The thing about leaders is that even the terrible ones tend to think they are good. And those who are widely admired as ‘great business leaders’ often end up disappointing us with what they do – or don’t do.
‘I hesitate to pick an example of a good leader, because he or she might be in the news the very next day,’ says Tim London, senior lecturer at the Allan Gray Centre for Values-Based Leadership at the University of Cape Town’s Graduate School of Business.
He says that – contrary to what some company bosses want us to believe – leadership does not reside exclusively in a handful of senior positions.
‘Some CEOs convince their boards that they are “magic” and irreplaceable, and, as a result, negotiate huge salaries. But it’s ridiculous to expect one person to have all the answers. Nobody can be an expert at everything,’ he says.
‘This narrow view of leaders and leadership, ignoring the many smaller decisions, generally creates a series of impacts on the organisation that, while each can be hard to spot, can eventually combine to create serious faults.
‘Three key areas that tend to exhibit problems when leadership is seen as only residing in senior leadership positions are a lack of employee engagement, a more toxic culture of internal politics and a decrease in innovation.’
So, according to London, by the time corporate scandals hit the headlines, there are usually many things – rather than one isolated leadership decision – that have gone wrong. Recent examples include Steinhoff, KPMG and Eskom. To prevent such failures, governance frameworks such as South Africa’s King reports on corporate governance have set guidelines for corporate leadership with increased accountability and oversight.
‘Ethical and effective leadership is not just about making profits; it’s more about how this is done,’ says Parmi Natesan, executive of the Centre for Corporate Governance at the Institute of Directors in Southern Africa (IoDSA). ‘Feedback from stakeholders, such as employees, shareholders, regulators and fellow board members, is essential in this regard. The challenge is that the latter is not as easy to measure or as tangible as the former. It often hinges on gut feel at a point in time, which may turn out to be wrong down the line.’
Leadership perceptions, she says, have changed over the years. ‘Today there is a much bigger focus on ethical – “doing it right” – leadership rather than just effective – “getting results” – leadership. There is much more public scrutiny on leaders and what is expected of them.
‘Sustainability and the concept of an organisation being cognisant of its impact, as opposed to just output, has definitely taken more of a focus, specifically as we see our natural and other resources dwindling.’
This is why values-based leadership is gaining traction across the globe. ‘Companies and societies are in great need of leaders who are able to refocus their organisations on the task of creating wealth, while also adding value to society through meaningful, purposeful and inclusive business,’ says London.
‘It’s about finding ways to contribute to the development of the economy and society in which they are operating, whether rich or poor, mature or emerging.’
London adds that leaders should take the mindset of younger generations into account, who, according to a growing body of research, want to work for responsible organisations, in jobs that have a purpose, and who, as conscious consumers, prefer goods, food and services that are produced sustainably.
The Deloitte Millennial Survey 2018 confirms this trend, revealing that millennials and Generation Z ‘yearn for leaders whose decisions might benefit the world – and their careers… [and] their concerns suggest this is an ideal time for business leaders to prove themselves as agents of positive change’.
In a rapidly changing, complex world, modern leaders need to articulate (and stick to) their personal values, as well as their purpose, says London. It’s not enough for a company merely to display its values on its website and PR material. They need to embed them in the corporate culture and strategy to encourage employees to live these values and hold each other accountable. ‘As a leader you need to know what your individual values are,’ he says. ‘You need to answer questions such as: Why am I here? What is most important to me? If you know your values and your purpose, you have a better chance at success, because you know what you’re shooting for.’
EY’s Global Leadership Forecast 2018 validates London’s statements. ‘We discovered that purposeful organisations – those with active leadership support – get even stronger financial performance in the short and long term – and are better equipped to deal with the fast-changing, competitive environment,’ states the EY forecast. It also found purpose to be a key driver of employee engagement, trust, company loyalty and resilience, with purpose-driven leaders creating psychological safety and agility among their teams.
‘Purposeful organisations build leaders’ skills in inspiring, adapting and team leadership. ‘They do this by focusing on experiences, coaching and mentoring,’ according to EY. ‘Leaders learn from leaders, and they coach and develop their people.’
