Growing Better Leaders: 5 Developmental Stages

The increasingly complex and chaotic marketplace poses an urgent need to grow better leaders. Companies that seek to maintain competitive advantages require strong leadership.

Leaders remain confused, however, about how to strengthen their competencies. Formal training and higher education haven’t sufficiently prepared them for all of the 21st century’s disruptive innovations and global challenges. While some leaders thrive, others barely survive. Many of today’s executives feel as though they’re in over their heads.

In their quest to unlock leadership potential, organizations invest millions in assessments, training programs and executive coaching. These investments seem to pay off, at least for a while. But for long-term growth, organizations must understand leadership’s developmental stages.

How Leaders “Grow Up”

Like all maturing adults, leaders progress through sequential developmental levels. At each stage, adults gain greater awareness and cognitive capacities. Similarly, leadership effectiveness improves as one develops, matures and expands consciousness.

At the higher stages of development, leaders become more successful and their businesses enjoy greater results. With increased leadership effectiveness, there’s a 38% probability of seeing higher business performance, according to one study. A 38% leverage is well beyond most companies’ profit margins, so developing capable leaders should be a priority.

Developmental-stage theory is relatively new and even more cutting-edge when applied to leadership programs. Rather than focusing on training, skills and knowledge, it involves expanding one’s mindset and “forms of mind” (defined by New Zealand leadership coach Jennifer Garvey Berger as our changing capacity to cope with complexity, multiple perspectives and abstraction).

Yet, few leadership-development initiatives address the inner game: how leaders perceive, find meaning, make decisions and handle complexities.

Robert J. Anderson and William A. Adams, authors of Mastering Leadership: An Integrated Framework for Breakthrough Performance and Extraordinary Business Results (Wiley, 2015), applied developmental-stage theory to create the Leadership Circle Profile, a 360° assessment tool that measures leaders’ developmental stages. Founders of The Leadership Circle consultancy, they also developed The Universal Model of Leadership.

Similarly, William B. Joiner and Stephen A. Josephs use developmental-stage theory as the foundation for Leadership Agility 360°, their 360° assessment tool, as explained in Leadership Agility: Five Levels of Mastery for Anticipating and Initiating Change (Jossey-Bass 2007).

These assessment tools are based on decades of psychological studies and are designed to accurately measure leadership effectiveness and identify a leader’s developmental stage. More than descriptive, the stages point to leadership behaviors that help target how to coax a leader to the next level.

By identifying stages of progressive development, we can create behavioral action plans and use coaching to expand a leader’s form of mind and modify behavior. Progressive organizations have adopted this strategy to promote leadership agility.

Foundations of Developmental Theory

Developmental theories have been around for decades, based on 50 years of psychological research into how adults mature. Organizational psychologists have since applied the basic tenets to leadership development. Their conclusions are summarized here:

  1. Just as children improve their cognitive capacities with age, so do adults.
  2. Adults, however, develop according to needs and opportunities, not because of age.
  3. Not all adults progress through all stages.
  4. Some adults can function only at lower levels of development. A small percentage attains higher levels of awareness, wisdom and compassion.
  5. As leaders progress through developmental levels, they expand their mental and emotional capacities and become increasingly skilled at handling complexity.
  6. Each stage describes a form of mind: a way of thinking about responsibility, conflicts, perspective and assumptions (about self, others and the world).
  7. Leaders may operate partially at one stage and occasionally at the next, but return to old habits before transitioning.
  8. Transitioning requires changing one’s previous assumptions to expand consciousness.
  9. Leaders who function at higher developmental stages produce significantly improved business results.
  10. Knowing a leader’s developmental level, coupled with behavioral action plans and coaching, provides a measure of competitive advantage or disadvantage.

Levels of Leadership

The following table explains how four leadership experts define levels of leadership behaviors and mindsets. Unfortunately, there is no uniform agreement on vocabulary, which has created a confusing array of names and definitions.

(Please note: The rows of stages aren’t equal; that is, while there may be some similarities, the stages are not defined as equivalent to others across rows.)

Using a broad brush, we can summarize the various stages of leadership development as follows:

  • Level 1: Leaders who operate at the first stage of development are focused on their own need to excel, which explains why it’s referred to as an Egocentric, Opportunist or Expert stage. These leaders are acutely aware of what they need to do to succeed and how they must be perceived by others. Leadership at Level 1 therefore tends to be autocratic and controlling. A leader’s mindset is limited at this stage because there’s no shared reality. Growth requires one to become aware of, and interested in, other people’s needs and to reach out co-relationally. This is a normal developmental stage for young adults, but ineffective for leaders (although 5% appear to operate at this stage).
  • Level 2: Leaders’ abilities to simultaneously respond to their personal needs and those of others is the hallmark of Stage 2, referred to as the Socialized or Reactive mindset by some, and the Diplomat or Achiever stage by others. At this stage, a leader plays by the organization’s rules and expectations and builds alliances, but with a focus on how to best get ahead. One’s emphasis is on the outer game to gain meaning, self-worth and security.

