There is an extensive literature on the qualities one needs to be an effective leader, but isn’t effectiveness in the boardroom more about what directors do, how they cope with challenges and address opportunities and the quality of their decisions? Isn’t their contribution and impact and where they are going more important than the sort of people they are and where they have come from? Isn’t it possible for individuals with a wide range of personal qualities and personality types to be successful leaders if they do the right things in the situation they are in?
While certain qualities such as integrity may underpin all that a board does, other attributes may or may not be relevant, appropriate or desirable depending upon the situation and context? When inappropriate they can alienate people, divide people and create rivalries between people. Is too much emphasis also sometimes put upon leadership potential. Without motivation it may remain latent and unrealised. Potential also needs to be appropriate and relevant to an opportunity.
What sort of leadership should the board provide in relation to business excellence and areas such as innovation, human capital development and the digital economy? Such issues are to be explored at the 2016 Dubai Global Convention on Leadership for Business Excellence and Innovation being organised by the Institute of Directors. It will provide an opportunity to consider what excellence and innovation mean in today’s business environment and in relation to a board’s own performance?
How should we assess excellence? Should it be against a standard model, or against the issues, challenges and opportunities facing our organizations and how we respond? Can one have a culture of excellence? For companies whose people and customers embrace a variety of nationalities, religions, situations, requirements and aspirations, successful organic evolution, growth and development can depend upon a multitude of local cultures, decisions and interactions.
A board needs to provide balance and focus. Should we aim to excel at everything, or just excel at the critical success factors for competing and winning, while being “good enough” elsewhere? Will customers pay for us to be excellent in areas that do not directly affect them? Are relevance and affordability more important than “excellence”?
Some boards talk in general terms about creating a culture of excellence and innovation, rather than provide the conditions and support for people from a diversity of backgrounds and cultures to excel where is matters. How does one encourage, unleash and support innovation across an organisation and its value chain, and ensure there are synergies between strategy, entrepreneurship and innovation? How might a responsible business make innovation work for society?
How can directors and business leaders build more innovative, entrepreneurial and sustainable business models? What are the governance implications? How might they be more innovative and entrepreneurial in governance itself, including when relating it to the situation, requirements and stage of development of particular enterprises? What approaches might better reflect the changing nature of organizations and the contemporary business environment?
Do board agendas, corporate priorities and approaches to management, leadership and governance need to make more explicit reference to creativity and the stimulation, enabling and harnessing of creativity? Innovation is the result of creativity that leads to something that is adopted and which can be subsequently monetized. It is a result and creativity is the cause.
Many pressing challenges facing companies and mankind may not be addressed by incremental improvements to existing activities. More imaginative and innovative responses may be required. Can contemporary leaders encourage and support the free enquiry and creativity that will enable them to occur. Leadership is often associated with taking decisions, yet creative thinking may thrive best where leaders stand back, invite challenge and encourage diversity and debate.
In my 1997 book The Future of the Organisation I set out ten essential freedoms for liberating people by allowing them to work, learn and collaborate in ways and at times and places that allow them to be at their most creative and productive. When the conditions are right for the people and relationships involved they can flourish. A succession of practical and desirable outcomes may emerge that address particular problems and/or meet customer requirements. A leader might need to focus on removing obstacles to the creative process rather than determining individual outcomes.
In competitive and dynamic situations, quick and front-line responses may be required. Those responsible need to be able to easily access the help they need and increasingly this has to be available on a 24/7 basis. Support requirements can sometimes be best determined by those in the front-line. Directors must ensure those involved are aware of available alternatives and the most relevant and appropriate options are considered.
Human capital is a major concern of chief executive officers. Boards need to ensure their companies have the human, financial and technological resources to achieve corporate visions and goals. Many boards also face challenges such as achieving greater diversity and raising productivity, while teamwork and group dynamics can be an issue at all levels across an organisation.
Leaders are expected to maximise the value of human capital and derive as much benefit as they can from people for whom they are responsible. Selection committees expect candidates for leadership roles have “people skills” and a “people orientation”. However, can one over invest in human capital as opposed to technology or moving activities on-line and be too people oriented? What is the role of human capital in the face of artificial intelligence (AI) and robotic revolutions?
Humans can be expensive and variable in their performance. They are not always reliable and motivated. Are there better alternatives? Some HR professionals are so preoccupied with recruitment, employment and disciplinary issues that they have little time to consider the interface of people and technology and trade-offs between them. Is a combination of people and technology the key to increasing productivity and operational excellence?
Approaches to leadership sometimes appear to assume that people are apathetic, disinterested and bored, don’t know what they are doing or why, and just waiting for a leader to come along who will breath life, purpose and motivation into them. Is this an accurate portrayal of life in organizations today? What do some approaches to leadership tell us about the respect we have for others?
Have boards failed to provide strategic direction? Are talented people waiting for leaders to show them the light? Are they so empty or misguided that they need an employer to provide them with a corporate culture and a set of values? In reality, while some individuals lack inward direction and not all corporate visions, missions and goals may have been properly communicated, many people are competent and responsible. They know what they are about. They may have joined a company because they support its endeavours and want it to succeed.
Confident, responsible and talented people may understand the purpose of an organisation and the situation they are in. They may be prepared to take ownership of issues and may have the competence to address them. Can self-managed work groups and trusted teams who are close to customers and know their requirements be left to get on with it? At what point does inappropriate management and leadership become unnecessary interference, a distraction and counter-productive?
Just as some silent film stars failed to survive the introduction of sound, not all leaders may adapt to the requirements for success in the digital economy. Are these requirements sufficiently stressed in leadership development courses? Are business excellence and other models too preoccupied with people considerations? Boards need to ensure that people are enabled to adopt, integrate and benefit from greater connectivity, big data and knowledge and information management systems.
