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Understand Your Leadership Effectiveness

Gusto Editors  
Female leader smiling while looking down at her tablet

Do you currently measure if your leadership is effective?

Gusto, along with our partners at CPA Academy, proudly presented a webinar called “How to Increase Your Leadership Effectiveness” with coach Amber Setter. You can watch the entire webinar here.

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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 She has been practicing for eight years, drawing on her own leadership journey, together with her lessons, while coaching others.

In Part One, we explored how to discover your performance potential. Part Two looked at the three levels of adult development. In this final part, we learn how to understand your leadership effectiveness.

How are people segmented within the three adult development levels?

Amber broke down the population percentages that fall into three levels. The source material comes from the book An Everyone Culture written by Robert Keegan and Lisa Lahey. The book presents meta-studies looking at the populations of leaders that they coached. These were their findings.

  • Less than 1% makes it to the Self-Transforming Mind.
  • Around 6% of people are on the cusp of transitioning from a Self-Authoring Mind to a Self-Transforming Mind.
  • An excellent healthy 34% are at the Self-Authoring Mind.
  • Around 27% of people have a Socialized Mind.
  • The final group was 32% on the cusp transitioning from the Socialized Mind to the Self-Authoring Mind.

“I want you to keep this in mind. I know for me, I have always wanted to be the best. I have that ego. I am working on dissolving it, but let me be honest, I am not quite at the Self-Transforming Mind. It is what I aspire to. I think it is a real place of possibility. It is where I want to grow myself and others too.”

Amber Setter

Are you racking your brain for an example of someone in the 1%?

Amber is quick to point to Ray Dalio and suggests following him on LinkedIn. He is the CEO of Bridgewater, one of the world’s highest-performing hedge funds based in New York. He is active on the platform, sharing posts regularly, and she cited one of his previous posts about the ego.

“Understand your ego barrier. When I refer to your ego barrier, I’m referring to your subliminal defense mechanisms that make it hard for you to accept your mistakes and your weaknesses.”

Amber Setter

These barriers are our deep-seated needs and fears, like the need to be loved and the fear of losing love, the need to survive, and the fear of not surviving. These reside in the primitive parts of our brain, which are not accessible to our conscious awareness, making it virtually impossible to understand what they want and how they control us. They oversimplify things and react very instinctively.

Information is constantly bombarding our brains, and our minds are trying to use as little energy as possible; it wants to stick to what it knows.

In other words, our minds love the well-traveled path or most straightforward path. It is like grabbing that Uber to let someone else drive. This example demonstrates how our consciousness, what we cannot see, operates. It’s driving us around all the time.

To understand how Ray and Bridgewater have become so effective in what they do, An Everyone Culture demonstrates a deeper understanding of the value created by focusing on consciousness and competence.

Two male leaders in a warehouse referencing her lap during a conversation

Bridgewater is relentless in its focus on what causes behavior rather than behavior itself. Remember, 10% is what most accounting firms focus on—whether tasks are completed on time or not or how many billable hours does an employee have.

At Bridgewater, they are looking at the 90% to transform their business. They want to understand why the behavior took place. They’re all about understanding the inner world and how it runs the performance’s outer game.

Can we measure the benefits of leadership effectiveness?

The value in understanding consciousness lies in creating a more profound and more meaningful awareness of yourself and others. Combine that with technical brilliance and competence at your disposal, and you will unleash your leadership effectiveness while inspiring others in your organizations.

Measuring leadership effectiveness is crucial. It boils down to bridging the gap of what is happening compared to what is needed.

“We are helping somebody to identify where you are today. Then, where do you want to be in the future? Once we establish the gap, we co-create a plan to keep them accountable for crossing the bridge and achieving the desired change. In today’s world, the primary development gap that leaders face is leading with a level of complexity that requires a much more mature interior.”

Amber Setter

Sounds easy enough. But how do you measure someone’s leadership behavior that correlates to stages of adult development?

“I use a tool called the leadership circle profile. You can do a self-assessment on the website that measures your effectiveness as a leader. Now, when I use this in a coaching context, I am administering it as a 360. The tool is not about job performance. Again, it is about leadership effectiveness. This tool is profound because it provides focused feedback while helping someone to reveal the underlying, underneath the surface, the underlying assumptions, that’s causing their patterns of strength and limitations.”

Amber Setter

With this in place, leadership development is accelerated. Without it, lasting and transformative change is less likely to happen. This tool correlates numerical data with leadership behaviors, which feel harder to quantify.

Here is a quick overview of what the report reveals and how it correlates to adult development.

The overview has an image that contains two half circles.

The top half is creative competencies.

The bottom is reactive tendencies.

