INTRODUCTION

Definition of leadership
Leadership is one of those concepts that everyone has an idea of what it means
yet everyones intuitive idea might be a little different from anyone elses. In the
leadership literature, numerous definitions have been given for the concept of
leadership over time. Most definitions describe leadership as an influencing process
as a process by which some individuals inspire others to work towards shared
goals. By definition, leaders lead others. I therefore define leadership as: "the
nature of the influencing processand its resultant outcomesthat occurs between
a leader and followers and how this influencing processes is explained by the
leaders dispositional characteristics and behaviours, follower perceptions and
attributions of the leader, and the context in which the influencing process occurs
[italics added] (Antonakis, Gianciolo, et al., 2004:5).
The above definition highlights several important aspects relevant for our
discussion here:

First, it distinguishes between leaders and followers. Leaders lead, and

followers follow I.e., they perform the actions the leader seeks to induce.
As I will elaborate later, high-growth new ventures are likely to differ quite
drastically from large, established firms when it comes to defining exactly
who those followers are and where they reside.
The second point to note is that leadership is an influencing process: leaders
seek to influence others, through a continued process of interaction between
the leader and the followers. This draws natural attention to the question
of how this influencing occurs. Again, keeping in mind the focus of this
discussion paper, one may speculate that high-growth new ventures differ
from large organisations in terms of the repertoire of influencing mechanisms
that they require.
Third, according to the definition, leadership effectiveness is co-determined
by leader characteristics and follower perceptions. In other words, it is
follower perceptions, rather than what the leader actually does, that matter
for the leaders ability to induce desired outcomes. This resonates with the
importance of, e.g., symbolic actions that new ventures have been reported
to occasionally employ when seeking to access and mobilise resources for
opportunity pursuit (Zott and Huy, 2007).
Fourth, the above suggest that leadership effectiveness may be contingent
upon the context within which leadership behaviours are performed
(Antonakis and Autio, 2006). In other words, different leadership styles may
be required in new venture contexts and mature firm contexts, for example.

WHAT DO WE MEAN BY THE CHALLENGES OF LEADERSHIP?

Being a leader is in itself a challenge. The challenges of leadership are really of three kinds:
external, coming from people and situations; internal, stemming from within the leader himself;
and those arising from the nature of the leadership role.

EXTERNAL CHALLENGES
It's almost impossible to imagine a situation where a leader doesn't have to cope with external
challenges. In an organization, such issues as lack of funding and other resources, opposition
from forces in the community, and interpersonal problems within the organization often rear their
heads. Social, economic, and political forces in the larger world can affect the organization as
well. To some extent, the measure of any leader is how well he can deal with the constant
succession of crises and minor annoyances that threaten the mission of his group. If he is able to
solve problems, take advantage of opportunities, and resolve conflict with an air of calm and a
minimum of fuss, most of the external issues are hardly noticeable to anyone else.
If the leader doesn't handle external challenges well, the organization probably won't, either.
We've all seen examples of this, in organizations where everyone, from the director to the
custodian, has a constantly worried look, and news is passed in whispers. When people feel that
leaders are stressed or unsure, they themselves become stressed or unsure as well, and the
emphasis of the group moves from its mission to the current worrisome situation. The work of
the group suffers.

INTERNAL CHALLENGES
While leadership presents to each of us the opportunity to demonstrate the best of what we are, it
also exposes our limitations. In many cases, good leaders have to overcome those limitations in
order to transmit and follow their vision. Fear, lack of confidence, insecurity, impatience,
intolerance (all can act as barriers to leadership. At the same time, acknowledging and
overcoming them can turn a mediocre leader into a great one.
It's often very difficult for people, especially those who see themselves as leaders, to admit that
they might have personality traits or personal characteristics that interfere with their ability to
reach their goals. Part of good leadership is learning to accept the reality of those traits, and
working to change them so they don't get in the way.

