Kevill, Alex, Trehan, Kiran and Easterby-Smith, Mark (2012) Leadership Development as a Vehicle for Evolving Dynamic Capability: A Path into the Future for Micro Firms? In: Institute for Small Business and Entrepreneurship 2012 Conference, 7th-8th November 2012, Dublin, Ireland. (Unpublished)

Objectives: This empirical study looks into the potential relationship between leadership development courses undertaken by owner-managers of micro organizations and dynamic capabilities within such organizations. Specifically it looks at the role leadership development courses could play in the evolution of dynamic capabilities through their influence on micro-organizations’ owner-managers.

Prior Work: Leadership development and dynamic capability pay particular attention to the goals of interventions, the importance of context and environmental dynamism; yet their potential to enrich each other’s perspectives has rarely been explored. Furthermore, dynamic capability research has largely ignored the context of the micro-organization. This study will improve understanding of the business practices of owner-managers related to dynamic capabilities within such firms. Such understanding could prove significant given the substantial contribution such firms make to the economy.

Approach: This qualitative study will look to understand the perspectives of owner-managers and the meanings they assign to experiences. To generate the data for this study interviews have been undertaken with one owner-manager each from two private sector micro-firms based in the UK.

Results: The analysis illuminates that in the two organizations included within this study, leadership development courses had very different effects on the evolution of dynamic capability. One of the owner-managers embraced concepts and ideas introduced to him on the leadership development course that he participated in, and the change in his cognition associated with this provided a vehicle towards dynamic capability evolution. However, economic and social relationships have acted to construct road blocks on his path toward dynamic capability evolution, and leadership development itself may play an important role in overcoming these. The evolution of a dynamic managerial capability in the other owner-manager’s organization was facilitated not so much by the content of the leadership development course that he participated in but rather the social capital it helped him to build. Emotion played an important role in the evolution of this dynamic managerial capability.

Implications: The analysis illuminates the potential that leadership development courses could be undertaken by owner-managers of micro organizations to influence the evolution of dynamic capabilities within their organization with the aim of improving organizational performance. This could help such owner-managers to improve their ability to strategically develop their organizations. This study also highlights however that this is by no means a simple endeavour and that leadership development courses can have very different effects on different owner-managers based in different organizational contexts. A critical approach to leadership development requires a genuine commitment to engage with emotional and political dynamics associated with dynamic capability.

Value: By providing original insights relating to the synthesis of leadership development and dynamic capabilities in the context of the micro-organization this study offers potential avenues for future research in furthering debates relating to both leadership development and dynamic capability. Fresh insights on dynamic capabilities from a critical perspective are also provided in this paper. The insights gained will also help to move forward policy debates relating to supporting owner-managers in developing micro-organizations for the benefit of the economy. The study also informs research methodology used to understand leadership development and dynamic capabilities through taking a narrative research approach.