The ‘DNA’ of

leadership
potential

Human Capital Consulting | Deloitte Leadership UK

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The ‘DNA’ of leadership potential

Deloitte Leadership Capability Model: Theory

The aim of this document is to provide an It was David McClelland (1975) who first publicised
Deloitte Leadership has account of the development of the Deloitte the term ‘competency’, and the concept was

developed a leadership Leadership model, based on psychological popularised further by Richard Boyatzis (1982) in
theory and studies, leadership literature, and his seminal book ‘The Competent Manager: A
model which identifies the empirical research. Model for Effective Performance’. There are many
‘building blocks’ or ‘DNA’ of reasons for the popularity of competency models.

potential for senior Background

At the heart of any leadership talent They provide a common language about what is
managers. The ‘Leadership management system is a model of capability. expected of people, a foundation for
Capability Model’ forms the Since the 1970s, behavioural competencies performance management discussions,

basis of Deloitte’s have been used by organisations to capture the transparency about what matters for promotion
criteria associated with successful leadership. It and a ‘syllabus’ for management development.
processes for assessing the is estimated that 80% of organisations apply the However, despite their success in other areas
capability and potential of approach (CIPD, 2007). difficulties arise when competencies are used as

individual leaders. the basis for forming judgements about leaders’

potential.

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The ‘DNA’ of leadership potential

Assessing potential

In the assessment of leaders’ potential, Another criticism levied towards For example, below are real examples of
competencies can be criticised because they competencies is that of complexity. If you competency descriptions. The different
focus heavily upon past behaviour rather than analyse most competency descriptions, you colours represent discrete
future potential. The mantra behind will find that each competency is in fact an psychological skills.
competency-based assessment is ‘the best amalgamation of a variety of different areas of
predictor of future behaviour is past behaviour’ knowledge, skills and motivation.
(Smith, 1989). Consequently, competency-based “Is clear and consistent in decision making,
interviews are inherently retrospective; “tell me “ ..it often emerges that competencies do not takes actions and inspires trust in others”
about a time you…”. Therefore whether a leader make psychological sense. Either the
“Takes responsibility within the group,
has sufficient ‘relevant’ experience will be a psychological qualities required for different keeps the group working together by
significant factor in determining their behaviours described under a single adjusting own interventions, supports and
competence rating. Furthermore, if an individual competency conflict with each other, or the challenges others”
has not demonstrated a competency in the same thing is true across two (or more)
“Uses a combination of logical argument,
past, what can we conclude about their different competencies - implying that it is personal conviction and passion to create a
potential to develop and display that unlikely that an individual could score highly winning case”
competency in the future? on both”. Clive Fletcher (1996)

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The ‘DNA’ of leadership potential

Assessing potential

As Fletcher (1996) states: “the same Consequently, the strength of competencies in

psychological factors contribute to different guiding performance management by
competencies. A common example would be describing clearly observable behaviours is also
‘emotional control’. This contributes to the their weakness in assessment; they are typically
assessment of competencies such as ‘customer a mix of psychological factors which do not
relations’, ‘resilience’ and ‘interpersonal co-vary and differ in their ability to be
sensitivity’”. developed.
The reason for this is that competencies are
descriptions of behaviour, not psychological
skills. They are the manifestation of the
interaction of a variety of psychological
processes, such as thinking, memory and
emotions. Indeed, Boyatzis’ definition of a
competency is: “a motive, trait, skills, aspect of
one’s self-image or social role, or a body of
knowledge which he or she uses.”
Boyatzis (1982)

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The ‘DNA’ of leadership potential

The origins of a new model

In order to create a more robust framework for assessing potential, Deloitte Leadership drew on three sources of
research:

Analysis of Deloitte Research studies conducted Published research in the field

Leadership’s database of by Deloitte Leadership into of psychology,
psychometric data from over ‘high flyers’ and successful neuropsychology and
23,000 international leaders senior managers published leadership research

© 2020 Deloitte MCS Limited. All rights reserved. 5

The ‘DNA’ of leadership potential

Deloitte Leadership Capability Model: Overview

The Deloitte Leadership Capability model identifies two distinct elements:

Developable Capabilities
Developable Capabilities: These are
Inspirational
learned factors which are ‘acquired’. Leadership
Execution Influence Collaboration
They are developable, change over
time and reflect what a leader can do Business Competitive Building
Direction
Judgement Edge Talent

Potential
Leadership Potential: These are
‘hardwired’ or ‘innate’ factors which
are hard to develop, stable over time
and reflect how the person is Change Intellectual People Motivational
Potential Potential Potential Potential

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The ‘DNA’ of leadership potential

Leadership Potential

Driven by our core

psychological processes, our
definitions for the Leadership
Potential factors are shown:

The strength of a leader’s

potential factors will determine
the speed with which the leader
will be able to move up the
organisation and meet the
increased scope and
complexity of demands at the
next level.

