It could be argued that leadership has never been more necessary than at the current time; at government level, whether in Europe or in the States, citizens watch as their ‘leaders’ evade the tough decisions, especially the tackling of crippling debt issues, while in business we marvel at the abdication of morality which led the bankers to the crisis they visited upon us. Writing in the current issue of Edge magazine (the journal of the UKs Institute of Leadership and Management, ILM) Penny De Valk cites recent research by the ILM; not surprisingly, the research points to the critical role trust plays in the leadership equation, with integrity and competence being the critical drivers of trust. And visibility, she argues, is the key to demonstrating this those whom one would lead; to this in would add consistency of behaviour and performance. “If no one sees you or knows who you are , if no one knows what you stand for and believe in, you cannot earn their trust. And, when there is a communications void, people will fill in the gaps themselves, often with ill-founded conjecture and rumour”, comments De Valk. All common sense stuff we might agree; and yet why is it so hard, in a world of mass communications and social networking, to create authentic and visible leadership? perhaps it has something to do with a combination of lack of intent and ignorance. Intent: as Dr Penny Tamkin, associate director at the Institute for Employment Studies, observes, “there are lots of competing priorities that demand your attention and maybe it feels like a luxury you can’t afford to do at that point.” Some luxury, because the best leaders realise that this is a central part of their role, to be close to those whom they would lead. Ignorance: it is my experience, working with leaders in large organisations that they are often ignorant at two levels about the effect they can have by being conspicuously visible; the first is generic, they just don’t get the idea or the importance; the second is personal and often based on modesty – my colleague and I can cite two CEOs whose impact on the staff when going walkabout was electric, yet it took us to point out this fact to them. So, I guess the message is pretty simple; it’s not enough to be a good leader (though that’s tough enough), one has to be seen to be a good leaders. And if the leadership patch is too big, once the personal presence has been established there is the support offered by modern media; podcasts, intranets, social networking and DVDs.
But, not all leaders are good, in fact some are plain toxic. This is the interesting theme picked up by Tim Phillips, in his new book Fit to Bust: How Great Companies Fail (Kogan Page, £14.99). In investigating the reasons why good companies fail, he explains how being fooled into believing in a leader who turns out to be toxic can take a company down. “The trick is to discern what’s genuinely innovative and inspiring from the poisonous bluster that kills companies”, he contends. Implicitly he warns against the downside of charismatic leadership, citing organisational psychologist Dave Arnott, who contends that modern corporations can function as a cult, having charismatic leadership, becoming separate from outsiders and assuming many of the paternalistic roles that society previously filled; this, he argues, can bind the employees to the leader, offering a sense of common purpose, whilst encouraging the toleration of poisonous behaviour, especially when the business appears to be successful. Enron springs immediately to mind, together with leading UK corporate for whom we worked recently. Of course charismatic leadership can be, and often is, immensely powerful, but the genuinely transformational leader inevitably keeps clear of Tim Phillip’s worst scenarios.
Back with Penny De Valk, and the oft-asked questions, ‘are entrepreneurs born or made?’ I have often reflected on the fact that the natural default position of human beings is the market, and with it the currency of barter. Go way back in history and that is what humans did, quite naturally. Whether fishing or farming, mining or making, they created a market space and traded. But that was a long time ago, but maybe the instinct is still there. One thing is sure in the UK, as the government tries to cut back the influence and spend of the State; we are all being told now that it is entrepreneurship that will have to fuel the recovery and future prosperity of the nation. According to the Centre for Economics and Business Research, small and medium-sized enterprises (SMEs) contribute £1.6trillion of total national business turnover – more than the entire FTSE 100; and in the process accounting for 49% of UK business expenditure and 53% of business tax contributions. SMEs are a powerful force for sure, making up 90% of UK firms and employing over 60% of the private sector workforce. This is where entrepreneurs start their careers, and in recessionary 2010 over 310,000 businesses were started from scratch, a UK record. This is a trend that OECD, in their publication Innovation Strategy: Getting a Head Start on Tomorrow, recognises as it argues that future growth in economically advanced countries must increasingly come from innovation-induced productivity growth.
So back to the central question, born or made. Academics have tried to study it and inevitable end up settling for the ‘bit of both’ conclusion. Ask Richard Branson and he will tell you it’s in-born, whereas Poly Gowers, founder of Everyclick thinks it was both nature and nurture, being the off-spring of 24/7 work-driven self-employed parents. Sahar Hashemi, founder of Coffee Republic, the UK high street operator, is quite clear: “We all have entrepreneurial qualities inside us. It’s a question of whether they remain dormant or you find a way to activate them.” And she has some words for those running large corporates: in her latest book, Switched On, she argues the need to find ways of ensuring that the entrepreneurial spirit can flourish inside the corporate body. And that, like so much else, will need inspired and determined leadership.