LITERATURE REVIEW
Return on Leadership Competencies that Generate
Growth
Growth is the Holy Grail of corporate strategy. Not only do high-growth companies
deliver significantly greater shareholder returns than the average, they are also five
times more likely to survive as independent entities than their low-growth
counterparts.1 There is little doubt that leadership quality is a key determinant of a
companys growth, but the specifics are frustratingly elusive. What matters more
analytics or people leadership? Is growth driven by a small group of stars or a broad
leadership cadre? Should executives conform to one corporate leadership profile, or
does diversity deliver faster growth? Few studies have been able to provide
analytically rigorous answers to these questions or quantify the impact of
leadership on growth. As a result, companies struggle to focus their leadership
development efforts and budgets on creating value for the business. To solve this
problem, McKinsey & Company and Egon Zehnder International have carried out
thorough statistical analyses of the relationship between managerial quality and
revenue growth, across a global sample of more than 5,000 leaders in 47 listed
companies (see box, Quantifying the link between leadership talent and revenue
growth). The study confirms that talent matters: executives of high-growth
companies have a higher level of competency than those of low-performing firms.
But the study also makes it clear that having good leaders is not good enough; only
excellence makes the difference. Companies with outstanding leadership teams
have a high correlation with revenue growth, while those with solid but
unexceptional leaders have no correlation at all. The study also shows that several
commonly held beliefs are mistaken. For example, it is not true that a solid talent
bench can pull off any strategy: leadership is always contextual, and competencies
for success vary greatly by strategy. Indeed, the study makes it clear that
companies must accurately target their efforts to develop and recruit leaders
building true excellence in the most critical roles and competencies if these are to
translate into vigorous revenue growth. This report discusses these findings, and
their implications for companies, as three principles for action:

Focus on the leadership competencies that matter most for growth

Build a critical mass of excellent leaders

Celebrate the extremes develop and promote spiky leaders

FOCUS ON THE LEADERSHIP COMPETENCIES THAT MATTER

MOST FOR GROWTH
Outstanding leadership correlates strongly with growth, but truly excellent leaders
are few and far between. Only 1% of the executives in the study sample achieved
an average competency score of 6 or 7 (on a scale of 1 to 7), and only 11% were
scaled 5 or higher. Further, it is no easy matter to develop leaders. In Egon
Zehnders experience, high-potential executives who receive intensive coaching and
development support from their employers can improve their appraisal scores by no
more than +2 in one competency, or +1 in two competencies, in one year. And no
one can repeat this kind of improvement year after year. What this means is that
companies can build leadership excellence in only a few selected competencies
and even then, this requires considerable time and investment. The companies with
executives that excel at the competencies most relevant for growth therefore enjoy
a significant competitive advantage that is difficult for others to replicate.
There is no standard skill set for success Beyond a focus on Customer Impact, the
analysis shows that the leadership competencies needed to achieve breakout
growth vary greatly depending on a companys strategy. Indeed, there is no
standard skill set for success. Consider portfolio momentum growth the organic
revenue growth a company achieves by capitalizing on the market growth of its
existing segments. Such growth requires outstanding, consistent execution across
the organization and often across the globe; this is driven by a strong cadre of
senior managers (i.e., not the top team) who excel at business and people
leadership. In the study sample, the senior management of companies with topquartile portfolio momentum growth excelled in three key leadership competencies
(in addition to Customer Impact):

Developing Organizational Capability a systematic focus on developing

critical skills throughout the organization
Team Leadership the ability to focus, align, and build high-performing teams

Change Leadership the ability to drive large-scale, coordinated change

across the entire organization.
Market Insight the ability to look beyond the companys current context to
discern future growth opportunities
Results Orientation the ability to lead and transform a business for high
performance.

