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.

Productivity - Management or Government

The Australian Financial Review today ran a front page article headlined “Managers blamed over productivity”.

The article is an example of the pointless either/or nature of the argument over the causes of low productivity in Australia and who should show leadership in addressing this problem.

Mediocre management

McKinsey (and others) conducted the survey cited in the article and they found that mediocre management leads to mediocre results – and Australia's score of 3 for management performance on a 1 to 5 scale is mediocre!

The US and Germany are only a little less mediocre.  It would appear that mediocrity is the global standard for management performance.

Attribution error

Managers, like everyone else, seek to blame external factors (government, unions, foreign companies) for poor company performance but attribute good performance to their own capability.  This known to social psychologists as “attribution error”.

On this, McKinsey found that government regulations restrict management action but management capability was the primary driver of company performance and that protection from competition allows poorly managed companies to survive.

McKinsey also stated that a 6% gain in productivity follows from moving the management performance score from 3 to 4.  The Total Quality Management (TQM) movement of the 80s and 90s proved that the level of waste in companies could be the equivalent of 30%-50% of revenue.

Boosting productivity through Leadership

It is clear that if business groups (and economists) want Australia’s productivity to improve they must show leadership and promote modern techniques such as Lean Enterprise.

The government must also show leadership and address restrictive labour practices and boost competition between businesses.

For further information on boosting productivity, please check the Library on my company's website

My personal philosophy of leadership, mentoring and coaching

Leadership skills and behaviours

The fundamental principle of leadership is concern for the success and well-being of followers.  The purpose of leadership is to make one’s followers successful, for through their success the leader will also be a success.  But the well-being of followers is also crucial.  There is no point winning a battle if all one’s soldiers lay dead on the battlefield.

How should a leader behave in adhering to this principle?  Firstly, a leader must always strive to make the ‘right’ decision.  Not just the correct decision, but one that is morally sound.  It is not valid for leaders to say “they had no choice”.  Leaders must not embrace determinism – that is moral bankruptcy.  Having made a decision, a leader must engage directly (face-to-face, wherever possible) with followers to develop a shared understanding, and to help followers make sense of the decision.  In these engagements, the leader must always be truthful and consistent – actions must match words.  Whatever the consequences of the decision, a leader must take responsibility for the outcome, accepting blame for failure while giving credit to the followers for any success.

Secondly, a leader must focus on “making a difference”, not on trivial matters.  Leadership is about leaps, not steps.  A leader must focus on the higher purpose of their organisation’s existence – whether it be to serve customers or a community.  This higher purpose both defines success and unites followers behind a common cause, at the same time motivating followers to strive for success.

Finally, a leader must seek to develop followers, in both their technical competence and their emotional maturity.  This requires a leader to coach and mentor followers so that they may create success for themselves.

Facets of Poor Leadership

There are three dangers or lapses that make for poor leadership.  They arise from a leaders misconception of their own capability.  Leaders fail when they believe that they are omniscient, omnipotent and infallible.

Omniscience

Leaders may suffer from attribution bias – believing that the success of their organisation (business, team, nation) is due to their own knowledge and competence.  Any failure or under-performance is due to external factors (government policy, weather, foreigners).  Leaders who believe themselves omniscient make decisions for their followers and supervise their activity.

Good leaders understand that followers know more of what is the actuality, and that they should be given support and encouragement to take appropriate action themselves.

Good leaders also understand that they are not the only possible source of leadership.  The leadership “need” depends on the context, and a good leader knows when to defer to a “better” leader.

Omnipotence

Poor leaders believe that they can lead by commandment, that what they say must happen will, in fact, happen.  Good leaders understand that this is not the case, and they devolve power to their followers.  This not only empowers the followers but, by placing power where its effect is more directly seen and felt, a leader reduces the risk of accidentally causing “undeserved harm”.

Infallibility

Good leaders accept that they will make mistakes.  They also understand that mistakes lead to improvement.  When accepting that mistakes are inevitable, a good leader takes action that minimises or mitigates the consequences of mistakes.  A good leader is always in control, without needing to exercise overt control.

Leadership Skills and Building Trust

I found two interesting papers by The Ken Blanchard Companies, Critical Leadership Skills and Building Trust, on the internet.

Critical Leadership Skills

The article reports on the findings of four studies conducted by the company, and that the critical skills are:

1. Communication/listening skills - reflective listening, use of a variety of styles, and providing relevant information
2. Effective people management skills - adapting the leadership style to suit the individual follower and the situation, modeling desired behaviours, and coaching
3. Emotional intelligence/empathy - putting the needs, issues and concerns of followers ahead of the leaders own; empathy, concern, engagement; valuing others, preserving their dignity.

Close to my own philosophy, if not performance!

