Catalyst for change: the mechanics of leadership

February 2019  |  COVER STORY  |  BOARDROOM INTELLIGENCE

Financier Worldwide Magazine

February 2019 Issue

“Leadership is one of the most observed and least understood phenomena on earth”, wrote the late American historian and political scientist James MacGregor Burns in one of his many studies of the fundamental characteristics of leadership.

A concept as old as human history, leadership and its mechanics has long been debated and is a conundrum that continues to this day. Many view leadership as an activity, not an object. Others characterise it as representing engagement between people, rather than an individual gift. Going further, there are those for whom a true understanding of leadership represents nothing less than the holy grail of the corporate world.

Debate aside, what is certain is that effective leadership is critical to every organisation, regardless of its size, location, sector or maturity. Identifying the qualities leaders need to be successful is therefore key – especially given the reams of research into the travails of leadership, such as the Center for Creative Leadership study which found that 38 percent of leaders fail during their first 18 months in charge.

Compounding the difficulties those earmarked for leadership face is the inadequacy of many organisations’ leadership development programmes. According to Skillsoft, despite the attention companies purportedly pay to the development of their leaders, only 41 percent actually believe that such programmes are effective and only two in five develop leaders in a way that they feel tangibly benefits the business.

“Being a leader involves defining a vision and establishing a strategy, motivating or directing others to execute that strategy and delivering results,” says Dr Alexander Stein, founder of Dolus Advisers. “This functional understanding of leadership focuses on whether or to what degrees an individual occupying the leader position possesses certain characteristics and attributes deemed more desirable and effective.

“The leader is usually conferred with institutionally unique decision-making authority and influence, but those are elements and prerogatives of the office, not the makings of the person who occupies it,” he adds.

According to business and leadership author Peter Economy, effective leaders are the people who are able to do certain things very well indeed. “They delegate responsibility and authority wisely,” he says. “They set goals that are motivating but achievable, communicate transparently and often, make time for their people, and recognise and reward employee achievements. They also think about lasting solutions and put them into place.”

Additionally, there are some practitioners who feel that the corporate world requires many different kinds of leadership and for different situations. “In the most general sense, corporate leadership requires the ability to facilitate human productivity,” says Alexandra Lajoux, chief knowledge officer emeritus at the National Association of Corporate Directors (NACD). “Clearly, to be productive, humans need a sense of direction, a sense of their own role in the direction and the financial and technological resources to fulfil that role.”

Essential qualities

Needless to say, there is no such thing as a universally agreed definition of leadership, but there are a number of essential qualities that every leader – potential and established – needs to possess in order to succeed.

According to Bill Green, chief executive and founder of LendingOne LLC, the character traits which are universal in each and every leader are self-awareness, decisiveness, fairness, enthusiasm, integrity, knowledge, creativity and imagination, and endurance. “Being an effective business leader takes years of practice,” says Mr Green. “Effective leadership means being able to balance a number of skills, all of which require their own learning curve. In fact, virtues is the best word for it.”

Augmenting the list of essential leadership qualities is Paul Glatzhofer, director of leadership solutions at Select International, who cites the ability to “lead and influence others, relate and interact with peers, subordinates and superiors, analyse information and make decisions, execute and deliver, and adapt to changes and be innovative”, as the top skills possessed by effective leaders.

“A great leader is defined by the work and wellbeing of the people they lead, not just by the goals they accomplish,” believes Marcia Reynolds, president of Covisioning LLC. “Even with a results-focused leader, success in getting employees to give extra time and wholehearted effort depends on how the leader makes them feel. People want to feel understood when they are confused, frustrated or overwhelmed. They want to feel valued by the leader for what they try as well as what they produce. And they want to know that the leader cares about their future.”

This capacity for empathy is what is known as emotional intelligence – a quality that is a particularly key requirement in the makeup of a leader. “Effective leadership boils down to emotional intelligence, which is not one capability but a collection of competencies, including self-awareness, interpersonal savvy, decision making and stress tolerance,” explains Loren Margolis, chief executive and founder of Training & Leadership Success. “These essential capabilities are the basis for effective leadership and can be learned. I truly believe that emotional intelligence is the basis for all effective leadership in any level of leader, and in any culture and location in the world.”

Furthermore, it is critical that organisations stipulate their leadership competencies, which can of course change as leaders move up the corporate ladder. “A frontline leader will need to demonstrate a different skillset than a functional or enterprise leader,” says Ms Reynolds. “As much as possible, leadership competencies should be defined in observable behaviours, so that people know how their leadership is being measured as objectively as possible. These behaviours should be in alignment with the company values to strengthen the desired culture.”

The challenges of leadership

Once leadership potential has been identified, developed and honed, a leader will quickly be faced with myriad challenges improving his or her organisation’s productivity, turnover, reputation and overall operational efficiency, while, at the same time, avoiding inadvertently taking actions and making decisions that prove ineffective and damaging.

A 2018 study by the Center for Creative Leadership found that leaders are consistently facing challenges, such as: (i) developing relevant skills, including time management, prioritisation, strategic thinking and decision making; (ii) inspiring or motivating others to work smarter; (iii) leading a team and team development, such as mentoring and coaching; (iv) managing, mobilising, understanding and leading change, including knowing how to mitigate consequences, overcoming resistance to change and dealing with employees’ reactions to change; and (v) managing internal and external stakeholder relationships.

