What is transformational leadership? Or even simpler, what is leadership?  

These are not easy self-reflecting questions to answer. Where do you even begin?

Gusto, along with our partners at CPA Academy, is proud to present a webinar titled “How to Increase your Leadership Effectiveness” with professional coach Amber Setter. You can watch the full session here.

In this article, we discover how to unlock your performance potential, while Part Two looks at the three levels of adult development. Lastly, in Part Three, we talk about understanding your leadership effectiveness as a whole. 

Amber Setter worked for 13 years as an accountant within public accounting firms before completing her Master’s in leadership and becoming a certified coach. In her eight years coaching others, one of the most common questions she hears from leaders is, “How do I improve my leadership effectiveness?” 

“It is something that we say we want to get better at, we want to learn more about, but it is something that feels elusive. Leadership behaviors, they are soft, they are hard to measure; they are hard to name, may be hard to quantify But I am here to let you know we can measure them.”

Amber Setter

This is a movement away from traditional leadership towards servant leadership, the type of leadership we will unpack here for you in this article. This type of leadership requires intention and understanding of how to implement softer skills effectively. 

Let us take a closer look at why these kinds of softer or non-technical skills are critical in difficult times. 

Understanding how to measure performance

When you think of the word “performance,” synonymous words that immediately come to mind are metrics and competence. What about personal development, though? 

Performance varies in every organization, and there is no perfect answer. 

“What I see, oftentimes, is an overarching amount of attention put on metrics and competence. Having worked in public accounting for a long time, I know the billable hour is the Holy Grail. While we might say that other things such as the ability to influence, leadership, connecting with clients and staff retention are important—when the rubber hits the road, billable hours and clients under management end up being the most important things.”

Amber Setter

Competence, whether you are in public accounting or an industry type of role, is often used to promote people in this field as a knowledge worker and an expert. The more you know, the more valuable you are. Competence certainly has a place, but it is not sufficient anymore. 

Organizations need to think differently about performance, and a great place to start that journey is doubling down on personal development.

In California, the Continuing Professional Education (CPE) for personal development does not provide certifications. However, the National Association of State Boards of Accountancy (NASBA) does provide certifications.

“I think that personal development and having greater awareness of yourself, consciousness — seeing yourself in a deeper and more meaningful way—is how we can unlock latent potential in leaders.”

Amber Setter

Leaders can begin to improve their leadership performance through something called adult development theory.

In the webinar, Amber took us through the framework of what adult development theory is, the basic difference between this framework and physical human development, and shares the three aspects about adult development theory. 

What is adult development theory?

Adult development theory is a framework for how consciousness structures itself and strives to understand our behaviors’ subconscious drivers.

We are all familiar with human development—the physical stages a human predictably goes through. For example, we can track the size and the changes a fetus undergoes every week in the womb. We know that a child will walk around the age of one, followed by the terrible twos, and we have teenage adolescent years. Then a person leaves the nest around the age of 18. 

Senior male colleague writing on white board surround bay four employees

However, physical development and mental development must be separated from each other. They do not happen at the same rate. This is how adult development theory was born.

Human beings continue to grow and develop psychologically long after their 20s. There are some universal clues we all understood long before scientists studied this. For example, does a midlife crisis sound familiar? 

“I would say, rather than it being a crisis, it might just be that a person is going through big growing pains and having an awakening that they want to live their life very differently.”

Amber Setter

Adult development theory reveals the clues to observe in others or ourselves so we can distinguish what development stage someone is in. We discuss these stages in-depth in Part Two.

These higher levels on the plateaus of adult development theory are critical in VUCA times—times that are volatile, uncertain, complex, and ambiguous.

How does adult development theory impact work performance? 

Comparing the performance of a knowledge worker to an iceberg, the 10% visible (the observable actions one takes) is seeing if a person completes their work on time. When a deadline is missed, not many of us ask the question, “Why was the deadline missed in the first place?”  

The answer lies in the 90% of the iceberg that’s hidden. 

Leadership effectiveness comes from permitting yourself to be curious and to ask what prevented that person (or myself) from getting that done on time? How deeply are you willing to look for that answer?

“The unobservable stuff below the surface, that’s our being. It comprises our beliefs, our fears, our feelings, our hopes, and our expectations. Much of this stuff below the surface is hardwired and driven by these unconscious thinking patterns and feelings and behaviors. Deadlines are never missed because someone doesn’t know how to manage their time. “

Amber Setter

Instead of focusing on a missed deadline, we can dig into that 90% to find out that, for example, they are a perfectionist who feels the need to triple-check their work. Being a perfectionist can stem from their fear of not being smart enough or the fear of losing their job. 