“When it comes to neuroscience, creative competencies are when we are using the part of our brain called our prefrontal cortex. That is the part of us that can get us to the balcony and become a Self-Authored Mind. These leaders can stop, pause, check-in with themselves, and analyze what part is triggered, upset, annoyed, or even inspired? How is that informing the decisions that I make? What is the best course of action here?”

Amber Setter

Amber went on to deconstruct the lower half of the circle:

“In contrast, the reactive tendencies are when we are in fight or flight mode. We are using our lizard brain, and we are reacting to old conversations in our minds about who we are or who we are not, or what is possible or what is not. Again, adult development theory is pretty big, new ideas out there, but it is about how we make meaning and sense and how we interpret things going on in our world.”

Amber Setter

To highlight the difference between these tendencies, let us compare working examples:

The creative aspect is:

  • Relating—it is about caring, mentoring, teamwork, and interpersonal.
  • Being—it is about balance, composure, integrity, and courage.
  • Achieving—it is about vision, strategy, results, and decisions.

Conversely, the reactive aspect is:

  • Complying—it is about pleasing, belonging, and passiveness.
  • Protective—it is abouts distance, criticalness, and arrogance.
  • Controlling—it is about autocracy, ambition, and perfectionism.
Male colleagues comparing notes in a hallway

It is best to compare these two against each other just as you would a balance sheet. Your creative tendencies are your leadership assets—the value that you can bring. The reactive tendencies are your leadership liabilities—the personal stumbling blocks holding us back.

This model shows that if you have too many liabilities, it pulls down your assets. It pulls down your effectiveness. This tool helps you quantify and see the value you can bring and how you might be getting in your way.

The other thing the report highlights is the gap.

This report effectively represents how somebody evaluates themselves compared with how other people in the organization (or even personal life) assess them.

“The gap to me often is wasting space for your brain. Understanding the gap is important for a performance worker. To view the way our minds work, think about an operating system. Your computer only has so much capacity to run so many applications at the same time. Your human brain operates much the same way.”

Amber Setter

When we have anxiety and fear about the world or our performance or who we are, this is taking up a lot of our mental capacity. It decreases the available ability for essential aspects like strategic planning, critical thinking, and fast decision-making.

That is why consciousness is crucial for knowledge workers.

Lastly, let us explore the correlation to adult development. There is another fantastic book out there called Scaling Leadership, authored by Robert (Bob) J. Anderson and William (Bill) A. Adams

They look at adult development theory, and they map it to thousands of responses of the leadership circle profile. These are their findings:

  1. The Socialized Mind—their leadership effectiveness is at 40%. That is 60% of the value out the door. An Everyone Culture says, “When you don’t deal with people’s anxieties, you’re paying full-time wages for part-time contributions.”
  2. The Self-Authored Mind—their leadership effectiveness increases to 65%.
  3. The Self-Transforming Mind—their leadership effectiveness is 90%. This is the epitome of consciousness. It encompases an awareness of who we are, how we get in our own way, and our perception gaps.

Bob Anderson, the co-creator of the leadership circle profile tool, has dedicated his 35-year career to exploring the intersections between leadership and personal mastery, and between competence and consciousness. He made quite a prophetic statement a few years ago.  

“If we do not focus on the inner game of consciousness, we are going to fall short in our efforts to develop leaders for the future at the pace required in these transformative times.”

Amber Setter

If we want a higher order of performance, we need to have higher levels of consciousness. Just as we upgrade our laptops, we can undoubtedly upgrade our inner operating system through adult development.

Is coaching for everyone?

Amber answered a valid question about coaching and if it is possible to force leaders that need it the most to be coached or even move employees from a Socialized Mind to a Self-Authoring Mind.

“You can never force anyone to do anything. It is fun to think we can control other people, but we cannot. All we can do is control ourselves. You can invite them into possibility. The other thing that we say as coaches and as accountants who are like this is you have to bankrupt their way of being.”

Amber Setter

You can demonstrate how their current way of living and leading is unsustainable—show them how they are bankrupting their way of being.

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Organizations can also make requests that an employee attends leadership training, especially if they’ve been showing up to work grumpy and unmotivated.

“I can partner with an organization on the language to invite them into the coaching and discuss the possibility of enrolling them in coaching. It is an invitation. It is never a push. If somebody does not want to do it, they will not do it.”

Amber Setter

How is your firm or small business handling leadership training? Do you have a system in place? If not, it may be time to install one, especially since we need leaders now more than ever. 

Learn more about leadership to unlock your potential and effectiveness 

Remember to check out Part One about discovering your performance potential as well as Part Two about the three levels of adult development. You can also watch the entire webinar here.

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

Updated: August 17, 2021

Gusto Editors
Gusto Editors
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