58-59

36 Cf. Kuehl, S. (2016), Arbeit 4.0: Flexibel, demokratisch und agil?, p. 58-59

37 Cf. Ternès, A. (2018), Agenda HR – Digitalisierung, Arbeit 4.0, New Leadership, p. 5

38 Cf. Ternès, A. (2018), Agenda HR – Digitalisierung, Arbeit 4.0, New Leadership, p. 6

39 Cf. Ternès, A. (2018), Agenda HR – Digitalisierung, Arbeit 4.0, New Leadership, p. 6

40 Cf. Ternès, A. (2018), Agenda HR – Digitalisierung, Arbeit 4.0, New Leadership, p. 6

41 Cf. Lesser, R. (2018), An Algorithm for a successful 21st century CEO, p. 2

42 Cf. Lesser, R. (2018), An Algorithm for a successful 21st century CEO, p. 2

43 Cf. Lesser, R. (2018), An Algorithm for a successful 21st century CEO, p. 6

44 Cf. Keller, S. (2018), Successfully transitioning to new leadership roles, p. 4

45 Cf. Keller, S. (2018), Successfully transitioning to new leadership roles, p. 4

46 Cf. Robey, L. (2016), What does digital transformation mean for leaders?, p. 1-3

47 Cf. Robey, L. (2016), What does digital transformation mean for leaders?, p. 3

48 Cf. Webb, A. (2015), When to change how you lead, p. 1

49 Cf. Mollbach, A. (2017), Future Management Development, p. 5

50 Cf. Thakkar, B. (2018), The Future of Leadership, p. 8

51 Cf. Thakkar, B. (2018), The Future of Leadership, p. 8

52 Cf. Thakkar, B. (2018), The Future of Leadership, p. 8

53 Cf. Author’s own illustration

54 Cf. Fischer, T. et al. (2017), New Leadership – Führung im digital-analogen Spagat, p. 1

55 Cf. Fischer, T. et al. (2017), New Leadership – Führung im digital-analogen Spagat, p. 1

56 Cf. Fischer, T. et al. (2017), New Leadership – Führung im digital-analogen Spagat, p. 1

57 Cf. Fischer, T. et al. (2017), New Leadership – Führung im digital-analogen Spagat, p. 1

58 Cf. Fischer, T. et al. (2017), New Leadership – Führung im digital-analogen Spagat, p. 1

59 Cf. Fischer, T. et al. (2017), New Leadership – Führung im digital-analogen Spagat, p. 1

60 Cf. Fischer, T. et al. (2017), New Leadership – Führung im digital-analogen Spagat, p. 2

61 Cf. Fischer, T. et al. (2017), New Leadership – Führung im digital-analogen Spagat, p. 2

62 Cf. Dettmers, S. (2018), Die Kunst des Führens in der Digitalen Revolution, p. 2

63 Cf. Dettmers, S. (2018), Die Kunst des Führens in der Digitalen Revolution, p. 2

64 Cf. Dettmers, S. (2018), Die Kunst des Führens in der Digitalen Revolution, p. 26

65 Cf. Bruch, H. (2016), Arbeitswelt im Umbruch, p. 8

66 Cf. Böck, V. (2018), Leadership in Digitalization, p. 67

67 Cf. Böck, V. (2018), Leadership in Digitalization, p. 67

68 Cf. Grabmeier, S. (2015), New Leadership – Führung in der Arbeitswelt 4.0, p. 7

69 Cf. Schäfer, V. (2018), Leadership 4.0 ist keine Frage des Alters, 15

70 Cf. Gregersen, H. (2018), Abschied vom Manager, der alles im Griff hat, p. 1

71 Cf. Gregersen, H. (2018), Abschied vom Manager, der alles im Griff hat, p. 1-2

72 Cf. Feser, C. (2015), Decoding leadership: What really matters, p. 1

73 Cf. Feser, C. (2015), Decoding leadership: What really matters, p. 1

74 Cf. Feser, C. (2015), Decoding leadership: What really matters, p. 2

75 Cf. Feser, C. (2015), Decoding leadership: What really matters, p. 3

76 Cf. Bhalla, V. (2015), The Global Leadership and Talent Index, p. 2

77 Cf. Bhalla, V. (2015), The Global Leadership and Talent Index, p. 3

78 Cf. Bhalla, V. (2015), The Global Leadership and Talent Index, p. 3

79 Cf. Bhalla, V. (2015), The Global Leadership and Talent Index, p. 4

80 Cf. Bhalla, V. (2015), The Global Leadership and Talent Index, p. 8

81 Cf. Bhalla, V. (2015), The Global Leadership and Talent Index, p. 8

82 Cf. Author’s own illustration

83 Cf. Laub, J. (2018), The Purpose of Leadership, p. 47

84 Cf. Laub, J. (2018), The Purpose of Leadership, p. 47

85 Cf. Laub, J. (2018), The Purpose of Leadership, p. 53

86 Cf. Laub, J. (2018), The Purpose of Leadership, p. 58

87 Cf. Laub, J. (2018), The Purpose of Leadership, p. 58

88 Cf. Laub, J. (2018), The Purpose of Leadership, p. 62

89 Cf. Laub, J. (2018), The Purpose of Leadership, p. 64

90 Cf. Laub, J. (2018), The Purpose of Leadership, p. 67

91 Cf. Laub, J. (2018), The Purpose of Leadership, p. 69

92 Cf. Laub, J. (2018), The Purpose of Leadership, p. 67

93 Cf. Harrison, C. (2018), Leadership Theory and Research – A critical approach, p. 4-7

94 Cf. Harrison, C. (2018), Leadership Theory and Research – A critical approach, p. 2

95 Cf. Harrison, C. (2018), Leadership Theory and Research – A critical approach, p. 3

96 Cf. Harrison, C. (2018), Leadership Theory and Research – A critical approach, p. 7

97 Cf. Harrison, C. (2018), Leadership Theory and Research – A critical approach, p. 17

98 Cf. Harrison, C. (2018), Leadership Theory and Research – A critical approach, p. 29

99 Cf. Harrison, C. (2018), Leadership Theory and Research – A critical approach, p. 29

100 Cf. Harrison, C. (2018), Leadership Theory and Research – A critical approach, p. 33

101 Cf. Harrison, C. (2018), Leadership Theory and Research – A critical approach, p. 80-95

102 Cf. Hinterhuber, H. (2018), Unternehmerische Führung als Erfolgsfaktor, p. 2

Excerpt out of 126 pages

Details

Title
Leadership in High Performing Cultures
Subtitle
An Empirical Analysis in German Consulting Practice
College
University of Applied Sciences Essen
Grade
1,0
Author
Year
2019
Pages
126
Catalog Number
V455481
ISBN (eBook)
9783668879058
Language
English
Tags
Leadership; Consulting
Quote paper
Betriebswirt (B.A.) Sebastian Schulz (Author), 2019, Leadership in High Performing Cultures, Munich, GRIN Verlag, https://www.grin.com/document/455481

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