Another example of subconscious reasons for missed deadlines is people overpromising and under-delivering. These people-pleasing behaviors are often learned during their childhood or through formative career experiences.

Deeper understandings such as these allow leaders to alleviate any fears or assumptions to free up mental bandwidth.

Uncovering what is in the way of optimal performance creates your effectiveness as a leader, and it starts by looking within. The greatest possibilities for improving performance are not found in looking at the metrics and top 10%. 

“The most powerful results come from exploring the uncharted territories of a person’s inner world. Because once the unconscious becomes conscious, then a person has a choice about their action. They begin to see what drives their behavior and can consciously choose behavior that is more effective and produces greater results.”

Amber Setter

How often do we hear discussions about couples growing apart when they are probably growing at different stages or different change rates? They’re not necessarily growing apart, but growing at different levels. 

Two colleagues referencing an ipad in the middle of the office exchanging in conversation

Adult development theory, at its core, is a way in which we can understand our behavioral motives and how we make sense of the world around us.

Adult development and COVID-19

For example, take a moment and think about the ways different people experienced the COVID-19 pandemic. We are all influenced by experiences that go back as far as childhood. Adult development shapes who we are and is influenced by our upbringing, our relationship to authority, our religious ideals, what is possible, what’s not possible, and sense-making. These all influence how we relate and interpret events as they occur.

Some people went through this pandemic feeling completely overwhelmed, wanting to hide under the covers, while others sought opportunities as one door closes and another door opens for them. Both sides were equally shaped by all adult development theory. 

Now that we’ve explored adult development theory and how it drives our behavior, let us look at how this influences leadership specifically.

The three aspects of adult development theory in leadership

#1: There is no correlation between age or IQ with leadership effectiveness

This is important in the context of how positions of power or authority in our organizations have traditionally been filled. Promotions are based on tenure or the observable actions—the 10% of the performance iceberg. The number of years in an organization or role is highlighted instead of an individual’s capacity to lead differently and lead through change. 

Moving forward, when thinking about promoting someone, it is important to analyze prospects across all these metrics.

#2: Mental complexity helps us take more responsibility for our actions

Mental complexity is the second important factor that offers us a way to take greater responsibility for our own thinking and feelings. 

Asking questions in the promotion process that include their level of adult development helps identify people and their level to take on mental complexity. It gives us greater capacity to understand problems by delving into “What does this mean?” or “How does this show up in the world?”

If we look at the population as a whole, mental complexity increases with age. There is certainly an amount of wisdom gained from age—but remember, there is no correlation to age and IQ with adult development. There can be considerable variation. We can look at 10 people in their 40s, and they can be at different places and levels of mental complexity—how they make sense of the world around them and their ability to perform in volatile situations can be vastly different.

“When we have the capacity to take on more mental complexity, the capacity to be responsible for our own thinking and feeling, we can retain more layers of information; we can think farther into the future. That is really important in times like these. I do not know about you, but I feel like in the past few months, I’m getting decision making fatigue.

Amber Setter

Think about how simple decisions have become more complex than before. In March 2020, a complex question was, “Where do I buy toilet paper?” Later, key questions migrated to  personal health and safety, whether or not it’s safe to go to the grocery store,get a haircut, or travel. The basic things in life fundamentally changed. 

What about the more complex issues business owners, leaders, and managers are required to make? 

“How do we work from home as an individual? How do we connect with our team? How do we deliver feedback when somebody is physically not in the office? What do we do when our people want to move s and work from different places? We are all being asked to make these decisions, and they have never existed before. It takes a lot more of our internal sturdiness and strength to be able to take on all this additional mental complexity.”

Amber Setter

#3: Adult development does not unfold continuously 

Lastly, development does not unfold continuously.

In other words, there are periods of growth and stability, but there are also periods of contraction. We may have matured in certain ways, but then difficult life circumstances happen, and we backtrack a little bit. It is not one continuous upward chart, and that requires leadership to understand how employees progress along this path and at what stages they currently are. 

This leads us to ask a big question: What is the benefit of having leaders on a higher adult development stage?

It is effective leadership

Learn more about leadership to unlock your potential and effectiveness

Make sure to check out Part Two to learn about the three levels of adult development and Part Three to understand your leadership effectiveness. You can also watch the full webinar here.

When you become a Gusto partner, we provide you the tools that will help you expand your accounting practice and offer clients new insights. Feel free to visit our resource center, where a quick search on “leadership” will unlock more valuable insights to help you in your business.

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.
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