Leadership Competencies for Succesful Change Management

Preliminary Study Report Prepared by: Milan Pagon, Emanuel Banutai, Uros Bizjak University of Maribor, Slovenia

Introduction

Competencies in General A competence in general can be understood as the ability of an individual to activate, use and connect the acquired knowledge in the complex, diverse and unpredictable situations (Perrenoud, 1997, in Svetlik, 2005).Gruban (2003) defines competencies as the ability to use knowledge and other capabilities, necessary for successful and efficient accomplishment of an appointed task, transaction of work, goal realization, or performance of a certain role in the business process. Competencies encompass knowledge, expertise, skills, personal and behavioral characteristics, beliefs, motives, values, etc. They are behavioral records of the roles, which people perform in the work processes.To avoid terminological confusion, Ellstrom (1997; cited in Virtanen, 2000) distinguishes a competence from a qualification.

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He considers competence as an attribute of an employee referring to “a kind of human capital or a human resource that can be transformed into productivity” while qualification is understood as “requirements of a certain class of work tasks (a job)”. 1. 2 Leadership Competencies Changes in organizations are more and more common. They appear at faster pace and employees are expected to be even more adaptable.Leaders play an important role in setting an example for all those values, behaviors and considerations expected from employees. Leaders have to achieve that changes in an organization are accepted and implemented in a way resulting not only in better job performance but also in general understanding and satisfaction of all. Therefore, it is reasonable to set the expectations of key employees – what they should achieve and how they should behave in order to implement successful changes.

In other words, which are the important leadership competencies for successful change management? It is necessary to distinguish between leadership competencies in profit organizations and public (as well as not-for-profit) organizations. Nature of activity, context, orientation of work and the budget, to name only a few areas, cause certain distinctions in leadership competencies between these two groups.There is a lack of studies comparing leadership factors and skills relevant to profit, public, and not-for-profit organizations. According to Bennis (1987; cited in Thach et al. , 2007), there are a few leadership competencies that have been proven time and again as mandatory for effective leadership. These include the competency clusters of vision and goal-setting, interpersonal skills, self-knowledge and technical competence regarding the specifics of the business in which the leader works.In addition, commonly referenced competencies include: integrity/honesty, communication, technical competence, diversity consciousness, developing others, results-orientation, change management, interpersonal skills, problem-solving, decision making, political savvy, strategic/visionary thinking, customer focus, business skills, team leadership, influence skills, conflict management, more recently emotional intelligence, social and environmental responsibility, depending on the culture of the organization even humor and innovation (Trinka, 2004; cited in Thach et al.

2007; Spencer and Spencer, 1993; Employer’s Organization, 2004; Guggenheimer and Szule, 1998; Breckenridge Consulting Group, 2004; OPM, 1992; Laszlo, 2003; Goleman, McKee and Boyatzis, 2002; Thompson, 1985). There appear to be minor differences in the not-for-profit and profit leadership competency models. Not-for-profit organizations tend to center around new competencies such as governance effectiveness, boardroom contribution, and service to community (Chait, Ryan and Taylor, 2004; cited in Thach et al. , 2007).On the other hand, profit organizations tend to emphasize financial responsibility and accountability more than non-profit organizations. Public administration organizations tend to emphasize political savvy more, as well as physical health/endurance and building coalitions (Horey and Fallesen, 2003, cited in Thach et al. , 2007; OPM, 1992).

Despite diverse definitions and different understanding, competencies can be understood as cognitive, functional and social abilities and skills, including all individual resources one can use for performing diverse tasks in various areas, gaining required knowledge and achieving good results.Every competency is based on a combination of mutually linked cognitive and practical skills, knowledge, motivation, orientation values, beliefs, emotions, and other social and behavioral components, applicable as a whole in an efficient activity (OECD, 2002; cited in Svetlik, 2005). Competency Model A competency model was developed for this study (Figure 1), based on a comprehensive literature review. The model starts with the antecedents of competency development.

