Critical skills and the CEO - includes related article - Human Resources

Chief Executive, The, April, 1993 by John H. Callen, Jr., Charles C. Jett

With competitive advantage difficult to attain in global markets that are ever-more complex, it's time for a hard look at the basic competencies CEOs and other managers need.

America's business leaders face an ominous challenge: survival in a world increasingly marked by high technology and international competition. More than ever, CEOs will need to make critical decisions about the people hired and trained for leadership roles. With our competitive advantage narrowing in some areas--and disappearing in others--it is time to revisit the fundamentals--the blocking and tackling skills necessary for our future leaders.

What are these fundamentals? In 1992, the Department of Labor published a report by the Secretary's Commission on Achieving Necessary Skills. SCANS reported that a high-performance company requires workers who have a solid foundation in basic literacy and computational skills. Also necessary are core competencies such as an ability to manage resources, to work with others, to acquire and use information, to master complex systems, and to work with a variety of technologies. Secretary of Labor Robert Reich argues the fast-paced high-tech environment also requires more advanced analytical skills. These include the capacity to interpret raw data and to evaluate alternative ideas.

Recently, a study of position requirements for some 900 executive searches further defined necessary management skills. At the top of the list were the ability to communicate, to think logically, to apply ideas and theories, to work as a member of a team, and to manage one's time effectively.

Keep in mind, however, that critical skills vary from company to company. The particular talents required may depend on a company's line of business, strategic goals, work force demographics, and available resources. Since no one knows a company's needs better than its chief executive, it is imperative that CEOs play an active part in defining core skills and creating an environment in which both managers and front-line workers can acquire them.

IDENTIFYING CRITICAL SKILLS

A large corporation recently conducted a study to determine the skill profile of what it considered to be its capstone positions--the "bread-and-butter" front-line positions responsible for most of its revenues. This organization provides management expertise to clients in the food industry through resident executives.

The company was interested in developing the skill mosaic of these resident executives and conducted multiple interviews with successful executives to determine the kinds of skills needed for individuals to succeed in these positions. Additionally, the company was interested in finding out what skills were necessary to identify and screen "high potential hires"--individuals who could be brought into the company with a high degree of confidence that they could succeed into resident executive roles.

Drawing on the study, the company pieced together a skill mosaic. Clearly, it concluded that some attributes--particularly personal qualities and intelligence--were "critical skills." It also determined that knowledge of the business was not a necessary criterion for its "high potential hires." The company would assign that task to internal training programs and on-the-job experience.

By conducting this study and identifying the skill mosaic appropriate for the resident executive position, the company was able to:

* Articulate clearly to employees the skills necessary to achieve the position--in essence, making critical skills part of the company's vocabulary.

* Incorporate specific skills into the company's performance evaluation procedures.

* Identify the critical skills to be used in identifying and employing high potential hires.

* Develop interview questions and techniques specifically designed to measure candidates' critical skills.

CRITICAL SKILLS AND THE CORNER OFFICE

Critical skills underpin every aspect and function of a business--from the top to the bottom of the corporate pyramid. In seeking to recruit more minorities and women, for example, a leading distributor of industrial products focuses on the critical skills for individual positions. This gives minorities the best chance to succeed in the company and represents a significant change from its past recruiting and training practices.

In executive recruiting, a major retailer believes its set of critical skills is as important to a new executive's success as a reliance on functional skills. The company instructs its executive recruiters to focus heavily on evaluating candidates' critical skills and requires a thoughtful analysis by recruiters of these areas.

The concept of critical skills is also shaping and strengthening partnerships between business and the educational system. One major organization that employs large numbers of students throughout the country is working with the Illinois-based Critical Skills Foundation to tailor its individual store training program to its own set of critical skills. Thus, store managers can offer local schools an educational program that is consistent both with their needs and the skills advocated by SCANS and other sources. Students who work for this company--whether full-time, part-time, or in a cooperative education program with the school--will eventually participate in this educational program as a condition of employment. The company is even considering issuing a certificate of competency to students who successfully complete the program.