    Leaders hone their strengths, but are nonetheless limited by them. At this stage, identity is defined from the outside-in and requires external validation in one of three ways: relationship strength, intellect, or results. Leaders fall into three categories at Level 2: Complying, Protecting or Controlling (reflecting overdependence on heart, head or will). When self-worth and identity depend on overused strengths, growth is self-limited, as behavioral options are restricted. Most leaders (nearly 75%, as with most adults) operate at this second level of maturity.

  • Level 3: Referred to as the Creative, Self-Authoring, Individualist or Catalyst stage, Level 3 is marked by personal transformation from old assumptions/beliefs and a quest for external validation to a more authentic version of the self. These leaders want to know who they truly are and what they care most about. They’re on a path to becoming visionary leaders, accepting that authenticity carries a risk of disappointing others, potential failures and hazards associated with contradicting accepted norms. Leaders trade their need to be admired for a higher purpose. They don’t feel the need to be the hero and begin to share power. No longer the sole decision-makers, Level 3 leaders encourage groups to become more self-managing and meaningfully involved in organizational success. They focus on high performance through teamwork and a desire to develop others. Their leadership is truly collaborative. About 20% of leaders operate with a Level 3 mindset.
  • Level 4: Called the Integral, Transforming Self, Strategist and Co-Creator stage, Level 4’s hallmark is one’s ability to focus not only on an organizational vision, but the welfare of the larger system in which a company operates. Servant leadership emerges, as one considers more interdependent components and systemic complexities.
  • Level 5: Level 5 is referred to as Unitive, Alchemist and Synergist. At this level, leaders expand perspectives even further, focusing on higher purpose and common good. Beyond this level other stages may be unexplored, as very few leaders grow past the fourth level. To some theorists, Level 5 encompasses a spiritual focus.

Heroic and Post-Heroic Stages

The first two levels are based on leaders’ ability to hold themselves out as heroes, providing answers and solutions. But operating with this mindset means you’re intent on meeting your own needs, including wanting to be the recognized expert, achieving results and being admired.

When you can transition to the third stage (Creative, Self-Authoring, Catalyst), you no longer have an externally based self-worth. At this point, you aim for a higher purpose, are willing to share power, and can let go of previous assumptions and your hero complex.

Great leadership and business performance emerge at the “post-heroic” stages. In the top 10% of the highest-performing businesses (out of a half million surveyed), the average leadership effectiveness score falls into the 80th percentile, research shows. These leaders score better than 80% of their peers.

Surging Past the Norm

Most adults fail to progress beyond what’s normative: the Socialized or Reactive mind. Only 10% of adults progress beyond the Achiever level, according to the Leadership Agility authors:

Viewed from The Leadership Circle research, only 20% progress beyond the Reactive stage, which points to the urgent need for leadership-development programs to address far more than skills and outer competencies.

Why All of This Matters

At higher levels of development, leaders can detect nuances, deal with paradoxes and respond with agility in lieu of being reactive. Today’s volatile business environment demands higher levels of consciousness.

Developmental-stage theories are more than descriptive tools. The stages chart a path that can help leaders develop more complex forms of mind. The framework also helps match a leader’s mindset at any given time with that required by a particular task.

As they progress from one level to the next, leaders expand their strengths and abilities. They can grow into the next developmental stage, recognizing there will be a learning curve and inherent challenges.

“Leaders with different forms of mind will have different capacities to take the perspectives of others, to be self-directed, to generate and modify systems, to manage conflicts, and to deal with paradox.” ~ Jennifer Garvey Berger Changing on the Job: Developing Leaders for a Complex World, Stanford Business Books, 2011

As a leader, your ability to make sense of greater levels of complexity continues throughout the lifespan and has a significant impact on both leadership and development. You acquire special competencies and skills with experience, as well as a mind that sharpens over time. Only when leadership development programs take developmental stages into account will you grow into a better leader.

Leadership Decisions: Fast and Slow Thinking

If you haven’t read this great book on decision making, I suggest you do: Nobel Prize laureate Daniel Kahneman writes in Thinking, Fast and Slow (Farrar, Straus and Giroux, 2011):

“My intuitive thinking is just as prone to overconfidence, extreme predictions, and the planning fallacy as it was before I made a study of these issues. I have improved only in my ability to recognize situations in which errors are likely.”