BUILD A CRITICAL MASS OF EXCELLENT LEADERS

A further key finding disproves the myth that a small group of high-potentials or
just a star CEO can drive business success. Rather, the study shows that a critical
mass of excellent leaders is needed to trigger and sustain corporate growth. This
finding was particularly marked for the Customer Impact competency discussed
above. At companies in the top quartile of revenue growth, at least 40% of senior
executives were scored 5 or above for Customer Impact on Egon Zehnders 7-level
scale (Exhibit 4). There is also evidence of a link between achieving above-average
growth and having a critical mass of highly qualified talent, i.e., to belong to the top
50% growth companies, at least 20% of the leaders had to excel in Customer
Impact. How do companies build such critical mass? The best of them create clear,
measurable leadership development targets across thousands of senior and middle
managers, and hardwire leadership development into the companys performance
management, recruitment, succession, and reward processes. In this way, they
systematically build the quantities of excellent leaders with business relevant
skills needed to drive consistent revenue growth.

Figure 1. Graphic representation of the six leadership views in the framework

(Boyce, 1999)

Visionary
Power &
Political

Ethical

Authentic
Leadership
Personal &
Trait
Theory
Situational & Team
Personal/Trait Theory Leadership

Organizational
& Positional

Key concepts: Leadership is linked to biological and inborn traits - some people are
born to be leaders, others are not, and/or everyone can lead, but their leadership
behavior will vary depending on their personal style. Assessing personal skills,
preferences, strengths and weaknesses, and understanding personal styles of
leadership are part of the personal/trait theory view. The personal/trait theory view
is also the portion of the leadership framework that connects to the concept of
existence addressing the question, What is the history of the person, group, or
community? Examples of scholarship in the personal/trait theory leadership view
include: Myers and Briggs-Myers (1995), Pearman (1998), and Barrick and Mount
(1991).

Situational/Team Leadership
Key concepts: Leadership is fluid, dynamic and changing dependent on the needs
of the group. Everyone has the potential to lead and to be a group member. The role
of the leader is to help the group move to the desired goal by using different
leadership skills/techniques at appropriate times. The situational/team leadership
view is also the portion of the leadership framework that connects to the concept of
resources addressing the question, What are the types of resources needed for
success? Examples of scholarship in the situational/team leadership view include:
Hersey (1984), Hersey and Blanchard (1993), Murphy (1996), Parker (1990), and
Katzenbach and Smith (1993).
Organizational/Positional Leadership
Key concepts: Leadership is connected to organizational position and role.
Leadership responsibilities differ among levels of the organization, and a role of
leadership is to create and adapt the organizational structures and processes to
work as effectively as possible. Leadership can be defined by the behaviors, skills
and activities exhibited by those in positions of organizational influence. The
organizational/positional leadership view is also the portion of the leadership
framework that connects to the concept of structure addressing the question,
What are the plans, processes and systems used to organize the work? Examples
of scholarship in the organizational/positional leadership view include: Bennis and
Nanus (1985), Kouzes and Posner (1995), and Belasco and Stayer (1993).

Power/Political Leadership
Key concepts: Leadership is connected to getting something done initiating
change. Leadership is viewed as (a) moving forward a personal agenda, and/or (b)
the empowerment and engagement of others. Leaders must have the skills to work
successfully in formal and informal systems, deal with power and conflict, build

coalitions, and address issues of participation and involvement. The power/political

leadership view is also the portion of the leadership framework that connects to the
concept of power answering the questions, What is the level of commitment with
those who are stakeholders? and What are the dynamics between those involved
in this issue? Examples of scholarship in the power/political leadership view
include: Boyte (1989), Block (1987), Bryson and Crosby (1992), and Tichy (1997).

Visionary Leadership
Key concepts: Leaders help others to critically examine the present - and leaders
provide a sense of direction for the future. Thinking outside the existing system
is encouraged. Developing scenarios, possibilities for the future, and doing that
which has not been done before is expected. The visionary leadership view is also
the portion of the leadership framework that connects to the concept of mission
addressing the question, What is the purpose, direction or mission of what we are
trying to accomplish? Examples of scholarship in the visionary leadership view
include: Wheatley (1993), Kotter (1996), Adams (1986), Renesch (1994), and Senge
(1990).

Ethical Leadership
Key concepts: Leadership is concerned about doing the right thing - moving
toward a beneficial end or common good. Leadership assesses why something
should be done, what is to be done, and the values that underlie the situation.

