We have long accepted that leadership is the pivotal ingredient in any successful enterprise. There are few who would argue against the importance of good leaders.
When asked, most executives will name leadership as the significant factor in resolving their organisational priorities. No one ever questions the belief or the logic. There is no shortage of leadership experts to confirm the need for more and better leaders – and partake in the willingness of companies to spend money on leadership development, estimated to be worth between $14B and $50B a year in the US alone.
The notion that enterprise success is directly related to quality of leadership is so embedded that even the most improbable reasons for developing leadership are regularly swallowed whole.
Problem 1: management bashing
The most ridiculous of these is management bashing. “Managers command; leaders inspire” is the basic theme. It’s the oldest of narratives: good versus evil. Managers (like stepmothers) are the archetypal antagonists; the overbearing, mechanistic and self-interested “bosses”. Leaders are the heroes: engaging, giving and selfless. Pity the poor souls who work for managers.
It’s a cheap shot; not only grossly inaccurate but intentionally simplistic because it makes finding an enemy so easy. When things go bad, downsize management and call for better leadership.
Anyone who has undertaken any activity where success was a matter of do-or-die will tell you that you management matters as much as leadership. Try climbing Mt Everest, for example, without someone to plan supplies, control timelines, ensure technical details are addressed, maintain order and set the rules. Running an enterprise in today’s hyper-changing, digitally-enhanced environment – if less dramatic – is as fraught and unpredictable requiring much more than just ‘good leadership’.
Problem 2: desired leader attributes
Less obvious, but equally problematic is the definition of leaders based on trait theories. Trait theories emerged around the mid-1900s linking certain attributes to better leaders. Through various studies, the common characteristics of essential qualities of good leaders include social skills, self-confidence, responsibility, integrity and courage.
The conception of a good leader having certain traits has persisted, “and despite scholarly criticism, has continued to be popular,” say authors Shriberg and Shriberg in Practicing Leadership Principles and Applications (2011). The human tendency to confirmation bias makes hard to shake the belief that traits equal leadership and leadership equals outcomes. Desirable attributes are both easy to identify and engaging, and making the leap between them and success is easy.
Linking other, less desirable, attributes to failures also requires minimal mental effort. It is much harder to remember, never mind be objective about the failures at the hands of ‘good’ leaders. On the other hand we tend to think of successes in spite of ‘bad leaders’ rather than because of.
A constant criticism of leadership traits is they are linked with ‘male’ attributes. Studies asking participants to describe good leadership use the same words to describe male leaders. The words typically used to describe female leaders are those frequently associated with weakness in leadership.
Unsurprisingly, women have a much harder time achieving senior positions in firms. However, evidence consistently shows that more women in senior positions correlate directly with higher performance. This is often attributed to increased diversity, but it could also be the leadership traits we so admire and strive for don’t matter as much as we think they do.
Problem 3: emotional intelligence
At its most fundamental level, to lead is to manipulate (moving or changing something in a skilful way) and exploit (drawing on or putting something to good use). Leaders who can do this well are usually high in emotional intelligence, the term popularised by Daniel Goleman to refer to one’s ability to identify and manage emotions. How fine is the line between leadership and manipulation and exploitation?
Gandhi, Luther-King, Nelson and Lincoln are considered some of history’s greatest leaders high in emotional intelligence. But equally so were Hitler, Mao, Stalin and Idi Amin.
Author and professor of management and psychology at the University of Pennsylvania’s Wharton School of Business, Adam Grant wrote in The Atlantic in 2014: “…unbridled enthusiasm has obscured a dark side. New evidence shows that when people hone their emotional intelligence, they become better at manipulating others.” … “When you know what others are feeling, you can tug at their heartstrings and motivate them to act against their own best interests.”
Problem 4: still not enough leaders
For the better part of sixty years, we have given leadership the highest of status amongst many capabilities. It is taught not just to managers, but to children at school, in sport and even in play.
You would think we should have reached some sort of saturation point by now. After all, it is pretty hard to find a job applicant, LinkedIn profile or other professional self-description that does not claim or clearly allude to being high in leadership capabilities and experience.
The 2014 McKinsey Quarterly article, Why leadership-development programs fail, cites a survey that reports only 7 per cent of senior managers think their companies develop global leaders effectively, and another that finds 30 per cent of US companies missed international business opportunities due to inadequate leadership.
At regular intervals, surveys report other failings of leadership: employee disengagement, lack of successors for executive positions, poor diversity, and increasingly being unprepared for digital disruption.
Removing the industrial lens
Perhaps one of the key problems is all our thinking on leadership is filtered through the lens of the industrial-style organisation. Inevitably we frame our understanding of organisations, how they are led and how they perform on top-down hierarchies, layers of management implementing strategic plans, and work performed by formally-arranged groups.
Even though some alternatives, such as holocracy, shake this common view, it is yet to be accepted that it can be fully replaced. Once enterprises grow, their structures increasingly formalise around hierarchies and teams.
We may need to expand our definition of leadership from personal attributes to culturally-based.
For the few industries left where there is full predictability and no foreseeable change of any significance, leadership of the hero-attribute type may be right. If people are going to be doing the same thing day after day, they probably need someone charismatic enough to make them want to keep going.
Organisations that have grown through highly-leveraged social capital depend on culture-based leadership. These are companies such as Airbnb, Google, Facebook and Uber, valued at billions despite owning none of the physical assets their competitors depend on. Such companies trade on currencies like trust. They build their markets essentially by digitally capturing their values using code and algorithms that allows them to effectively utilise other people’s assets.
In 2012, Greg Satell’s blog, Digital Tonto, described “The Leaderless Organization”. He cites the example of a privately-owned company that processes tomato products valued at $700 million, The Morning Star. There are no bosses, everyone has purchasing authority and salaries are negotiated between employees.
He also describes the online organisation, Anonymous, “which isn’t really an organization at all, but a mish mash of online chat rooms, forums and software protocols.
“…the hacktivist group grew out of the imageboard 4chan and other online subculture sites. The online chatter turned to pranks, mostly consisting of uncovering the identity of online rivals and ordering pizzas and the like to their homes.
“The pranks turned to more purpose driven acts, such as uncovering pedophiles and eventually online activism. The group has successfully targeted the Church of Scientology, Sarah Palin, the governments of Tunisia and Egypt as well as major corporations like Paypal, Mastercard and Visa, among others.
“Anonymous doesn’t have a leadership structure or even a real membership. Someone gets an idea for an “Op” and recruits through chat rooms. Planning is done by ad hoc groups in special private chats that are invite-only. Despite being loosely knit and geographically diverse, they have successfully attacked organizations with sophisticated infrastructures.”
Many argue that all organisations, even Anonymous, still use leadership even if informally. Once a person takes a role that coordinates the efforts of others, regardless of the informality, brevity or style of the activities, if others are following, someone is leading.
The question is, when your enterprise makes any decision that involves leadership, or prepares to embark on another round of leadership development, what exactly are you aiming to achieve? If it is as simple as ‘we need someone for people to follow’, despite how you frame the leadership competencies or requirements, you will probably run into one or more of the leadership problems described here.
As more enterprises, not just those in the tech sector, depend on social capital to compete and generate value, you may want to look more closely at developing culture-based leadership. If it works to make a company like Airbnb that owns no hotels the largest hotel company in the world, it would probably work well for your enterprise too.