No one leadership style is right for all types of business, although some are more successful for the long term than others.
LIKE many other Australians, I have been impressed by the leadership shown by Anna Bligh during the flood disaster in Queensland. In particular, I have been struck by her authenticity, no-nonsense grasp of the situation, obvious empathy for the victims and consistent ability to give clear, factual updates on the changing situation.
Ms Bligh has inspired people to rally, pull together and have hope for the future. Of course, an even greater feat of leadership would have been a strategy for ensuring a major Australian city such as Brisbane was flood-proof by the 21st century.
In reflecting on Ms Bligh’s leadership, it is difficult not to make comparisons and draw parallels. Apart from those in the public eye, I have worked with thousands of managers, as a coach and consultant, helping them acquire or strengthen leadership skills. So it is probably timely to re-visit the issue of leadership and to explore a developmental instrument I have designed to assist organisations and individuals in a wide variety of industries.
The Leadership Style Descriptor (LSD)
The LSD is a practical, research-based, diagnostic and feedback tool to help managers learn from their experiences, develop their skills and increase their leadership effectiveness. It helps address a need faced by many organisations around the world because, according to a recent global survey conducted by McKinsey, while 60 per cent of senior executives consider the shortage of talent to be their first priority, they also believe that their current strategies for addressing the problem are ineffective.
Three unique benefits of the LSD are that: first, it helps managers review their past actions, decisions and relationships against best and worst practice; second, it demonstrates that, in order to become more effective, managers need to recognise that character and competence are equally important contributors to leadership effectiveness; and third, it provides the touchstone and take-off point for future coaching and training programs.
In short, the LSD is helpful in highlighting not only how managers exercise influence and power within organisations but also how they relate to colleagues, employees and other stakeholders. It is an ideal instrument for identifying specific organisational issues, diagnosing learning priorities and designing both individual and group leadership development programs based on hard evidence and feedback.
There are four integrated elements in the LSD model.
1) The leader’s character
Trust and credibility are essential ingredients of leadership because leadership is an ‘influence’ relationship, defined by the experience of followers. These ingredients are direct extensions of the leader’s perceived character and competence and which, although very different in nature, in practice are as inseparable as the body and the soul. Abraham Lincoln has provided one of the most useful definitions of character: ‘Reputation is the shadow, character is the tree’. Although ‘spin’ and PR are frequently used these days to manufacture a positive image in the short term, a leader’s true character inevitably emerges over time.
Character is other people’s perception of a manager’s moral and ethical qualities. These qualities, such as fairness, taking responsibility and caring for others, have been judged to be largely absent in the behaviour of many Australian CEOs in recent years.
(2) Character in leadership roles
The most important test of the leader’s character and competence is how he/she performs over time in relation to the major leadership roles such as creating a shared vision, designing effective strategies, building a culture of learning and growth and inspiring people to take pride in pursuit of a common goal.
Good, strong leaders demonstrate a consistent pattern of wise, ethical and unselfish behaviour in relationships, decision-making and achieving objectives. Because character is cumulative, it develops slowly and is what a person brings to and takes from their experience. It is best revealed in crises and adversity, as the floods in Queensland demonstrated. As Winston Churchill once put it: ‘Mountaintops inspire leaders, but valleys mature them’.
By comparison with personality, character is more objective, universal and can be taught and learned. It includes qualities such as behaving honestly, demonstrating openness, sharing credit, giving respect, being resilient, extending compassion, acting consistently, taking responsibility, showing loyalty and possessing courage.
Courage is arguably the most important of all the leadership qualities because without it the others would not be possible. As Hemingway once put it ‘courage is grace under pressure’.
There is evidence that successful leaders reflect a wide variety of personality traits. This makes it almost impossible to construct a personality trait-based theory of leadership. Effective leaders can be introverts or extroverts, optimists or pessimists, blunt or discreet, enthusiastic or laid-back, talkative or reserved, altruistic or selfish.
3) Leadership competencies
Leadership competencies are an essential part of the manager’s tool-box and are vital assets in performing the key leadership roles – setting goals, devising strategies, aligning staff, building trust and involving everybody in a systematic implementation process.
