Thursday, January 12, 2012

What Makes A Better Business Leaders ?


Drucker (2008, p288) defines a leader as an individual who is capable of ‘lifting a person’s vision to higher sights, the raising of a person’s performance to higher standards, and the building of personality beyond its normal limitations’. A number of models have been proposed that aim to define the attributes of a leader.

Trait Theory proposed that leaders are born and not made (Robbins, 2004) and attempted to investigate if specific traits such as charisma, courage, passion and enthusiasm led to a better leader. However, many deficiencies in such a proposition were identified and found that ‘some traits increase the likelihood of success as a leader, but none guarantee success’ (Robbins, 2004, p339).

Trait Theory gave way behavioral theories such as those tested in the Ohio and Michigan State studies. These focused on the belief that Initiating Structure and Consideration were vital for effective leadership (Fleischman, 1953). Such beliefs provided a structure for the separation of leadership into personal and professional leadership (George, Sims, McLean, & Mayer, 2007). However, Bartol et al (2004, p403-404) believe that the idea of a “high-high” leader is a myth and that ‘situational elements such as subordinate expectations and task nature’ underpin better leadership behaviors.

A better business leader will be able to modify their leadership style based on specific situations. Path-Goal and Situational Leadership theory proposed that better leaders select a leadership style that takes into account the willingness of the sub-ordinates to follow (Hershey & Blanchard, 1982), the characteristics of the sub-ordinates and environmental factors (House, 1971). In doing so, a better business leader will more easily engage co-operators who willingly contribute their efforts to realize better business outcomes (Mastrangelo, Eddy, & Lorenzet, 2004)

It is shown that better business leaders are able to genuinely earn the trust and respect of their followers, demonstrate consistency of values, morals and integrity and understand that they alone cannot achieve greatness – it is their ability to motivate and inspire the power and ability of the collective that will define their success as a better business leader.



The question of what makes a “better” business leader is the topic of continual academic research and hypothesis. Over the past 50 years over 1,000 studies (George, Sims, McLean, & Mayer, 2007) have explored why business leadership is important, what skills, attributes and traits define a leader and the impacts of the leader on subordinates and peers. Whilst the research supports no single definition or answer to these questions there is a commonly accepted hypothesis that a person is not born a great leader (Durcker, 2008) though through the application of leadership theory in demonstrable behaviors, beliefs, processes and practices one can be considered a great leader by their peers and subordinates.

Leadership theory developed and matured with evolving technology, business practices and global events. The Rational Goal (1900-1925),  Internal Process (1900-1925), Human Relations (1926-195), Open Systems (1971-1975) and The Integrated Approach (1975) models all provide varying levels of effectiveness, emphasis and role definition. As there is no one size fits all approach to leadership, the acknowledgement that traits, behaviors and motivations vary for each individual and the ability to capitalize on these (Buckingham, 2005) unique attributes in varying situations is key to better leadership.

This paper contends that individuals with good self-awareness and understanding that beneficial business outcomes are more readily achieved by organizations whose employees demonstrate leadership that inspire staff toward honest, willing and committed participation in the activities of the business make better business leaders. This is further bettered by converting awareness of leadership theory, life experiences and values into specific behaviors and actions (George, Sims, McLean, & Mayer, 2007) that transform the peer/subordinate relationship from one of management to one of the more desired leadership.

Within this contention, we seek to understand what makes a better business leader. One may question better compared to what and how is one leader “better” than another ? The Cambridge dictionary defines “better” as “comparative of good; of a higher standard, or more suitable, pleasing or effective than other things or people”. For the purpose of this contention, we shall imply that a better business leader is one who is more effective and efficient at achieving business outcomes than another.

This contention is explored through a literature review focusing on fundamental management models (Taylor, Fayol and Weber, Mayo, Rothslinger, McGregor, Maslow, Herzberg, Katz and Khan et. al), genuine and authentic leadership (Buckingham, 2005), and The Theory of The Business  (Durcker, 2008). Supported by evidence taken from case studies, research and personal experience it will be shown that better business leaders are able to develop a deep and personal integration of these theories and demonstrate this through actions and behaviors, ultimately proven by improved business outcomes.

No single approach to leadership can be clearly identified as the “right” approach. Studies have been undertaken from a number of perspectives (Mastrangelo, Eddy, & Lorenzet, 2004) in an attempt to validate and prove a number of hypotheses; from the Open Systems Model (Katz & Kahn, 1966) and the Integrated Model (Goleman, Boyatzis, & McKee, 2002) to situational theory (Hershey & Blanchard, 1982) and The Theory Of The Business (Durcker, 2008). No definition, traits, attributes, values and/or behaviors have been identified that definitively encompass what it is that makes a better business leader. However, these theories support the contention in as much as collectively they highlight the importance of self-awareness, staff engagement and willingness in leadership.

