Some of the more interesting conversations I’d had with clients in recent years have concerned how much weight quantifiable results and demonstrated competencies should respectively be given in measuring leaders’ performance. The prevalent practices in this area for companies of all sizes and industries range from results/competencies weightings of 100%/0% to 50%/50%. Not surprisingly, the right answer for a particular company will depend heavily on history, culture and the extent to which competency demonstration and results-based performance have each been historically emphasized.
A more fundamental issue though is whether a one-size-fits-all performance ratio should be applied broadly to a company’s leadership. Last week, a client executive asked me whether, as part of the annual goal-setting process, it might make sense for the leader and his/her boss to agree on the leader’s results/competency ratio for that year. Under this approach, leaders who are weak at critical soft skills would have goals weighted to that area and leaders who need more motivation to achieve results would have goals weighted to that area. I applaud this approach in the right environment.
It works great where the boss is enlightened and appreciates the importance of soft skills to great leadership. It works poorly where a “bully-like” boss regularly over-weights results vs. competencies and passes on his poor behavior, helping create burnt-out subordinates and a weak culture. In companies where this behavior exists, it’s best to insist on a fixed results/competencies ratio.