Companies & Industries

Harvard: 'Hard' Skills Trump 'Soft' Skills


Research from Steve Kaplan and colleagues suggests investors should hire a Jack Welch or a Steve Jobs—both with tough reputations—rather than a Jeff Immelt

Posted on Conversation Starter: December 13, 2007 5:47 PM

In a New York Times article earlier this year, Joe Nocera described GE's Jeff Immelt as the prototypical modern chief executive. Immelt, he said, possesses the softer skills required of leaders today: they must be good listeners, consensus builders, team players.

That may sound intuitive, but it's not what our research found.

Earlier this year, my colleagues and I undertook a study that attempted to provide a large sample, empirical look at leadership skills and company success. We assessed data on more than 300 CEO candidates for companies involved in private equity (PE) transactions occurring between 2000 and 2005. In a typical situation, the PE firm was considering an investment in a company, but wanted to assess the qualifications of the current CEO and/or other potential CEO candidates.

In addition to collecting the candidate ratings, we contacted the PE firms to determine whether the PE firms had made the investment, whether the candidate had been hired, and whether the hired candidates had been successful.

So what did we find?

We found that CEO skills can be classified into two areas—"hard" skills like aggressiveness, follow-through and speed; and "soft" skills—like creativity, listening skills, and team skills.

When we looked at success, however, we were a little surprised. CEOs who scored higher on harder skills, such as being "fast," "aggressive," and "persistent," were more likely to be successful than CEOs who scored particularly high on softer skills such as being "good listeners," "open to criticism," and "team players." In other words, our results suggest investors should hire Jack Welch or Steve Jobs who have tough reputations rather than Jeff Immelt who has a softer one.

These results have two implications. First, CEO talent or skills appear to be measurable and those talents appear to matter. Second, on the margin, soft skills appear to be over-emphasized in hiring decisions.

We note two caveats. First, the CEOs in our sample work for companies funded by venture capital and buyout investors. We cannot say whether these results generalize for all companies. Second, our results do not necessarily mean that soft skills are unimportant. It is possible that the CEO candidates needed to have a certain level of those skills to be credible candidates or to be hired. However, once the candidates have that level of skills and are hired, greater soft skills are irrelevant or negative on the margin.

What do you think? In your experience, do hard skills in a leader make for a more successful company, or have you seen better results under leaders that employed softer traits?

Provided by Harvard Business—Where Leaders Get Their Edge

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