Businesses Don’t Fail Leaders Do

Businesses Don’t Fail Leaders Do

September 28th, 2015 // 6:53 pm @

Leaders-Fail1Failures in leadership are the primary cause of companies not delivering the returns shareholders expect, or even ceasing to trade completely.

Research undertaken by Dr Robert Hogan estimates that somewhere in excess of half of people in Leadership roles actually do not have the skills required to lead effectively.

So why do companies struggle to find genuinely good leaders.

Part of the issue is the noisy leader, the egotistical individual who will tell the world how brilliant he or she is, they distracts us with what looks like leadership. We have all seen them, the individuals who believe only they can make every decision in the company, who listen to know one and see only one side to every question. This desperate need to feed their own ego is the driver of their decision making process, and the needs of the company become secondary.

We sadly see now with VW that a culture which allowed the massive and deliberate faking of emission results which endangers the very existence of the VW group, came at least in part from a culture where being the biggest car maker in the world was critical to senior management. Within car making being No1 in volume has no particular commercial benefit to the company, but feeds the ego of senior management.

This egotistical form of leadership drives a number of issues:-

  • The feeding of the CEO’s ego is in reality the key driver of decision-making, in some extreme cases the very strategy of the company is to feed the CEO’s ego.
  • As the leader believes only they can make a decision, all decision making is centralized. The leader is making every decision often without all the information or time required to make a good decision.
  • The ideas of other people in the organization are never considered, denying the company access to a wealth of potentially great ideas.
  • The decisions taken never receive the internal rigorous review that can identify issues before they occur.
  • Good people will not work for egotistical leaders, as the skill required to succeed is to be able to feed the leaders ego, not being good at your job.

Strangely people will often enthusiastically follow egotistical leaders, as people want to believe that someone is confidently dealing with the big issues, it makes us feel better, whether or not the way they are dealing with the big issues is correct. I have sat with groups of employees who talked about their CEO almost in the same way they would a pop star, there was a powerful desire to want to be associated with the aggressive apparently confident egotistical CEO. In my travels I have never heard even the most outrageously egotistical leaders questioned by their staff, until at least they start to fail, when a feeding frenzy of criticism descends on them.

The weaknesses of such leaders normally come out at some point, too often with disastrous results for the company.

The second reason we struggle to get great leaders for our companies, is many boards of directors and shareholders struggle to articulate what they need in a CEO. Therefore so many job descriptions for CEO’s start “Industry Experience”, that cuts the pool of potential candidates dramatically, the fact someone has been a CEO in your industry does not prove they can effectively be a leader.

But this is how CEO job descriptions tend to start, because to define the skills we are looking for and to interview thoroughly to understand if the candidate has them is difficult.

What leadership is not is a job title, or an ego race, it is a mix of recognizable skills and personality traits:

Vision – A great leader must enthuse everyone in the organization with a vision of where the company is going and why. Most people want to work for a successful company and if they buy into the vision, they will work towards it. This vision needs as well as being articulated it has to be right, it needs to be the correct vision for that company.

Decisiveness – I was once told by a leader I much respected “Knowing what to do is relatively easy, having the courage to do it is the difficult bit”. It is often the case that making a clear decision and carrying it through with commitment is more important than fine-tuning the actual decision.

Integrity – People within an organization and outside recognize even if only subconsciously any lack of integrity or narcissism. People respect integrity, even when the individual makes mistakes. A good leader must be seen to be trying to do the right thing for all stakeholders, that is something people will follow.

Competence – As a leader you must actually make decisions and you need to get the majority correct. No one will get every decision correct, but a demonstrable commercial competence is critical to leadership.

Communication – To lead is to communicate, the vision, the strategy, the business model, decisions taken, results. The more people know about what is happening and believe in it, the more they will work towards the corporate goals without he need for close supervision

The organizations that value and nurture true leadership the most are those in the military. They have understood the critical value of leadership better than commercial organizations for generations.

History is littered with military examples of where leadership was the difference between success and failure, from Alexander the Great to Patton. So many battles were won when on paper they should not have been, and the only difference was leadership. Yet in commerce we do not seem to have grasped the critical nature of leadership as thoroughly.

When recruiting people into leadership roles, leadership is rarely even mentioned, and almost never are the specific skills and personality traits required laid out as necessary for the successful candidate.

If those recruiting CEO’s can actually define the skills they are looking for, and recruit against them, we will get the leaders we need and deserve.


Category : Blog &CEO &Leadership

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