Business leaders face the difficult balance of letting go to empower managers and boost staff motivation, while staying in firm control of the company’s aims and strategic goals
It’s tougher than ever to be a leader in today’s business climate. Thanks to a string of commercial scandals at institutions such as the Co-operative Bank and RBS, there is intense scrutiny of executive decisions and trust in senior managers has decreased.
At the same time, the context in which leaders operate has become more complex. Companies are more geographically dispersed, managers have more direct lines of reporting and often a much wider remit than before. A study by best practice insight company CEB found that 85 per cent of leaders felt there was an increase in the number of job responsibilities, while 61 per cent reported they had to consult with more people before making a decision.
“There’s exponential technology change, too, which creates more transparency around leadership,” says Simon Hayward, chief executive of Cirrus Group, a leadership consultancy. “If a customer has a bad experience, we find out about it more quickly, and industries are rapidly changing and innovating – take Uber for example.”
With this backdrop, the qualities we expect of a great leader have changed, argues Mr Hayward. The authoritarian, command-and-control leadership style that used to dominate corporate life is no longer relevant. “Under that style of leadership, people follow instructions, but they’re dependent. That’s fine if the leader is always right, but it depends on the wisdom of that leader,” he adds.
CEB’s research has identified three ways great leaders can be effective: how they manage the transactional side of leadership, that is how efficient they are at getting things done; how transformational they are in style, how they motivate, engage and empower employees; and finally, whether they practise networked leadership.
Jean Martin, CEB talent solutions architect, explains: “Networked leaders know how to get things from the organization, but also give stuff back; they pull information from employees rather than just pushing directions down.”
Jane Sunley, chief executive of HR consultancy PurpleCubed, believes this more collaborative style is better suited to the leadership challenges of today. “A good leader asks questions, observes, allows people to speak up if there’s a problem,” she says. “In a management culture where all the focus is on metrics and measurement, people will massage the figures because they dread getting it wrong.” It’s also a style that Generation Y or the millennials – the future generation of managers and leaders – prefer, she adds.
Training and development
When it comes to training and developing leaders, embedding this style of leadership requires a more nuanced approach than before. The one-size-fits-all approach of sending groups of managers to a residential course where they learn how things are done may no longer be as effective.
“You have to articulate what leadership looks like in your company. It will mean different things to different people,” argues Ms Sunley. She advocates appointing internal mentors and facilitators, who can share examples of good leadership, and “tell stories about how they solved problems”.
Hotel group Dorchester Collection aims to train future leaders from an early stage in their involvement with the company. Its Dorchester Academy has five different levels, and the focus is on building emotional intelligence and learning through experience rather than decreeing how things are done. “Only one of our programmes looks at how we run the service side of the business, the rest focuses on knowing yourself and knowing the company. If people know who they are, what their strengths are and who they work best with, they can be their most successful,” explains Eugenio Pirri, the hotel group’s vice president for people and organisational development.
Getting leadership right will pay dividends in terms of employees’ happiness at work and willingness to do well
The idea here is to empower staff to make their own decisions, but within the context of the company’s values, he adds. “It doesn’t work when you tell people what to do or you put them in a box. We spend time looking at how we deliver five-star service, but if someone wants to serve a coffee in their own way, with their own spark, they can do that.”
This empowerment will become all the more important as employees rely less on leadership from the very top and more on relationships with local managers. “Our research has shown that organisations will become a more loosely connected group of people whose primary experience is not with the ‘logo’, but with the leader they work most closely with,” says Tania Lennon, associate director of leadership and talent at Hay Group.
What could hold them back, however, are systems that don’t fit with a more agile style of working, for example appraisal processes that only look at performance once a year. “We see many organisations starting to lead in a way that gives employees more freedom, but systems haven’t caught up,” adds Ms Lennon. “It can mean they’re trying to lead with one hand tied behind their back.”
Getting leadership right will pay dividends in terms of employees’ happiness at work and willingness to do well. CEB’s research shows, for example, that employees who operate in a more networked leadership environment tend to show 35 per cent higher employee engagement.
“When employees sense their work is aligned with the company’s goals, that’s a real driver of engagement. Rather than blaming or pointing at problems, good leaders empower employees to fix things along the way,” CEB’s Ms Martin concludes.