Written by
Changeboard Team

Published
08 Mar 2011

The ABC of leadership

08 Mar 2011 • by Changeboard Team

Biggest leadership challenge

The quartet were the chairman and CEOs of failed banks HBOS and RBS which this fearless foursome had led to their downfall.

The biggest challenge we face now is to try and understand the nature of leadership so that we can learn from those mistakes. I have called these the ABC of leadership.

Leadership competencies

Abilities – leadership competencies are being rewritten in response to the tough economic times we now find ourselves in. Much greater emphasis is being placed on aspects such as engagement, deployment and execution, in other words, getting the job done. 

But descriptors like this not only state what is required but also imply the way jobs should be done. It's a very militaristic, macho, view of leadership. I am concerned that we will end up over-valuing these characteristics and ignoring the importance of qualities such as empathy and respect. More and more research is showing that empathy is one of the key differentiators between great and run of the mill leaders.

This virile form of leadership will mean that we may miss the opportunity to change the nature of leaders from being transactional to transformational. There is a real danger that the opportunity to rethink what we want from our leaders will be lost.

Leadership bias

The ‘hero’ style of leadership stereotypically will be more closely associated with men. This model of leadership therefore not only is less effective but it is also distinctly monotone and the result will be a lack of diversity. 

Bias can also display itself in a lack of inclusion and the bad decision making that results. One of the reasons why a major institution like Lehman Brothers failed was due to the fact that views that contradicted those of its two powerful leaders, Dick Fuld and Joe Gregory, were not tolerated. Dissenters were disrespected, dismissed and ultimately dispactched. 

In other words leaders need to have a much better appreciation of the way in which decisions about people and strategy are made and the way our biases can affect them.

Compensation

Egocentric bias is one of the most common that exists – it’s a bias towards ourselves. You know the type of thing: for example, 80% of people consider themselves to be above average drivers. We overestimate our abilities in other words.

Many large corporations pay their most senior officers extremely large salaries with equally large bonuses topped up with pension payments and the like. The defence practically always comes in two forms, “well I deserve it” and “it’s what needs to be paid to get quality people”. 

Research studies reveal something rather more different.  High salaries and bonuses do lead to better performance - up to a point. After that point is reached quality and effectiveness of performance declines. The compensation can become so large that it starts to affect the quality of decision making, making it more prone to short termism. 

Currently, there is a growing sense of injustice at the gap between the lowest and highest earners in organisations and we need to establish better and clearer criteria for executive pay.

Leadership challenges facing us now

These are all important challenges that confront us about the quality of leadership in our organisations now and in the future. The opportunity to re-think and re-appraise our ideas about leadership exist now, but I sense the appetite to really discuss and challenge the existing state of affairs isn’t there. In which case we should be prepared for more of the same self-serving grovelling we witnessed in February 2009.

Free diversity master class - 5 April

Professor Binna Kandola will host a free diversity master class on Tuesday, 5 April 2011, from 10.00am - 12.00pm at The British Psychological Society, 30-34 Tabernacle St, London EC2A 4UE

Many organisations are finding that their work on diversity has stalled. This master class has been developed to help you move your diversity thinking to a new level by tackling a subject that is difficult to address: Unconscious Bias. Whether we like it or not, we are all biased and this affects all the decisions that we make at work. Through this session Prof. Binna Kandola will help you to understand why we’re biased and provide you with techniques and processes to help reduce, or potentially eliminate bias in your decision making. It will reveal the tell-tale signs which indicate when decisions made by others are biased, how the difficult topic of addressing unconscious bias can be effectively broached in the workplace, and how to move the diversity agenda on in your organisation.

For more information please go to www.pearnkandola.com or to book your seat please contact Laura Hollitzer on 01865 399060 or email lhollitzer@pearnkandola.com with your name, job title and full contact details including telephone number.