5 dimensions of advisor leadership (and 5 books that can help)
It’s that time of the year when we turn our minds toward self-improvement and social scientists like myself write long-form articles about how you’ll inevitably fail in those efforts. Except, this isn’t one of those articles. When looking at the top resolutions people make in any given year, it’s no surprise (if your holiday binge looked anything like mine) that diet and exercise hold down 3 of the top 4 spots, with only “saving more money” even coming close. But just outside of the top 4 we see “leadership and personal development”, which is where I’d like to focus today.
Leadership theory of some sort or another is ancient; as long as there have been people, there have been leaders and ideas about what made them exceptional. However, it is only recently that we have begun to examine leadership, and leadership excellence, in a systematic and scientific way. It’s incredible to think that the formal study of psychology is only a few hundred years old and the formal study of leadership is even more nascent.
One of the earliest theories, the “Great Man” theory, emphasized the role of a very small cadre of charismatic men in shaping history. This theory is largely ignored now, given its dismissal of 50% of the population and its singular focus on inborn greatness to the exclusion of environmental factors.
By the middle of the 20th century, the preeminence of Behavioral Psychology gave rise to behavioral approaches to leadership as well. Behavioral approaches emphasize that certain behaviors are always desirable in a leader, such as determination and extroversion. This approach lost favor as further scrutiny revealed successful leadership to be highly contextual. Success on the battlefield requires one thing, excellence in the boardroom quite another.
Subsequent approaches have emphasized the importance of relationships and having a compelling mission, but while both are necessary, neither are sufficient to wholly encompass what should be looked for when selecting leaders. Given the increasing complexity of the world in which we live, and the demands placed upon leaders, most modern theories of leadership are holistic in nature, and include innate, contextual, and behavioral dimensions.
Given my love for baseball (Go Cardinals!), I’ve created an approach to measuring leadership that is a riff on the popular notion of the “five-tool player.” Just as a five-tool player can run, hit for power and average, field, and has a strong arm, a five-tool leader is possessed of all that is required for holistic excellence. I’d invite you to consider each of these five dimensions below, as well as the suggested reading, to help kickstart your personal development efforts in 2020.
The Five Tools of Leadership Excellence
Intelligence – Not everyone loves the finding, but research has borne out time and again that general intelligence is the variable that best predicts job performance. Some estimates say that intelligence accounts for 25 percent of the variance between those that excel at their job and those that do not! Intelligence is especially crucial to consider when an advisor must be brought up to speed and begin delivering quickly. Further, intelligence helps mask the appearance of other developmental weaknesses. For instance, someone with high intelligence and a tendency to procrastinate may be able to “fake it” through a presentation based solely on her intellectual gifts, lack of preparation notwithstanding.
Suggested reading: Thinking Fast and Slow by Daniel Kahneman. OK, it won’t actually improve your general intelligence, but it will get you thinking about your thinking.
Emotional Intelligence (EQ) – Emotional intelligence was shown in a Harvard University study to be twice as predictive of excellent performance as expertise. It is also positively correlated with participative management, putting others at ease, relationship building, doing whatever it takes to win, and managing change effectively. Those rated as having high EQ are more likely to lead profitable businesses. For the next-generation advisor who understands the centrality of behavioral coaching, there simply is no substitute for high EQ.
Suggested reading: Emotional Intelligence: Why It Can Matter More Than IQ by Daniel Goleman. Many have written on EQ since, but Goleman is the OG and the work stands up.
Technical Skill – I started my career giving pre-employment assessments to bankers and used to ask those that I interviewed what they valued in a leader. The most popular answer, by a comfortable margin, was “technical know-how.” Having deep subject matter expertise helps leaders get buy-in from those with boots on the ground and decreases the problem of management being out of touch with the quotidian goings-on of those they lead. People don’t want a leader barking orders that are disconnected from the day-to-day realities of working with clients, they want someone working shoulder to shoulder with them.
Suggested reading: The Nerd’s Eye View blog by Michael Kitces. Kitces has a preternatural gift for attending to details that put most of us to sleep and has the gift of conveying those details back to his readers in an easy to understand way. He’s a gift to the profession and no technician’s toolbox is complete without having read his work.
Leadership – Leadership is defined as the ability to influence people to work in service of a common goal. Therefore, leaders are those with a well-defined vision of where they are going and the skills necessary to persuade others to come along. Forget the myriad definitions of leadership you’ve heard over the years and strip leadership down to its bones – vision and influence.
Suggested reading: Influence: The Psychology of Persuasion by Robert Cialdini. This is quite simply the most powerful framework for reaching others that you will ever find. Read the book. Re-read the book. Tattoo the six pillars of influence on your person and reflect on them daily.
Fit – The idea of one prototypical leader is as dead as the people who thought it up. Consider your current approach to the demands your practice is facing going into 2020. Remember, “what got you here won’t get you there”, and your style may need to be tweaked as you move from a growth phase toward a more established business.
If hiring, examine the needs of your organization and your team and determine how good a fit someone is against your actual needs, not some romanticized vision of what your culture looks like. Be careful, though, as “goodness of fit” can quickly become code for biased thinking and lead you to exclude those who have the new ideas your organization needs. Ideally, you want someone who is a ~75% fit for your existing values but exhibits a ~25% divergence to help you challenge old ways of thinking; a good enough fit to minimize disruption but different enough to spur growth.
Suggested reading: The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company by Robert Iger. Nobody understands culture like The Mouse and Bob Iger’s story of helming that organization will entertain as it educates.
I promised from the outset that this wouldn’t be one of those, “you’ll never reach your New Year’s resolutions” posts and I was mostly telling the truth. I’ll just close by saying that a survey of 1,450 Americans found that the easiest resolution to keep was personal development and that healthy eating was the most difficult. So good luck on all of your positive goals for the new year, and consider prioritizing those with the highest chances of success!
The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a registered investment advisor.