Developing authentic leadership White Paper
Dynamic Learning Network, 2003
Table of Contents
A. Truly Authentic Leadership
- Definition of “authentic leadership”
- Five key ingredients to demonstrate successful authentic leadership
- The characteristics of an authentic leader
B. Creating best practice and make good decisions, while respecting the context
- SARS – A leadership challenge
- Breaking through the glass ceiling: Diversity and Race
- Making tough choices with compassion
- Corporate Social Responsibility – where are the limits?
- The work-life debate: is balance achievable?
C. Conclusion
Part a. truly authentic leadership
1. Definition of “authentic Leadership”
Something ignited in my soul,
Fever or unremembered wings,
And I went my own way,
Deciphering that burning fire.
Pablo Neruda
Current management best sellers address opposite ends of the leadership spectrum: the high-level, charismatic leaders on the one hand, and books on starting out your career on the other. But somewhere in the transition between middle management and CEO, there are a whole host of leadership issues and challenges that are currently not addressed in popular literature.
The framework and principles for the “Developing Authentic Leadership” DLN did come from a recently launched book by Bill George, former CEO and Chairman of the Board of Medtronic, and current board member of the Goldman Sachs, Novartis and Target Corporations. For Bill, authentic leadership is about being yourself; being the person you were created to be. This is not what most of the literature on leadership says, nor is it what the experts in corporate America teach.
There is also something important, that authentic leadership is not about. It is not about developing the image or persona of a leader.
2. Five key ingredients to demonstrate successful authentic leadership
2.1Purpose: What is your personal or corporate mission and vision
2.2Values: Do individuals or companies practice solid values while delivering on their bottom line
2.3Heart: How to lead with heart and empower employees to fulfill themselves
2.4Relationships: How to build an enduring, committed organisation
2.5Self-discipline: Delivering results for all stakeholders
3. The characteristics of an authentic leader
For each of the above key ingredients of authentic leadership, a developmental quality is required for leaders to be effective.
3.1To find your personal or corporate purpose, you require Passion to realise your mission and to follow your vision.
3.2Whether an individual or a corporate practices solid values will be expressed through its Behaviour (“walk the talk”).
3.3To lead with heart is to feel, show and to not be afraid of Compassion.
3.4To build enduring and committed relationships and organisations requires a strong degree of Connectedness.
3.5Delivering results and self-discipline in daily business life is all about Consistency.
Part B. Creating best practice and make good decisions, while respecting the context
1. SARS – A leadership challenge
1.1Topic summary:
The first discussion of our DLN evolved around the leadership dilemmas that arose from the Severe Acute Respiratory Syndrome (SARS) outbreak, earlier in the year. The DLN was launched as the SARS tragedy was at its peak; hence the issues were pertinent and contemporary and unfortunately not a phantasmagoria.
Imagine yourself in Shanghai today working for a multinational, your government back home warning people to return, the press being cagey about what it reports, your friends no wiser than you are about what's really going on.Your employees and your family are counting on you. Do yousend your family out of this trouble-spot? What about yourresponsibilityto your staff? What decisions do you make about them?What are the trade offs? Finally, do you stay or choose to take an obdurate stance and operate remotely from a safer place, because you can…?
1.2 Forum participation – Discussion threads:
The enthusiastic response from our learned participants, of many metiers, about the Earth shattering dilemmas surrounding leadership was a great beginning to our Dynamic Learning Network
Many responses were related to the question: did the press exaggerate the situation (which today, in hindsight, may be true). But is not one of the qualities of a leader to make decisions, even relating to human life, without full information at hand? Do you just defenestrate your values in these cases?
As one interviewee said “The worst thing was the lack of transparency and reliable information. Making decisions without information is tough, and this contributed enormously to the fear levels”. Certainly a situation of trepidation.
Gerd Pircher, an IMD MBA candidate, led the discussion by quoting another interviewee with regard to the professional leadership responsibilities but with a mind to the fact that leaders also have families "when you have children, statistics do not matter" extremely powerful and true. An interesting and non-innocuous response.
Lino DiCuollo, another IMD MBA candidate, responded in gainsay: I too was moved by the 'statistics do not matter' quote. But, unfortunately, the law does not and cannot take such matters into account - otherwise, the system would be unworkable. The legal system is a way to create certainty for business ventures and provide redress when persons are injured; it is, in other words, heartless.
Unfortunately many western managers left the region, but worse, without taking responsibility for their employees left behind.
