Simple definitions of leadership remain elusive. Good leaders are multi-faceted by nature and employ different qualities at different times.Leadership...
Simple definitions of leadership remain elusive. Good leaders are multi-faceted by nature and employ different qualities at different times.
Leadership never goes out of fashion. Management fads and fancies come and go,
but the reality of leadership cannot change. The fate of businesses is determined in large measure by the actions and inactions, for good or ill, of those in charge of the enterprise. Not surprisingly, many writers have sought to explain and expound the nature and essence of effective leadership, so that its lessons can be studied, learned and imitated.
The catch is that no two leaders are exactly alike, and neither are their leadership styles or actions. Take two men who probably rank as the greatest business leaders of their eras (and certainly as the richest) – John D Rockefeller I of Standard Oil and Bill Gates of Microsoft. There’s little in common here save enormous ambition and a ruthless (to put it mildly) attitude to competition. You can’t teach these behaviours at business school.
The difficulty of definition
All the same, in 2004, the Harvard Business Review devoted a whole issue to leadership, testimony to our ongoing fascination with the subject. Yet the contributors couldn’t escape the fact that leadership is hard to define, elusive to grasp. It’s like being in love: you just know when you’ve got it – and when you haven’t. It isn’t simply management, but without good leadership managers must flounder. They have to know “who’s in charge here?” Just as important, they must know where the leader is leading.
Authority and purpose (abundant in both Rockefeller and Gates) are the two pillars on which all leaders build. If the authority is weak or wobbly, or the purpose is ill-defined and wavering, effective leadership is lost. That truth, however, doesn’t take you very far, especially in the 21st century. For a start, who is the leader? Businesses have become much more complex, and it’s not realistic to expect one man or woman to lead every aspect of this complexity, or one leadership style to fit all cases.
The cult of the Chief Executive
Yet the literature, from journalism to gurudom, blandly denies this self-evident truth. The cult of the chief executive still flourishes. The cultists hold that you simply appoint somebody with the right leadership qualities, whatever they may be, incentivise them with the promise (and reality) of inordinate rewards, and leave them alone to lead in their own omniscient way. The analogy is military. The CEO is a mini-Wellington, the “man on horseback”, armed with charisma and genius, who will rouse the troops and destroy the competition.
This fantasy has been exploded time and again, mostly by abject failures. In 2005, Fortune magazine looked at 20 “epic decisions”, some “breathtakingly smart”, like Sam Walton’s 1983 decision to transform Wal-Mart, already hugely wealthy, into
super-colossal stature by creating “the world’s largest private satellite network”. But other epic decisions were “appallingly stupid” (like Gerald Levin’s destructive merger with AOL, which wiped out half of Time Warner’s value). At least these contrasting epics define a major part of the leader’s role: to ensure that necessary decisions are made as necessary (the easier bit) and that the decisions are right (the difficult part).
Decisive and courageous
This necessity points to two surely indispensable qualities for good leaders – that they are decisive and expert at mobilising the contributions of others (above all, their colleagues) to the decision-making process, thus improving both the quality and the acceptance of decisions. That sounds clear enough, but it misleads in a vital respect.
Sometimes excellent leadership demands ignoring everybody else, inside and outside the company, and doing what you, the leader, know to be right.
In 1985,Andy Grove and Gordon Moore of Intel astounded associates by abandoning memory chips, the origin and core of their great business, and switching to micro-processors – thus creating a far greater business (and changing the world). Again, that suggests another indispensable quality: courage. Sure enough, bravery features on most lists of leadership attributes. But what if the pair had been wrong? The future hinged, not on their courage alone, but on other commonly listed attributes. Indeed, Grove and Moore exemplified what one such list names as “inner and outer strengths” of the leader. In taking their momentous decision, they deployed other inner strengths besides courage, above all vision, but also self-belief, results focus (Intel was losing money on memory chips) and integrity. They were greatly helped in forcing through the transformation by external strengths involving others – their communication, visibility, commitment, team work and attentiveness.
Contradictory qualities
All very admirable. But there’s a problem with such lists. As with motherhood, few will speak against those strengths. But is that any more than lip-service? What do the fine words actually mean in practice? They are certainly poor guides to effective leadership. Taking a bad decision boldly may show courage, but has nothing else to be said for it (witness Levin and AOL).Many terrible tycoons, moreover , have been all too visible (for example, Robert Maxwell).And as for results focus, that has notoriously led to wrong-headed actions governed by the leader’s slavish addiction to the share price. Vision illustrates the gap between fine words and harsh realities especially well. Early in Lou Gerstner’s celebrated reign at IBM, he made the PR mistake of denying that he had any vision for the company. At the time, over-arching plans for future glory were all the rage in leadership, and Gerstner had to backtrack briskly. But nothing really changed. The leader went on masterminding IBM’s pragmatic switch from hardware to services as before.
Preparing for the future
As it happens, IBM’s strategy has buckled since Gerstner’s departure – so perhaps the critics of his lack of vision were not so wrong. A leader is inevitably judged by his or her results in the here and now. But strategy unfolds in a future when the leader maybe long gone .Good leaders envision and prepare for a future which will excel the present and enable their heirs to build new and larger achievements on the inherited foundations. Rockefeller’s Standard Oil empire was split up by the federal trust-busters. But the biggest component, Exxon Mobil, is to this day the second largest company on earth– and the biggest profit-maker. From early on, this first billionaire businessman (just like mega-investor Warren Buffett today) exhibited one supreme talent of leaders who build for the future: selection. Rockefeller picked excellent colleagues and delegated authority widely and wisely; indeed, he attributed his success to putting his trust in people who he had given reason to trust him. The great man demonstrated that confidence by retiring from active business in his fifties.
