In tough economic times good business leadership is more critical than ever. But what defines a successful business leader? And does the wide range of training opportunities available suggest the triumph of ‘nurture over nature’: leaders are made, not born and, with the right training, anyone can step up to the plate. Patricia Moore examines the issues of leadership development.
sk a dozen different people what makes a business leader outstanding and you’ll get a dozen different answers. What’s more, there’s probably a convincing argument for every one of them.
“At one stage the emphasis was on leadership traits, the idea that you either had them or you didn’t,” says Dr David Tweed. “But if leadership is defined by traits then basically there’s no point in having courses on leadership. You either have those traits or you don’t.”
Tweed, who is associate pro-vice chancellor, Executive Education, at Massey University, says there are characteristics that can be developed, and there are behaviours and skills that can be learned. “In the end it’s probably a little of both. Business leaders need to have some raw potential but it needs to be developed.”
Everyone has a view on the nature versus nurture debate, says Dr Sven Hansen of The Resilience Institute. “Separating causality from correlation is devilishly difficult. Trait theory, which is nearly 100 years old, proposed that height, deep voice, big jaw and so on, qualified a leader. In the military model of leadership this may make some sense.” (A recent biography of George Washington discusses how he became leader of the rebel congress by dressing as an officer in the colonial militia, looking stern and saying little, so that despite a mediocre fighting record he stood out as the only real choice of military leader.)
“Today we make a case for intelligence, resilience and emotional intelligence, but probably no more than 50 percent of your performance is based on genes. Perhaps ten percent is circumstance – or luck – and a full 40 percent is personal effort,” says Hansen. As the old saying goes – it’s not what you’ve been given but what you do with it that matters.
Earlier this year consulting firm Hay Group released its sixth annual Best Companies for Leadership (BCL) Study and Top 20 list, ranking the best companies for leadership around the world and examining how they develop current and future leaders. The study reported that everyone, at every level of the organisation in those top companies, has the opportunity to practice the capabilities needed to lead others. The study also found that in 90 percent of the Top 20 companies, people are expected to lead, regardless of whether or not they’re in a position of authority.
Since 2006, when the study began, the change in priority towards leadership development has been significant, says Gillian Hopkins, head of Hay Group New Zealand’s Leadership and Talent Practice. Initially only 62 percent of the Top 20 placed a priority on providing leadership development for senior managers. “BCL research has found that the Top 20 companies consistently produce the best leaders through both on-going development programmes and success leadership qualities such as innovation, collaboration, empowerment through flatter structures, and embracing diversity. Hay Group believes these qualities can be learnt and adopted by aspiring business leaders.”
Given that the 2010 Top 20 was headed by General Electric with Procter & Gamble, Intel Corporation, Siemens and Banco Santander completing the top 5, how relevant to the SME sector are those findings? “The leadership qualities displayed by the Top 20 companies are universal and can be adopted by an organisation irrespective of its size or reach,” says Hopkins.
Leadership in the workplace
So how does top leadership manifest itself in the workplace? The top business leaders surveyed in the BCL research understand that to be successful they can’t do it alone; collaboration is key, says Hopkins. “In addition to this they ensure they not only innovate as they operate, they involve everyone in the process.” Those same leaders ensure their organisations keep in shape by putting a higher priority on looking after their most important asset – their employees. “95 percent of the Top 20 companies identified helping employees achieve work-life balance as a priority and 84 percent have created flexible working arrangements, such as working from home.
“All Top 20 companies in the BCL place greater emphasis on developing leaders internally, and actively manage a pool of successors for mission-critical roles.”
David Tweed suggests leadership is best demonstrated in situations where there’s change. “Leaders are not fazed by change; they’re able to look at it and not only see where it’s going but see the pathway to lead their organisation through.” Toyota NZ CEO Alistair Davis is an outstanding example of this, says Tweed. “He had to manage the company through the recession and did so without laying off any staff. He went to his people and explained they had some hard choices to make; they needed to watch expenses, but whatever decisions were made he wanted to keep everyone employed. They managed it.”
