Leadership is a complex phenomenon that can be roughly defined as the two-sided relationship between leaders and followers who work together with the same purpose to achieve shared goals (Avolio et al., 2016; Lewis and Donaldson-Feilder, 2012; Yammarino, 2013). One of the tools that can help in understanding leadership is the leadership capability framework, which is an analytical instrument that can direct leaders to obtain and exhibit specific skills, knowledge, and behaviours for greater success (Hosseini et al., 2017). The present paper reviews several of these frameworks to pinpoint some of the major competencies of a modern leader, especially those pertinent to the “Volatile Uncertain Complex Ambiguous” world (VUCA) (Lewis and Donaldson-Feilder, 2012, p. 5), and connect them to pertinent leadership theories and tools.
Key Competencies for 21st Century Leaders
The competencies required of a leader nowadays are numerous, and different competency framework interpretations focus on varied aspects. However, certain general competencies can be singled out. First, the knowledge and skills related to entrepreneurship and business are a must (Feser et al., 2015; Seidel et al., 2017; Wardman et al., 2016). A leader is supposed to develop and communicate clear and inspirational mission, vision, and objectives (McAuley et al., 2014; Muda et al., 2017). Strategic thinking (Ghasemy et al., 2016), change and crisis management (Coombs, 2014; Răducan and Răducan, 2014), innovation promotion (Hosseini et al., 2017; Prasad and Junni, 2016), and decision-making are also crucial (Steiber and Alänge, 2016). Finally, business capabilities include role- and industry-specific knowledge and skills (Ghasemy et al., 2016; Wardman et al., 2016). For instance, a school principal and a nurse educator will be required to perform different functions and operate in distinct contexts, which affects their required competencies (Halcomb et al., 2015; Zheng et al., 2017). Such features can serve to distinguish the leadership in various fields of activity.
Secondly, the interpersonal skills of a leader are critical for influencing the followers (Ghasemy et al., 2016; Muda et al., 2017). Among other things, they include emotional intelligence competencies (Higgs and Dulewicz, 2016; Saxena et al., 2017). Also, a specific leadership competency is the development and empowerment of human resources (Choi et al., 2016; Dong et al., 2016; Han et al., 2015; Joo et al., 2016). Empowered employees are a competitive advantage (Davis, 2017; Delery and Roumpi, 2017), which highlights the significance of this competency, especially in VUCA (Hall and Rowland, 2016).
In continuation, the understanding of human psychology can be helpful to a leader (Zaleznik, 2009). For example, follower motivation is a major interpersonal competency (Dionne et al., 2014), which can be enhanced by the knowledge of psychological motivation theories (Huczynski and Buchanan, 2014). For instance, Maslow suggests that motivation is governed by needs, including basic ones and those pertinent to communication, self-esteem, and self-actualisation (Martínez-Cañas et al., 2016). However, the theory of Maslow was criticised as simplistic, and Herzberg modified it to include the idea of hygiene (environmental elements like policies or relationships) and motivator factors (rewards, recognition, and so on) (Hall and Rowland, 2016; Urick, 2016). The former factors correspond to lower-level needs of Maslow’s hierarchy, and they have to be satisfied to avoid demotivation; the latter reflect higher-level needs and can actually motivate followers (Escardíbul and Afcha, 2016; Martínez-Cañas et al., 2016). By employing relevant theories, a modern leader can also manage employee motivation.
Diversity management is another competency for a modern leader and, possibly, and ethical requirement (Treviño and Nelson, 2016; Zheltoukhova, 2014). This competency is located at the intersection of business and interpersonal capabilities. Apart from being ethical, inclusive environments are reported to have improved performance (Hajro et al., 2015; Jin et al., 2017; Tekleab et al., 2016; Williams, 2015), which highlights their importance in VUCA.
Ghasemy et al. (2016) also suggest singling out “generic competencies,” for example, self-organisation or integrity. The traits and behaviours that can facilitate leadership (for instance, honesty) may be included in this category (Joo and Jo, 2017; Nichols, 2016). Also, ethical conduct is a crucial part of modern-day leaders’ generic competencies (Bachmann, 2017; Dionne et al., 2014). An ethical leader fosters the culture of responsibility, promoting corporate social responsibility (CSR) or other relevant frameworks (Gupta et al., 2016; Hansen et al., 2015). Ethical behaviour can have a positive effect on leadership outcomes and performance (Palanski and Yammarino, 2009; Walumbwa et al., 2017; Xu et al., 2014). Also, the ethical performance of a firm is its major asset, especially in VUCA (Lins et al., 2017). In summary, the competencies of modern-day leaders can be roughly categorised into entrepreneurial, interpersonal, and generic ones.
