Changing leadership mindsets
In my view the recent debates about the “crisis in capitalism” miss the point, the implementation of capitalism and its impact on organisations, society and individuals is directly driven by the decisions of political and organisational leaders not some mystical entity. Thus the issue isn’t with capitalism it’s with the leaders that implement it and how they do so – either effectively with ethics and integrity or not. But leadership isn’t just an issue for CEOs, Prime Ministers and NGOs, the shortfall in both leadership skills and behaviour is pervasive everywhere.
Recent data from the Chartered Management Institute in their Management 2020 initiative suggests only 40% of leaders in UK organisations are being effectively developed. A similar picture exists in relation to talent from CIPD and other sources. In 1999 when I was on a Government expert panel considering the same problem only 30% were being developed. So in 14 years we have managed only a slightly pathetic 10% improvement.
What this means in practice is that for a majority of leaders in organisations the “basics”: e.g. effective task planning and management, are not in place. As a result firefighting becomes common practice leading to highly ineffective delivery and almost total loss of long term perspectives. Then the more complex activity that’s piled on top the worse the situation gets. Hardly surprising then that in comparison to European peers, G7 and many G20 countries UK lags behind in leadership development and consequently productivity. If we had better leaders at all levels in organisations it could increase UK GDP by maybe £65bn, benefitting us all. It also means that literally millions of people stand no real chance of ever realising their full potential at work and having rewarding lives as a result.
So there is an organisational, social and individual imperative to improve leadership. There certainly isn’t any lack of evidence that good leadership produces high performance which produces organisational success and economic growth. Thus the problem isn’t it doesn’t work so it must either be the message isn’t getting through or the implementation is ineffective or a combination. Leadership isn’t rocket science. Organisations have objectives, people have needs and aspirations, leaders just align the two.
Why are we waiting to develop our leaders, its time to act now
The compelling evidence that good leadership delivers success just isn’t getting across. When I showed some finance directors the potential financial benefits of getting leadership right they clearly hadn’t seen the data before. Their response was: “This is a no brainer. We should have been doing it for years. It’s virtually a licence to print money.” CEOs responses are similar. Once people see the evidence they all want to develop better leadership – both individually and organisationally – but if they never see it they can’t act.
This imperative has got more urgent with recent changes in organisations, in particular headcount reductions, which mean fewer people having to do more. According to the Corporate Executive Board, 55% of employees to say they don’t have enough time to do the work they are asked to do. In addition change in the importance of collaboration, i.e. not just doing your own work but working with others to deliver wider organisational objectives, to profitability is significant. It has doubled since 2002 to 49% of profitability.
With these significant changes in the world of work, the fact that the old approach to leadership just wasn’t working, I thought that a new way of looking at leadership was needed. It had to be simple, practical and possible for anyone in any organisation anywhere. No complex models, no list of 20 actions, it all had to make sense to a new first line manager or a CEO and for them to be able do something about it at once.
The first step had to be to make sure the leaders gets maximum effort from everyone. I take the pragmatic view that if people want to proactively do the best for their organisation they are “engaged” and will work harder and collaborate to do more than just their job. That is likely to improve both individual, team and organisational performance. That simple reality is reflected in the personal experience of all of us from our working lives. I called this “engagement” Mach 1 Leadership.
But engagement alone is not enough. My work as global head of leadership for UBS revealed that too much effort was used on work that didn’t maximise organisational performance. 20% of effort was producing 80% of value with the other 80% being sucked into things that really didn’t matter. There needed to be the second step – to focus effort onto what really matters. Thus Mach 2 Leadership was created.
Taking these two critical components – maximising effort and then focusing that effort onto what really matters seemed to be a simple common sense two step leadership approach that really resonated with everyone I spoke to. In addition it was clear that two other key day to day requirements of leaders were important – being “ethical” (the how), being “effective” (the what). These then completed picture with “engaging” to maximise effort and “entrepreneurial” to focus that onto what really matters.
Reflecting on the success and failure I had seen over many years these two steps – engage and then focus – were always present where success occurred. Indeed it has been confirmed recently in my role as a judge for Investors In People for their 2014 awards. In every shortlisted success story this engage and then focus progression was clear, founded on basic leadership capability.
Foundations for Mach 2 Leadership
Thus the progression it both simple and effective – first step – Mach 1 – to engage your people so they maximise discretionary effort by creating an environment where they want to give their best. To achieve this is so simple, it’s by telling leaders to do for their people the things that they experienced from their most inspirational bosses that made them give super performance.
Simple things like “telling me what’s going on and how we fit into the bigger picture”, “listening to me and asking for my ideas”, “respecting me as a person and a professional”, “developing my skills and helping me grow”, “actually caring about me”. All simple, no cost and actions which can be delivered immediately. The interesting thing is that what really drives maximised discretionary effort is not being task focused alone, above all its relationship related. Pure delivery or task focus is actually counter productive to maximising performance.
Mach 2 then takes that extra effort and focuses it on what really matters. But to decide what to focus the effort onto requires leaders to think more holistically – but that inherently also requires greater knowledge, indeed also additional skills. The key, and final, element of the Mach 2 step is to become and entrepreneurial leader, however you can’t be entrepreneurial to focus effort effectively unless you understand what the context and priority for such focus. I therefore developed a model of capability enhancement that built, stage on stage, skills and knowledge that enabled optimum focus. The foundation of this was the successful entrepreneurial leadership approach delivered at UBS. This is now part of a Harvard case study. See below:
Sadly most leaders never progress above the lowest level.
The entrepreneurial leadership mindset at the top is key to success – but it is only effective if the supporting elements are in place. Entrepreneurial leadership embeds the key drivers that entrepreneurs use for success into the larger organisation.
This is applicable to both public and private sector and not for profit. These day to day actions act to counter the cultural and system changes that tend to occur as organisations get larger which eventually obstruct achieving their own objectives. It’s what entrepreneurs do day to day – total focus on end customer, constantly seeking opportunities for innovation and improvement, keeping things as simple as possible, optimising and not minimising risk, taking personal responsibility, inspiring others to do their best, collaborate and deliver success.
Who can be an entrepreneur?
However with the larger organisation it’s not possible for everyone to be entrepreneurial in an “ad hoc” way and everyone in the organisation to act in concert to deliver its objectives. Thus a system needs to be created where leaders at higher levels enable, support and align this entrepreneurial activity to organisational requirements. These system leaders, as well as being entrepreneurial with their own teams have to deliver other day to day actions to enable the entrepreneurial approach Mach 2 is trying to build. These include:
- Being a role model for collaboration, values and excellence inside the organisation
- Being an ambassador outside the organisation
- Driving integration and alignment to make the system work better
Only a very few leaders, first line managers, need to lead just their direct reports. The majority of leaders as well as having direct reports also have to lead other leaders through those direct reports. They must therefore have the skills and knowledge to create a “mini” organisational system within their departments, divisions or other structures. This is often forgotten in their development and in most leadership books.
Given that there is a critical imperative for organisations to develop more and better leaders – and not just in UK – and that the current system isn’t working HR is in a perfect position to act as the catalyst for a new approach.
Creating meaningful purpose
My purpose in writing Lead to Succeed was to not only give individual leaders a road map for success but to give the HR community something compelling they can be used to communicate the critical need and the proven benefits of better leadership, to get buy in for transformation and then creating a simple system to deliver it successfully.
We are in a new world of work and we need a new way of thinking and delivering leadership – successful leadership for a new world. In this new world leading to succeed in an effective, ethical, entrepreneurial and engaging way are key to success. After all leadership is about making a difference and transforming lives not just making money.