It began with a question from the chief technology officer (CTO) of a fast-growing firm: “How do I get my team leaders to the next level when measuring success doesn’t involve making or selling products?”

In other words, how can you measure growth and performance in a role as amorphous as leadership? The answer involves peering under the hood to see what runs the leadership engine.

Finding a Key Driver of Leadership Success

The CTO has enjoyed a successful career, having invented several technologies. He now leads an organization that will move his inventions to a larger stage. There, he focuses on building the company’s reputation and creating the right products for customers. His team leaders support these goals by giving speeches, educating potential customers and creating company buzz in the community.

To advance their careers, the team leaders will have to work on competencies related to strategy, alignment and communication. These areas of expertise are essential to leadership. Whether the team leaders succeed, however, depends how they perform an often overlooked but fundamental leadership competency: effective navigation of risk.

Leaders cannot move an organization forward without dealing with risk. Risk shows up everywhere, including in competition for customers, capital and talent. To handle risk, leaders must face the uncertainty of what lies beneath it. That’s a major and unavoidable challenge. A leader’s job is to pursue new ideas that will make things better for customers, employees and communities. Leaders have to test their ideas, not knowing ahead of time if they will work or not. That jagged journey causes discomfort for both leaders and followers. Without it, however, better things will not happen.

Can you measure how well someone navigates the discomfort of risk? The short answer is yes, as long as you can accept basing your measurement on the inexact science of observing human behavior. A longer answer begins with a quick history of measuring performance.

Measuring Leadership: A Brief History

The business world loves to measure performance. The famous line, attributed to everyone from Peter Drucker to Rheticus in the 1500s (who knew?), “what gets measured gets managed,” drove a frenzy of performance measurements in the 1980’s. Most of them were quantified sales and production activities.

Tom Peters took performance measurement to a new level when he proclaimed that virtually everything can be quantified, including leadership. He proposed time management metrics for how much of each day executives should spend in their desk chairs as opposed to roaming around the office and calling on customers. That may have worked in the ‘80s, when teams and customers resided in the same geography. In 21st-century business life, diversity of geography, time and talent make such performance measurements impractical.

Leading Through Discomfort

Winning in our fast, hyperconnected world demands constant innovation, changing strategies and scanning the horizon for new developments. It relies on mind management, not time management. To succeed, leaders need an entrepreneurial mindset that continually looks for new possibilities. Then, they have to lead others through the awkwardness of testing them.

Advancing leaders in our current business world requires, first, recognition of the importance of embracing the discomfort of experimenting with new ideas and, second, performance measurement that uses behaviors to judge how effectively leaders function in uncertain situations. Here are four practices to develop and measure the ability to navigate the discomfort of risk in the pursuit of new ideas.

1. Identify effective navigation of risk as a core leadership competency.

Formalize effective navigation of risk as a core competency in your leadership development requirements. Include taking behavioral risks in your definition. That means adapting to different personalities, diverse communication styles and ambiguous situations in order to advance a cause.

2. Accept feedback based on observed behavior as imperfect, but not unreliable.

Judging the behavior of others itself carries risks. Even when numerical ratings are applied, ultimately, they are subjective. Nevertheless, humans are not invertebrates. Using their emotions and five senses to guide them, they take in a large amount of information about their fellow humans. Their observations may not be quantifiable with perfect math but, absent political agendas or mental disorder, they will give the observers what they need to know to decide how effectively someone leads.

3. Build a survey tool that ties risk navigation to observable behaviors.

Reliable feedback arises from observed behaviors rather than opinions. A 360 review with behavior-based questions can provide invaluable observations from critical stakeholders. A wide cross-section of reviewers (e.g., direct reports, colleagues from other departments, peers, senior leadership and customers) will deepen the results. Well-designed and -administered 360s can lead to higher employee engagement, customer satisfaction and sales.

4. Tailor feedback questions to the leader’s job description.

Create feedback questions relevant to the job of the people being assessed. In the case of the CTO’s team leaders, for example, does each person:

  • Propose ideas based on new customer requests that have to be tested?
  • Pose open-ended questions and relevant follow-up questions, even when responding to unexpected remarks?
  • Solicit both positive and negative feedback from others?
  • Admit failures, whether their own or others’, and treat them as learning experiences?

Approaching rather than avoiding the discomfort of risk can feel like an odd thing to do. Yet the reward of building something better makes it worth the journey.