Royal Bank of Scotland

Three Tips for Today’s Leaders

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By Lynda Gratton

As a business professor, I’m often asked about the nature of leadership today. When I think about what it means to be a leader right now, the first thing that comes to mind is complexity: today, leadership means being prepared to deal with many stakeholders – from  NGOs that are becoming more voracious in their demands to followers who are increasingly emboldened.

This situation is not only complex, but also tough to navigate – particularly in a world that is increasingly transparent and connected. However, there are still things leaders can do to smooth the process – let me share three of them with you.

  • Keep your eyes wide open More than 15 years ago my colleague Sumantra Ghoshal and I wrote business cases on three companies that were at that time leaders in their field: BP, Royal Bank of Scotland and Nokia. In one way or another, and for rather different reasons, all of these companies have since struggled. So my first observation is that in an ever more complex world, a company and its leaders are subject to continuous de-stabilizing forces. Being vigilant and observant about the nature and velocity of these forces is crucial. In complex times leaders do not believe the hype that surrounds them – they keep their eyes wide open to the reality of their world.
  • Find the balance between being authentic and being a custodian The debate about leadership authenticity is an important counter balance to earlier notions of hierarchical and role based leaders. Rather than following a narrow description of what a leader is – individuals are asked to be themselves, to be authentic and by doing so to bring more of themselves to work. I believe this is an important antidote to old style leadership. However, in an organization that is becoming ever more complex, being faced with a group of leaders all of whom are idiosyncratic in their authenticity, could become confusing and distracting for those that follow. Over dinner we talked about Steve Jobs, who was indeed idiosyncratically authentic, but was also engaged in founding what would become one of the world’s great companies. For many leaders, their role is less as a founder and more as a custodian who is capable of growing and passing on to future generations of employees and shareholders the value that past generations has created. So yes, be authentic to oneself – but not so idiosyncratic that those that follow need a ‘rule book’ on how to engage with leaders. The world is complex enough without this further variable to be considered.
  • Remember: it’s all about teams Thinking back to the cases mentioned earlier, I believe that if there is one underlying factor that accounts for the problems encountered by BP, RBS and Nokia it is their failure to build diverse, highly collaborative leadership teams. At RBS, CEO Fred Goodwin isolated himself from his colleagues, failed to listen to others and behaved in an increasingly idiosyncratic manner. At Nokia, the senior leadership team was for a long time extraordinarily homogenous (mostly men, mostly from Finland, mostly software engineers, mostly educated in Helsinki) and so failed to spot the rapid consumer developments in the Asian markets, or indeed the accelerating technological and design developments in Silicon Valley. At BP, the difficulties the leadership team had to integrate the US assets and build close collaboration with those that ran the US acquisitions was one reason why safety standards never became globally embedded. Simply put, as the world becomes more complex, so it becomes ever more crucial to put together leadership teams who have sufficient diversity to see beyond the hubris and myopia, and sufficient collegiality to work collaboratively with each other even when under stress.

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