WHICH LEADERSHIP MODEL NOW?

Given what I do for a living I found John Adair’s comments published in a recent ILM publication of particular interest. “The immense industry which has grown up around leadership is now estimated to be worth $50bn per year but has not actually produced many better leaders.” The truths of this statement are apparent in the various leadership scandals and failures currently dogging just about every part of our society and almost ever present in our daily news stories. Another day another leadership scandal or failure or, at least, an example of bad leadership and the consequences we have to bear as a result – dying to meet a target? So what kind of leadership or leadership model should we be investing in as we move forward?

Ethical leadership and authentic leadership are interesting to consider in context of the current spate of leadership debacles, though not as leadership styles because they are more than concepts of style. Being ethical is about being guided by moral principles and ethical leaders embody, exhibit and live their beliefs and values. Being authentic is about being real or true and authentic leadership is about being sincere, directing with integrity and taking full responsibility by being true. Doing things right is not the same as doing the right thing and reward for being good is not the same as being good for reward. Ethical and authentic leadership are about being good and doing the right thing to be good and true to self and others whilst accepting responsibility for actions and decisions.

My personal view of leadership, generally and specifically, is the most difficult element of leadership to deal with is behaviour; your own behaviour as a leader and that of those you lead. I believe it is the behavioural aspect of leadership which yields the greatest returns and yet most often breaks leaders and destroys leadership. With this in mind and considering the Ethical and Authentic leadership models are founded on values and behaviours, I suspect the appetite to be led by ethical and authentic leaders will be greater than the appetite of leaders to become such. Considering how to develop future leaders in the ethical and authentic ‘mould’ is a particular challenge given the apparent shortage of appropriate role models available to them and the obvious limitations of traditional training. How do we incentivise and give primacy to adopting good behaviour over achieving rewards? How much does knowing about behaviour inform behaviour and decision making? How does legislation affect leaders and leadership? Thinking of these questions called the following quote by Plato to mind.

“Good people do not need laws to tell them to act responsibly while bad people will find a way around the laws”

I cannot help but wonder how more stringent banking legislation or stronger whistle blowing laws will have any sustainable effect in addressing bad leadership?

MODERN ETHICAL LEADERSHIP

Not very long ago, only the good guys did ethical leadership. All very well but it didn’t make much difference to the bottom line apparently.  Well life and times in the UK are proving otherwise -  get the culture wrong and you could be facing the wall.

How the BBC, NHS, most high street banks and now some food producers must rue the day they decided it was all about profit, targets and bonuses.  Ignore the culture in your organization and you ignore it at your peril.

And all the retail brands who ignored their customer needs must regret doing some simple market research.

Lack of checks or possibly blatant disregard will be bringing down a number of food producers in the next couple of weeks.  The culture of not checking deliveries properly came from a culture of tacit acceptance, lack of communication and probably management bullying.  The culprits will undoubtedly be facing irreparable damage to their reputation and possibly a date in court.

Barclays announced today it’s closing its tax avoidance unit ‘in a bid to repair its battered reputation’.    How life could have been so different if they had thought about their brand and their customer first, rather than focus solely on profit.

Everyone knows that the Mid Staffs hospital scandal is merely the tip of the iceberg.  Stories such as we heard last week can be replicated in many other hospitals around the country.  We’ve all heard or experienced shocking levels of care – or rather lack of it.

The common denominator here is poor leadership.  Of course, business leaders have to make a profit.  But they need to value and give value to their customers  - and that includes listening to them.  And finally they need to think about their brand and their culture.  Get it right within the organization and you are someway down the road to getting it right for your customers.

So Sampson Hall say you should answer four simple questions about every business decision any leader makes.

Is it honest?

Is it fair?

Is it right for our brand?

Does it provide value for all involved?

If some of the above had addressed these issues, the current headlines would be very different

WHY THE WORLD AND ORGANISATIONS NEED MORE ETHICAL LEADERSHIP

The Evidence

You only have to open a newspaper or switch your television on these days to see another example of a failure in leadership, banks are repeatedly the culprits with LIBOR and IRSAs, newspapers with phone tapping were and now its supermarkets and horsemeat. Even leaders of large retail outlets such as Jessops, Blockbuster and Comet have been susceptible. So why do I blame it all on leadership? Surely some of it is down to the environmental and societal changes?

