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.