Competencies and Leadership Styles
Different leadership styles have been distinguished, and their impact on leadership competencies is worth investigating. For example, the autocratic leadership style is characterised by individual decision-making, and the democratic one implies participative decision-making (Saitis and Saiti, 2017; Wilson, 2017). Moreover, there is bureaucratic leadership, which is controlled by the exact standards, and laissez-faire leadership, in which the leader does not offer much control or guidance over the followers’ activities (Alonderiene and Majauskaite, 2016; Eshbaugh-Soha, 2017). Such styles have different advantages and disadvantages and determine the likelihood of leaders exhibiting specific behaviours and exercising particular skills (Fashola et al., 2016; Rawat and Lyndon, 2016; Saxena et al., 2017). For instance, decision-making skills are more important for an autocratic leader than a laissez-faire one, and autocratic and democratic leaders are likely to employ dissimilar interpersonal skills (Saitis and Saiti, 2017). However, these differences are not likely to completely remove the need for entrepreneurial, interpersonal, and generic competencies mentioned above.
Managerial and Leadership Competencies and Crisis Management
Management and leadership are linked but can be distinguished. Kotter (2008) suggests that leaders and managers differ in their functions (vision versus plan and human resource development versus staffing), methods that they employ to perform these functions (motivation versus monitoring), and outcomes of their activities (change versus order). In other words, both are involved in managing business processes, but leaders are mostly concerned with human resources and strategic development (change) while managers work with more static administrative procedures (Hornstein, 2015; Hosseini et al., 2017; Puni et al., 2014; Răducan and Răducan, 2014). Therefore, the above-mentioned competencies apply to leaders, but managers would need a different framework.
Another dimension that can be used to distinguish leaders and managers is crisis management. Gruber et al. (2015) frame this difference by suggesting that managers are expected to react to a crisis by containing it while leaders are more proactive and would be expected to focus on analysis and reflection. Employing the five-phase model, the typically “managerial” phases of crises start with the third one (containment), while leaders are specifically engaged in preventive activities and the final stage (learning) (Wooten and James, 2008; Wright, 2017). However, this distinction is relatively flexible, and managers and leaders are expected to combine efforts when dealing with a crisis (Gruber et al., 2015).
Crisis management is especially important in VUCA due to the complexity of the modern social, political, economic, ecological environment (Chapman-Clarke, 2017). VUCA requires the ability to prevent, respond to, and recover from crises, and leaders are expected to take part in the process (Bundy et al., 2016; Dückers et al., 2017). VUCA also demands efficiency and innovative, creative approaches to new and old challenges (Bowers et al., 2017; Steiber and Alänge, 2016; Zheltoukhova, 2014). By promoting change and sustainability and exhibiting other leadership competencies, leaders can help companies survive in VUCA (Steiber and Alänge, 2016).
Bad Leadership: Incompetence and Its Consequences
Because of personal flaws and behaviour (for instance, inactivity) or institutionalised issues (for instance, blame culture or nepotism), bad leadership can take place (Barling and Frone, 2016; Solas, 2016). While it is difficult to define, the primary feature of bad leadership is its adverse outcomes (Naseer et al., 2016; Örtenblad et al., 2016); also, they typically can be traced back to incompetence (Nicolle, 2016). For instance, the frauds related to the Libor scandal have been framed as the outcomes of poor decision-making and unethical conduct, which resulted in fines, lawsuits, and damage to reputation for the company (Nicolle, 2016; Yeoh, 2016). Similarly, disastrous events like oil spills (for instance, the Shell spill into the Gulf of Mexico) tend to be the outcomes of poor decision-making and ineffective preventive crisis management and damage the environment, community, and business (Arora and Lodhia, 2017; Pranesh et al., 2017). Thus, the outcomes of leaders’ incompetence can be most harmful.
Classical Leadership Capabilities: Similarities and Differences
To consider the classical leadership capabilities, it may be helpful to review classical leadership theories. For example, the early perspective on leadership consisted of hero worship (Bass, 2009; Pendleton and Furnham, 2016). The theoretical version of this mindset is the personality theories; its initial versions, the great man theory and the trait theory, were developed in the 1840s and 1920s respectively (Harrison, 2017; Spector, 2015). The great man theory mythologised leadership, suggesting that it only manifested in exceptional individuals. The trait theory framed leadership as the ability which is rooted in personal traits (Harrison, 2017; Tal and Gordon, 2016). Both approaches viewed leadership as an innate ability, implying that it could not be developed (Harrison, 2017; Lu et al., 2017; Tal and Gordon, 2016). Thus, early leadership theories suggested that the only “competency” of a leader was innate abilities and features.
Nowadays, personality theory abandoned the idea of exclusively innate leadership, but it still seeks to understand the specifics of human personalities that can facilitate leadership (Cuhadar et al., 2016). The approach is still relevant, although critics point it out that leaders may exhibit the traits that are not typically connected to leadership (for instance, introversion) and remain effective (for example, Gandhi is a legendary introverted leader) (Cain, 2013; Farrell, 2017). However, as a response and criticism of the early personality theories, the behaviour theory (the 1940s) was developed (Lewis and Donaldson-Feilder, 2012). It focuses on behavioural competencies, promoting the idea that a person can become a leader (Olden, 2016).
