The BCA and yesterday's leaders

The BCA and its Plan for us

Much is being made by the Business Council of Australia (BCA) and the business media of the BCA's recent polemic against Australian 'governments', their “Action Plan forEnduring Prosperity”. The Plan has a lot of good content, particularly Part 5: Measuring Success which has a very good 'balanced scorecard' that includes indicators in three categories:

1. economic and material prosperity
2. social progress and liveability
3. sustainability.

Unfortunately, the bulk of the plan is a list of 'to dos' for the federal and state governments, mainly the federal government. Here perhaps a bit of politicking comes in – indirect criticism of the current Labor government and instruction to the (likely) incoming LNP government (despite the BCA's professed political neutrality one can see that the plan is consistent with the views of the conservative side of politics).

Yesterday's men

The biggest, and the fundamental, problem with the plan is its central thesis that what's good for business is good for the nation. This thinking is fifty years behind the times – how can these CEOs consider themselves to be community 'leaders' when their 'followers' have passed them by?

For example, the plan has over 100 mentions of “environment”. More than half of these refer to the “business environment” or similar. The others are predominantly related to environmental regulations and approvals that the BCA wants to be more business-friendly. Only one, referring to the energy sector, relates to business responsibility for environmental sustainability.

The plan is full of what the government should be doing, but little to nothing about what business is and should be doing. One can deduce that the BCA and its members feel that they are doing a cracking job and its only terrible government that is holding them back from achieving their true potential.

Self-delusion

The BCA really wants to be seen as a leading organisation in the Australian community. However, it has succumbed to the self-delusion that it, and its members: know what is good for the country; have the authority to demand that what it wants done, be done; and that their views are correct.

Their success as business people has created tremendous self-belief, which is important in a leader. However, they have fallen into believing in their own omniscience, omnipotence and infallibility.

Leadership lessons from Project GLOBE

What is Project GLOBE?

Project GLOBE is a research project that surveyed 17,000 middle managers from 61 countries to better understand the inter-relationships between societal culture, organisational culture and organisational leadership.  The leadership attributes assessed by the project are:

• Charismatic/Value-based - reflects the ability to inspire, to motivate, and to expect high performance from others based on strongly held core values; such leaders are able to create, or drive the creation of, a vision for the organisation and communicate and model that vision and inspire the organisation to pursue the vision.
• Team-oriented - emphasises team building and a common purpose among team members; this type of leader promotes collaboration and a team-based workplace.
• Participative - reflects the degree to which leaders involve others in making and implementing decisions; such leaders employ inclusive decision-making, they delegate responsibility and don't try to lead by command.
• Humane-oriented - emphasises being supportive, considerate, compassionate, and generous.
• Autonomous - refers to independent and individualistic leadership, which includes being autonomous and unique
• Self-protective – invokes a focus on the safety and security of the leaders themselves; self-centred and self-protective.

The charismatic/value-based, team-oriented, and participative stles are associated with exceptional leadership; humane orientation has some association with exceptional leadership; autonomy may impede or facilitate (both slightly) exceptional leadership; the self-protective style impedes exceptional leadership.

Leadership in the 'Anglo' countries

The following chart shows the rating on each dimension for the Anglo cluster as a whole and for Australia, New Zealand and the USA.

As you can see form the chart, the leadership style preferred in “anglo” countries is charismatic value-based with a need to be visionary and inspiring. This must be accompanied by a team orientation and a participative approach.

Societal culture and leadership

Differences across the cluster are slight, but nuances of leadership style are required depending on the culture of each country. The Project GLOBE cultural dimensions are not described here but can be found in http://www.thunderbird.edu/wwwfiles/sites/globe/pdf/jwb_globe_intro.pdf. The societal practices ('as is') scores and the societal values ('should be') for the Anglo cluster are given in the charts below.

The next chart includes the practices and values scores for Australia.

We can see a desire to be more future-oriented, more gender-egalitarian, more family-oriented, more performance-oriented and more humane-oriented, but with less acceptance of an unequal distribution of power (power distance).

The Australian Leader

WIth regard to leadership, the Australian cultural profile indicates that good leadership requires an acceptance of the egalitarian nature of the society – a leader must be 'one of us' – while not being too assertive and not exhibiting self-serving behaviour. Exceptional leadership in the USA and New Zealand will be similar but not exactly the same due to cultural and values differences. This suggests caution when applying US management approaches in other countries, even other 'anglo' countries.

Crisis in management, not leadership

This month's edition of BOSS magazine (in the Australian Financial Review [AFR]) contains a feature article on Leadership (“Crisis in business leadership”, BOSS, July 12). It's key point is that Australian "workplaces suffer a failure of leadership" according to the executives it surveyed.

It quotes John Lord, Chairman of Huawei Technologies, that Australian companies “focus, as people come up through their careers, on their management ability – are they able to drive a profit or run [the business] most efficiently – rather than leadership,” and that “management skills aren’t as important because you can build the right team around you.”

This distinction between Leadership and Management seems to have become axiomatic. The use of the term “leader” to mean the most senior manager (CEO, MD an so forth) has been supplanted by the concept that it confers leadership qualities on the managerial class. The leader has become a Leader. With this expansion in meaning has come an expansion in the assumed purview of corporate and business leaders. Not only are they leaders of their organisations, but they are national Leaders. Their words of wisdom are sought on public policy and are accepted as being in the national interest, not the narrower interests of their business. For example, the Business Council of Australia states that its membership of “business leaders” has initiated and shaped “the key economic and business reform debates that have underpinned Australia’s economic resurgence”. The AFR itself promotes this involvement by hosting “roundtables' of “business leaders” whose utterances are presented as facts rather than opinions.  By "business reform" the BCA means legal and regulatory changes that benefit business, not reforms to how their members manage their businesses.

My first text book on management (from 1982) states that leadership is an important quality of a manager, yet nowadays leadership is treated as supra-management. This would appear to be driven by two forces. The first is the desire of business people to be seen as having risen above the realm of mere manager to a higher state, from where they are entitled to speak philosophically about Management and advise politicians on how to run the country. The second force is the Leadership industry that has seized this opportunity and happily rebadged its Management offerings to meet its customers' demands. The two are symbiotic.

The evidence from many studies – such as the by the McKinsey-LSE and The Society for Knowledge Economics - and newspaper reports on poor company performance suggests that managers have not yet fully mastered what was previously known as “Management”, particularly modern management skills, the application of which requires true leadership. Perhaps they should focus more attention on the transition from Supervisor to Manager before attempting the leap to Leader.