Handing over the reins
In the modern era and in another country, Japan, Soichiro Honda of automotive fame did likewise, observing that he didn’t understand computers and it was time to quit – anyway, he hadn’t looked at any operating documents for ten years. Honda was ahead of his time. Today, many high-tech leaders are stepping back from operations while still in full vigour. Perhaps the best example is Bill Gates – still only in his forties when he moved away from operations.
These anecdotes make a crucial point. Excellent leaders do not hog power, but share power among effective deputy leaders to whose selection and development they pay enormous attention. One of Fortune’s epic decisions belongs to Reginald Jones of GE, who in 1980 deliberately picked as successor Jack Welch, a tough maverick whose nature and management style were entirely different, but who could be trusted to shake GE up from top to bottom.
Welch in turn devoted much of his second decade in power to choosing his own successor. He settled for Jeff Immelt, who has put imagination and marketing ahead of the financial and production emphasis of the Welch era. There have been many other examples of building a different future by backing different heirs. For a fabulous British example, look no further than the transfer of the Tesco leadership from Sir Jack Cohen and his family to a new generation that has transformed the business.
Defining the essence of “achievers”?
Do Welch and Tesco’s Sir Terry Leahy have any more in common than Rockefeller and Gates? Not surprisingly, all four careers fit the label “achiever”, one of “Seven Ways of Leading” identified in the Harvard Business Review by David Rooke and William R Torbert. An achiever “meets strategic goals, effectively achieves goals through teams, juggles managerial duties and market demands”. The achiever is “well suited to managerial roles, action- and goaloriented”. That, you might think, wraps it up.
Not so – even though, when it comes to implementing the strategies (the authors’ acid test of leadership), the achiever significantly outdoes three other ways: opportunist (“wins any way possible”), diplomat (“avoids overt conflict”) and expert (“rules by logic and expertise”). But the achiever in turn is beaten to the performance punch by three others: the alchemist (“generates social transformations”),the strategist (“generates organisational and personal transformations”) and the individualist (“interweaves competing personal and company action logics”).
Multi-faceted leadership
Yet how can any other way work well without the achiever’s ability to effectively achieve goals through teams? For that matter, how can the achiever succeed without at times using the powers of the diplomat, the alchemist, etc? And why does the achiever account for 30 per cent of the research sample, three times as many as those described as alchemists and strategists, if the latter ways are truly “most effective for organisational leadership”?
One answer is that the definition of leadership – in this study, as strategic implementation through transformation – obviously affects judgment of its quality. Second, the good leader is never restricted to one “way of leading”, but is multi-faceted. The leader of Toyota’s “impossible” invasion of the US car market, Seisei Kato, compared his brilliant leadership to chess: he was by no means always king – “sometimes I was a foraying rook, and at other times I bustled about as part of the fighting force like a bishop,” he said.
Commitment and adaptability
Most importantly, Kato “led the ‘troops’ myself”. Deeply involved personal commitment is the constant around which true leaders play their many parts, suiting their actions (and acting) to changing needs and circumstances. At times, even strategy may be subordinated – for example, when crisis threatens an organisation’s very survival. That’s when the turnround experts (or company doctors) come into their own, deploying formidable, high-speed powers of command and control to lead the patient back from the brink . IBM’s Gerstner is an outstanding example, both of a turnaround man and, perhaps, of the latter’s notorious inability to see beyond the crisis and cure to a bright new strategic future. There are some who believe that leaders in general are now in a similar fix. In his latest book, Re-Imagine!, the iconoclastic guru Tom Peters calls for“ New Leadership… The Ultimate New Mandate”. Leaders and led alike, Peters believes,“ don’t have a clue” about what the “new mandate” entails. So he offers leaders 50 heretical ideas.
Towards a new model of leadership
But heresies like admitting “I don’t know”, honouring rebels and encouraging freaks no longer sound that heretical. Peters’ demand that leaders push their organisations into the “value-added stratosphere”, while also creating new markets, sounds very much like the direction in which Jeff Immelt is trying to lead GE. In an age whose motto should be innovate or die, innovatory leadership is surely essential. The old order rested on hierarchy and the cult of the chief executive. The new order rests on radical initiatives and freer organisational forms.
Those demand a major shift from hard-nosed command and control (the classic military model) to what Daniel Goleman labelled as “emotional intelligence”, whose chief components are “self-awareness, self-regulation, motivation, empathy and social skill”. Emotional intelligence emerged as star of the show in the Harvard Business Review special on leadership – rightly so, if you believe that, in a world of fragmenting markets and sub-dividing organisations, genuine self-managed teams will be the building blocks of successful business.
In team leadership, all the hard attributes – from authority and purpose to decisiveness and the need to achieve – weigh as heavily as ever. But they will wither with-out the softer qualities – from collaboration and delegation to trust and sharing power. Hard and soft need each other for either to contribute fully to the brave.
Original Author: Robert Heller, Management Journalist
