Leadership is a modern business fetish. It is admired, encouraged, taught – often for vast fees – and respected as the ultimate solution to almost any professional challenge. Yet it remains as elusive as dark matter, the mysterious matter the existence of which can only be inferred from other phenomena and which comprises much of the known universe.
Definitions of leadership tend to be circular and self-referential: the act of leading and the ability to do so. Leadership, however defined, is also contextual.
The ability to found a business is not always indicative of the ability to manage it as it grows (note Jerry Yang & Yahoo!); while different sets of skills may be required to resolve conflicting policies among company divisions, or relations with investors and their representatives, or avoiding damaging labour issues; or managing relationships with governments and regulatory agencies and all the while pursuing a profitable strategy.
No two people will possess the same of mix of what HR people call competencies when navigating these issues.
And some people are better at driving growth in the good times, while others excel at slash and burn in the bad.
Nor do individual business heads come with uniform personality types and identities. They can be introverted, extroverted, female, male, straight or gay.
From this complex mix of skills, aptitudes and temperaments it is challenging to distill universal characteristics that define leadership.
These difficulties notwithstanding, those tasked with hiring CEOs and other senior managers need a model of leadership to guide their decision-making. CEOs and future CEOs are ultimately critical to the overall performance of their businesses.
In creating a model of leadership there are three guidelines that HR staff and their colleagues should follow:
- Occupying a leadership position does not of itself make anyone a ‘leader’. Simple observation of company blunders and failures offers more than sufficient evidence.
- Leadership, the act of leading, does not apply to board-level aspirants alone. Anyone in the company with three or more staff has a leadership role. Identifying and nurturing talent early is in the company’s interest.
- Leadership is not a quality or talent that can be applied regardless of context. The leader of a commodity trader may not be an ideal candidate to manage an IT company. Understanding what you are managing is essential. An example of where things went badly wrong is offered by Northern Rock, a British bank that failed after its CEO, Matt Ridley, pursued a policy of wholesale funding for mortgages. It was nationalised in 2008.
To create a viable working model of leadership it is essential to break it into components. A good point of departure is the concept of management. There are varied definitions of management. This is the one I prefer: managing is motivating and directing a group of people to work together in pursuit of a common goal or outcome.
To some, this may read like a working definition of leadership. And so it should be. There is not a great divide between managing and leading. Leadership is fundamentally management on steroids. A leader is not an incompetent manager.
But steroid boosted management skills in no way justify the ratio between CEO remuneration and that of average workers, which in the USA is more than 300:1 .
Some writers, however, make a sharp distinction between leadership and management, the former consisting of handing down a great strategy and the latter being concerned with detailed implementation. This is a misconception on two counts.
First, if genius is defined as 99 per cent hard work, strategy is 99 per cent process. Any plan or vision that springs from the mind of a senior management team or individual and then is left to the peons to work out the detail will fail. Strategy must be linked to the realities of markets and the company’s capabilities and potential. It must be rigorously tested and supported by metrics . It must be competently communicated to those to whom falls the task of implementing and managing it; and often clearing up the mess when it goes wrong.
Second, if those concerned with implementation and management are not granted a clear view of strategy, they will be demotivated and less confident in the leaders of the company. Staff prefer to know why they are doing something and how it contributes to corporate success. They generally spot with unerring accuracy duds and fakes at the top.
Distinguishing features of leaders are:
- Drive and ambition. People do drop into leadership positions by happenstance but success seldom follows.
- Hard work, while not unique to leaders, is necessary. This does not, however, entail running each morning 10 miles before breakfast.
- A willingness to act when others hang back.
- An exceptional ability to influence the views and actions of others.
- An ability to inspire loyalty. This is wholly different from demanding loyalty, which is often a sign the demander gives none in return.
- An understanding of the organisation in which she operates, its culture, capabilities and strategic options.
- The ability to distinguish between the important and the less important. Those who fight over every last comma are corporate roadblocks. Leaders choose their battles with care.
- Leaders build effective networks of critical relationships to support their work.
Few people are born with all these attributes. However many of them may be learned through diligent application or bruising experience. Yet to be a complete leader one other faculty is useful if not essential, timing.
A few CEOs enjoy long terms of office. However, the average is probably less than 10 years and for good reason. People get tired, run out of ideas, set in their ways or find themselves unable to adapt to changing circumstances. Knowing when to retire or move on is valuable. Being fired taints your leadership legacy. Avoid that fate, write, with an appropriate ghost, the book of your insights and experiences and you will become an instant business icon.