# Presentation: 213589

## IRS 360° Assessment Study:Developing Great Leaders

**Jim Trinka**
**Director, Leadership and Organizational Effectiveness**
**IRS Strategic Human Resources**

## Key Learning Points

- Great leaders make a great difference in organizations
- What are the characteristics (competencies) of a great leader (IRS)?
- How can we develop more great leaders (IRS)?

- Challenging Common Myths

- 360o assessments do not accurately reflect on-the-job performance
- Leadership development should focus solely on correcting weaknesses
- Concentrate directly on a targeted competency for best development

## Motivations for this Study

- Feedback showed that while we had leaders complete 360° assessments, we did not do a great job of either interpreting the results or customizing developmental improvements
- In a tight budget environment, we needed to  focus developmental efforts to achieve the greatest impact on behavior and results

## Leadership Effectiveness Impacts Balanced Measures 

- Data from *The Extraordinary Leader,* by Jack Zenger and Joe Folkman

**Leadership Effectiveness – 360********Assessed (Insurance Co.)**

**Leadership Effectiveness – 360********Assessed (High Tech Co.)**

**Leadership Effectiveness – 360********Assessed (Mortgage Bank)**

## Leadership Effectiveness Impacts Employee Engagement

- Data from *The Extraordinary Leader,* by Jack Zenger and Joe Folkman

**Great leaders make**
**a great difference**

**Good leaders have**
**an adequate impact**

**Poor leaders create**
**dissatisfaction**

***Finding:  *****It takes a substantial change in leadership effectiveness (perceived by 360**** assessments) to greatly impact balanced measures and employee engagement (i.e., the relationship is not incremental)**

**Leadership Effectiveness – 360******** Assessed (High Tech Co.)**

## IRS Leadership Competency Model

| Leadership | Employee Satisfaction | Customer Satisfaction | Business Results | EEO and Diversity |
| --- | --- | --- | --- | --- |
| Adaptability (AD) | Continual Learning (CL) | Customer Focus (CF) | Achievement Orientation (AO) | *Supporting Compe-tencies |
| Communication* (CO) | Developing Others* (DO) | Entrepreneurship (EN) | Business Acumen (BA) |  |
| Decisiveness (DC) | Diversity Awareness* (DA) | External Awareness (EA) | Political Savvy (PS) |  |
| Integrity/
Honesty* (I/H) | Group Leadership* (GL) | Influencing/ Negotiating* (I/N) | Problem Solving* (PR) |  |
| Service Motivation (SM) | Teamwork (TW) | Partnering* (PA) | Technical Credibility (TC) |  |
| Strategic Thinking (ST) |  |  |  |  |

**A daunting list of 21 competencies for IRS leaders to become proficient in to increase overall perceived leadership effectiveness**

## Traditional Incremental Development Approach

**IRS Leadership Competencies (in alphabetical order)**

**Traditional developmental approach would primarily focus on circled weaknesses (a 10% rise in these 3 competencies would improve this executive’s effectiveness to the 55****th**** percentile with a corresponding increase of only 3% in employee engagement!)**

**Here is an IRS executive with an overall leadership effectiveness rating at the 50****th**** percentile assessed through a 360**** evaluation**

## IRS 360 Assessment Methodology

- Rigorous statistical analysis of the 360° assessment data from 785 IRS managers
- 101 Executives
- 498 Senior Managers
- 186 Front-line Managers
- Compare “great” IRS leaders (top 10%)* to the bottom 10% to determine what others perceive are the key competencies that put them above the rest
- Compare developmental approaches of building key strengths vs. correcting weaknesses of IRS leaders to determine which approach most increases perceived leadership effectiveness (360 assessed)

- *percentile ranked by average “Total Others” scores across all 21 competencies for each leader

## Key Competencies that Set Apart Great IRS Leaders

| Leadership | Employee Satisfaction | Customer Satisfaction | Business Results | EEO and Diversity |
| --- | --- | --- | --- | --- |
| Communication* | Developing Others* | External Awareness | Business Acumen | *Supporting Competencies |
| Service Motivation | Group Leadership* | Influencing/ Negotiating* | Political Savvy |  |
| Strategic Thinking |  |  | Problem Solving* |  |
|  |  |  | Technical Credibility |  |

**Comparing the top 10% of IRS leaders to the bottom 10% yields a much more manageable list of what others perceive are the key competencies that put “great” IRS leaders well above the rest**
***Finding:*****  The list balances 2-4 key competencies in each IRS Core Management Responsibility (many support EEO and Diversity)**

## Impact of Displaying Strengths in Key IRS Competencies

**IRS leaders who display profound strengths in key differentiating competencies (scores ******** 3.95) achieve much higher levels of overall perceived leadership effectiveness (360******** assessed)**
***Finding:*****  IRS leaders who build just 1 more profound strength in a key competency experience a 10-95% improvement in overall perceived leadership effectiveness (360******** assessed)**