Kahneman simplifies the mind’s decision-making process by dividing it into Systems 1 and 2.
System 1 is fast, routinely guiding our thoughts and action – and it’s generally on the mark. Our associative memory maintains a richly detailed model of our world, as well as a vast repertoire of skills acquired over a lifetime of practice. This allows us to produce remarkable solutions to everyday challenges.
System 2 is slow. It represents our rational self (who we think we are). It articulates judgments and makes choices, but it often endorses or rationalizes ideas and feelings generated by System 1.
But System 2 isn’t merely an apologist for System 1; it also prevents many foolish thoughts and inappropriate impulses from becoming overt expressions. System 2 is not always rational, and we don’t always think straight. We often make mistakes because we don’t know any better.
System 1 simultaneously generates answers to related questions, and may substitute a response that more easily comes to mind for the one that was requested. By using heuristics, it quickly provides probable answers that are often correct – but sometimes they are quite wrong.
There is no way for System 2 to know if a System 1 answer is a skilled or heuristic response without slowing down and attempting to construct an answer on its own. But this is a slow and arduous thinking process, which the brain resists.
And so, we are prone to thinking errors. System 1 is not readily educable. The only recourse is to recognize you are in a cognitive minefield, slow down and ask for System 2 reinforcement.
No warning bell rings. “The voice of reason may be much fainter than the loud and clear voice of an erroneous intuition, and questioning your intuitions is unpleasant when you face the stress of a big decision,” according to Kahneman. “More doubt is the last thing you want when you are in trouble.”
It’s usually easier to spot a minefield when you see others wander into it. This is why smart leaders work with senior leadership teams and executive coaches. Observers are less cognitively mired and more open to information than those who are intensely involved.
 

Ethical Failures in Executives

The news media have highlighted numerous cases involving failed CEOs derailed by their low emotional intelligence, or EI. Press coverage has prompted boards to become more sensitive to this leadership trait.

You’re prone to ethical failures if you overestimate your intelligence and believe you’ll never get caught. Arrogance distorts your capacity to read situations accurately.

In a recent Wall Street Journal article, neurosciences journalist Jonah Lehrer discusses the contradiction of power – essentially, how nice people can change when they assume positions of authority.

“People in power tend to reliably overestimate their moral virtue, which leads them to stifle oversight,” he writes. “They lobby against regulators, and fill corporate boards with their friends. The end result is sometimes power at its most dangerous.”

Research by Daniel Goleman and other experts supports the view that EI can be learned, and it seems to rise with age and maturity.

In 2005, TalentSmart measured the EI of 3,000 top executives in China. The Chinese leaders scored, on average, 15 points higher than American executives in self-management and relationship management. To compete globally, the United States must pay attention to emotional competencies.

Developing your EI skills is not something you learn in school or by reading a book. It takes training, practice and reinforcement. The first step is measurement, through behavioral-based interviews and 360-degree feedback.

Executives with little experience in receiving feedback can find this approach somewhat threatening. Try to conquer your fears, as the process brings needed attention to gaps and development opportunities. It may be best to work through an executive coaching, like our healthcare coaching.

Remember: Your emotional state and actions affect how others feel and perform. This trickle-down effect contributes to – or sabotages – your organization’s well-being. If you are interested in learning more about your own EI, consider working with a coach. Give me a call if I can help.

Two More Mindsets of Good Bosses

Mindset #2: True Grit
Are you a boss with true grit? What does that mean? And how do you get it right?
“Gritty bosses are driven by the nagging conviction that everything they and their people do could be better if they tried just a little harder or were just a bit more creative,” writes Robert Sutton in Good Boss, Bad Boss
Such bosses instill grit in subordinates. Without creating the impression that everything is an emergency, great bosses have a sense of urgency. They are dogged and patient, sensing when to press forward and when to be flexible.
As Albert Einstein once stated: “It’s not that I am so smart; it is just that I stay with my problems longer.”
University of Pennsylvania Assistant Professor of Psychology Angela Duckworth, PhD, and her colleagues define grit as perseverance and passion toward long-term goals.
“Grit entails working strenuously toward challenges, maintaining effort and interest despite failure, adversity and plateaus in progress,” they wrote in a 2007 Journal of Personality and Social Psychology paper.
Without becoming discouraging, bosses with grit believe that progress isn’t always good enough – that you can never stop learning or rest on your laurels.
Mindset #3: Small Wins Count
If you set big goals to energize and direct people, you can fall into the trap of overwhelming and discouraging them. In the work I do coaching executives, I see this happen all the time.
The path to success is lined with small wins. When you frame goals as a series of small steps, it helps people see the importance of their participation.
Smaller goals also help people make better decisions, sustain motivation and manage stress. When subordinates experience a challenge as too big or complex, they can freeze up. When problems are broken down into bite-sized pieces, a boss inspires clarity, calmness and confidence.
The Questions to Ask Yourself
Mindset #2: True Grit
a. Do you treat work as a marathon or a sprint?
b. Do you look for quick fixes?
c. Do you instill a sense of urgency without treating everything as a crisis?
d. In the face of failures, do you persist or give up?
Mindset #3: Small Wins
a. Do you frame what your people need to do as a series of small, realistic and clear steps?
b. Do you propose grand goals?
c. Do you break things down into bite-sized steps?
What do you think about these two mindsets? What’s been your experience? I’d love to hear from you.