BTS Strategic Execution Blog

Business Leadership: The Essential Capabilities of an Effective Leader

Sunday, April 01, 2012 | Category :

Dr. Philios Andreou Sphika

Leading companies around the globe consider leadership development a critical challenge and are making the investment in their future leaders. However, most organizations rely on the traditional view that "leaders in an organization are business experts" and "leadership development is about the how to deal with people" which nowadays seem to be only partially true. Leaders identified seldom have a track-record for running multiple functions or achieving comprehensive P&L targets. More often than not, their roles typically have been those of a functional leader and business oriented leadership skills are much more than simple financial acumen or product/customer and sales expertise.

Historically, or even cinematically, effective leaders draw on a wide array of talents to inspire those who follow. In the film, Gladiator, there is a powerful scene where General Maximus is addressing his troops before going into battle. To motivate and inspire his troops, he says:

“Three weeks from now, I will be harvesting my crops. Imagine where you will be, and it will be so. Hold the line! Stay with me! If you find yourself alone, riding in the green fields with the sun on your face, do not be troubled. For you are in Elysium, and you're already dead! ... Brothers, what we do in life... echoes in eternity… "

The whole idea of the speech is “stay with me – I know how to keep you alive” – “follow my instructions and we will be where we all want to be very soon”. This speech becomes powerful because Maximus has credibility. He is credible because he understands the situation and the complexity of the battle; he has the capability to draw on a strategy to help his team win; and most importantly, Maximus has a clear vision.

People Leadership vs. Business Leadership

Great leaders encompass a range of skills that can be classified into two groups – people leadership and business leadership. There are distinct differences between the two. Often, we tend to focus on people leadership skills (the “How”) such as the ability to engage and inspire, collaborate, influence, manage stakeholder expectations, develop talent, and lead change. While these skills are essential, business skills (the “What”) are on the more strategic side of the capability spectrum and are often given minimal attention. Key capabilities that are included under the business leadership umbrella include strategic thinking, market savvy, business and financial acumen, competitive awareness, fact base analysis, scenario planning & evaluation, portfolio management and decision-making.

Leaders that exemplify strong business skills, including business acumen, are better equipped to understand and articulate the company strategy, and can make better decisions to execute more effectively. They are better equipped to manage the three tensions in business: profitability vs. growth, long term vs. short term, centralization vs. decentralization.1 Combine these characteristics with the ability to engage, inspire, collaborate and the result is an effective and successful leader.

Putting Business Leadership Skills to Practice

The good news is there is no need to go to the battlefield to practice business leadership skills. As one US Army General interviewed by BTS pointed out, “there are some things I really do not want my people to learn on the field,” meaning I would rather have them practice in a simulated risk free environment where learning is impactful and secure.2 The use of experiential methodologies like business simulations, Engage Maps and other discovery based learning techniques can help accelerate business acumen learning and allow people to practice business leadership skills in order to deliver meaningful results. Studies have shown that practice by doing increases the learning impact by 8-10 times over the traditional techniques of lecture and reading.

Finally, immersing leaders in discovery-based learning initiatives that are connected to desired organizational results creates valuable experiences that are more apt to stick as they return to their job. As Tim Mooney and Robert Brinkerhoff explain in their book, Courageous Training, leaders must understand how their new skills and capabilities are linked to their strategic objectives.3 Learners must leave the experiential learning program armed with an action plan and a clear understanding of how these new capabilities align to the company’s strategy.

In Conclusion

Leaders who exemplify a combination of strong business leadership skills and people leadership skills understand the key question to a company’s ultimate goals of value creation. They can combine the drivers of profitability and growth with a market focused approach whilst engaging, inspiring and collaborating with those around them to ensure agility and long-term success of the organization. As a friend who is a famous basketball pro told me once: “It is not your height that matters in basketball; it is the height of your game!"

About the Author: Dr. Philios Andreou Sphika is Managing Director, BTS Iberia and Latin America

1 Corporate Universities by Jeanne Meister, McGraw-Hill, 1998

2Interview with Brigadier General W.Chris King In

3Mooney & R. Brinkerhoff, “Courageous Training” Berrett-Koehler Publishers, 2008


  1. 2 Ros 21 Apr
    There seem to a few things to cover here Firstly, there is a whole cinservatoon to be had about who is a leader and the fact that everyone needs to be a leader from time to time but unless this is a group with which I have worked on a number of sessions in the past, this is probably not the time to to deal with this. Instead, I would be more pragmatic and try to give short quick reasons why it is still important to talk about the leadership competencies.The most straightforward one for me is to explain that focusing on leadership competencies during the action learning session helps us to be be more effective as a group. By choosing to work on specific aspects of our behaviour during the discussion, we will improve our own individual performance which will have the net effect of helping us to work more effectively as a group. I would also stress that because we will all be listening for examples of how other group members are performing against their leadership competencies, it will improve our listening skills and help us to be more constructive and supportive of one another.If it feels like the term leadership competency' is too loaded then I think you could re-position the term as being an interpersonal work competency'. Later on at the end of the session (or when the group next meets and after having had a chat with the sponsor) you could highlight the competencies and use the opportunity to ask questions that help the group understand how those competencies link to leadership and how leadership links to their role.
  2. 1 Phipiit 22 Apr
    I agree with Matt and Carole the best language fit is inrpotamt for the participants to take something from the session. If the title of leadership competencies is off putting to the participants (I have found this in some sessions I have taken) I would ask the group what would best describe these types of behaviours in your organisation . They may decide to call these attributes problem solving skills . It is down to the common language of the organisaiton and it is best prior to the session to talk to the sponsor about this to gain an understanding. If people feel uncomfortable or intimidated they are less likely to participate. I like to give participants a list of the competencies/skills to select from if they would like to do so at the beginning of the session. Making sure that the list also reflects their language is helpful. It's all about getting them to take part so the can experience the benefits.At the beginning of the session it is inrpotamt to explain to the participants that focusing on one of these skills during the session will help solidify the learning and that they will get a lot more out of the session. Most people will find themselves in leadership type situations everyday without even knowing this so it might be helpful to put the quesiton out to the group can any of you describe a time where you were in a leadership type of situation . This may help them to look beyond their current role at work.

BTS is a public company traded at the OMX Nordic Exchange Stockholm under the symbol BTS b
© BTS All Rights Reserved