What differentiates one leader from others? Many people would conclude that a leader needs to be great at everything and that seems like an insurmountable task. However, research shows that leaders who were very effective at just three competencies, where 16 in total were evaluated, were rated overall at the 81st percentile.
After studying the difference between good and great leaders, it can be concluded that in the lion's share of cases, great leaders do a few things well. The research also revealed that some competencies had a substantial impact on overall leadership effectiveness while others had almost none.
From the research, Zenger Folkman generated Extraordinary Leader 360, a unique dataset that helps to understand some key leadership competencies for finance leaders. Leadership effectiveness data was gathered on 125 leaders who were considered potential candidates for the top job in the finance function. These candidates were from approximately 100 different Fortune 500 companies in diverse industries and locations.
While the majority of these leaders were located in North America, most of them represented global organizations. On average each leader gathered feedback from 11 respondents, including their manager, peers, direct reports and others, along with their own self-assessment.
Comparing the results from these 125 leaders to Zenger Folkman's global database of 35,000 leaders, this group was at the 58th percentile, with 31 percent of these leaders rated in the top quartile, 9 percent rated in the bottom quartile and 15 percent in the top 10 percent. This group was, obviously, clearly above average.
Which Leadership Capabilities Most Separate 'Average' From 'Great?'
What does it take for financial leaders to really differentiate themselves? To understand this, results were compared for financial leaders who were below the 50th percentile to those who were at the top 10 percent of this group. The analysis showed significant differences on all survey items but by looking at the top 1 5 items, six key characteristics were identified that really made the top leaders stand out from the pack.
Inspires and Motivates Others
In the study, raters were asked to indicate which of 16 leadership competencies were most important for the person being rated to do well to be successful in their current job. The competency selected most frequently was "Inspires and Motivates Others." It was especially high on the list of the direct reports.