Eight skills that make you a good leader

Leadership: The skills needed to be a good leader

The subject of leadership has attracted a huge amount of attention and the debate runs on and on as to what is involved in this mercurial process.

One of the clearest guides to leadership has recently been published by Ram Charan, whose book "Know-How" clearly explains the eight skills that separate leaders who perform from those that do not. Here are his eight skills (we have paraphrased them, of course):

  1. Know how to position the business to make money. In other words, make sure that your business is meeting customers needs and is doing so in a better and different way to the competition (one of the most difficult tasks as we market researchers know).
  2. Know what external forces are affecting your business. These forces can be positive or negative and much depends on how you react to them. However you do need to recognise them so that you can detect the points before they tip.
  3. Manage the "social system" of your business effectively. This is essential if the people in the business are to work together more effectively. Charan cites Bob Nardelli, Home Depot’s chief executive, as a supreme exponent. When he arrived at the struggling DIY business he introduced a Monday morning, two-hour conference call with his top 25 senior managers. Scepticism faded as managers realised Mr Nardelli was serious about listening to them, including their ideas and feeding them back into the business.
  4. Have a process for judging, selecting and developing leaders. Charan says that this is a skill that can be developed only through practice, he says. Good leaders become people experts: they know how to ask questions of potential future leaders that reveal personality and capabilities.
  5. Mould a team of leaders. As he points out, a team of talented people is "a huge multiplier of your capability for making better decisions and getting things done".
  6. Choose and set the right goals. Compare and contrast General Motors and GE, Charan says. While GE is seeking new opportunities in emerging markets, and investing heavily in green technology that it believes will win it new customers, GM is struggling on the back of a misguided ambition to rebuild its US market share. Greater profitability rather than crude market share would have been a better bet.
  7. Set priorities that will help achieve those goals. Know the difference between what is important in getting to those goals and don’t get distracted from a vital job by polishing under the microwave.
  8. React well when forces beyond their control make themselves felt. When asked what would affect the future, Harold Macmillan the British Prime Minister at the time famously said: “Events, dear boy, events". Good leaders know how to react to these out of control events. Today’s round-the-clock, online and interconnected business world can throw up challenges at any time.

The eight skills together constitute what Charan calls "know-how". After four decades of studying and working with leaders, he believes it is this essential know-how that separates winners from losers. Honing all eight skills is obviously a daunting task. It might even remind you of the time-honoured variety act, in which a performer keeps several plates spinning on the end of poles at the same time. And the best leaders do know what they are doing. And they never stop working at trying to get better at it.

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