A
company’s brand of leadership is determined by many factors, both internal and
external, and it is essential to identify this style to successfully succession
plan. To assist the process, Caroline Horn outlines four leading styles and
their advocates
The
perception of leadership has changed significantly in the past four to five
years with the recognition that organisations need key skills from their
leaders – communication and strategy typically ranking highest. But with
increasing pressure on business, there is much less time for leaders to learn
on the job. And as economic conditions get tougher, leaders are more likely to
find themselves caught up in day-to-day management issues.
Current
economic conditions mean that visionary leadership is giving way to practical
issues, says Roger Gill, director of research centre at The Leadership Trust.
"More rarefied ideas such as clear vision and communication are being
de-emphasised because of practical things like recession in the telecoms, IT
and manufacturing industries, and that’s a great shame."
"The
cutbacks we are seeing in staffing levels are having a bad effect. People are
returning to basic management ideas and I see something of regression in
leadership behaviour and some old-fashioned practices re-emerging. There is
less individualised consideration, as with transformational leadership, and
more blanket treatment of people."
Kate
Lidbetter, director of SKAI Associates, argues that the effect of the economic
downturn will vary. "It depends as much on the company as the challenges
it faces," she says. "Successful companies have the luxury of going
for the leading edge leadership style, but where market conditions are tough,
there is a tendency to revert to type. So if a corporation had a tendency to be
more controlled and old fashioned, they are more likely to focus on processes
and tasks."
But,
she adds, "Because it takes so much time and effort to make improvements
and create a new style of leadership, companies strive to hang on to what they
achieved when times were better."
Participative
leadership
The
values of a corporate are typically elected by the board, but in a company
committed to participative leadership, the whole company is involved in
deciding its values.
Participative
leadership is about "listening, collaboration and networking", says
Jane Fiona Cumming, director at sustainable development consultancy Article 13.
It is a process that takes visionary leadership one step further: while the
visionary leader communicates a vision of where the company is going in a
simple, accessible and desirable way, a participative leader will say, ‘given
that’s the vision, how do we want to get there’?"
Participative
leadership is focused on empowerment, and it can work in a number of different
ways – from listening to opinions of team members before taking a decision, or
striving for consensus.
Team
building, commitment and a better quality of decision can result – as long as
employees are facilitated, through coaching, in how to make sound decisions.
However, participative leadership may be less effective if employees are
apathetic, or willing to accept autocratic decisions.
Individuals
Marjorie Scardino, CEO of Pearson and easyJet founder and chairman Stelios
Haji-Ioannou are among those who exemplify a participative approach to
leadership. As is Pat Mitchell, president and CEO of Public Broadcasting
Service in the US, who grew the company’s television audience partly through
groundbreaking collaborations with other parties such as ABC News Nightline,
Fox Studios, and National Public Radio.
Companies
Participative leadership does not have to be limited to the company itself.
Global environment organisation WWF-UK recognised that real change could only
come by sharing its agenda with parties outside the organisation. Facilitated
by Article 13, WWF-UK policy director Andrew Lee developed a network of
interested and affected parties across the UK to develop a shared submission to
the government on the rural agenda and common agricultural policy reform.
Level
5 leadership
Level
5 leaders are capable of taking an ordinary organisation, making it a great
organisation – and then sustaining the success over many years. While Lee
Lacocca transformed Chrysler into a thriving organisation, he was unable to sustain
that performance. Level 5 leaders, on the other hand, might lack the charisma
and charm favoured by the City, but they have the resolve, will and humility to
bring about long-term results.
Jim
Collins, author of Good to Great: Why Some Companies Make the Leap and Others
Don’t has described Level 5 leaders as modest, self-effacing and understated.
But they are also fanatically driven by the need to produce sustained results,
and are resolved to do whatever it takes to make the company great.
Hay
Group carried out a study with Harvard University to examine the dynamics of
top executive teams. The most effective leaders have been shown to combine four
styles of leadership – authoritative, democratic, affiliative and coaching
leadership – and that this is what Level 5 leaders do, says Chris Dyson,
director at Hay Group. "They are not the great ‘I am’."
