Few can doubt that we are experiencing uncertain economic times. Martin Wolf, Economics Editor of the Financial Times describes the financial crisis in the West as “a turning point in the world financial system”, while Alan Greenspan, rather more gloomily, predicated that “the financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war.” (Financial Times, March 2008)
Few can doubt that we are experiencing uncertain economic times. Martin Wolf, Economics Editor of the Financial Times describes the financial crisis in the West as "a turning point in the world financial system”, while Alan Greenspan, rather more gloomily, predicated that "the financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war.” (Financial Times, March 2008)
Against this background, trading and operating conditions for many South African organisations are likely to be challenging in the next year or two, We are all aware that when trading conditions become difficult, organisations naturally look to cut costs and investing in development is seen as a luxury that can be dispensed with.
And yet is can be argued that it is precisely when times get tough that leadership is most required, especially leaders who can lead people through uncertainty and keep people engaged and focused on performance.
In South Africa today, where the skills shortage is one of the problems we hear most about, it is worth noting that leadership is a key factor in explaining why people want to either stay with their employers and give their best, or leave, or, worse still, stay but become cynical and find work meaningless.
Why is leadership key? The beating heart of the organisation needs something more than great processes, strategies and technologies to make it tick. People want to belong to something they willingly feel a part of.
The organisation is a community in its own right, where people look to find their place, grow their skills, develop their careers and succeed in what they do.
The most successful leaders recognise and nurture that sense of an inclusive community serving a worthwhile purpose.
They help create a shared mindset that engages and inspires people, providing parameters within which people can be creative and empowered in serving the needs of their customers.
The best leaders focus on developing capabilities rather than just on achieving cost efficiencies, building their organisation’s potential for future success, as well as leading for high performance in the here and now.
Authentic leadership
The greatest emphasis in a review of leadership literature over recent years is on the role of individual leaders as authentic moral leaders.
It is this more than anything that accounts for the extraordinary influence that our own Nelson Mandela has exerted worldwide.
Leaders have a sense of purpose in life, they work for others and themselves, and they are unselfish and are defined by their commitments.
They also, as shown by Jim Collins’s Good to Great (1996) study, demonstrate "a compelling modesty and are often understated”.
According to Sujansky (Leadership Challenges for Challenging Times, Business Credit, Jan 2006), there are six classic leadership mistakes and the first is lack of trust.
The others are: failure to shape and share a vision, unclear expectations, setting bad examples, taking success for granted and failure to retain top talent.
Leaders or Leadership?
The concept of leadership is in a state of flux. The idea of the charismatic leader who single-handedly shook up and transformed the performance of a major corporation is a seductive one, because we all like a hero, but there’s been a definite move away from the aggressive Lee Iacocca or Jack Welch stereotype – the kind of kick-butt, top down leadership style of the 80s and 90s.
Why is the model changing? Research has shown the kick-butt type leaders were often damaging to long-term organisational performance and the stereotype probably wasn’t accurate anyway.
Not only that, but companies have become far too complex for their success to be attributable to one person. So we are seeing a more consensual, more culturally aware, more participative, more team-oriented, more coaching model of leadership which better suits our organisations today.
Because the type of leadership that is best suited to the complexity and diversity of modern organisations is based in teamwork, team based leadership is taking over from the old concept of a single strong leader, whether he or she is galvanising an army into battle or wrestling with the seven habits.
What makes a good leader?
There’s no recipe for that. We can’t simply say "Develop these six qualities and you’ll be a great leader”.
So what people who aspire to leadership need to find out, is what works for them. And what works for them might be their intellect, their humour, their loyalty – even physical attributes like size.
So we get the concept of discretionary leadership, where the leader has a wide range of approaches to choose from in fulfilling their role, and the choice depends on the context.
The leadership paradox is that strong leaders are needed, but they can’t command change in employees – unless employees choose to follow them.
There’s greater recognition that in order to be effective, leaders have to take their followers with them and vary their style to suit the different situations they face.
This does mean that leaders must first understand themselves. The aim is for each individual to reach inside themselves and find the leadership style of their own that meshes most successfully with their organisation, the needs of the situation and their own strengths.