As described by Ormo Hugo, A DLN participant:
I can see two different approaches in the case. The first interviewed did honestly face the situation and expose clearly her fears and decisions. Weighting also the overall impact of any of the solutions (rules are different for locals or foreigners?).
The second interviewed, under the same circumstances showed different behaviour. He left for planned vacations and mentioned that many foreigners did, probably because it was all planned too...
If I would be in the first interviewed team and local I would feel even more bonded to the company and to the team. In the second case I would feel frustrated and I wouldn't trust anymore the interviewed. Do we detect animosity?
Our summation? Reverting back to the timely quote. When the times get tough, the tough get going. Unfortunately the un-tough in this case, literally left. The issues are extremely complex and quite possibly unique and difficult to measure with a fixed yard stick, but we feel we covered a great deal. There is a lot to learn from the leadership experiences of the SARS “era” and what a great start to our DLN experience!
2. Breaking through the glass ceiling: Diversity and Race
2.1 Topic summary:
Roberto Goizueta (Cuban), former CEO of Coca-Cola, Rajat Gupta (Indian) former CEO of McKinsey, Ken Chennault of American Express Company….are these mere minor ripples on the ocean’s surface, or are they an indication of definite trend?
But, one has to ask two questions, (a) is this diversity indeed good and (b) how can real diversity be achieved. These days, most of the companies seem to have a prevalent theme around their ‘diversity policy’. Should a successful and intelligent person really be given a pass for promotion, only because she is not from a minority community? However far-fetched it might sound, this is happening in many companies.
2.2 Forum participation – Discussion threads:
Participants quickly resolved that there are two issues here, moral and business. Though the first issue seems fairly obvious, there are certain fundamental (and often incorrect) assumptions. How do you define minority? Should an affluent, third-generation, Harvard-educated African-American be considered a minority in the USA? Participants went on to ask, whether - if the moral basis of diversity is equity, fairness and valuing difference - how relevant are diversity indices measured on the basis of colours and races? The other issue is equally unclear; what value can be derived out of tapping people from different cultural and racial backgrounds? If the fundamental issue were that of ‘search for talent’, would diversity add to the talent within an organization? There is a widely recognized view that no single grouping has a monopoly over talent and in diversity we increase the chances of finding the right talent for our organizations.
It was eventually resolved in a pertinent discussion thread that the question, of whether you ensure diversity, through quota systems or through some other pre-determined framework, is equally elusive. How do we make sure that those who are truly disadvantaged do compete on a level playing field? Quota system seems to be a double-edged sword for many of our experienced participants that has potential to do more harm than good. Quotas can ultimately drive wrong behaviours and deliver wrong outcomes for the company. The real question is that of merit. Recruitment for any position should be a competitive process. The teams should consist of people who have different personalities, different perspectives and who think differently.
It was discussed that many prominent companies, in the near past, have had to face civil lawsuits due to work-place discrimination. Some CEOs, like Niall Fitzgerald of Unilever, have been talking about their quest to increase the participation of women at senior levels. As a statement of intent, it is quite impressive, but the proof of sincerity will have to be seen. Like corporate responsibility, issues related to diversity are quite easy to spin some positive propaganda around. As a kind of parting question, participants left the thread with a doubt whether it might be worth thinking about whether corporate scandals of similar magnitude as the ones seen over the past 24 months would have happened, if more women had been on the boards of companies like Enron, WorldCom or Tyco. After all, most of the whistle blowers are women…
Finally, there was also a discussion thread on mobbing. Participants gave mostly personal examples of mobbing, which can happen not only through colleagues but also through unhappy customers, suppliers, and others. What comes more - the internet supports that. There exist many websites, which only aim at damaging companies/individuals. This can be done anonymously, and it is almost impossible to enforce the existing laws (e.g. prohibiting damaging publication etc). Suggestions as to how mobbing can be reduced included clear internal company guidelines, an open culture of communication within a company and clear guidelines as to what is to be done about mobbing cases that have occurred.
3. Making tough choices with compassion
This topic of the White Paper has the thread discussions woven into the summary of the topic, as essentially the threads further discussed and refined the “to do list” of layoffs, which we proposed at the outset of this topic.
Layoffs, are they right or wrong?
They are right because:
in a situation of underperforming employees within a team, a layoff of that person can actually improve team morale;
a less clear reason: in unforeseen economic/business circumstances, they allow to respond to changes in demand.
They are wrong because:
large scale dismissals are a great waste of resources;
they can kill staff dedication and commitment of the remaining staff;
they reflect a lack of senior management planning and foresight (e.g. Swiss International hiring then firing, and now suffering from a lack of pilots);
can be a result of unrealistic performance expectations driven by stock market;
potential loss of knowledge;
loss of motivation and work overload for remaining employees.