Affordable digital technologies are rapidly evolving. Many of their applications have the potential to be disruptive and terminal for unaware or disinterested laggards. Developments in areas ranging from design tools to gamification have implications for innovation and the development, launch and support of new products and services and relationships with customers, business partners and users. What will their implications be for leadership, organization and governance?
The nature of work and organisations continue to evolve. As technological developments, automation and expert systems replace people with intelligent apps, robots and drones, and accessible and low-cost on-line services, more leaders may find themselves presiding over options, systems and processes rather than people. What will this mean for leadership roles, how people should prepare for them and the qualities that those appointing them will seek?
Directors also need to be aware of sectoral issues. Applications of technology to enhance agility, improve productivity, drive performance, support innovation and mitigate and manage operational, strategic and governance risks can vary by sector. So can customer aspirations, requirements and expectations. Continuing awareness is needed as to what is considered excellent and innovative.
Some sectors face an uncertain future. For example, in relation to financial services will traditional banks and their branch networks continue to be relevant? In an era of crowd sourcing, AI and automated and on-line transactions, do we actually need banks as we know them today? Are regulatory and licensing practices preventing a revolution in banking?
Does traditional top-down leadership assume a bureaucratic organisation with a leader at its apex? How does it apply to virtual and network organisations where key relationships may be with collaborating peers and partner organisations rather than junior subordinates? What if the priority is coordination and people are in roles that do not enable them to issue instructions to others?
Early investigations of leadership explored what it meant in particular contexts, whether the leadership of military units or the leadership of business organisations. However, there are many other arenas in which leadership issues might arise. For example, what form of leadership is required in relation to vocational bodies and professional associations and firms? What does leadership mean within the creative industries?
Aspects of leadership can be handled differently, depending upon the context. In the world of higher education, key academic decisions can be taken by an academic board. Are there lessons here for companies operating in knowledge dependent arenas? Could business leaders looking for more democratic models of management and governance learn from the public and voluntary sectors?
For directors eager to learn from developments and innovations elsewhere, how relevant is European, North American and Middle Eastern experience for other parts of the world such as Asia and Africa? Listening in Dubai to case study presentations by winners of the Golden Peacock Awards for Business Excellence and Innovation is one way of learning from other sectors. Follow-up networking can allow participants to explore the transferability of insights gained.
What can be learned from entrepreneurs? How do traditional views of leadership relate to those who start a business without anyone to lead? Some people begin an enterprise journey with the support of family members, friends or business partners rather than dependent employees. Others who join them may risk their careers and put their trust in an early stage venture because they share a vision, see an opportunity or believe in a cause. These can also be reasons why certain people are attracted to larger and more established businesses.
In what areas and to what extent are owner-entrepreneurs different from those who have either advanced on merit, or used guile, cunning and political skills, to reach a leadership position at the top of a large and bureaucratic organisation? Does it make sense to call start-up entrepreneurs “leaders”? Is there a separate category of “entrepreneurial leader”? Do leaders of established businesses need to become more entrepreneurial and compelling to attract the talent they need?
Compared with founder entrepreneurs whose influence might be as visible as muddy finger prints all over an enterprise, how does one assess the contribution of other people in leadership positions when corporate performance may be the aggregation of many other contributions. Paradoxically the effective leader whose leadership style helps, builds and supports others and encourages them to take ownership may be less visible than headline grabbing peers.
Some leaders do not inspire people, support them or enable them to excel. They centralise, constrain and consolidate. How can boards prevent too much power accruing to a determined individual who may be confident and energetic, but possibly also incompetent, deluded, mistaken, naïve or out of his or her depth? How can a board reclaim power from a strong CEO?
To avoid the dictatorship of a strong-willed and charismatic CEO one may need to strengthen the remits and powers of other executive directors, as well as ensuring that a board has a suitable and effective contingent of independent directors whose first duty is to the best long-term interests of a company. Boards can play a vital role in ensuring that checks and balances are in place to prevent an excessive concentration of power and ensure there is collective leadership.
Some leaders struggle. The demands of leadership roles can be onerous and they may be difficult to fill. Offering more money to possible candidates may not be the answer. Might some form of shared leadership allow complementary people to collectively cover different aspects of what needs to be done? Might a shared role better accommodate family responsibilities and work-life balance needs?
In addition to providing strategic leadership and good governance, directors should assess the nature and exercise of leadership across an organisation. Established companies may need entrepreneurs to help them to quickly adapt and evolve and remain relevant. In the digital economy start-up companies can grow quickly. Those who have wrestled with the problems of corporate bureaucracy may know how to avoid them. Those who have succeeded at renewal and re-invention may speak a language that an entrepreneur could understand.
In future more leaders may move between established and newer businesses where the priority is to articulate a vision or cause and/or operate more sustainably in order to reach and engage others. Innovation is required in terms of how we think about leadership and the nature of leadership that is required in relation to the changing nature of work, organisation, learning and entrepreneurship.
Published in the March 2016 issue of Director Today (Vol. II, Issue III, March, pp 33-37) a monthly journal published by India’s Institute of Directors (www.iodglobal.com). The citation is:
Coulson-Thomas, Colin (2016), Leadership Excellence and Innovation, Director Today, Vol. II Issue III, March, pp 33-37
Prof. Colin Coulson-Thomas, Director-General, UK and Europe of IOD India and Chancellor and a Professorial Fellow at the School for the Creative Arts, holds a portfolio of public and private sector board level appointments.