Leadership engages followers in a respectful, voluntary and community- enhancing

relationship. The ethical leadership view is also the portion of the leadership
framework connected to the concept of meaning addressing questions of What is
at stake here? and What are the right things to do? Examples of scholarship in
the ethical leadership view include: Burns (1987), Covey (1991), Kidder (1995),
Greenleaf (1997), Ciulla (1998), and Kouzes and Posner (1993).
The six views of leadership function as an integrated system. Effective leadership
requires knowledge and attention to all six areas simultaneously. Terry (1993)
referred to this integration of all the leadership views as authentic leadership.

Authentic Leadership
Engaging in all of the above being true to self and true to the world; leading to
fulfillment understanding the honoring the promises made to all stakeholders.

THEORITICAL FRAMEWORK
Model for assessing the effectiveness
development in high-growth new ventures

of

leadership

After the brief review of the leadership and entrepreneurship literatures, I next
develop a model for assessing the qualities of policy initiatives designed to support
leadership development in high-growth new ventures. Our model is based on the
following premises. First, I echo the distinction in the leadership literature between
instrumental and task-oriented activities, on the one hand, and strategic and
visionary activities, on the other. Instrumental and task-oriented activities aim at
reaching tangible milestones in new venture development. These may include
organising tasks such as recruitment and setting up business processes, as well as
reaching developmental milestones such as growth targets, business model
configurations and financing rounds and other resource activities. Strategic and
visionary activities involve designing and implementing strategic plans, configuring
business models, monitoring strategy implementation as well as establishing and

performing control functions. Second, I distinguish between capability transfer and

execution, on the one hand, and capability development and learning, on the other.
Capability transfer and execution involve the transfer of existing capabilities to the
new venture, so that these can be readily deployed within the new venture context.
Capability development and learning involve the development of new organic
capabilities within the new venture. Policy interventions can support new venture
development both within the instrumental task performance and strategic visioning
continuum, as well as within the capability transfer and capability learning
continuum. The combination of these two continua sets up four distinct areas of
leadership development in high-growth new ventures:
1 Leadership development initiatives can support the learning and development of
new strategic leadership capabilities within the high-growth new venture. Examples
of policy initiatives enhancing this aspect include board mentoring initiatives as well
as initiatives designed to support the development of visioning activities and
momentum-building activities within the high-growth new venture.
2 Leadership development initiatives can also support the learning and
development of new instrumental and task-oriented capabilities within the new
venture. Examples of policy initiatives enhancing this aspect include networking
activities designed to enhance exploratory learning from peers and industry leaders.
3 Leadership development initiatives can also be designed to transfer instrumental
and task execution capabilities to the high-growth new venture. Examples of policy
initiatives focusing on this aspect include the transfer of seasoned managers to the
new venture and hands-on management consulting activities.
4 Finally, leadership development activities can support the transfer of strategic
planning and monitoring capabilities to the high-growth new venture. Examples of
policy initiatives falling into this category include the transfer of non-executive
directors to high growth new ventures under mentoring schemes. The above areas
of leadership development often occur together. For example, initiatives designed to
transfer seasoned managers and non-executive directors to high-growth new
ventures may involve networking and peer learning activities in addition to
capability transfer. Similarly, board mentoring activities may also involve direct
participation to instrumental management activities. In particular, funding-driven
initiatives such as new venture accelerator initiatives can involve leadership
development activities in all four areas highlighted above. our schematic model of
leadership development support in high-growth new ventures is outlined in Figure 1.

The Five Practices of Exemplary Leadership

Model The Way
Leaders establish principles concerning the way people (constituents, peers, colleagues, and
customers alike) should be treated and the way goals should be pursued. They create standards of
excellence and then set an example for others to follow. Because the prospect of complex change
can overwhelm people and stifle action, they set interim goals so that people can achieve small
wins as they work toward larger objectives. They unravel bureaucracy when it impedes action;
they put up signposts when people are unsure of where to go or how to get there; and they create
opportunities for victory.
Inspire a Shared Vision
Leaders passionately believe that they can make a difference. They envision the future, creating
an ideal and unique image of what the organization can become. Through their magnetism and
quiet persuasion, leaders enlist others in their dreams. They breathe life into their visions and get
people to see exciting possibilities for the future.