Compounding such challenges is the strong probability that the toughest challenge facing leaders resides within themselves. “Even the most ambitious, talented and skilled leaders have fallibilities and shortcomings,” says Dr Stein. “There is no inoculation against the normal human condition, which is replete with deficits and blind spots. The crucial point is that the flip side of crediting great accomplishment to a single individual is blaming that same individual for being lacklustre or destructive.

“With that in mind, it is relatively simple for a leader to impair an organisation, even unintentionally,” he continues. “Tactical or diagnostic brilliance could be nullified by anxiety or risk aversion. Gap-leaping inventiveness, dazzling negotiation skills and peerless market acumen may be hamstrung by an abrasive personality. And a propensity to belittle or reject partnership and collaboration is likely to curtail enterprise growth and derail even the best business plans.”

Finding ways in which to mitigate the shortcomings of the human condition is therefore key. In the view of Ms Lajoux, an individual’s ability to lead is mostly a matter of training. “It is true that leaders are made, not born,” she says. “Everyone needs help in becoming and remaining a leader. Therefore, the key is to identify potential leaders for advancement – preferably from inside an organisation – and provide training in the traits of leadership. Training is far more important than recruitment. A lack of leadership-oriented training may be the single greatest handicap to corporate success today.”

For Darcy Eikenberg, executive coach and founder of Red Cape Revolution, meeting the challenges of leadership requires leaders to be clear about who they serve – whether it is customers, employees or shareholders – and then align their decisions accordingly. “Today’s leader needs to strengthen their decision-making muscle and get comfortable with moving forward, even amid ambiguity and fear,” she believes. “Knowing who you serve, and what they value most, is an effective lens for leaders to use to make the hard choices they need to make.”

Clearly, the path to becoming an effective leader is often paved with failure. “Leadership is invariably a challenging and painstaking process,” adds Dr Stein. “Even when employing well-established rubrics and methods, some customisation is always needed to accommodate the unique mixtures of person, context, time and inevitable situational curve-balls.”

Future trends and developments

Although there are some who believe that the topic of leadership has been comprehensively examined from every conceivable angle, leaving very little left to say on the matter, there are, on the contrary, a number of trends and developments set to come to the fore in 2019.

According to the Oslo Business Forum, the leadership arena will see: (i) a move toward embracing a work-life blend so that the relationship between a leader’s work life and personal life is reciprocal; (ii) the emergence of upskilling and retraining programmes, from micro-learning sessions to conferences and mentoring; (iii) company culture expand to become a core part of organisations’ business strategies; (iv) greater gender diversity among leadership, with the elevation and retention of females a priority; and (v) leaders increasingly observe the need to not only hold their teams accountable for proper behaviour, but hold themselves accountable as well.

“Ongoing globalisation and generational shifts are two further trends that will shape leadership in 2019,” says Ms Margolis. “As companies continue to do business beyond their own borders, leaders must seek to understand their new markets and environments, before ever attempting to practice leadership within them,” she says. “Therefore, the nature of leadership will continue to shift from a command and control approach where the authoritarian leader knows best, to one that is centred on learning and empowering your people to make decisions.”

In Mr Economy’s view, this shift in style will also see leaders being held more accountable than ever before for delivering measurable results and outcomes for their organisations. “It is no longer enough for leaders to deliver only feel-good, qualitative results,” he believes. “As competition continues to ramp up globally, and the speed of business and disruption in markets continues to increase, organisations will live or die on the quantitative results they are able to realise. It is up to leaders – working with their people – to deliver them.”

Adding spice to the leader and follower dynamic is the higher expectations that today’s workforce has of leadership. “They expect to be listened to, to be valued for their contribution and to be helped to prepare for the future,” says Ms Reynolds. “Their expectations are forcing a shift in leadership behaviour and this is good for everyone.”

Acid test

The acid test of leadership is the extent to which it drives excellence across the length, breadth and depth of an organisation. Fundamental to this is the approach taken by leaders, with an empathy and engagement style of leadership seen as increasingly persuasive by many.

“The core test of leadership is whether others trust you enough to follow you,” says Ms Eikenberg. “In an era where trust is declining significantly each year and scepticism for authority rises, we increasingly cannot build trust simply by asking for it. Leaders have to demonstrate trust first: trust in their teams, trust in their customers, and – perhaps most importantly – trust in themselves. Only when trust has been shown in others will people show trust in leaders.”

Moreover, with a leader the one responsible for achieving goals, saving money and taking calculated risks to ensure ongoing growth, he or she cannot afford to lose focus. “If they engage and ask their employees for ideas, leaders will reach their goals more quickly,” believes Ms Reynolds. “If leaders help people to learn and grow, then everyone wins. A commitment to developing the skills of their employees – that is the acid test.”

According to Ms Lajoux, in 2019, leaders will be more diverse than ever before, with the very definition of diversity moving and changing to mean something more. “While it will remain important out of deference to corporate culture to ‘dress for success’, with a certain level of sartorial conformity prevailing, there will no longer be a ‘mental image’ of a typical leader by gender, race, height, weight, hair length or mannerisms,” she suggests. “Rather, the focus will be on invisible characteristics – the cardinal virtues of prudence, justice, fortitude and temperance.”

Ultimately, in order to thrive in a dynamic, volatile and fast-changing world, organisations need agile, savvy and effective leadership at all levels – from fledgling manager to senior executive and every role in between – today, tomorrow and beyond.

© Financier Worldwide

BY

Fraser Tennant