Harvard Business School Article Worth Reading This Week

Financial expertise and operational experience will only take executives so far. More than ever, companies want senior leaders with strong social skills and emotional intelligence, says research by Raffaella Sadun and Joseph Fuller.

For a better shot at landing the top job at today’s companies, aspiring CEOs should set aside their slide presentations and work on their listening skills instead, new research suggests.

Companies are increasingly seeking socially adept leaders—not charismatic smooth-talkers, but executives who listen empathetically, welcome input, and rally the workforce around a common goal, according to a recent study by a team of researchers including Harvard Business School Professors Raffaella Sadun and Joseph Fuller, who analyzed thousands of executive job search descriptions created over a 17-year period.

“The demand for social skills is increasing in every category of the economy,” says Sadun, the Charles Edward Wilson Professor of Business Administration in the Strategy Unit at HBS. “[But] it’s not about schmoozing.”

Instead, headhunters and corporate recruiters want candidates with soft skills who can:

  • actively listen to others;
  • empathize genuinely with others’ experiences;
  • persuade people to work toward a common goal;
  • and communicate clearly—or, as Sadun puts it, “touch the chords of listeners.”

Top executives who demonstrate this kind of interpersonal prowess are more likely to be in high demand, particularly at large, multinational, and information-intensive organizations, the research suggests. Those companies see social skills in the C-suite as more important than more traditional operational and administrative abilities, such as monitoring the allocation of financial resources.

“The demand for social skills in executive searches reflects specific firm needs, in particular the need to coordinate more—and more complex—activities within firms,” the paper says.

Sadun and Fuller, along with co-authors Stephen Hansen of the Imperial College Business School in London, and Tejas Ramdas of Cornell University, analyzed 4,622 searches for top executives conducted by 3,794 executive-search firms between 2000 and 2017. About 43 percent of the searches were for CEOs, 36 percent were for CFOs, and the rest were for other top management positions.

The researchers studied searches primarily conducted on behalf of companies with 1,500 to 55,000 employees in a variety of industries, including manufacturing, finance, insurance, real estate, retail, and information technology. United States companies represented 57 percent of the searches and European firms accounted for 29 percent.

The researchers used machine learning algorithms to map the text of the job descriptions into six distinct clusters of skills: administrative, management of financial and material resources, management of human resources, information skills, monitoring of performance, and social skills. The team defined “social skills” as “interacting with, listening to, persuading, and empathizing with others” and “being aware of others’ reactions and understanding why they react as they do.” Demand for these skills has been on the rise for decades across all spectrums of management, but they are most highly valued in CEO candidates, the authors found.

While corporations still require top executive candidates to possess “concrete” skills, such as financial expertise, administrative and operational experience, and technical knowledge, the demand for these skills has remained static or has declined in recent years. In contrast, demand for social skills has jumped significantly, the study results show.

Complex work requires new skills

The authors found that demand for social skills depended on the size of firms, the geographic diversification of workforces, and a firm’s involvement in mergers and acquisitions.

  • Larger firms were more likely to include social skills in their job-search requirements.
  • Being a multinational corporation was associated with a 4.7 percentage point increase in the probability of including references to social skills in the job description.
  • Firms involved in mergers and acquisitions were 3 percentage points more likely to seek social skills.
  • Study models also found that firms requiring large numbers of employees with IT skills were associated with a 5.2 to 6.3 percent increase in demand within the social-skills cluster.

“It’s related to the increasing complexity associated with managing larger and more knowledge-intensive organizations,” says Sadun.

Past generations of CEOs might have tapped a smaller cadre of advisers or made decisions unilaterally, but today’s leaders must gather more input and buy-in from a larger and more diverse range of experts to achieve corporate goals and solve increasingly difficult problems, the researchers say. Broad changes in the nature of work conducted globally require different managerial capabilities, especially at the top of organizations.

Can social skills be taught?

Previous studies have explored the importance of interpersonal skills in the broader job market. But the authors say their study is one of the first to highlight the importance of these capabilities for top managerial occupations. The growing emphasis on social skills emerging from the job descriptions suggests that seemingly basic social capabilities are perceived to play a key role for the success of complex and information intensive organizations.

It is unclear, however, whether the supply of social skills in the managerial labor market has been able to meet this increasing demand. Do enough C-suite executives currently possess these skills to meet the corporate demand? And if not, can aspiring CEOs receive training to improve on their social skills?

Some early work in this area, including an experiment conducted by HBS faculty on entrepreneurs, suggests that this may well be the case, but the evidence on top managers and in high income countries is still scant. More research is needed on whether key social skills can be learned, whether they’re inherently unique to some individuals, or whether it’s a combination of the two, Sadun says.

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