Antecedents of Competencies DevelopmentAn antecedent is here understood as a precondition for a leader’s individual competency development. One of the purposes of this study is to find out to what extent a particular antecedent is actually associated with a particular leadership competency. Literature review identified various antecedents. However, our model includes the following antecedents:

• • • • • Primary socialization, Work introduction, Consulting, Characteristic of the environment, and Work experience (Svetlik, 2005; Medves, 2006).In addition, other included antecedents are:

• • • Secondary socialization (education, friends) (Cugmas, 1991), Mentoring, coaching, and on-the-job training (Allio, 2005; Kim, 2007), Workshops, individual coaching sessions (Rappe and Zwick, 2007).

2 Leadership Competencies Definition, understanding, and implementation of competencies for selected employees (the leaders in this case) are known as a “competency model”. This model has to be harmonized with a core philosophy of organization (its vision, mission, values, and goals). Figure 1 - Competency Model Virtanen (2000) explored the generic features of public managers. He presented a model of five competence areas: task competence, professional competence in substantive policy filed, professional competence in administration, political competence and ethical competence (see Table 1). Furthermore, he uttered that much of previous research on managerial competence saw management as a generic profession and the differences between private and public sector were not directly addressed.Task and professional competence are in many ways the same for both sectors, but important differences exist in the areas of political and ethical competencies. In addition, the author argues that the organizational values in the public sector have been in transition, as the traditional values of public service in the Western democracies have been questioned by the imperatives of the new public management (NPM), emerging over the past twenty years.

In our model, we adopted a view of Medves (2006), who claims that competencies are a conglomerate, consisting of three dimensions: cognitive, functional, and personal/social competencies. Table 1: The competence areas of public managers Criterion of competence Task competence Performance Professional competence In subject area Development of the policy object In administration Development of policy execution Political competence Legitimacy Ethical competence Justification Known selection of means, implicit goals Formation f instruments out of resources Specification of the policy goal Allocation of the resources Creation and authorization of the goal Creation and detachment of resources for the goal Acceptability of the goal Acceptability of the resources and their instrumentalisation Control of the policy object “Know-how” of the policy object Contingencies of public service Given goals and means Use of instruments Competence area Value area Motivation Instrumental competence Abilities Control of the policy program Know-how” of cooperation Ideology, interests Possession of power Morality Argumentation Source: Virtanen (2000) . Cognitive competencies Educational environment in an early age has tremendous impact on cognitive competencies development. Systematic knowledge generates cognitive competencies, including those concepts of spontaneous experiences at the implicit level of knowledge (Medves, 2006). This dimension of competencies includes control of general principles, laws, theories and concepts.

Particularly significant cognitive competencies include:

• • • • • • • Divergent thinking, Critical thinking, Creativity, Problem solving, Strategic thinking, Analytical skills, and Numerical abilities (Svetlik, 2005; Medves, 2006).

Functional competencies Methodological knowledge generates functional competencies (Medves, 2006). These competencies are qualifications and skills that an individual needs for every day problem solving or to perform a concrete activity.Particularly significant functional competencies include:

• • • Language and communication skills, Technological skills (IT, media etc. ), Multicultural competencies (knowledge of a general and other cultures, foreign languages, etc. ),

• • • • Learning abilities and personal development, Career planning skills, Managerial skills, and Decision skills (Svetlik, 2005; Medves, 2006). In addition, other functional competencies are:

• • International environment skills, and Globalization skills (Manning, 2003; May, 1997; Jokinen, 2005; Suutari, 2002; Harris, 2001). Personal and social competencies The third dimension consists of competencies, which enable an individual to establish and maintain relationship with others:

• • • • • • • • Self-direction, Interpersonal skills, Teamwork skills, Compassion, Integrity, Mobilizing skills, Personal and social values, and Ethical dimensions (Svetlik, 2005; Medves, 2006).