In 2004, Robbins proposed that ‘leaders are born, rather than created’. This proposition would render the contention invalid as it would be impossible to make a better business leader. Over time and through the maturing of leadership theory, specific traits and qualities were attached to leadership in an effort to distinguish good and poor leadership. However, the realization that some traits improve the likely outcome of leadership, though “none guarantee success” (Robbins, 2004) lead to significant limitations of trait theory. The contention is non-specific in relation to its breadth of applicability. Specifically, the one-size fits all approach, especially that of trait theory, failed to consider that differing management situations and characteristics that may give the perception of leadership rather than a measure of actual performance and the possible “elitist” concept of leadership may discourage those without obvious leadership traits from pursuing leadership positions. As such trait theory fails to support the contention as it doesn’t take into account situational leadership which is an essential capability of a better business leader.

As leaders cannot succeed on their own (George, Sims, McLean, & Mayer, 2007) it is important that they balance concern for people (relationships) and concern for tasks (production). The Ohio state studies explored definition and structure of work and implied that a better business leader would be able to structure their role and the role of their subordinates in an effort to attain a goal (Fleischman, 1953). Additionally, to have relationships defined by mutual trust, respect for sub-ordinate ideas and regards for their feelings (Fleischman, 1953). This study lends weight to the contention by validating the importance of specific values such as trust and respect in better business leadership.

Similarly, the Michigan study further explored task and relationship oriented behaviors and suggested that there are three types of leader behaviors; Autocratic – unilateral decision making, punitive feedback; Democratic – Participative decision making, feedback for coaching and support; and Laissez-faire – gives complete freedom, avoids feedback (Likert, 1961). It is reasonable to conclude from these studies that an individual who can balance both task and relationship behaviors will be a better business leader. The contention implies a better business leader must have a strong understanding of both the theory of the business and the impact of relationship behaviors and as such the outcomes of the Michigan studies lend further weight and validation to the contention.

Blake and Mouton (1964) suggested that a leadership grid (see Figure 1) integrating both the Ohio and Michigan studies could classify leadership based on specific behaviors rather than specific traits. This led to the concept that there is a “best” way to lead people (Blake & Mouton, 1964) – commonly called the 9,9 way.

The Blake and Mouton’s model came into question as it failed to clarify whether a single leadership behavior was adequate to derive maximum benefit in all situations. A better business leader within the context of the contention should be able to adapt their leadership style based on the situation. Path-Goal and Situational Leadership theory proposed that leaders should select a leadership style that takes into account the willingness of the sub-ordinates to follow (Hershey & Blanchard, 1982), the characteristics of the sub-ordinates and environmental factors (House, 1971). In doing so, a better business leader will more easily engage co-operators who willingly contribute their efforts to realize better business outcomes (Mastrangelo, Eddy, & Lorenzet, 2004). Hershey and Blanchard support the contention by confirming that a better business leader must understand the skill and experience of their employees and select the most appropriate leadership style suitable for them and the specific situation.

Evans (1970, p277) proposes that “the individual’s perception of how his action or behavior (path) may be related to the individual’s idiosyncratic outcomes (goals)” allowing Path-Goal theory to cater for individuality in the peer/sub-ordinate and provides a model that links leadership behaviors, situational factors to a desired end result. However, such a model does not take into consideration the benefits of emotional awareness .According to Goleman (1998), emotional intelligence and awareness enhances the likelihood of being a better business leader. Such emotional awareness is said to lead to six leadership styles (Goleman, Boyatzis, & McKee, 2002) 1) Visionary 2) Coaching 3) Affiliative 4) Democratic 5) Pacesetting 6) Commanding. The contention is in agreement with Goleman who supports the position that a better business leader should be able to determine the appropriate style based on the situation.

The literature reinforces the contention is as much as those who are in tune with themselves, with others and with their environment/situation make better business leaders. However, as suggested by Druker (1994) too many people work in ways that are not their natural style and this “almost always leads to nonperformance” (Durcker, 2008).  George, Sims, McLean and Mayer understood this and proposed that leaders are primarily driven by intrinsic and extrinsic motivations. These motivations are underpinned by a sense of meaning to life and measurement of success against outside world parameters (George, Sims, McLean, & Mayer, 2007). Therefore, in agreement with the contention, a better business leader would be “authentic”, demonstrate a passion for their purpose, consistently practice their values and lead with their hearts as well as their heads. (George, Sims, McLean, & Mayer, 2007).

In 2004, Mastrangelo, Eddy and Lorenzet proposed that effective leaders engage in both professional and personal leadership behaviors. Further, they suggest that personal leadership “mediates” the relationship between professional leadership and willing co-operation.