Why do employees become poor performers?
performance bar is raising while employees are not growing;
employees are promoted without appropriate skills or training;
personal issues;
outsiders of social group (set up to fail syndrome).
How to execute layoffs – An attempt to draft a “to do” list:
provide managers training on how to execute them (e.g. case of merger of Sandoz and Ciba into Novartis, managers were given specific training);
be open about market downturns;
if possible communicate number and type of positions to be laid off;
offer voluntary resignation;
establish layoff rules/guidelines;
ensure quick execution of communicated layoffs;
relocate employees (does not always work: managers do not hire dismissed employees, they fear they have lost commitment towards the company and prefer to hire new blood instead);
avoid typical HR approach: focus on numbers (rather than on individuals) and on meeting legal procedures.
Who do you lay off?
underperformers
- executed through forced ranking (fire the bottom);
- Downside: i) what motivation and morale creates in employees, and ii) lack of subjective evaluation procedures.
cheaper to fire, last in first out, over 55 (depends on legal system and country).
Alternatives to layoffs:
Part time working
Reasons:
- not to loose talented team members;
- ensuring that we have enough team members once the business picks up again;
- keeping team members employed instead of them loosing their jobs;
- Reducing recruitment costs once the business picks up again ;
Caveats: may not work in countries with high unemployment, and only for blue collars and at the end of the downturn.
Focus on new business opportunities rather than layoffs (easy way out)
Dismissals are as much a cultural thing as anything else. In some countries it is quite normal to have been laid off and there is little or no stigma attached. Likewise, there is little bitterness felt by those laid off.
By way of a conclusion, a participant left us with a particularly daring thought: as a sign of true leadership, should an authentic leader also resign?
4. Corporate Social Responsibility – where are the limits?
Participants gave examples where corporates can bear the responsibility to help authorities to regulate a market. Participants strongly supported the view that corporates run business in their industrial fields and have much more management experience than the authorities. They know standards of procedure to get a qualified product and thus, they can share these standards with the authorities so that government can enact legislation for health protection. For example, a corporate in the food industry can suggest to authorities to set up a disposal rule by which spoilt food cannot return from shops direct to producers but via a third party body.
Participants asserted that there can be big advantages for corporates to collaborate with government. It is a chance to tell the community that you are a leader in the given industry and your product is trustworthy. Most corporate leaders produce and transport their products here and there.
Corporate leaders should bear the obligation to respond to a community’s concerns and protect our environment. However, one single corporate cannot do much for the environment or a community. There must be an organization, preferably coordinated by an official body such as the government, to lead these campaigns. So collaboration with the government or its agencies is an important social responsibility in itself.
A very interesting example was given by participants, as follows. Since 1990’s, Safety & Regulatory officers from Ciba, BASF, 3M and Kodak set up a regular technical forum twice a year for SEPA (China EPA). SEPA was proposed to adopt an international harmonized procedure to replace the old Chinese system of chemical materials monitoring. The new reporting system included a safety database of chemical materials. Moreover the safety data can be used by the National Emergency Response Center. Such kind of cooperation benefits both. The government can utilize resources from leader companies in the industry to set up its system fast and effectively and protect the environment and community. By cooperating proactively, corporates also minimize regulation compliance difficulties so that they can save operation costs.
However, participants expressed a high degree of cynicism towards the large number of corporates who apparently use CSR for mere propaganda or, even worse, for dishonest purposes. One given example was that of some Taiwanese corporate that established a non-for-profit foundation, essentially only to save tax and to have some money that can be paid “under the table”. In another case, the chairman of a public company used the authorities to establish a Charity foundation. However, the foundation was actually managed by the relatives of that Chairman, so that it became a secret channel for money transfers of convenience.
5. The work-life debate: is balance achievable?
5.1 Topic summary:
Work life balance is a contentious topic. The debate used to focus largely around working mothers, but has now widened to include the entire working population. Employees now cite a reasonable work life balance as a major factor in their choice of employer and career, and few companies can afford to ignore this trend.
While there exists plenty of good will in the business world already, most companies do struggle to fundamentally rethink work cultures in which hours worked and volume of tasks/work covered are often directly or indirectly measured as attributes of effective working. A culture of “presenteeism” in many industries has meant that while people spend long hours in the office, their overall productivity has been negatively impacted as many of these hours are wasted. In other industries there is an aggressive business model which treats people as expendable, and calculates average burnout time to help with staffing requirements.