Additional competencies include: • Character, creativity and compassion (Allio, 2005). The Outcome – Successful Change Management Successful change management is an important element of this study, as it represents a criterion for an individual competency assessment.Therefore, basic elements of change management have to be taken into consideration:

• How do organizations react to environmental changes and how they try to impact the environment

• • How risky are the changes (the role of resilience and firmness) Change as a condition for basic capability planning in order to achieve success in the future

• Guided and unguided, planned and unplanned change of organization – a course and the extent of changes

• • The meaning of right timing, when to start the change And last but not east, resistance to change and managing it. Change in an organization can be very different. Lorenzi and Riley (2000) identify four types of changes, with the definite possibility of overlap among them:

• Operational changes, affecting the way the ongoing operations of the business are conducted

• • Strategic changes, that occur in the strategic business direction Cultural changes, which affect the basic organizational philosophies by which the business is conducted

• Political changes, occurring in staffing primarily for political reasons of various types.

According to the OECD (2007), change management in public administration over the past three decades has been influenced by NPM ideas and techniques resulting in a cultural revolution in the public service (Table 2). 7 Table 2: Cultural transformation in government Traditional Values Instruments of Reform New Cultural Values Citizens empowerment Hierarchies of control Conformity End of lifelong career Policy dialogue Normalization of employment condition Delegation of authority Performance-oriented focus Subtle leadershipAccountability Openness Transparency Efficiency Effectiveness Authority through leadership Managerial culture Impersonality of work Authority through position Command-control paradigm Source: OECD (2007) Managing change from traditional values to new cultural values, as defined in Table 2, enables us to examine and assess successfulness of change management in a particular public administration institution. Outcome indicators, included in our model, are:

Productivity, Relationship quality, Number of conflicts, Level of cooperation, Organizational culture and climate, Organizational learning curve, Goal attainment, Change implementation, Employee satisfaction, Motivation, Adaptability, Customer satisfaction, and Superior agency’s satisfaction. 8 2 THE EMPIRICAL PART OF THE STUDY This part of the report describes the research conducted to test the competency model described above. 2. 1 Sample 284 public administration managers completed an on-line survey.Those 284 participants were from the following countries (including the European Commission): Country European Commission Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland No.

Country Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom

Among the participants, there were 153 (54%) males and 130 (46%) females and one person did not provide an answer to that question. 9 The mean age of the participants was 46. 2 years. Sample included 41 (14. 5%) people with a doctoral degree, 138 (49%) had a master's degree, 95 (33. 7%) had a university degree, 8 (2. 8%) participants had a high school degree or less, and 2 participants did not answer this question.

(61. %) participants reported being in the rank of middle management, while 109 (38. 8%) indicated the rank of top management, and 3 people did not indicate their rank. The mean amount of work experience of the participants was 21. 4 years, while the mean amount of work experience in PA was 16. 5 years, and the mean amount of work experience at the current PA institution was 10 years. The mean amount of work experience in the current position was 3.

6 years. Questionnaire Based on the model described in the introduction, we developed a questionnaire.We used several existing scales (The Big Five Factors of personality, Locus of Control, Terminal Values). In addition, based on the reviewed literature, we created scales for measuring the factors of training and environment, individual traits, competencies and successful change management. There were the following sections and scales included in the questionnaire:

• Demographics: o Gender o Age o Country o Education o Job Title o Rank o Work Experience o Work Experience in Public Administration (PA) o Work Experience t the Current PA Institution o Work Experience in the Current Position

• Questions regarding: o Training o Mentoring o Coaching o Consulting o On-the-Job Training o Characteristics of the Environment

• Locus of Control: o Internality, Powerful Others, and Chance Scales (Levenson, 1981)

• Values: o Terminal Values from The Value Survey (Rokeach, 1967)

• Personal Characteristics / Traits: o Sample items – Ambitious, Broadminded, Courageous, Responsible, Ethical..

Personality: o The Big Five Factors of Personality (the Mini IPIP Scales - Donnellan, Oswald, Baird, ; Lucas, 2006); Factors – Extraversion, Agreeableness, Conscientiousness, Neuroticism, and Intellect / Imagination (or Openness to Experience)

• Questions regarding: o Cognitive Competencies o Functional Competencies o Personal / Social Competencies

