What do Enron, French Telecom (Orange), Northern Rock, Lehman Brothers, Equitable Life, Volkswagen, Toys R Us, Kmart and many other companies that have fallen from grace have in common? They have all experienced inadequate leadership that led to bankruptcies, lost jobs, criminal charges and even employee suicides (in the case of French Telecom).
Many leaders in those (and other) organisations led using outdated approaches based on (at best) hierarchical command and control, micromanagement and treating people as replenishable resources. At worst they created a deliberate culture of fear, bullying and breaking the law. The whole world has witnessed the consequences suffered in such companies.
We need more humane approaches to leadership, not only because this is morally the right thing to do, but also because there are economic benefits to human-centred leadership. For example, research shows knowledge workers don’t like being told what to do; they can silently withdraw cooperation or change jobs. And there are many examples of creative and technological firms that thrive with a fluid or ambiguous hierarchy and become more innovative as a result.
This leads to some fundamental questions for all businesses: does anyone want to be told what to do? Can we get along in teams that are largely self-managed? Do we actually need formal leadership roles anymore? Do we need to abolish leadership as we know it?
Even some of the more benevolent forms of leadership carry with them an assumption of inequality between people – that initiatives or challenges can only be addressed by a minority (the leaders) bringing out the best in the majority (the followers). This concept, that the gifted elite has the right to guide lesser mortals, does not feel right to the modern democratic mind.
We need a more mature approach than the naïve belief that a tiny cadre of elite leaders know everything, have to make every decision by and for everyone else, should be perfect, and should be subject to ridicule if they make a strategic error – even if an honest, well-intentioned one.
Research studies, as well as professional experience, tells us that while the challenge of leadership won’t go away, there is a pressing need for radically fresh thinking. The most effective approaches to managing organisations deploy an approach to ‘leadership’ far removed from the traditional hierarchical concept.
A truly enlightened approach to organisational management and leadership sees leadership roles commensurate to people’s capabilities, rather than arbitrary status within a hierarchy. So, the person who has the most relevant expertise is typically the best to take the lead for a project where this expertise is key. In other circumstances, where a range of specialist disciplines is involved, an expert facilitator may be best placed to take the lead.
Furthermore, the most effective approaches are based on a philosophy of seeking to create a working environment where all can give their best. This is perhaps the most neglected area as, in the busy world of business, many organisations tend to downplay or even overlook the importance of values, beliefs and culture.
The change in leadership that much research now points to is profound. It is a different mindset and worldview, not just a set of techniques. It is a shift from seeing leadership as a particular set of individual traits that can autocratically guide followers to do the right thing, towards seeing leadership as the formation of a creative culture that includes leadership behaviour – but from many different individuals within the wider group, depending on the context and the need. The discipline comes from a binding set of values and principles that everyone subscribes to, rather than a detailed list of rules and regulations.
There is a need for a cultural shift in perception, philosophy and approach to the whole area of improving leadership, management and workplace culture. It is inadequate to move away from command and control structures without a fundamental change to command and control mindsets. Leadership is moving towards becoming more about relationships and interdependence, replacing the concept where an elite few set the vision and ‘roll out’ or ‘cascade’ their decisions.
This emerging understanding supports an approach of reinvention of leadership and abolishing the traditional approaches. Leadership needs to be fluid, interchangeable, relational, reciprocal, and temporary, rather than rigid and hierarchical and the gift of a tiny minority. Organisations that get this do well and do good – while attracting highly engaged talent.
Vlatka Hlupic is professor of leadership and organisational transformation at Hult Ashridge Executive Education and CEO of The Management Shift Consulting