The 5 Most Important Competencies for Function Leaders

We work closely with many leaders who are running functions or divisions in large organizations. They carry titles such as vice president or senior director and have responsibilities for one or more functions — such as sales, marketing, finance, operations, engineering, technology, legal, and human resources. They run business units and geographic regions. Functional leaders typically manage groups of more than 500 people, have budgets in excess of $500M, and are often on a shortlist to be COO or CEO.

What leadership competencies are most important for success in a functional leadership role? And how well do leaders perform in these critically important areas?

We surveyed nearly 1,000 leaders to find out. From a list of 13 competencies for leading the function, here are the Top 5 that emerged:

Executive communication. Expresses ideas clearly and uses language to build common understanding. Execution and results. Aligns resources to accomplish key objectives and assigns clear accountability for important objectives. Achieves meaningful accomplishments. Influence. Inspires and motivates others to take action. Strategic perspective. Gains perspective and balances the tension between daily tasks and strategic actions that impact the long-term viability of the organization. Working across boundaries. Works across the organization to build collaborative relationships.

The leaders surveyed rated themselves in terms of their effectiveness in the 13 critical competencies. Bosses, peers, superiors, and direct reports also rated the effectiveness of the leader. Each rater chooses their 7 “most important” competencies for the functional leader’s success in the organization from the list of 13. Then we ranked these competencies from highest to lowest based on how frequently they were selected as most important.

We looked at how the different rater groups responded. There was high agreement among all raters that executive communication, execution and results, influence and strategic perspective are in the top tier.

Not surprisingly, peers and bosses placed more importance on “working across boundaries” than direct reports did (who are themselves mid- to senior-level managers). For peers and bosses, “understanding the enterprise” was also in the Top 7 — for direct reports, “vision” held a top spot.

But functional leaders cannot ignore the lower ranked competencies.

Engagement, understanding the enterprise, vision, innovation, executive presence and approachability, self-awareness, learning agility, and leading globally are still vitally important skills. Based on our experiences with these senior leaders, we see all of the 13 competencies are essential. One main reason — they’re interconnected.

For example, self-awareness is critical to understanding how to improve your influence and executive communication. Second, the importance of a competency is dependent on the current role and the organization. Leading globally, for instance, was lowest on the list overall but was given higher importance in situations where leaders were in global roles in a global organization.

While every competency may not be critical all the time, to be exceptional, functional leaders need to be effective in all 13 areas.

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