Building Trust

The "high cost of low trust" has these components:

1. Low morale
2. Lower productivity
3. People 'quit but stay'
4. Increased turnover

The report finds that four elements (ABCD) of trust are:

1. Ability - demonstrated competence
2. Believable - acting with integrity
3. Connected - demonstrating care and concern for other people
4. Dependable - reliably following through on what one says one will do

The "trust busters" are

1. Lack of communication
2. Dishonesty
3. Breaking confidentiality
4. Taking credit for another's work

The "trust builders" are:

1. Giving credit
2. Listening
3. Setting clear goals
4. Honesty
5. Following through

The 8 things a leader should do to improve trust:

1. Demonstrate trust
2. Share information
3. Tell it straight
4. Provide opportunities for everyone to win
5. Provide feedback
6. Resolve concerns 'head on'
7. Admit to mistakes
8. Walk the talk

This reinforces the "critical skills" but adds more on 'how to'.

The Real Real Leadership Lessons of Steve Jobs!

Here, in summary, are the general leadership lessons form Walter Isaacson's blog piece*.

A good leader:

1. Clearly articulates the intent of the organisation and ensures the whole organisation understands it, and conducts itself in accordance with that purpose and mission.
2. Understands the essence of the organisation's purpose and eschews activities and complications that absorb people's time and spirit, and wastes organisational resources.
3. Ensures that the organisation takes responsibility for its complete value chain - from its suppliers' suppliers to its customers' customers.
4. Encourages continuous improvement and couples this with "breakthrough" innovation 
5. Guides the organisation so that it remains true to its intent, purpose, mission and values
6. Thinks in terms of what people need, not what they want; makes a difference to the world.
7. Knows that people have more in them than they realise.  To rise to a challenge they must be motivated, and the motivation comes from their leader's confidence that they can do so.
8. Addresses not just the material needs of his/her follower, but considers (and uses to advantage) their emotional and spiritual needs.
9. Want his/her followers to have pride in their work.  This pride motivates them to do great deeds.
10. Expects his/her followers to do great things.

This is the beginning of the statement of my personal philosophy of leadership, mentoring and coaching.

*Adapted from "The Real Leadership Lessons of Steve Jobs" by Walter Isaacson, in hbr.org. 

Steve Jobs' Leadership Lesson 10 - Tolerate Only 'A' Players

This piece* seems a bit confused.  It starts by reporting on Jobs' trait of being "impatient, petulant, and tough" on employees.  Although "not laudable", it emanates from his perfectionism and desire to "work with only the best".  But Jobs inspired people and many stayed loyal to him for long periods.

Presciently, Isaacson warns other CEOs that they "should not emulate his roughness without understanding his ability to generate loyalty".

Unfortunately, it's easier to be rough than it is to generate loyalty!

Perhaps the more general leadership lesson comes at the end of this section of the article where Isaacson quotes Jobs as saying that "by expecting them [followers] to do great things, you can get them to do great things".  But does expectation have to be so aggressive?

*Adapted from "The Real Leadership Lessons of Steve Jobs" by Walter Isaacson, in hbr.org. 

What do Leaders Do?

The inaugural issue of Momentum, the University of Queensland Business School magazine, answers this question using the research and views of five of their Professors and Lecturers.
The five components of their answer are:

1. Leaders create trust
2. Leaders facilitate strategy
3. Leaders drive change
4. Leaders manager emotions
5. Leaders build teams.

A summary of the answers is given below with my comments (in italics).

Leaders create trust (Dr. Nicole Gillespie)

Trust is important for "without trust, how can a leader engender commitment" according to Dr. Gillespie.  Trust can be built in six (6) ways - empowering, coordinating, coaching, developing common values and goals, modeling competence and integrity, and benevolence.
This view is quite similar to Onora O'Neill's response to the "crisis of trust".

Leaders facilitate strategy (Dr. John Steen)

Strategy formulation, says Dr. Steen, should be a continuing conversation facilitated by the leader.  This describes a coaching role for the leader - in this article Dr. Steen has made "leader" synonymous withe "CEO".

More generally, a leader should be having "sense-making conversations" with his/her followers to maintain a shared understanding of what is required and what is acceptable behaviour and what is not.

Leaders drive change (Prof. Victor Callan)

Change must be planned and driven by the leader, according to Prof. Callan.  To do so, business leaders must have self-confidence and conviction.
This is a very "directive" view of the change managers role, perhaps missing the many other entities that create change in an organisation.  A bit too "heroic" for my taste!

Leaders manage emotions (Prof. Neal Ashkanasy)

Professor Ashkanasy's research looks into how emotions get one into "the top job" and "makes you successful" once you become the leader.  The Profs piece touches on rhetoric as motivation, modeling appropriate emotions, and emotional intelligence. 

This, to me, is somewhat akin to Kant's imperative that people be treated with respect.

Leaders build teams (Dr. Neil Paulsen)

The Doctor sees that a leaders contribution is "not about having all the answers" but is in "coordinating and connecting ideas and resources" to enable team success.  He also believes that effective leaders should "manage the context" in which the team operates.

This view of the purpose of leadership being the success of the "followers" is very much in line with my thinking on leadership.

Reflection

This is a very interesting article and quite informative.  It is one of the best I've read in the "popular" press on the topic.  And not just because the writers agree with me!