Absolutely right to a degree, but it is the leader’s duty to ensure that the organisation at least keeps up with the environment that sustains it. Leaders must always be in touch with what is going on around them.

The Problem

The modern business leader has to balance three conflicting issues: the first is the requirement to generate profit for the organisation and its stakeholders; the next is the requirement to give value to customers so that they become advocates of and indeed return to the organisation whenever possible; the third aspect is what I call brand and culture this concerns the public and indeed self image of the organisation. It is how we do things round here when no one is looking. It involves values and ethics that need to be maintained and sustained. I am not advocating rigid traditions here but a set of clearly understood values and standards that are regularly reviewed for their relevance.

The Need

Modern Business Leadership is a difficult balance between organisational needs- profit, customers’ needs- value and societal needs- trust if we look at all the recent issues in business they have arisen where one of these issues has dominated the leaders thinking too much and the balance has been lost. Mostly its profit with the banks and the Horse meat, sometimes its value with Jessops and Comet and then its trust which is the one that is most difficult to rectify for before trust must come the truth! As society moves on our values have changed and matured. No more is it a zero sum game, today's world is about win win for it is only then that an organisation has true longevity. A modern organisation has to balance its brand with its profit and its customer value.

Here are some questions a modern leader should always challenge a decision with prior to promulgating it.

Is it honest? Is it fair? Is it right for our brand? Does it provide value for all involved?

FOCUS ON SHAREHOLDER RETURNS IS NOT THE ONLY WAY

Recently as high street names fall the short term focus on profitability has been brought sharply into the fore ground. How do stores like Jessops and HMV survive in the modern world when price is king and overheads are seen as an albatross to retail survival? However how often does cheap last?

Commercial history tells us that the most successful organisations, over the long term, consistently focus on “enabling” people things (leadership, purpose, employee motivation) whose immediate benefits aren’t always clear in the short term. These robust organisations are internally aligned around a clear and cohesive vision and strategy; can execute to a high quality thanks to strong capabilities, management processes, and employee motivation; and renew themselves in an ever more demanding environment more effectively than their rivals do. In short, healthy processes today drive improved performance tomorrow.

The issue in the majority of the larger organisations is the short term requirements placed upon them by their shareholders. Many Chief Executives and Senior Vice Presidents instinctively understand the paradox of performance and health, though few have expressed or acted upon it better than John Mackey, founder and CEO of Whole Foods. “We have not achieved our tremendous increase in shareholder value,” he once observed, “by making shareholder value the only purpose of our business.” No most certainly not and yet the increase in value has been long term it has been as a result of healthy strategic processes and disciplines. Outstanding strategy, effective communication and the evolution of people processes to free up mangers and leaders to focus on the future rather than immerse themselves in the problems of today. Don't forget that people run businesses and people are the interface between a business and its customer base if they feel empowered, understand what they have to do and the route they have to take to get there, then they can create extraordinary value and longevity!

TEAM BUILDING v BUILDING TEAMS

I  always like to start discussions around team building with our clients by drawing their attention to and discussing Patrick Lencioni’s five dysfunctions of a team, namely:

Absence of Trust

Fear of Conflict

Lack of Commitment

Avoidance of Accountability

Inattention to Results

I do this because I think this model provides an excellent basis for building effective teams simply by removing the negative descriptors before the key words. So, for me an effective team achieves the following:

Trust through knowledge and acceptance

Constructive conflict by open communication

Commitment to agreed objectives and goals

Accountability and ownership of outcomes, individually and collectively

Results orientation through focus on desired outcomes

In terms of achieving a truly functional team, as defined above, in which team members are interdependent and supportive of one another; I believe there is little which can be achieved by traditional action learning ‘teambuilding’ events and activities. This is not to say the same have no value, more they tend not to build a team in any sustainable or relatively significant way.

Traditional team building activities ordinarily involve achieving defined tasks, which are not work related, away from the team’s operational environment. This dislocates and disassociates the team from their ordinary working experience and employs them in achieving an outcome which is irrelevant to the team in their operational role. Also, Lencioni’s model is hierarchical insofar as the absence of trust leads to fear of conflict which prevents commitment, and so on. By dislocating, disassociation and irrelevance the foundations of the functional team, that is, trust and constructive conflict are no longer required to achieve commitment to the task in hand. This in turn makes it relatively easy for team members to commit to the (irrelevant) task which can be achieved, more or less, without significant penalty in relation to ownership and accountability. Clearly, skilled delivery and facilitation can enable drawing of parallels and lessons relative to the working environment but the implementation of the same is another matter altogether.