This is reflected in the contention and is best supported by Kouzes and Posner who propose that “excellent” leaders exhibit these behaviors in at least 5 practices; 1) Challenge the process – take risks and learn from success and failure 2) Inspire a shared vision – communicate a vision and persuade others to commit to it 3) Enable others to act – foster collaboration and get people to work together 4) Model the way – act as a role model and set people up for success 5) Encourage the heart – reward individual contribution and celebrate group success (Kouzes & Posner, 1987). Each of these behaviors are implicit in the contention further strengthening that argument that better business leadership requires awareness of leadership theory, life experiences and values into specific behaviors and actions.

Whilst, personal leadership may carry the professional message, the leader must be intimately familiar with the assumptions on which the organization is based (Durcker, 2008). Mastrangelo, Eddy and Lorenzet suggest that professional leadership is positively related to willing co-operation. This would support the contention that better leaders must cater for both the heart and the head.

Darling (1999) articulated this in his “Model of Keys to Success and Leadership Strategies” in which four leadership strategies were identified 1) Attention Through Vision 2) Meaning Through Communication 3) Confidence Through Respect 4) Trust Through Positioning. Such strategies are in agreement with the visionary style of leadership identified by Goleman (2002), Kouzes and Posners concept of “Model The Way” and the importance of authenticity (George, Sims, McLean, & Mayer, 2007).

The implied behaviors and actions within the stated contention require the consistent demonstration of authentic and trustworthy behaviors (rather than traits) that connect to their peers and sub-ordinates in a meaningful and “human” way. Such a connection provides a medium that carries the professional message (George, Sims, McLean, & Mayer, 2007), vision and common purpose to such an extent that unknowingly the peer/subordinate becomes a willing participant in the actions that fulfill the goals of the business.

Though the literature supports varying models, interpretations and definitions, one may reasonably conclude that there is sufficient literary evidence to robustly support the stated contention.

There is no doubt that the financial turn around of Continental Airlines during the period 1994 to 1997 was remarkable. However, one cannot overlook the critical role leadership took in achieving such an outstanding result. Facing almost certain financial ruin, Brenneman and George Bethune (CEO) devised a “Go Forward Plan” to save Continental. Whilst the financial and commercial aspects of this plan are interesting, it is clear that the link between leadership behaviors, actions and business outcomes are a central theme in the ultimate successful application of the strategy.

Coming from a middle class background, Greg Brenneman had little operational experience when appointed Chief Operating Officer in 1994. By no means would Brenneman be considered a “born leader”, however, from the outset he knew that Continental would fail unless everyone in the company pulled together (Brenneman, 1998). He achieved this by creating a “go forward plan” which at its core inspired a shared vision. Supported by the concepts of Kouzes and Posner the intent of this vision was to ensure that every employee was heading in the same direction. However, Brenneman was aware that the staff needed to “buy-in” to this vision and plan, and as such he sold it to them with “energetic zeal” (Brenneman, 1998, p. 168). He also understood that the success of the plan needed to be “tracked relentlessly” (Brenneman, 1998, p. 168) developing a sense of shared accountability for the outcomes.

Such an approach is in agreement with the proposition that better business leaders are able to address both professional and personal leadership (Mastrangelo, Eddy, & Lorenzet, 2004). By coupling the shared vision with strong performance metric monitoring, Brenneman understood that the customers of Continental would experience an improved product and Continental would become an airline of choice (Brenneman, 1998). This in turn, would yield improved business outcomes for staff and shareholders.

Through the “Go Forward Plan” a new corporate culture was created. By restoring employee confidence in management and the establishment of a co-operative atmosphere between working groups a results oriented work environment was built. This was achieved through a top-down ethos of teamwork, dignity, respect and collaboration. The demonstration of these personal leadership behaviors led to the willing co-operation of staff which ultimately (though not solely) made a major contribution to the successful turn-around.

Though Brenneman undertook many complex and difficult professional leadership actions including down sizing, refinancing debt and restructuring the organization, one could conclude that his personal awareness and understanding of the situation was a key factor in his success. The development and execution of the strategy was of paramount importance (Nohria, Joyce, & Robertson, 2003), though by identifying the most appropriate leadership style for the situation Brenneman was able to engage his staff and his customers. This is highlighted by his “listening to the customer in seat 9C” example, where after understanding the needs of the customer he employed the innovation, consultation and democratic styles across the business to ensure the customers needs were met – “when the customers won, the employees did too” (Brenneman, 1998, p. 174)

Brenneman refers to many intimate emotions and feelings ranging from painful, embarrassed, humbling and confession, demonstrating his deep understanding that “strong leadership is imperative” (Brenneman, 1998, p. 176) and personal. He further acknowledges that the most important job of the leader is to cultivate honesty, trust, dignity and respect (Brenneman, 1998) – “they all go together; they reinforce one another” (Brenneman, 1998, p. 176).