The LSD 12 competency framework provides a useful template for systematic leadership training and development.
(4) Leadership style
Leadership style is the perception of how effectively the manager applies leadership competencies in performing the key roles. Leadership education and training programs frequently fail to distinguish leadership competencies from leadership style. There tends to be a ‘one-size-fits-all’ approach.
Competencies are often addressed, developed and evaluated individually and sequentially, whereas a proper treatment of leadership style really requires a more holistic approach based on regular review of critical incidents and 360 degrees feedback.
Because leadership style is a generalised perception, which is reinforced on a daily basis, it becomes part of a manager’s image and reputation. It is susceptible to the ‘halo effect’ and easily becomes an embedded stereotype, which may be neither fair nor totally accurate.
Nevertheless, stereotypes are a reality and must be taken into account and dealt with by managers who are serious about performing their leadership roles effectively. For example, a manager who acquires a reputation for ‘thinking big’ may also, in certain cases, get a corresponding but unwarranted reputation for neglecting detail. This was probably the case with Paul Keating.
Enduring leadership effectiveness demands the ability to assess, adapt and respond quickly to changing environments and new challenges. Outstanding leaders demonstrate mastery of a full range of styles as the situation requires.
However, research indicates that most managers tend to become prisoners of old habits and assumptions. They easily get stuck in a groove and follow the same pattern regardless of the circumstances. Indeed very few leaders fit the ideal profile incorporating the ‘pathfinding, transformational, customer-centric and mentoring/coaching’ styles.
There are 12 generic leadership styles; they are neither mutually exclusive nor comprehensive. They are based on evidence drawn from stakeholder descriptions and feedback rather than textbook competency prescriptions.
The suitability of particular leadership styles will be influenced strongly by different situations and contexts and especially by the quality and complementarity of the entire management team.
Good leaders do not lead in a vacuum. Leadership is a team activity.
It is important to recognise that the word ‘leader’ is often used indiscriminately to describe any CEO or senior person in an organisation, whether or not he/she actually practises effective leadership. Similarly, the simple act of analysing and describing someone’s leadership style does not necessarily mean that he/she should be considered a leader. While many managers are competent practitioners of the basic management functions that produce strategies and structures, they frequently fail to create the culture needed to implement them effectively.
Leadership style profiles
1) Pathfinding
True pathfinders are relatively rare because they are often more ambitious for their organisation or community than for themselves. They combine a preference for bold, ambitious goals and an ability to foresee where developing trends are likely to lead or, with innovative leadership, could possibly lead.
The challenge for business pathfinders, such as Bill Gates, Rupert Murdoch and Howard Schultz, is to find a way of managing the present from the future and to inspire and empower people throughout the organisation to embark on that journey. Because of their desperation for glory and a place in history, pathfinders tend to be pre-occupied with the big picture and longer-term issues. They often underestimate the importance of disciplined execution. This was certainly the case with former US president John F Kennedy.
Kennedy’s legislative record was poor because he tended to neglect the tedious task of winning support and addressing the nitty-gritty details of the implementation process. However, his ambitious and inspiring space program in the 1960s included a systematic action plan that realised his goal of putting a man on the moon and bringing him back by the end of the decade.
2) Populist
Most populists are clever opportunists and climb to the top by championing a timely issue, popular cause or fashionable business strategy. They keep their message simple and clear and they communicate directly to mass audiences.
Successful populists rely on short-term appeal and simplistic solutions, directed especially to people who are cynical and alienated. They speak in simple, emotional language and are seen to be practical, down-to-earth and ‘one of us’. However, populists rarely offer sustainable visions or considered strategies for dealing with the complex challenges that confront most organisations and communities.
Beyond their rhetoric, populists tend to avoid proposing detailed implementation plans. In the political sphere, Pauline Hanson, founder and leader of the One Nation Party, sought to unleash ‘the people’s voice against an immigration policy she claimed was ‘undermining Australian values and our way of life’.
