Managers Need Not Apply: Our Obsession with Leadership

Businesses don’t want mere managers, they want leaders, writes PEX Network Editor Diana Davis. But why?

Within the pages of just about any business magazine you’ll see them: advertisements with smiling, well dressed people, typically wearing an expensive Rolex. Positioned above their toothy grin, there will be a short quote about how a certain educational establishment gave them the leadership skills they needed to become ultra successful (which presumably enabled them to purchase that lovely timepiece they sport on their wrist).

Creating leaders is a multi-billion dollar industry. The first strap line on Harvard Business School’s homepage is, for instance, "Educating leaders who make a difference in the world" followed by several other permutations on the leadership theme. Publishing is in on the act too: a quick search of reveals over 12,736 "results" in the leadership category alone. If you could read one leadership book a day, you would need over thirty four years to read all the ink that’s been written about it.

Indeed, a 2010 study conducted by EFMD, an accreditation body of management education, for instance, found that Leadership was the number one topic pursued by corporate buyers of education (more than 90% of respondents). The less aspirational "General Management Development" was the second most popular area for corporate education with a more distant 68% of respondents indicating it as an area of focus.

Businesses don’t want mere managers, it seems, they want leaders. Employees don’t want to manage, they aspire to lead.

And for good reason.

For individuals, leadership is a lucrative proposition. According to American lobby group Paywatch, for instance, in 1980 the average CEO salary was equal to 42 times that of a normal employee. By 2010, that figure had risen to 343 times that of the average employee. Whatever you think about executive compensation (and there are those who think it’s gotten out of hand, particularly with regards banker compensation), clearly it’s profitable to be the leader rather than the worker, perhaps helping to explain why the ambitious will pay tens of thousands of dollars to garner the credentials that help get them there.

And the reason that companies will pay so much money for good leadership? Well, the oft-quoted maxim to explain the difference between management and leadership goes a long way to explaining it: "A manager does things right. A leader does the right things."

One needs only looks at the last couple of years to see what happens when leadership does the wrong things.

During the economic turmoil that roiled markets in the latter part of this past decade, for instance leadership (or lack thereof) came under increasing scrutiny. The leaders of failed or bailed out banks, like Lehman Brother’s Dick Fuld, were vilified and hauled in front of Congress in the United States. The economic meltdown was often said to be a crisis or failure of leadership.

Meanwhile, Tony Hayward, the former Chief Executive of BP, became a figurehead of the "how-not-to-lead" school of business over his handling of the Deepwater Horizon disaster and the ensuing crisis in the Gulf of Mexico.

Bad leadership, it appears, can be distinctly harmful to an organization’s – and society’s - health.

Dominic Barton, global MD for consultancy McKinsey and Co, wrote recently in the Harvard Business Review, that "myopia plagues Western institutions in every sector." The average tenure of a CEO is now down to a mere 6 years (from an average of 10 years in 1995) and quarterly earnings targets "consumes extraordinary amounts of senior time and attention," he writes.

"Lost in the urgency is the notion that long-term thinking is essential for long-term success," he writes.

So, what is it that makes a good leader?

Rosabeth Moss Kanter, a professor at Harvard Business School, has an interesting theory. "Effective leaders zoom in and zoom out," she wrote in the March edition of the school’s magazine. She argues that it’s the ability to be able to focus in on the details when necessary, and zoom out to understand a situation in its bigger context that is the "essence of great strategic thinking."

With some of these big issues in mind, PEX Network will be looking this month at Operational Excellence Leadership. How do you successfully lead and embed a culture of sustainable process improvement? What are the big issues (zoom out) shaping your role and how do you couple them with the details (zoom in)? What are the critical elements of success? How do you define success in the long term, when you’ve got to meet your quarterly targets?

Our Deming and Drucker Files columns weigh in this month on what two of last centuries greatest business heavyweights have to say about the topic of corporate leadership. Check out Dr. Robert Swaim’s article Charisma, the Undoing of Leaders? published this week. We’ll be running Dr. Deming’s view on the matter in the third week of May.

Also out this month: Columnist Ian Gotts reflects on bridging the gap between strategy and execution. Phil Brown, Business Excellence Manager at Pattonair, comes up with a list of the seven questions you MUST ask your leadership team before even attempting to launch a process improvement project. And we have a video interview with Michelle Ray, leadership and workplace relationship expert, on everyday strategies you can incorporate into your work routine to increase your effectiveness and something she calls "personal leadership".

Stay tuned for these and more, running throughout May.

We’ve also running a special content series out next week (May 9-13) on Operational Excellence in Retail. Download the preliminary agenda or sign up to free Webinars.