**Leadership Effectiveness – 360******** Assessed**

**Number of Profound Strengths in IRS Key Competencies**

## Build Strengths in Key Differentiating Competencies

**IRS Leadership Competencies (in alphabetical order)**

**Building existing strong competencies to very high levels (raising circled strengths just 5%) could increase this executive’s overall perceived effectiveness to about the 80****th**** percentile (+62%) and employee engagement scores to about 72% (+60%)**

-  **Same IRS executive, different approach – build key strengths **

## Impact of “Fatal Flaws” on Leadership Effectiveness

**This IRS leader displays 2 key competency strengths (should score at ********72****nd**** percentile), yet only scores at the 49****th**** percentile due to a pronounced weakness or “fatal flaw” (scores ******** 3.0 out of 4.0)**
***Finding:*****  IRS leaders must fix “fatal flaws” to achieve marked increase (******** 50%) in overall perceived leadership effectiveness**

**IRS Leadership Competencies (in alphabetical order)**

**Proficiency Score – 360******** Assessed**

## “Fatal Flaws” for IRS Leaders

**“****Fatal flaws” typically include Technical Credibility, Business Acumen, Influencing/Negotiating, Developing Others, and Communication (5 of 11 key differentiating competencies)**
**Effects of fixing “fatal flaws” on overall perceived leadership effectiveness not as dramatic as building profound strengths**
***Finding: *****Leaders should build profound strengths unless they have “fatal flaws”**

**Most Often Occurring Weaknesses in IRS Leadership Competencies**

## New Insight for Competency Development

**Competencies are interdependent, so increasing proficiency in competency companions (i.e., those with high correlations) has an additive effect on raising scores in the targeted competency**
***Finding:*****  Strongest increases in proficiency scores on targeted competencies achieved by developing competency companions**

**Competency Companion**

**Targeted**
**Competency**

**Competency Companion**

- Strong
- Strategic
- Thinking

- Great
- Technical
- Credibility

- Poor
- Technical
- Credibility

- Weak
- Developing
- Others

- Strong
- Developing
- Others

- Weak
- Strategic
- Thinking

**Proficiency Scores - 360******** Assessed**

**The Power of Perception**

## Competency Companions for Developing Key Strengths

| Targeted Key Competencies | Competency Companions* |  |  |
| --- | --- | --- | --- |
| Communication | Adaptability | Diversity Awareness | Group Leadership |
| Service Motivation | Partnering | Technical Credibility | Strategic Thinking |
| Strategic Thinking | Problem Solving | External Awareness | Technical Credibility |
| Developing Others | Group Leadership | Achievement Orient. | Diversity Awareness |
| Group Leadership | Developing Others | Communication | Decisiveness |
| External Awareness | Continual Learning | Business Acumen | Strategic Thinking |
| Influence/Negotiate | External Awareness | Partnering | Group Leadership |
| Business Acumen | External Awareness | Political Savvy | Problem Solving |
| Political Savvy | Partnering | Problem Solving |  |
| Problem Solving | Decisiveness | Adaptability |  |
| Technical Credibility | Strategic Thinking | Service Motivation | Developing Others |

**List of statistically significant (*****p***** > .001) competency companions to develop to dramatically increase the proficiency scores (360******** assessed) on targeted key competencies**

***Development of 5 in circles yields greatest influence on targeted competencies (each listed as 3 companions)**

## How to Build Strengths in Key Competencies

**Same IRS executive, new approach – develop competency companions **

**IRS Leadership Competencies (in alphabetical order)**

**Developing competency companions just 2% builds this executive’s targeted areas by 5% and indirectly improves several other competencies (creating a “halo” effect) to easily increase overall perceived effectiveness to the 90****th**** percentile (+80%) and employee engagement to about 80% (+78%)**

## How to Operationalize Findings

- Arm instructors/coaches/counselors with information to easily interpret a leader’s 360° assessment and design individually customized developmental efforts to achieve huge behavioral improvements in key differentiating competencies and balanced measure results
- Use information to design core foundational leadership courses at each level to achieve huge behavioral improvements in key differentiating competencies and balanced measures results
- Provide baseline for further statistical work
- Measure actual results against predicted results
- Ongoing look into 360° results against performance evaluations, promotions, mobility, etc.

## Summary

- Good does not equal great and we need more great leaders
- Great leaders are not superheroes
- Great leaders get the power of perception working for them, not against
- Building strengths raises perceptions of overall leadership effectiveness much more than sealing “performance perforations”
- One of the keys to building leadership strengths is leveraging a leader’s passions
- When building strengths, sometimes the best way is to build around them