By contrast, Andrew Forrest, high-profile and populist founder and CEO of Fortescue Metals Group, has been quite successful in winning overseas investor support for ‘a third force’ in the WA iron ore industry, campaigning to increase the participation rate of Australian indigenous workers and lobbying to gain access to the Pilbara railway lines.
3) Autocratic
Autocratic leaders adopt a top-down approach and rely on one-way communication and feedback. They expect followers to obey orders and follow rules. There are times and a situation in all organisations when this style is appropriate but it is rarely effective as a dominant style of leadership. One only has to look at the ruinous effect that leaders such as Adolph Hitler, Joseph Stalin and Robert Mugabe have had on the countries they ruled to appreciate the corrupting and dehumanising consequences of autocratic government when there are no checks and balances.
Although a directive style is appropriate in certain contexts such as the military, and especially when managing crisis situations, it is becoming increasingly counter-productive in societies where people are increasingly well educated and seek satisfaction and fulfilment from their work.
There is considerable research evidence to show that staff turnover is much higher under autocratic leaders. Nevertheless, it continues to be a widely practised style, and not only in developing countries.
Bureaucrats who operate autocratically as well as bureaucratically manage many public sector organisations throughout the advanced world.
4) Transformational
In popular literature the transformational style is often explained by the charismatic qualities of the leader. However, there is no research evidence to make the connection between charisma and real leadership. On the other hand, transformational leaders – including Winston Churchill and even Bill Gates – acquire charisma as their leadership impact increases. Nelson Mandela is a special case made all the more interesting by the failure of his successors – Thabo Mbeki and Jacob Zuma – to consolidate his legacy.
An important example of a leader who is committed to an ambitious, long-term transformation process is Fumio Ohtsubo, president of Panasonic Corporation. Mr Ohtsubo has committed more than $1 billion in order to make his company the number one green innovation company in the electronics industry by 2018, the year of Panasonic’s centenary.
The scope for transformational leaders in the Australian context is complicated, as House’s Globe Study shows, by the widespread dislike and distrust of ‘tall poppies’. The failed political career of John Hewson is an instructive example. He was a brilliant conceptualiser with poor political skills.
5) Bureaucratic
This is the classic transactional style. Although it is not unusual for bureaucrats with ambition and good political skills to get to the top, their performance as leaders is compromised by their lack of vision and inability to inspire or even relate to others. They place heavy emphasis on organisational hierarchy, formal procedures and impersonal rules. Their general approach inhibits creativity, innovation and the effective management of change.
Signs of the bureaucratic style at work include lengthy procedure manuals and convoluted strategic planning documents which are full of plans but lacking in strategies.
6) Mentoring/coaching
Mentors and coaches genuinely believe that people are an organisation’s most valuable asset. They are committed to the paramount importance of continuous individual learning and development. These leaders aspire to be teachers, partners and role models to their colleagues.
7) Narcissistic
It would be easy to underestimate the number of narcissists who become CEOs. In fact, they are often seen as natural but difficult leaders, excelling as visionaries and innovators.
The narcissist is excessively ambitious, frequently charming at a superficial level, and has an overwhelming sense of entitlement. Subject to serious mood swings, narcissists are hard to predict because they experience incredible highs and inevitable lows. These characteristics are matched by an almost total lack of genuine empathy for others or capacity to see things in terms other than his/her own self-interest.
Most great leaders are narcissistic to some degree but their success hinges on the quality of the leadership team around them. Sometimes a trusted ‘side-kick’ or court jester has a unique ability to prevent the narcissistic leader from going off the rails. However, in cases where there are no checks and balances, such as Bernie Ebbers at WorldCom and Ray Williams at HIH Insurance, disaster is the eventual outcome.
8) Problem-solving
While the problem-solver shares the bureaucrat’s preoccupation with the implementation process, he/she has a much deeper grasp of the need to encourage initiative and creativity. Problem-solvers have good analytical skills and a related ability to systematically identify, explore and tackle problems in a structured way.
A problem-solving style generally facilitates inventiveness and incremental innovation. However, because problem-solving leaders frequently have an engineering or finance background, they tend to be hands-on to the point of frustrating and demotivating their staff.