Where change is not happening, leadership is more about influence, he says. “Allowing people to have ownership of what they’re doing and the outcomes.” And he notes there appears to be something in the Kiwi psyche that is resistant to being led. “When there’s not a lot of change happening we tend to say ‘give us an environment and let us get on and do the things we believe are in the best interests of the firm’.”
Tweed also makes the point that the demonstration of leadership depends on context; “in some situations a particular person may shine as a leader but not in others.” He cites Winston Churchill as an example – an outstanding war-time leader in Britain but later dumped because that kind of leadership was no longer required. “His moment of glory was best demonstrated within the context of a war.”
Resilience has become very topical, says Hansen. “The entire issue of April’s Harvard Business Review is devoted to it. “We are seeing resilience emerging in academia, education, health, business and popular media. He says there’s much to be gained from reflection and investment in resilience. “Perhaps learning how to support the resilience of their people is the greater challenge for leaders.”
The Resilience Institute offers short courses on resilience but Hansen says the real work involves putting the disciplines into action in their daily lives. “To become the guy everyone wants to work with you have to put the interpersonal dimensions (emotional intelligence) into every interaction with your people. This includes showing self-awareness, self-mastery, empathy and resonance.”
“It’s not easy to articulate great leadership,” says Bizzone’s Sarah Trotman. “But you know it when you see it. You can certainly learn the skills, the question is whether you have the strength of character to step up and it’s not always easy.” She cites a strong sense of values, consistent performance, accountability and courage as the attributes of a leader. “Being prepared to be accountable and having the courage to take calculated risks.”
Being a good leader must be incredibly challenging and isolating at times says Trotman, and she wonders about the support mechanisms for our leaders. “What happens when they start tiring? I think in New Zealand there’s a huge amount of responsibility resting on the shoulders of just a few. It’s great to see the Sir Peter Blake Trust celebrating leadership and people like Jo Brosnahan at Leadership New Zealand working to develop leaders, not just in business but across the whole community.”
SME owners and managers who want to improve their leadership capabilities are well catered for with a range of options through Massey University, says David Tweed. Time out to complete a BBS may not be the easiest way to upskill, but Massey’s graduate diplomas such as ‘entrepreneurship in small business’, can be “chewed off at two papers a year in four years and it doesn’t consume your life,” says Tweed. “There’s a range of concentrations available, including management, which gives access to leadership and for the SME market that’s definitely a possibility.”
Leadership opportunities specifically for women in business, are promoted through The New Zealand Centre for Women and Leadership, an initiative of Massey University.
For the more ambitious – and those who are prepared to give up weekend leisure pursuits for lectures and study – Massey’s nationwide executive MBA programme offers the opportunity to learn about all aspects of business by integrating various silos, rather than specialising in just one aspect. “Students are learning things they can actually take back into business and think about their application. They emerge at the end with not only knowledge about business but it’s had an impact on their practice.”
Identifying and grooming leaders
The attributes of successful business leaders are frequently listed and the merits of leaders like Bill Gates, Richard Branson, Henry Ford et al discussed and analysed. The danger lies in confusing success in business with a good PR machine and the awareness it can create.
“I think some of New Zealand’s best leaders don’t actually attract a lot of publicity,” says Tweed. A point also made by Sarah Trotman; “Sometimes you can overlook great leaders because they’re working behind the scenes making things happen.”
Businesses in New Zealand are getting better at identifying and grooming leaders, believes Sven Hansen. But he says there are still two challenges to overcome. The first is investment in vocational training; we lag behind many other economies, he says. “The second is that our top leaders are attracted to bigger economies both for the challenge and the development opportunities. The work that has been done at The ICEHOUSE in developing entrepreneurs and SME leaders is world leading. Resilience is a key part of the Owner/Manager and Agribusiness programme, and one of the most valued components. This is an area where New Zealand can be great since we are small, flexible, and make it easy for businesses to get going.”
Patricia Moore is an Auckland-based freelance writer. Email email@example.com