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Leading People in an Organization

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In a similar vein to delegation, leadership is one of the great intangibles of the business world. It is a skill most people would love to possess, but one which defies close definition. Ask people about leaders they admire and you are as likely to be told Gandhi as John Harvey-Jones, Ranulph Fiennes as Richard Branson. Yet most agree that leadership is a vital ingredient in business success and that great leaders make for great organizations.

'Broadly speaking there are two approaches to leadership. You can theorize about it or you can get on and do it. Theorizing about it is great fun, hugely indulgent and largely useless. Doing it - or doing it better - is demanding, frequently frustrating and of immense value,' says Francis Macleod, former chief executive of the Leadership Trust. Those who want to change an organization must be able to change people and in that process there is only one starting point that makes sense. Learning to lead oneself better is the only way to lead others better.'

The trouble is that what once constituted a great leader may not be the recipe for managerial success in the empowered 1990s. The leader's role has changed. It has become more complex and arguably even more critical to success. Leaders must ensure that high performance levels are achieved and sustained; handle complexity and ambiguity; enjoy leading the change process; ensure that the organization and its processes constantly develop; and that people within the company are motivated, developed and rewarded to produce outstanding results.

The new business leaders have to be veritable Renaissance men and women. The very individualism associated with leadership is also now a bone of contention. The people we tend to think of as leaders - from Napoleon to Margaret Thatcher - are not exactly renowned for their team working skills. But these are exactly the skills that management gurus insist are all-important for the 1990s and beyond.

'In some cases, the needs of a situation bring to the fore individuals with unique qualities or values, however, most leaders have to fit their skills, experience and vision to a particular time and place,' says psychologist Robert Sharrock of YSC. Today's leaders have to be pragmatic and flexible to survive. Increasingly, this means being people rather than task-oriented. The "great man" theory about leadership rarely applies - if teams are what make businesses run, then we have to look beyond individual leaders to groups of people with a variety of leadership skills.'

Indeed, the pendulum has swung so far that there is growing interest in the study of followers. Once the humble foot soldier was ignored as commentators sought out the General, now the foot soldiers are encouraged to voice their opinions and shape how the organization works. 'Followers are becoming more powerful. It is now common for the performance of bosses to be scrutinized and appraised by their corporate followers. This, of course, means that leaders have to actively seek the support of their followers in a way they would have never have previously contemplated,' says Robert Sharrock.

Phil Hodgson of Ashridge Management College has analyzed a number of business leaders. His conclusion is that old models of leadership are no longer appropriate. 'Generally, the managers had outgrown the notion of the individualistic leader. Instead, they regarded leadership as a question of drawing people and disparate parts of the organization together in a way that made individuals and the organization more effective.' He concludes that the new leader must add value as a coach, mentor and problem solver; allow people to accept credit for success and responsibility for failure; and must continually evaluate and enhance their own leadership role. 'They don't follow rigid or orthodox role models, but prefer to nurture their own unique leadership style,' he says. 'And, they don't do people's jobs for them or put their faith in developing a personality cult.' The new recipe for leadership, says Hodgson, centres on five key areas: learning, energy, simplicity, focus and inner sense.

In contrast, traditional views of leadership tend eventually to concentrate on vision and charisma. The message seems to be that charisma is no longer enough to carry leaders through -leaders with strong personalities are as likely to bite the corporate dust (as Bob Horton found to his cost at BP). The new model leaders include people like Percy Barnevik at Asea Brown Boveri, Virgin's Richard Branson and Jack Welch at GE in the United States.

The magic which marks them apart has been analyzed by INSEAD leadership expert Manfred Kets de Vries. They go beyond narrow definitions. They have an ability to excite people in their organizations,' he says. 'They also work extremely hard - leading by example is not dead - and are highly resistant to stress. Also, leaders like Branson or Barnevik are very aware of what their failings are. They make sure that they find good people who can fill these areas.'

In the age of empowerment, the ability to delegate effectively is critically important. 'Empowerment and leadership are not mutually exclusive,' says Professor de Vries. The trouble is that many executives feel it is good to have control. They become addicted to power - and that is what kills companies.'

Managing people

Managing people is a matter of trust and, increasingly, of developing and retaining talented people. In the past, trust was in short supply - you paid someone to do a job and paid someone else to supervise them. The micro division of labor has fostered a basic distrust of human beings. People weren't allowed to put the whole puzzle together. Instead they were given small parts because companies feared what people would do if they knew and saw the whole puzzle,' says Charles Handy. 'Human assets shouldn't be misused.'

Managing people was once the means to an end. Now, it is much, much more. Twenty or thirty years ago companies talked of labor management. Later it was realized that knowledge and skills are important. Now it has gone a stage further,' says Philip Sadler, author of Managing Talent. 'Knowledge is hard to destroy; hard to protect; and hard to measure. But, the true source of competitive advantage is not so much knowledge as talent, which is the only remaining scarce resource.'
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