It’s crucial to understand that the tone of any company is set at the top, says Natesan. ‘Directors and executives must lead by example and entrench a culture of ethical and effective behaviour throughout the organisation.’
With the rise of social media, whistle-blowing platforms and activism, such as the #MeToo campaign against sexual harassment, leaders can no longer get away with unacceptable behaviour. The public is likely to discover transgressions and judge them harshly.
Another hot global topic is gender transformation. In South Africa, there’s been a push to promote women, especially black women, into leadership positions. ‘At executive level there has been some progress‚ with more women appointed in senior roles. But still‚ percentage-wise‚ women remain woefully underrepresented,’ says Advaita Naidoo‚ COO of headhunting firm Jack Hammer.
The company’s 2018 research shows that 22% of executives in South Africa’s Top 40 companies are female, compared to 17% in 2015. At non-executive board level, it’s slightly more balanced: with 32% female board representation in the Top 40 companies, and Absa’s Maria Ramos the lone female CEO in this group. ‘We can see from placement data that shifts are being made at executive level,’ says Naidoo. ‘But when it comes to the most powerful position in a company‚ women remain conspicuously absent.’
This echoes findings by Pew Research Centre, which says women merely account for 10% of C-suite positions (and only 5% of CEOs) in top US companies. This could be a result of women being more likely to work in finance or legal instead of operations-focused roles that pave the way to the CEO chair.
Gender bias, whether open or unconscious, still seems to affect the way female leadership potential is valued. But whatever the gender, there’s no universally ‘right’ leadership style, because leaders need, constantly, to adapt their style to the situation, location and people with whom they are dealing at any particular moment. Leadership models (such as the behavioural theory of leadership styles which includes autocratic, democratic, strategic, transformational, team, cross-cultural, facilitative, laissez-faire, transactional, coaching, charismatic and visionary leadership) are ‘tools in the toolbox’, not an end in itself, says London.
However, there are ‘wrong’ ways of leading an organisation, argues Theo Veldsman, head of industrial psychology and people management at the University of Johannesburg. In his 2016 article on how toxic leaders destroy people as well as organisations, he says three out of every 10 leaders are ‘toxic’ – and deliberately destroy the fabric of their institution by undermining the sense of dignity, self-worth and efficacy of other individuals.
Veldsman identifies five types of toxic leaders: the Cold Fish: (anything goes if it yields the desired results); the Snake (the world serves to satisfy personal greed, status and power); the Glory Seeker (personal glory and public visibility at any cost); the Puppet Master (absolute, centralised control over everything); and the Monarch (ruling the organisation as a kingdom, with all assets available for personal use). These types of leaders are increasingly unacceptable, as the focus shifts towards ‘authentic’ leadership (based on self-awareness, openness and honesty) with a ‘360-degree view‘ (seeing from multiple perspectives).
‘Digitisation, technology and disruptors have changed the way leaders need to think; it’s no longer business as usual,’ says Natesan.
The rise of artificial intelligence and automation of the workplace requires leaders with a new way of thinking. The most sought-after leaders will be those who combine their technical expertise (such as mathematical or ICT skills) with soft, interpersonal abilities, according to the WEF’s Future of Jobs report. By 2020, the top skills will be complex problem-solving, critical thinking, creativity, people management, co-ordinating with others and emotional intelligence.
Leaders will have to balance the management of people and machines in the workplace. Klaus Schwab, WEF executive chairman, has been widely quoted saying: ‘We need leaders who are emotionally intelligent, and able to model and champion co-operative working. They’ll coach, rather than command; they’ll be driven by empathy, not ego. The digital revolution needs a different, more human kind of leadership.’
He also calls for leaders and citizens ‘together [to] shape a future that works for all by putting people first’.
This is a noble aim, but Africa’s business leaders – faced with high unemployment, low economic growth and political uncertainty – may feel they cannot afford to put the common good above their personal destiny.
‘Asking people to become completely selfless is unrealistic,’ says London. ‘But by putting shared purpose first, it can at least keep the majority of the focus on the needs shared between all stakeholders.’
Ultimately, it seems that the exact qualities that old-school business leaders used to suppress – emotional intelligence, concern for others, personal values and a sense of purpose, in short: the essence of humanity – will be the ones that will make for great future leaders.