© 2020 Deloitte MCS Limited. All rights reserved. 7

The ‘DNA’ of leadership potential

Leadership Capabilities

Capability refers to the

knowledge and skills which
leaders develop through
experience.

Deloitte Leadership’s research

has found that senior leaders
typically require capability in
the following areas:

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The ‘DNA’ of leadership potential

Deloitte Leadership Potential Model: Research

The following section provides a brief account of In summary, the left-hand side of the brain is In addition, Change Potential includes an
the psychological, neuropsychological and primarily responsible for logic, including openness to uncertainty. Cox & Cooper (1988)
leadership research which supports the language, numerical judgements and analysis. identified ‘seizing chances when presented’ as a
definitions of the Leadership Potential factors. Conversely, the right hemisphere is linked with differentiating factor of CEOs of financially
imagination, images and music (Greenfield, successful companies. Kets De Vries (2001) in
Intellectual Potential 1997). seeking to understand ‘The Leadership
Cognitive ability has been repeatedly found to Mystique’ identified ‘receptivity’ as a key factor.
be a very strong predictor of job performance in Change Potential Deloitte Leadership’s research studies found
a wide range of managerial roles (Smith et al, Over recent years, Daniel Goleman (e.g. that consistently successful managers were
1989). Deloitte Leadership’s research into senior Goleman, 1998) has popularised the concept of more emotionally balanced and that ‘high flyers’
managers with a consistent track record of ‘emotional intelligence’ and published numerous were both more open to feelings and less
success found ‘conceptual thinking’ (as studies which link ‘EI’ with people’s ability to vulnerable to stress (Crump, 1999; Jensen,
measured by GMA-A) and ‘divergent thinking’ (as adapt to changing circumstances (e.g. Goleman, 2008).
measured by ‘Consequences’) as significant 1998b). Goleman goes as far as to say that two- Neuropsychological studies have consistently
differentiators (Crump, 1999). thirds of a leader’s performance is accounted by pointed towards the amygdala as the ‘emotional
their levels of emotional intelligence. The centre’ of the brain. Goleman (1998a) writes of
The importance of these two cognitive importance of emotional control is further the ‘hijacking of the amygdala’ when describing
processes: analytical and creative, is further supported by Ketz De Vries (2001), Cox & emotional reactions to situations.
supported by neuropsychological studies into Cooper (1988) and McCall &
the functioning of the two brain hemispheres. Lombardo (1983).

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The ‘DNA’ of leadership potential

Deloitte Leadership Potential Model: Research

People Potential anterior cingulate gyrus plays an important role Neuropsychological studies have clearly
The importance of leaders’ ability to be socially in determining our willingness to interact with identified the influence of the endocrine system,
ascendant and assertive, as well as adopt others. The ventromedial cortex is responsible in particular the release of adrenaline and
different interpersonal styles with different types for human beings’ interpretation of others’ noradrenaline by the hypothalamus, on our
of people, has been widely recognised in the motives (e.g. Ratey, 2002). energy levels and behaviour. For example, the
leadership research literature. For example, most researched phenomena is that of the ‘fight
Kets De Vries (2001) and Deloitte Leadership’s Motivational Potential or flight’ response to threat (e.g. Greenfield,
research (Crump, 1999; Jensen, 2008) identified In virtually all studies into job effectiveness, 2001).
‘assertiveness’, ‘warmth’ and ‘sociability’ as key ‘conscientiousness’ emerges as the most Deloitte Leadership’s comparison of consistently
determinants of ‘high flyers’ and successful predictive personality trait (Barrick & Mount, successful senior managers with those with an
senior leaders. Furthermore, McCall & 1991). Drive, ‘need for achievement’ (McClelland, inconsistent history of achievement identified
Lombardo’s (1983) research study found that 1961) and ‘achievement striving’ (Costa & dutifulness or ‘stronger drive to fulfil obligations’
executives ‘derailed’ as a result of being ‘cold’, Mcrae, 1985) have been long associated with as a significant differentiator (Crump, 2001).
‘aloof’ and ‘arrogant’. In their study into ‘Why leadership success. For example, Cox & Similarly, ‘high flyer’ leaders, who achieved a
CEOs fail’ Charan & Colvey identified ‘people Cooper’s (1988) study into ‘high flyers’ found ‘manager of managers’ position within eight
acumen’ as a significant success factor. that ‘determination’ and ‘achievement years of starting their careers were significantly
orientation’ were key differentiators. Charon & higher on ‘achievement striving’, ‘activity’ and
Neuropsychological studies have highlighted Colvin (1999) identified ‘superior CEOs’ as having ‘openness to actions’ than other senior
several brain structures as having key roles in ‘an insatiable appetite for accomplishment and managers (Jensen, 2008).
shaping our social behaviour. For example, the results’.