Brenneman unknowingly used a deep and personal integration of leadership theory to drive his actions and behaviors. The success of which was ultimately proven by the financial outcomes of the company.

One can never be confident that they are a better business leader and surely could never place themselves in the same realm as true business leaders like Jack Welch, John Chambers, Richard Branson or Steve Jobs. However, one can only do their best to honor and respect the effort, passion and energy of their staff and peers.

Personal experience has led me to believe that being a better business leader is not achieved by being smarter, faster or “better” than my peers and competitors – it is achieved by energizing, exciting and empowering those around me, by focusing their efforts on a common goal and together relentlessly striving for continual better outcomes.

In my various roles at senior levels in the telecommunications industry both locally in Australia and overseas I have led technical organizations through mergers and acquisitions, initial public offerings and through insolvency – the one common thread across all situations is the unwavering needs of my staff to believe in the “end game” and to trust in their leadership to “win” this game. In my younger years, I found it confusing that even facing adversity, provided there was a clear goal and honest and open communication, staff would be committed and willingly engage their energy to the fulfillment of the goals. On reflection, this is in alignment with Kouzes and Posners “encourage the heart” and “create a shared vision”.

I have learnt over the years, through observation, painful lessons and heartwarming experiences, that leadership is about people, listening, showing respect and understanding that your colleagues experience feelings and emotions in response to each word, each action and each decision taken by their leaders, managers and peers. I have concluded that there is no single management or leadership theory that will make the best business leader – though by understanding, integrating and demonstrating consistent values, morals and integrity, one can strive to be a “better” business leader. Through my experiences I propose that the stated contention is valid.

It has been shown that a better business leader is one who achieves better business outcomes by selecting the most appropriate leadership model depending on the situation and the needs of their follower. It is clear that there is no right or wrong answer to what makes a better business leader, however, specific behaviors and actions are more likely to solicit willing co-operation from peers and sub-ordinates. These behaviors and actions are underpinned by a consistent and moral value system based on trust, integrity, caring, sharing and honesty.

Drucker said “A person is not born a great leader and traits such as charisma have little bearing on one’s success in a leadership role” (Durcker, 2008, p. 147). As shown by Brenneman of Continental Airlines when a leader shows “leadership” behaviors such as trust, integrity, caring, sharing and honesty with authenticity and discipline, better business outcomes are more easily achieved – personal traits and characteristics are not significant factors in being a better business leader.

A better business leader is a leader who is able to genuinely earn the trust and respect of their followers, is able to demonstrate consistency of values, morals and integrity and understand that they alone cannot achieve greatness – it is their ability to motivate and inspire the power and ability of the collective that will define their success as a better business leader.

 

Blake, R., & Mouton, J. (1964). The Management Grid. Houston, Texas, USA: Gulf Publishing.
Brenneman, G. (1998). Right Away and All at Once: How We Saved Continental. Harvard Business Review , 76 (5), 162-164.
Buckingham, M. (2005). What Great Managers Do. Harvard Business Review .
Durcker, P. (2008). Management (Revised Edition). 280-291.
Evans, M. (1970). The Efficiency of Supervisory Behaviors on the Path-Goal Relationship, Organisational Behavior and Human Performance.
Fleischman, E. (1953). The Description of Supervisory Behaviour. Personnel Psychology , 37, pp. 1-6.
George, B., Sims, P., McLean, A., & Mayer, D. (2007). Discovering your authentic leadership. Hardvard Business Review .
Goleman, D., Boyatzis, R., & McKee, A. (2002). The New Leaders (Vol. Ch.4). London, The United Kingdom: Little Brown.
Hershey, P., & Blanchard, K. (1982). Management of Behavior: Utilizing Human Resources (4th ed.). Englewood Cliffs, NJ, USA: Prentice Hall.
House, R. (1971). A Path-Goal Theory of Leader Effectiveness. Administrative Science Quarterly , 16, pp. 321-339.
Katz, D., & Kahn, R. (1966). The Social Psychology of Organizations. New York, NYC, USA: Wiley.
Kouzes, J., & B, P. (1987). The Leadership Challenge. San Francisco, CA, USA: Jossey-Bass.
Likert, R. (1961). New Patterns of Management. New York, NYC, USA: McGraw-Hill.
Mastrangelo, A., Eddy, E., & Lorenzet, S. (2004). The importance of personal and professonal leadership. The leadership & organisational development journal , 25 (5), 435-451.
Nohria, N., Joyce, W., & Robertson, B. (2003, July). What Really Works. Harvard Business Review , 43-52.
Robbins, S. (2004). Organization Behavior (11th ed.). New Jersey, USA: Prentice Hall.






[1] Adapted from (Kouzes & B, 1987) and (Mastrangelo, Eddy, & Lorenzet, 2004)

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