The leadership challenge

A recent debateon leadership, organised by business magazine European Business Forum (EBF), brought together a host of management luminaries. 

Managing and developing tomorrow’s leaders is a challenge for HR departments, especially in the wake of globalisation, technological change and growing public disgust at corporate greed. So how should leaders be identified and developed?

Leadership scholars suggest 21st century companies will need to develop new styles for them to stand out from their competitors.

Deanne den Hartog
Professor of organisational psychology at the Faculty of Economics and Business at the Erasmus University, Rotterdam, The Netherlands

The switch from physical to intellectual (and, therefore, more complex) labour, the advent of flat, networked organisations, and the growth of a virtual working environment are particular trends highlighted by Den Hartog. Such challenges, she explains, mean managers “can no longer literally oversee the efforts of subordinates”. Indeed, if some scholars are right, leadership responsibility could become ‘shared’ or ‘distributed’ – transferred from an individual to whole teams – while leaders themselves may become limited in their scope and duration as people take on temporary roles in some projects but not in others.

Meredith Belbin
International business guru

Best known internationally for his widely acclaimed and widely applied research into team roles, Belbin puts the challenge more starkly. As a species, he acknowledges: “We are stuck with our own genetic legacy, which, as it happens, is shared by all gregarious mammals – the basic principle of organisation being that of alpha-male dominance.” However, recent changes and sources of ‘disequilibrium’ are “taking us away from the top-down hierarchy and towards a looser yet deftly co-ordinated system of dynamic networking”, best exemplified in the sophisticated interdependent systems of the social insects. “We may not be able to imitate these insects,” Belbin suggests, “yet the balance is now swinging back in the direction of the human species, assisted by the colossal capacity of the laptop computer. Information is coming in from the side instead of from the top-down. Such a switch in information supply is creating pressure on the top. By losing its likely monopoly on leadership, the top can survive with credibility only by empowering the most suitable individuals and teams.”

Warren Bennis
Professor at the Marshall School of Business, University of Southern California

Such a democratic and inclusive vision also resonated in the mind of Bennis, one of the world’s leading authorities on leadership. “One reason corporate leadership has recently lost its credibility,” he says, “was its wholesale failure to create a culture of candour”.

“It is not easy to welcome criticism, however honest and tactful. But a willingness to do so is one of the indispensable qualities of authentic leaders. Too often the CEO says he or she wants honest input, but the company’s truth-tellers are marginalised, if not driven out. However nettlesome, internal critics are the most valuable employees of all – the ones who keep a company honest and help preserve its most important asset, its good reputation,” he says.

Bill George
Professor of leadership and corporate governance at International Institute of Management Development (IMD)in Switzerland

“Authentic” leadership – people of the highest integrity, with a deep sense of purpose and committed to building enduring organisations – is exactly how George describes the missing ingredient. He goes so far as to say that the future of capitalism, and the ending of “the never-ending string of corporate scandals”, depends on it.

Ferdinando ‘Nani’ Beccalli
President and chief executive of General Electric (GE) Europe,Middle East and Africa

The debate also included other challenging ideas for encouraging a new approach to leadership. Most contributors felt that ethics and personal integrity were critical, and that the example set by the top would ultimately define the culture and reputation of an organisation. Beccalli, for example, insists that signs of collusion or dishonesty need to be stamped out quickly, a point echoed by Daniel Vasella, chairman and chief executive of the Swiss-based drug giant Novartis. He argues: “In addition to encouraging good behaviour”, [people in leadership] have to have a system of reprimanding poor behaviour, for punishing those who live by the letter rather than the spirit of the rules and who are simply looking for the next loophole.”

Angel Cabrera
Dean of Instituto de Empresa graduate business school in Madrid

Cabrera further emphasises the need for trust, bemoaning the recent lack of it and urging business students to remember that “no matter what business they are in, their actions and decisions can have a great impact on the lives of their fellow human beings, and that this impact may determine the degree of their success in the long run.” The link to success, however, may not be sufficient incentive. Cabrera proposes that, like those of other honourable professions such as medicine and law, business graduates should assume a code of conduct. “Perhaps one day we will see business schools in Europe requiring their students to take the equivalent of the Hippocratic oath on graduation,” says Cabrera.