• Questions regarding the Indicators of Successful Change Management in a PA Institution, based on the OECD’s framework, described earlier. We performed factor analyses for the scales measuring competencies, successful change management, and individual characteristics.Seven factors emerged when we performed factor analysis for the competency scale. We named them (shown with sample items): - People skills (I am very sensitive to others’ needs and assumptions; I am very good in bringing out the best in people, etc. ) - Understanding, innovating and changing the organization constituents and clients, etc. ) (I have a talent for changing our PA institution’s vision into reality; I thoroughly understand the need, goals, demands, and problems of our PA institution’s -Emotional intelligence and self-control (I have great ability to understand and manage my emotions;

I am able to integrate my emotions in my decision making, etc.) - Planning and decision making (I always verify my assumptions before making a decision; When I face a problem, I take enough time to think before I attempt to solve it, etc. ) - Numbers and logic numbers, etc. ) (I am very good at making complex decisions; I have a good sense for and understanding of - Multicultural skills multicultural teams, etc. ) I feel confident conducting a meeting in a foreign language; I participate effectively in - Learning and using new technologies (I am a quick learner; I am well versed in using a personal computer, etc. ). We grouped them according to our model: Cognitive Competencies o Understanding, innovating and changing the organization 12 o Numbers and logic Functional Competencies o Planning and decision making o Multicultural skills o Learning and using new technologies Personal / Social Competencies o People skills o Emotional intelligence and self-controlWhen we factor analyzed the successful change management items, we got three factors, which we named: - Traditional values (Our PA institution relies heavily upon a strict hierarchy of control; In our PA institution, we value uniformity; personality should be kept out, etc. ) - Fear and resistance to change (Change led by our PA institution produces uncertainty and distrust due to lack of information; There is a high level of conflict within our PA institution, etc.

) - New cultural values (All important issues in our PA institution are openly discussed and shared with the public;Leadership of our PA institution is successful in transforming organizational culture, etc. ). Only two factors emerged from the scale for the individual characteristics items. We named them: Personal traits (Ambitious; Broadminded, Capable, etc. ) Gregarious traits (Forgiving, Loving, Cheerful, Obedient, etc. ) 2. 3 Results Table 3 shows the means and standard deviations for the variables included in our study.

A significant positive correlation exists between traditional values and fear and resistance to change. The more the traditional values exist in a certain PA institution, the more fear and resistance to change exist in this institution, and vice versa. And finally, a significant negative correlation exists between new cultural values and fear and resistance to change.The more the new cultural values exist in a PA institution, the less fear and resistance to change exist in this institution, and vice versa. This correlation is the strongest among all three. 2. 4 Conclusion The results indicate the following: • Traditional values and new cultural values coexist in PA institutions; they are negatively correlated.

• Traditional values are positively correlated with fear and resistance to change; new cultural values are negatively correlated with fear and resistance to change.

•Traditional values are positively associated with planning and decision-making skills, beliefs in powerful others and chance, agreeableness and gregarious traits. They are negatively associated with multicultural skills, understanding, innovating and changing the organization, as well as with appreciation of a sense of accomplishment, world of beauty, and equality.

• Fear and resistance to change are positively associated with planning and decision-making skills, beliefs in chance, as well as with extraversion and highly regulated environment.They are negatively associated with multicultural skills, emotional intelligence and self-control, understanding, innovating and changing the organization, training, as well with appreciation of a sense of accomplishment.

• New cultural values are positively associated with multicultural and people skills, understanding, innovating and changing the organization, numbers and logic skills, rank in PA, as well as with appreciation of a sense of accomplishment and world of peace, but— above all—with training.The results stress the importance of the following competencies:

• • • • Multicultural skills Understanding, innovating and changing the organization Emotional intelligence and self-control People skills.

Planning and decision-making skills were associated with traditional values and with fear and resistance to change. The results also stress the importance of the locus of control, especially the beliefs in powerful others and chance (and their association with traditional values and fear and resistance to change).One of the very important findings was that training has positive effects above and beyond its impact upon the competencies. 23 These results emphasize the significance of implementing new cultural values into the PA institutions. They indicate that replacing the old values with the new values in PA institutions can be achieved by proper training, mentoring and on-the-job training, emotional intelligence and self-control, a proper mind-set of managers (especially the internal locus of control and appreciation of a sense of accomplishment), multicultural skills, and competencies for numbers and logic.

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