Individuals
Joseph A Pichler, chairman, CEO and director at The Kroger Company; Daniel
Dimicco, president and CEO of Nucor Corporation; and L Daniel Jorndt, chairman
of Walgreens, exemplify Level 5 leadership.
Companies
Arturo Barahona, CEO of airline company AeroMexico, showed what this leadership
approach could achieve when he led the company through a process of
privatisation from the Mexican government. The company’s costs were cut by 2
per cent at a time when fuel costs were increasing, its safety record has been
improved, and it now has among the best time keeping records in the world.
Barahona
was happy to credit his team for major accomplishments. "The seven VPs on
our executive team had traditionally worked very independently," he says.
"If they had continued to work that way, we would never have accomplished
what we did."
Values-based
leadership
Values-based
leadership involves taking a more holistic view of a business’s activities and
committing to a chosen set of ethical business values. Generating a profit
remains important to a values-based leader, but they will also understand how
that profit is generated and the costs to society in terms of the environment
and society.
The
implications of values-based leadership are wide-ranging – a business will need
to consider how it manufactures its goods and services and what effect that has
on its employees, as well as the way it markets its services – even how its
services or products are used.
Andrew
Wilson, director at Ashridge, says that applying those considerations to
business requires a leader with vision, a sense of responsibility and
entrepreneurialship.
In
turn, values-based leadership will help improve morale and teamwork in an
organisation by enabling people to make more consistent choices, to influence
what happens to them – and to spend less time playing political games, since
everyone knows what to expect from each other.
The
Christopher Harding Leadership Programme at Ashridge is one initiative aimed at
introducing these ideas to businesses but a number of companies have already
put them into practice.
Individuals
Sir Mark Moody-Stewart, former chairman of Shell International, and John
Browne, chairman and CEO at BP, have introduced new values-based concepts that
seek to reposition their groups as energy-producing, rather than oil-producing,
and as environmental champions, not despoilers.
Companies
In the US, CEO Ray Anderson transformed his company, Interface Carpets, from a
company that produced floor coverings into a provider of floor coverings in an
environmentally sustainable way. To make that vision happen, Anderson had to
examine every area of production and consider new approaches to his business.
The company reduced its energy consumption, replaced petroleum-based supplies
with vegetable-based substitutes, and cut emissions by 24 per cent. It also adopted a new business philosophy.
Its customers no longer buy a carpet – they rent one. When it wears out, its
component parts are recycled and the customer receives a new one.
Servant
leadership
As
its name suggests, servant leadership asserts that true leaders serve those
whom they lead.
Servant
leaders act as teacher and standard setter, rather than a giver of directions.
They have faith in other people’s abilities and are strong team builders, as
well as helping to develop individuals within an organisation – because the
more developed the individuals, the stronger the organisation. Servant leaders
can also be led -they are more interested in finding out the best way to do
something than imposing their way.
Tim
Threipland, a facilitator with FranklinCovey, says that this style of
leadership can contribute a number of benefits to an organisation. "Ask
organisations whether they think they can get more out of their people, and
most will say ‘yes’. A leader needs to create a genuinely empowered environment
where excellence can thrive and people can realise their potential."
Individuals
Jim Parker, vice-chairman of the board and CEO of Southwest Airlines, Peter
Knight of marketing services agency Phoenix, and Jack Lowe Jr, president of
TDIndustries, have built their companies as servant leaders.
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Companies
At TDIndustries, every TDI employee (TDPartners) completes Servant Leadership
training and participates in small Servant Leadership dialogue groups.
Commitment to this philosophy has built an environment where employees trust
the senior management to listen to their thoughts and ideas, and leadership has
learned to trust the judgment of the employees.
TDI
is ranked fourth in Fortune’s 500 Best Places to Work 2002 list, in which
companies demonstrate an average of 50 per cent higher profit margin than
competitors of similar size. But Lowe Jr of TDIndustries cautions: "If you
go into this with the motive to make money, it won’t work. If you go into it to
build people and a great organisation, you will make money over the
long-run."