Want to learn more about good leadership? Try the Challenge of Leadership Conference in Newbury, Berkshire, on 9 March. It will share exclusive research and the experiences of leaders in top companies. For more information call 01865 516202 or e-mail
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Leadership tips for HR

  • Rethink traditional models of leadership, particularly in the light of globalisation and new technology

  • Examine if and how leadership should be ‘shared’ or ‘distributed’

  • Ask yourself how readily your leaders seek, and accept, criticism

  • Have you got a transparent and fair system for punishing bad behaviour?

  • New business leaders need to ask themselves whether they would be willing to take the equivalent of the Hippocratic oath. Challenge new management recruits with the same question

  • Consider the evidence that appropriate leadership skills can be learned, and that people are not just born with them

  • Leaders must learn to adapt their behaviour at different times, in different jobs, in different companies and in different parts of the world

  • Leaders need to remember that there are a number of sources of authority in the company – the board, the management team, middle managers, even employees – and work with them

  • Leaders must pay attention to how they use their time. Are they really concentrating on the business or on [ineffective and unproductive] ‘busyness’?

  • However successful a leader is, they must not forget we are all mortal. He/she must identify their successor in the light of the company’s current and future strategy

Other key issues for leaders and their coaches

The need to adapt behaviour to different circumstances

Nani Beccalli, of General Electric, says that, in his experience, successful leaders must learn to behave differently at different times, in different jobs, in different companies and in different parts of the world. “If you join a group like GE and try to exercise the sort of leadership practiced in some other organisation, you are likely to be a failure,” he says.

The critical role of the board and other sources of authority within the company

Implicitly reflecting the direction of Den Hartog, Vasella, of Novartis, rejects the recently fashionable style of leadership “that focuses only on the CEO”. Effective leadership, he says, “respects the inter-play… between the board and the executives, between the top and middle management, and between the middle management and the employees”. Certain qualities – result orientation, competitiveness and organisational discipline should be combined with mutual respect, trust and fairness – need to be embedded in the organisation’s DNA. But leaders should understand that the status quo is constantly challenged by acquisitions, structural change and new ‘hires’.

The special challenges of family-owned enterprises

“The family business is a complex system comprising two interdependent sub-systems: the company with its economic logic and organisational rationality on the one hand, and the family with its values, traditions and emotional relationships between members on the other,” according to Hans Hinterhuber, professor of strategic management and strategic leadership at the University of Innsbruck, Austria. Effective connection between these two sub-systems, he argues, is closely linked to international success.

The significance of willpower

Most of us acknowledge our own time-wasting and tendency to be distracted by short-term ‘firefighting’ rather than pursuing our company’s strategic goals. But according to Heike Bruch, director at the Institute for Leadership and HRM, and Wolfgang Jenewein, director of the executive MBA programme, both at the University of St Gallen, Switzerland, research shows that 90 per cent [of managers] squander their time on all sorts of ineffective activities. While motivation is part of the problem, both maintain that leaders who want to make things happen rely on a different force – volition.

The widespread tendency to overlook leadership succession

Owain Franks, chairman of PricewaterhouseCoopers’ HR services practice in the UK and a member of the firm’s global leadership team, said: “The most important aspect of succession planning and leadership development is in identifying the needs of the business and building a profile of the type of leader the organisation will need to fit the business strategy. Companies cannot spend too long examining these business needs,” he says. Andrew Kakabadse, deputy director of Cranfield School of Management and professor of international management development, also focused on leadership ‘fit’. Finding this, he believes, requires particular attention to the philosophy of the company, the stage it has reached in the business cycle, and the idiosyncrasies of individual situations.

The benefits of business education, properly applied

Both Herminia Ibarra, chaired professor of organisational behaviour at Insead, in France, and Marshall Young, vice-president of Templeton College, University of Oxford, highlight deficiencies in the current system. Ibarra’s research shows too many executives failing to meet their own and their company sponsor’s expectations because they neglect what happens before a leadership development programme begins, as well as their re-entry into the workplace. Young deplored the ‘remedial’ nature of many programmes, something he puts down to, among other things, excessive job focus and lack of imagination.

Tim Dickson is editor of European Business Forum (

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