For years, companies have focused on hiring and training for technical skills for those in leadership roles. Having a deep understanding of processes and procedures, technical know-how, and the ability to make decisions based on hard data have all been viewed as necessary traits in executives.
But do these characteristics produce the best return in investment?
New thinking in learning and development for leaders is leaning towards soft-skills, which have a greater impact on the bottom line in business.
What is self-awareness and why is it important for leadership development?
The concept of self-awareness was an idea generated by Daniel Goleman, psychologist and author of the best-selling book Emotional Intelligence, that described this attribute as being, “the ability to recognize and understand your moods, emotions, and drives, as well as their effect on others.” This characteristic can result in stronger professional choices and has been viewed as the hallmark of effective leaders.
A brand new study from Boston University, Harvard University, and the Ross School of Business at University of Michigan revealed that training in self-awareness and soft skills produces a 256% return on investment, based on an average rate of 12% higher team productivity and retention. This training should include a focus on soft skills, like interpersonal communication and problem-solving.
Researchers studied the effect of leadership training for female workers at Shadi Exports, the India-headquartered ready-made garment exporter with clients such as Walmart, Gap, Target, and JCPenney. Interestingly, during the time period of the study, all other factors like wages remained the same.
A couple of years ago, Korn Ferry produced similar data from a nearly 3-year study of 486 publicly traded companies that indicated a correlation between the hiring of professionals with high levels of self-awareness. David Zes and Dana Landis of Korn Ferry found that employees who rated themselves as poor performers had 20% more "blind spots" than their peers at companies that were stronger. These blind spots included skills that others viewed as important to success, such as communication and time management. In fact, 79% of the employees who saw themselves as not performing up to par said they were more likely to have lower levels of self-awareness.
One can make the conclusion, then, that self-awareness training for future leaders and executives alike is worth the investment because it produces more results.
What are the top soft skills that employers should be focusing on when training future leaders?
Leadership development should include a combination of hard and soft skills in order to be most effective. Having technical knowledge can be an advantage, but being self-aware of one’s own ability to lead and inspire others brings it all together. H. E. James, MBA, who contributes to the EffortlessHR blog, says these are the top soft skills for employees today:
- Clear communication – based on data from Monster.com, the ability to communicate well in all formats is a primary soft skill that all leaders must develop.
- Critical thinking skills – having the ability to process things in such a way as to be a keen problem-solver, while being comfortable enough to give and receive feedback.
- Teamwork – The above skills tie into teamwork, says James. Building strong teams often starts with critical thinking about any obstacles and then communicating through the challenges.