Challenge the Process

Leaders search for opportunities to change the status quo. They look for innovative ways to
improve the organization. In doing so, they experiment and take risks. And because leaders know
that risk taking involves mistakes and failures, they accept the inevitable disappointments as
learning opportunities.
Enable Others to Act
Leaders foster collaboration and build spirited teams. They actively involve others. Leaders
understand that mutual respect is what sustains extraordinary efforts; they strive to create an
atmosphere of trust and human dignity. They strengthen others, making each person feel capable
and powerful.
Encourage the Heart
Accomplishing extraordinary things in organizations is hard work. To keep hope and
determination alive, leaders recognize contributions that individuals make. In every winning
team, the members need to share in the rewards of their efforts, so leaders celebrate
accomplishments. They make people feel like heroes.

EXPERIENTIAL LEARNING
The purpose of this study was to conduct a thorough review of literature related to leadership
development and experiential learning. The objectives were as follows:
1. Define key terms.

2. Establish a need for leader development.

3. Connect the need for leader development with the outcomes of experiential learning.

RECOMMENDATION
The importance of growth for job creation and economic dynamism has been
widely acknowledged. What has been less widely recognised, however, is that
designing policy interventions to maximise the growth potential of new ventures is

challenging. However, the point that growth in organisations face unique and highly
demanding leadership challenges has received arguably the least recognition thus
far. As my literature review showed, leadership challenges in context of growth have
received only scant attention from researchers thus far, and the unique aspects of
those challenges i.e.,

orientation towards external stakeholders

emphasis on instrumental and transformative leadership behaviours remain
yet to be fully recognised and addressed by policy initiatives.

HOW TO COPE WITH EXTERNAL CHALLENGES

Be proactive.
Regardless of the situation, it's important for leaders to do something. Waiting is occasionally the
right strategy, but even when it is, it makes a group nervous to see its leader apparently not
exercising some control.
Be creative.
Try to think "outside the box," i.e. in unexpected but effective ways. If disaster has struck (you've
just lost a major source of funding, perhaps ), how can you turn what looks like the end of the
world into a new beginning? Can you change the way the organization operates to deal with the
loss? Can you use the fact that you're about to lose services to gain community and political
support? Is this an opportunity to diversify your funding? Can you expand your horizons and
your reach through collaboration? Don't just look at the obvious, but consider a situation from all
perspectives, and search for unusual ways to make things work.
Face conflict squarely.
This doesn't mean come out fighting, but rather identify and acknowledge the conflict, and work
to resolve it. This is true both for conflict within your group, and conflict between the group and
others outside it. Far too many people, leaders included, act as if conflict doesn't exist, because
they find it difficult or frightening to deal with. As a result, it only grows worse, and by the time
it erupts, it may be nearly impossible to resolve. If it's faced early, nearly any conflict can be
resolved in a way that is beneficial for everyone involved. It's a function of leadership to have the
courage to name the conflict and work on it.

Retain your objectivity.