My advice to clients seeking to build an effective team is to do so in their work place and utilising the realities of their environment and day to day work. Doing so smartly can also bring added value in achieving organic development and growth. In advising this I draw attention to the need for leadership and acknowledge the challenges involved in adopting such an approach. There are tools and processes which help in building effective teams in this way but the first requirement is for leadership and in so saying, the following clip by Patrick Lencioni about leadership helps explain why http://www.youtube.com/watch?v=6sqvWEI1CVg&feature=watch-vrec

HOPE IS NOT A STRATEGY- HOW STRATEGY CAN MAKE YOUR FUTURE

In today’s business world if you are a business leader you have two choices. You can shape your destiny or let fate take you to the destination it chooses. All too often we come across businesses that have taken the second option and found they are in a place that they did not want to be.  It’s a tough world out there with a rapidly changing environment with lots of competitors chipping away at your business. You need to ensure your business survives and flourishes through proper planning and preparation. Having some sort of Strategy that includes a vision of where you want to get to. An understanding of what might stop you. An idea of the team you would like to assist you on your way and a means of allocating your scarce resources to the most important aspects of your plan.

There is a time and place for each of these disciplines   but you need to understand the where and when and how and bring all of these disparate activities together into one coherent strategy.

So how do I put together my strategy and where do I start?

Like all good stories you need to start at the beginning by understanding your personal requirements and how these can be met by your business. There is little separation in today's fast moving world between home and office.  This entails asking yourself lots of questions. What is it you want to achieve? (Vision) How will you do this? (Plan) Whose help and guidance do you need? (Talent Management) What resources will you need?  How much will it cost? What’s my time frame to achieve this? (Resource Priorities and Risk Management)

Hone your answers at each stage of the process by continually asking one of the most important but rarely used questions – WHY? Sometimes its best asked five times to get to the real issue or desire!

That’s a lot to take in if you’re also spending most of your time on day-to-day operational business matters. Sometimes it pays to bring someone in from outside your business to look at your strategy with fresh eyes and there are plenty of consultants who can do this. Some may also assist in the implementation of your strategy as you focus on the day to day activities. After all we all work far too much "in rather than on" our business.

But in the words of Rick Page “Hope is not a strategy” Start shaping your future to ensure that you get your business to the place it needs to be to give you the life you want!

CREATING VALUE FOR YOUR CUSTOMERS AND YOUR PEOPLE

Companies often mistake profit for value and assume that the proof of profit within our capitalist society automatically indicates that value has been achieved. However the capitalist system is under siege. Companies are widely perceived to be prospering at the expense of their communities. A big part of the current problem is the stakeholders' and boards adopt a limited approach to value creation and the perception of value by potential customers. Focused on short-term financials, companies overlook the broader influences that will sustain their long-term success. The microscope that has been brought to bear by the economic environment brings with it a far more discretionary customer who is focused on what they get in total for their buck. Clever companies could bring business and society back together if they redefined their purpose as creating "shared value"—generating economic value in a way that also produces value for society by addressing some of its challenges; the old win win rather than zero sum argument.

What is value? Value is an individual perception. It comes from an individual's expectations which are founded in their own experience and beliefs. Value put simply is the positive difference between someone’s' expectation and reality. Just as a lack of value is the negative difference between expectation and reality.  So value comes in all sorts of shapes and sizes and it is here that companies need to get cleverer in their delivery of something. Value will last as long as the item is around it is not just about shiny and new products.

Value needs to be measured through the life of a product. It needs to be measured in all sorts of ways to match the expectations of the audience that is trying to assess it.  Long Term Value is no longer about initial cost but it is also about through life costs and disposal costs, it is also about the environmental impact, local economy impact, societal impact etc etc.

Clever companies are starting to focus their marketing on the other aspects of value that society considers important and those that don't reflect the new principles of non-monetary value will soon find their market dwindling as they look only towards their own profit. Clever companies provide and measure the same value to their employees, after all how good is it to work for a company your proud of!