Chapter 5 by elnara nasirli

Excerpt from New Normal, Radical Shift

Chapter 5: The Leadership Challenge Recasting the leadership challenge as one requiring a high level of people and analytical skills, devoted to the challenge of long-‐term resilience as well as short-‐term effectiveness, is profound. Fortunately, there is a wealth of literature and research on this. Indeed, we do not lack research or insight; what has been lacking has been the recognition in political circles and many boardrooms of the importance of leadership development. This has been combined with an over-‐reliance on restructuring as a way to try to effect change. In the real world, senior leaders within an organisation are not ‘re-‐engineering’ a discrete entity called ‘the organisation’. Instead, they are meeting, negotiating, deciding, motivating, hiring, delegating and communicating. They are dealing with people. The real organisation consists of highly complex network of teams, that are rich in human capital. It is more like an organic brain than a single, simplistic entity that can be engineered. Moreover, such complexity, both in organisational arrangements and product and service design, tends to be increasing. This has profound implications at a personal level for the individual leader and manager. If we re-‐conceive the corporation as a human enterprise, that can benefit commercially from a commitment to sustainability, we can see that leadership style is of central importance, and in crucial dimensions can be very different from those that might have been highly prized in the past. The best leaders are continually learning and developing, and see their abilities at relationship management as being of similar importance to those of business analysis and judgement. There is now a considerable amount of research on the links between a leader’s emotional intelligence and the climate within the organisation and commitment of employees, which in turn affects organisational performance. The structure of an organisation is comparatively unimportanti. A health warning does have to be sounded here. Some of the work on emotional intelligence has come under criticism, but often from commentators who compare it against a simplistic linear model in which there is supposed to be a simple discrete cause of effective leadership and easily measurable effects. Leadership is not like that. Emotionally mature leadership, based on the principles of Daniel Goleman and others, is more likely to nurture employee engagement, which in turn is more likely to generate good results. But success depends also on good judgement and analysis, innovation and, sometimes, luck. There is no silver bullet, and there are no guarantees. Leadership is contextual, and rooted in the real personality. The idea of a set of objectively determined competencies is inaccurate – at best, such concepts are outline indicators. However, the critics of some of the research on emotional intelligence and employee engagement tend to ignore the wider context, especially the baleful influence of negative messages about © Neela Bettridge and Philip Whiteley 2011 New Normal, Radical Shift

management from agency theory (see Chapter 3). They complain that emotionally smart leadership and engaged employees are merely necessary, not sufficient, for success, which is true; but its necessary-‐ness has been disguised or undermined by cynical theories from economic and political ideologies. Self awareness is an important check against arrogance or over-‐ambition in executives. It also should ensure that actions are in line with the values being put forward. For a vivid example of how this can go wrong, you only have to consider the misjudgement of leading automotive executives in the US in 2008 taking personal jets to fly to Washington to formally request Federal bail-‐out funds. It transpired that the companies had maintained a fleet of jets even while cutting jobs and benefits for their workers. There was political uproar, which ought to have been obvious to someone not caught up in the corporate culture. Of course, the cash saved by selling the fleet would have scarcely made much difference to the losses at the companies; that was not the point. It was the example set; and also the expectation that ordinary employees and taxpayers should subsidise such luxury that caused the political backlashii. One could imagine a similar controversy if an avowedly ‘green’ organisation was flying executives everywhere on a flight of personal jets. A mindful leader is a wise steward. He or she has given up the ‘command-‐and-‐control’ approach, but this does not mean retreating into an ivory tower as some sort of guru. It means making the connections between the individual, the team, the organisation and the performance and wider impact. The discussions in earlier chapters about understanding organisations and economies as being essentially behavioural have direct implications for the individual leader. i

For example, see ‘Primal Leadership: the Hidden Driver of Great Performance’, Goleman D, McKee A & st Boyatzis R, Harvard Business Review December 2001; also: ‘Leadership for the 21 Century, Hay Group/LOMA report 1999; also: ‘The Decision-‐Driven Organization: Forget the org-‐chart – the secret is to focus on decisions, not structure’, Mankins C & Rogers R, Harvard Business Review June 2010 ii

Big Three CEOs Flew Private Jets to Plead for Public Funds, ABC News, 19 November 2008