Lindred Greer: Great Leaders Understand the Fundamentals

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Leaders need to understand and be able to excel at the actual tasks their team members do, from accounting to engineering to marketing. | Reuters/Stephen Lam

Conventional wisdom has it that a leader’s most important qualities are personality traits like charisma, likeability, or an air of command. But new research from Stanford Graduate School of Business suggests something more fundamental helps teams perform well: a leader’s plain old competence at the task at hand.

Choosing leaders because of charisma or management skill has its benefits, but leaders still need to understand and be able to excel at the actual tasks their team members do, from accounting to engineering to marketing.

“We romanticize the charismatic CEO,” says Lindred Greer, a professor of organizational behavior at Stanford GSB. But a good leader has earned his or her stripes, she says.

The new research points to the importance of hiring and promoting leaders based on objective assessments and data — like assessment tests — rather than just political skill or the ability of a candidate to make a good impression, the researchers concluded. The research team included Greer, and Murat Tarakci and Patrick Groenen of Erasmus University Rotterdam. The research will be published in Journal of Applied Psychology.

Their series of studies included a computer simulation, a lab study, and a field study of the work of 49 teams comprising 1,126 employees of a publicly held Dutch company. They found that teams where the leaders had a high level of skill at the task at hand converged more rapidly on solutions. For instance, in the case of the Dutch company, which was working on auditing finances in search of tax evasion and fraud, the best leaders were those most skilled at the audit work.

Most surprising, the researchers found, was that 45% of the time, team members picked leaders for reasons other than competence, such as the person’s age, dominance, or perceived power level.

The researchers also examined whether it’s better to have a flat organizational structure or a hierarchical one, and in what circumstances. Previous researchers on power in teams have drawn different conclusions. On one hand, hierarchies help by supporting divisions of labor and clarifying roles. On the other hand, hierarchies can hurt performance because they encourage political and competitive behavior.

Greer’s team found a nuanced result: Hierarchy helps when leaders are competent at the task at hand, and when the hierarchy itself is dynamic — in other words, when the team can replace the leader if necessary. When either one of those factors was in place, having a hierarchy improved team performance; when both factors were in place, hierarchies helped most of all.

The researchers suggested three takeaways for managers building teams or boards choosing CEOs to lead executive teams.

Who Is the Most Competent?

A strong hierarchical structure can help a team, but make sure it’s easy to identify the competence of the team members, so that choice of leader is based at least in part on task competence.

Expect Power Shifts

It helps to make the leadership fluid, so that when the tasks change, the most competent person can assume the leadership position. As a corollary, team members need to be willing to allow power to shift. So, a hierarchical team structure with a group of ambitious alphas may not work.

“Having employees who always wish to be the smartest person in the room will make for ineffective hierarchies, and humility can pay dividends,” the researchers wrote.

Help Team Members Appreciate Each Other

Managers should also help team members understand the unique skills all members bring to the team with, for example, job-crafting — having members engage in a collaborative discussion to clarify skills and roles within the team. By helping members identify and understand the different competences members bring to the team, it will be easier for them to shift power within the team when task requirements change.

Without that fluidity, conflicts emerge, as ill-suited leaders breed resentment among followers and cause hierarchies to be sources of contention. In those cases, the researchers concluded, egalitarian structures are likely to be better.