© 2020 Deloitte MCS Limited. All rights reserved. 10

The ‘DNA’ of leadership potential

Deloitte Leadership Capability Model: Validation

As with any model of potential, it is important • A holistic interview to explore patterns in
to conduct research to determine whether the motivation, performance, decision making,
Deloitte Leadership Capability Model is personal style, interpersonal approach,
predictive of leadership success. Therefore, we and experience
conducted a study to compare the profiles of • A number of personality questionnaires,
‘high potential’ leaders and ‘low potential’ including NEO PI-R (a personality
leaders. questionnaire measuring the ‘five factors’
of reliable individual difference) and
Deloitte Leadership regularly conducts one-to- Hogan Development Survey (a personality
one personal profiles with leaders for the questionnaire measuring 11 ‘derailing’
purposes of assessment and development. A factors)
profile session will typically include a number • A number of thinking measures, including
of components: GMA-A (a culture fair measure of
conceptual thinking) and Consequences (a
culture fair measure of creative thinking)
• A structured Know How assessment, using
construct elicitation (repertory grid) to
assess the richness and extent of Leader
Know How

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The ‘DNA’ of leadership potential

Deloitte Leadership Capability Model: Validation

One of the outputs to this process is a rating Conversely, those in the ‘low potential’ group
against each of the Leadership Potential were at the manager or supervisor level, and
factors and capabilities which is ascertained by had taken nine years or more from starting their
means of an algorithm combining evidence career to be promoted to such a level. The
from all of the components of the profiling figure of nine years was selected as this
process. It is these ratings which were used represented the highest and lowest 25% in
during this study. terms of career progression.

In order to conduct the validation study we

selected two groups of leaders from the
The sample sizes were 145 leaders in the
high potential group and 158 leaders in the
Deloitte Leadership database of 23,000
low potential group. The leaders in the
leaders. Those in the ‘high potential’ group
sample were from a wide variety of sectors,
were managers of managers and had been
including financial, engineering, retail, legal,
promoted to such a level within nine years or
accountancy, utilities, media, manufacturing
less of starting their career. and technology and included international
leaders, with Europe, Asia, Australasia and
the Americas represented. 78% were male,
22% female.

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The ‘DNA’ of leadership potential

Results
The Leadership Potential ratings of the high potential and low potential leader groups were compared using independent samples t-tests, a powerful non-parametric
statistical test.

The differences between the capability scores was not explored, as capability ratings reflect acquired skills and knowledge and so would be dependent on the level of
experience rather than underlying core psychological skills which are relatively stable over time and can be used to predict potential. Based on previous research (Crump,
1999) we would expect those in the high potential group to have stronger capabilities because they were operating at a manager of manager level and therefore had
broader experience.

Mean Standard t Degrees of Significance

Deviation Freedom (2-tailed)

High Potential Group 11.83 2.58

Intellectual
2.25 375 0.025*
Potential Low Potential Group 11.18 2.81

High Potential Group 11.12 2.51

Change
4.06 301 0.00**
Potential Low Potential Group 9.94 2.55

High Potential Group 16.75 3.04

People
2.87 301 0.04*
Potential Low Potential Group 15.73 3.17

High Potential Group 7.22 1.09

Motivational
3.40 302 0.001*
Potential Low Potential Group 6.76 1.26

*p<0.05 significance **p<0.001 © 2020 Deloitte MCS Limited. All rights reserved. 13
The ‘DNA’ of leadership potential

Conclusions
The results showed that the high
potential leaders were rated significantly
higher on all Leadership Potential factors.
The larger difference was in the area of
Change Potential.

This study provides strong supportive

evidence for the power of the Deloitte
Leadership Capability Model for identifying
high potential leaders. Therefore, it can be
concluded that the model provides a viable
alternative to the competency models used by
many organisations, and may be more
predictive of leadership success as it focuses
on the underlying psychological skills which
are stable over time.
© 2020 Deloitte MCS Limited. All rights reserved. 14
The ‘DNA’
Section of leadership
title goes here potential

References

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Boyatzis, R. (1982) The competent manager: A model for effective performance. New York, John Wiley and Sons
Charan, R. and Colvin, G. (1999) Why CEOs fail. Fortune
CIPD (2007) Competency and competency frameworks. HR factsheet
Costa, P. and Mcrae, R. (1985) NEO PI-R Professional Manual, Psychological Assessment Resources
Cooper, J (1988) High Flyers: Anatomy of Executive Success, Wiley
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Tharumagnanam, S (2003) Characteristics of partners in professional advisory firms. British Psychological Society Occupational Psychologist Conference Proceedings
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The ‘DNA’ of leadership potential

If you would like to find out more, please do get in contact.

Tim Clayton-Ball
Partner
Leadership
tclaytonball@deloitte.co.uk

Peter Sloan Dunstan Arthur

Director Director
Leadership Assessment and
Financial Services
Digital Products
pesloan@deloitte.co.uk
dunstanarthur@deloitte.co.uk

Adam King Hima Vaghani

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