After that, multiple new approaches developed, including the situation theory, which considered the environment of leadership, and post-heroic models that focused on change (Lewis and Donaldson-Feilder, 2012). As for more modern theories, they are becoming rather numerous. Some of the relatively recent models and styles include values-based approaches (focusing on leaders’ values), contextual leadership (focusing on the context, for example, VUCA), and various forms of group-oriented collective theories (focusing on the complexity and fluidity of leader-follower relationships) (Fry et al., 2016; Lewis and Donaldson-Feilder, 2012). Thus, with time, leadership theories started to focus on an extensive range of leadership competencies, including those pertaining to the categories determined by this paper.
As pointed out by Yammarino et al. (2012), traditional and contemporary approaches to leadership consider a form of input or antecedent that should lead to specific consequences or outcomes. However, the specifics of the suggested inputs and desired outputs seem to differ. If leadership competencies are viewed as inputs, with time, theories started to introduce a greater number of more varied competencies (Lewis and Donaldson-Feilder, 2012). Similarly, the outcomes became more diverse: despite the traditional requirements for tangible outcomes, soft ones began to be introduced, including the development of commitment and trust in employees, ensuring their well-being and satisfaction, and so on (Yammarino et al., 2012). Consequently, the competencies that are geared towards soft outcomes (for example, diversity management) were introduced.
It is noteworthy that the distinction between traditional and contemporary leadership approaches can be controversial. The comparative analysis of works on the topic demonstrates some discrepancies: for example, some authors view relationship-oriented approaches as traditional ones (Dansereau et al., 2013), but others describe them as contemporary (Lewis and Donaldson-Feilder, 2012). It can be suggested that contemporary theories may be defined by the year of their appearance and their relevance for modern research and practice. For instance, the “great man theory” is outdated from the temporal and relevancy perspectives (Yammarino, 2013). However, group-oriented collective leadership approaches started to appear in the middle of the previous century (Dansereau et al., 2013), but they can still be viewed as relevant and, therefore, contemporary (Lewis and Donaldson-Feilder, 2012; Yammarino et al., 2012). Thus, the framing of leadership competencies may be a more valid criterion for the definition of modern approaches than the temporal factor.
Causes of the Changes to Leadership Competencies
Certain explanations can be offered to frame the changes in leadership competencies. First, new developments are related to the improved understanding of non-leadership topics. For instance, the advancement of sociology (feminist and other minority studies) introduced the diversity competency into the requirements for leaders (Gotsis and Grimani, 2016; Treviño and Nelson, 2016; Yammarino, 2013). Secondly, the development of the understanding of leadership, as well as the creation of new theories, also prompted changes. For instance, the “great man” approach prompted the direct response in the form of behavioural theories, and collective theories emerged as the criticism of the individualistic ones (Dansereau et al., 2013; Yammarino et al., 2012). Also, as can be seen from the later example, criticism does not necessarily result in discarding the previous ideas; instead, it can sprout additional ideas. Thus, criticism can lead to a new perspective building on a previous one (Lewis and Donaldson-Feilder, 2012; Yammarino, 2013), expanding relevant leadership competencies.
Finally, Lewis and Donaldson-Feilder (2012) also suggest that VUCA promotes the development of new approaches and theories by posing new challenges. For example, the emphasis on crisis management as a primary leadership competency may be connected to VUCA (Bundy et al., 2016; Dückers et al., 2017). Therefore, the development of new leadership competencies is also concerned with the need to equip leaders with the tools that can help them in leading their organisations, which is, essentially, the aim of the competency framework (Hosseini et al., 2017; Muda et al., 2017). Thus, the major causes of the changes to leadership competencies seem to be related to the aggregation of knowledge in various areas, the critical review of the previously developed theories, and the need for evolution.
The application of the leadership competencies framework to the notion of leadership allows characterising contemporary leadership and tracing its development throughout the multiple theories that have been conjured, criticised, and enhanced throughout the past and present centuries. Modern leadership appears to be described by a relatively large number of competencies that can be roughly subdivided into entrepreneurial, personal, and generic ones. Some of the competencies are not leadership-specific, and others can be industry-specific, but the main categories are likely to be universal across industries and leadership styles. The presented evidence also indicates that the evolution of leadership competencies moved from simplistic solutions towards increased complexity, in which one-dimensional perspectives were discarded or augmented as the value of new knowledge, skills, and behaviours to successful leadership was proven by evidence. The evolution may have been prompted by accumulated knowledge, critical reflection on previous ideas, and the needs of a leader operating in VUCA. Due to this development, the competencies framework is capable of performing its function of informing the professional growth of leaders and equip them for working in VUCA.
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