What is True Effective Leadership?

 

In February 2011 I had the privilege of seeing Dave Ulrich & Gareth Jones speaking live in London discussing “Why should anyone be led by you?”.

This first article is based on what they spoke about and my own experiences/interpretation on Leadership in the modern business era.

“Leadership is not about what I do, but what people get out of it”. Good statement I thought…..No matter how good you are at presenting yourself as a leader, no matter how savvy or adept you are at core management skills, strategy and industry analysis, if you cannot convey your message and company ideology to your employees then you are not truly leading.

Leadership is 20% leading and 80% getting your executive team to implement and communicate the message to the rest of the business.

How many occasions have we heard about company heads designing a new communication detailing their core strategies, goals and agendas only to send it to all of the staff via a webinar, CD or booklet expecting staff to be excited and encouraged to read it? How many staff do you really think bother to read it and live by it? Surely the best and only way to implement change like this is to effectively communicate it to key executives and managers who have the ability to relay the message down the line to the rest of the staff.

Dave Ulrich asked two simple questions as an example:

Think football – At the World Cup, what percentage of the time is the leading goal scorer on the team that wins the World Cup? 20% of the time. So 80% of the time, it is not about who has the most talented individual on their team, but which team works best as a group and plays to the strategy set out by the leader.

Think movies – How often is the winner of the best actor award also in the best film at the awards? 20% of the time. So 80% of the time it comes down to the Director managing and communicating what he wants from his actors and staff rather than simply going for the “pick of the moment” actor. How many films have you watched where they have a great actor as the leading role only to come away thinking that you have seen better?

So this demonstrates that you can have a prolific leader or talent in a business and they may be recognised for their abilities, but the best leaders are the ones that can get everyone on their side and singing from the same hymn sheet.

This is not to say that a great leadership icon cannot influence a business. Studies show that investors buy stock in companies based on 3 key areas:

1. 20-30% on Leadership, who is running the business.

2. 30-40% on the Firm, how well known is it, what are its beliefs and key principles.

3. 30-40% on the Industry, what sector do they operate in. Obviously some industry sectors do better than others, just think of the Internet Bubble in the early 2000’s.

We all remember BP stocks dropped dramatically after the oil spill but did not rise dramatically once they had contained the disaster. They rose the highest after the existing CEO resigned and a new boss was put in place. Everyone had lost confidence in Tony Hayward after a number of ill placed comments and the disaster itself.

When Steve Jobs originally resigned as boss of Apple due to ill health the stock dropped a massive 40% in 2008. This showed that a Leader can have a huge effect on an organisation. Meanwhile, when Bill Gates left Microsoft the stock only dropped by a few percent. Does this mean that Bill was less of a leader or an icon of the business? No….Microsoft knew that Bill would be leaving and so invested heavily in succession management and ensuring that they key members of the board who would take over had core leadership skills to keep the company going. The market knew this and reacted accordingly while Apple, partially due to the unforeseen circumstances I guess, did not have anything in place.

Recently Steve Jobs has announced that he is leaving Apple again for the same reasons. Do you think the stock did the same as last time? No, this time it only went down 2%, why? because Apple had made sure that they had leaders in place and a structure that would be capable of continuing the strategy of the business once Steve had departed.

So a truly great leader must be able to lead by example, communicate core aims and goals of the business, be authentic and trustworthy…..nothing radical there then, but it amazes me how so many companies still manage to get these things wrong. I think also that it is important to remember that leadership is not all about one person at the top. In order for a company to succeed in its ambitions, it is imperative that executives, managers and staff are all clear on the ambitions and strategy that a business has. In order to do this, a CEO must be willing to empower others to lead, no one expects the head of a multinational company to visit every division of their business and speak to every member of staff/customer and shareholder. They do however expect that someone who they trust will relay the information on to them.

Gareth Jones finished up his session by saying if you want to lead, don’t emulate someone else who has been successful, “be yourself…but with more skill!”

What are your thoughts on how to lead and what successful leadership actually is?

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