If you're mediating a conflict within the organization, don't take sides, even if you think you
know one side is right. That will come out if you mediate objectively and well.If you're faced
with detractors or opposition, don't automatically assume they're villains. What are their
concerns, and why do they disagree with what you're doing? Don't get sucked into a fight unless
there's really no alternative. Even rabid opposition can often be overcome through a combination
of respect, political pressure, and creative problem solving.
Look for opportunities to collaborate.
This is important both within and outside your group or organization. Within the group, involve
as many people as possible in decisions, and make sure they have control over what they do. The
more they own their jobs and the organization, the more enthusiastic they'll be, the more
effective the organization will be, and the more effective you'll be as a leader.
Outside the organization, try to forge ties with other organizations and groups. Let them know
what you're doing, get and give support, and work with them to the extent you can. Make
common cause with other groups that have similar interests. In numbers, there is strength, and
you'll be stronger as an alliance of groups than any one of you could be individually.
Listen.
Listen to people's responses to your ideas, plans, and opinions. Listen more than you talk. Listen
to a broad range of people, not just to those who agree with you. Probe to find out why they think
or feel the way they do. Assume that everyone has something important to say. If you hear the
same things from a number of different and diverse sources, you should at least consider the
possibility that they're accurate. If they're about things you do that you can change, you might
give it a try.
Ask for 360-degree feedback...and use it.
This is feedback (people's views of you) from everyone around you - staff, volunteers, Board,
participants, people from other organizations or groups yours works with - anyone you work
with in any way. As with listening, if you hear the same thing from a lot of different sources, it's
probably true. Act on it. All the feedback in the world won't do you any good unless you do
something with it.
Look at what's going on around you.
Are you the center of controversy and chaos? Or do calm and good feeling seem to reside
wherever you do? The chances are that the answer lies somewhere in between these extremes,
but it probably should be closer to the calm and good feeling side. Even if you're involved in a
battle with the forces of evil, you can foster calm in yourself and those you work with. At the
same time, your group could be on top of the world, and you and your colleagues could still be
climbing the walls if that's the kind of atmosphere you create.

Reach out for help in facing internal challenges.

Most of us find it difficult to change entirely on our own. A psychotherapist, a good friend, a
perceptive colleague, or a trusted clergyman might be able to help you gain perspective on issues
that you find hard to face. Many people find meditation or some form of self-discovery helpful in
understanding themselves and in getting through change. Don't feel you have to do it all on your
own.

CONCLUSION

ACTION STEPS TO CONFIGURE LEADERSHIP FOR GROWTH

These findings show that great leaders make all the difference in powering
corporate growth but efforts to develop and hire executives need to be targeted
and systematic if they are to have meaningful impact on the bottom line. In
summary, then, what are the steps that companies should take to configure their
leadership for growth? The first set of actions is about aligning corporate strategy
and leadership competencies. To identify and foster those leadership qualities that
matter most for their specific growth challenges, companies should:

Identify the required set of competencies for actual and future corporate
strategy, detailing these for business units and geographies, and determine
the number and quality of leaders their strategies need.
Assess managers and compare current talent bench with required standards.
Deriving competency gaps is easily done by heat maps that show available
leaders cross-matrixed against the requirements of each business unit and
geography (Exhibit 5 provides an example).
Optimize talent deployment by matching strategic opportunities and
competencies and develop measures to close competency gaps. Adjusting
recruiting and selection processes as well as intensifying capability building in
relevant competencies are both key in achieving the full potential of complex
growth strategies.

In addition to these context-specific measures, companies should strengthen

their customer focus both in existing business systems and talent practices. This
might mean building the sales process around customer needs, ensuring
touchpoints between customers and R&D, or developing a customer-oriented
knowledge management that is linked to existing customer research. In addition,
companies will need to adapt their talent management instruments to not only
include, but stress Customer Impact in, e.g., selection criteria, performance
management, or the competency model. To generate growth, all companies
need to build a critical mass of excellent leaders. Setting the bar high does not
suffice but must be complemented with adaptations of business systems, talent
management processes and high-impact capability building. Hence, companies
should:

Sharpen leadership development, by defining required competencies and skill

levels for each job family and hierarchy level; anchoring critical competencies
in all talent management processes, including recruiting, deployment, and

assessment; and providing targeted support for the transition between senior
management and top team roles given their differing skill sets.
Innovate competency building, by building a competency factory to focus
existing business processes and talent management practices on critical
competencies; using field and forum approaches and action learning for
sustainable change; and embedding leadership development in the
companys talent culture.
Develop and promote spiky leaders by assessing the competency spikes of
the current leadership team and talent bench; review the companys existing
leadership model and talent management practices for tolerance of spikes;
and adapt the leadership model, talent practices, and internal communication
to recognize the value added by the more unusual profiles. In addition, the
utmost importance should be given to the composition of top and senior
management teams. Our findings call for diverse teams with individuals of
complementary leadership spikes.