Most of these leaders demonstrate the strengths and weaknesses of transactional leadership.
Other common weaknesses include an inability to see the bigger picture, a fear of giving staff too much autonomy and too much reliance on technology for its own sake as opposed to the actual needs of the end customer.
A common danger of the problem-solving style is the failure to connect it with a strong, values-based corporate mission and strategic goal.
Many Australian CEOs reflect this flawed style, which is reflected in blatant opportunism, short-term time perspectives and heavy reliance on mergers, acquisitions and cost cutting.
9) Political
Internal promotion to the most senior positions in an organisation usually requires deft political skills practised over a lengthy period. The political style is often characterised by naked ambition, shrewd judgement, persistence and a willingness to compromise. John Howard is an extreme example of this style.
As organisations become flatter, managers need to be sensitive to subtle cultural norms and to the agendas of power players. Unless they are socially astute and adaptable, managers operating in highly complex and plural environments tend to encounter difficulty in influencing colleagues and driving change.
In the corporate sphere, it is a little-understood irony that university leaders are frequently more political than the professional practitioners in the real world of politics.
CEOs need to take great care to ensure they retain the backing of the board when they attempt to make major changes. The dismissals of Carly Fiorina at Hewlett Packard and David Kirk at Fairfax were due largely to their losing the confidence of powerful board members.
10) Entrepreneurial
It is well established that, as organisations grow larger, they tend to become more bureaucratic. However, there are striking exceptions including 3-M, Google, Virgin and Cochlear. Many highly successful entrepreneurial leaders, such as Richard Branson and Dick Smith, make the transition into an ambassadorial role at the appropriate time in the growth cycle and hand over the management reins to professional managers.
Entrepreneurs have a high need for control and often like to do everything themselves. They work long hours, make big sacrifices and are frequently blind or indifferent to HR issues and the wellbeing of other people. Their restlessness, propensity for spontaneous decision-making and risk-taking based on gut-feeling makes them difficult bedfellows, especially in large, slow-moving organisations.
Nevertheless, the difficult but urgent challenge for these organisations, operating as they do in tough, competitive environments, is to design policies, structures and incentives that harness the creative talents and maverick instincts of entrepreneurial leaders and, at the same time, balance them with the formality, transparency and accountability that is demanded of such organisations today. In certain industries, including banking, mining and certain areas of the public sector, for example, this challenge is especially daunting.
11) Ambassadorial
The ambassador’s focus and strength is external representation of the organisation in the media, governmental circles and the wider community.
He/she is rarely concerned with hands-on, day-to-day internal management issues. Ambassadors usually possess good communication skills, a high level of emotional intelligence and obvious personal credibility.
Effectiveness will be diminished by the perception that the ambassador is a lightweight or has been moved sideways into a position with no real power.
By contrast, Steve Jobs of Apple Computer is one of the world’s most influential corporate leaders. He is an ambassador-extraordinary for creativity, innovation and, above all, his company and its products, not only at conferences around the world but also among his own colleagues and employees.
12) Customer-centric
Whereas bureaucratic managers tend to be internally focused, the customer-centric style puts the customer at the forefront. This strong external orientation places heavy emphasis on environmental scanning, market intelligence, organisational learning and constant communication with customers. The ultimate aim is to achieve a holistic approach in managing customers’ total service experience.
Organisations that are truly customer-centric place as much attention on the needs of customers of the future as on the needs of existing ones.
ANZ CEO Mike Smith has adopted a strategy for moving the bank to a much more customer-focused business model. In a recent service excellence survey, John Hughes, a car dealer (one of the least trusted professions), was the clear winner in WA.
In addition to being seen as an impressive ambassador for his group’s brand, respondents describe Mr Hughes as ‘a real leader’ and ‘a straight shooter who is fanatical about high standards of service’. His mission goals of fair dealing and unfailing courtesy are applied with rigorous consistency to the point where customer endorsements are a regular feature of the company’s advertising strategy.
• Dr John Milton-Smith, of Milton-Smith and Associates, is emeritus and adjunct professor of Curtin Business School, and adjunct professor of Asia e-University.