BOARD AND CORPORATE LEADERSHIP – REVIEW & RETHINK –PART-II

LEADERSHIP TRENDS

As organizations become more fluid, open, flexible and responsive, opportunities are shared and more mutually beneficial relationships are forged, some forms of leadership are in decline. Top down and centrally controlled leadership has been challenged by more consensual and shared approaches, especially where people are critical elements of corporate success. However, tight control by small groups may still exist as more business models are adopted where activities are contracted out and/or automated. When key tasks are undertaken by algorithms, these and those who create them can become critical resources.

Command and control approaches to leadership may still exist in more stable contexts where routine activities and prescribed standards persist. However, other approaches more suited to contemporary requirements may continue to emerge as situations change. Further approaches may be latent. Leadership has traditionally been viewed as the leadership of people. It may evolve as more activities are undertaken by digital and other technologies. Many of the people involved may be undertaking support and maintenance tasks.

In fluid situations, such as when there is a change of status or business model, or during a transition or transformation journey, permanent, fixed and inherited leadership arrangements and personnel may require review. Owners and other stakeholders may step in to trigger and force changes. Interim or temporary leadership arrangements may be needed to ensure the agility and flexibility to cope with a succession of stages, challenges or opportunities.

HORSES FOR COURSES

Availability, succession issues and divisions over longer-term direction are among the circumstances that can give rise to rotating leadership. Events such as a takeover or insolvency can result in the replacement of some or all members of a leadership team. Some changes might trigger a search for different leadership approaches, experience and qualities. For example, a leader of major and mission critical transformation project on tight timescales might have experience and qualities that the head of a stable business might lack.

Crisis leadership may demand a particular skill set. Some companies face so many inter-related challenges that someone with program management experience covering a portfolio of projects may be more suitable than a person who has led a homogenous entity on what has been closer to a single corporate project.

In certain occasions, aspects of subversive or revolutionary leadership might be practiced by some members of a leadership group. A promising venture may need to be protected. Revisionists might wish to advance an initiative that is opposed by vested interests and supporters of a status-quo. Liberating leadership could endeavor to release pent-up forces to change.

PROBLEMATIC APPROACHES

Absent, ineffective or weak leadership can lead to drift and delay. Sometimes when leadership decisions are taken, those on nomination and remuneration committees over-react. They overcompensate. By trying to address what they feel has been lacking, they go too far in a different direction. Account must also be taken of emerging developments, future requirements and longer-term aspirations.

There may be few business advocates of the delusional leadership that is sometimes found in the political environment. While determined and focused leadership might have more appeal, directors need to think through what the determination and focus should be applied to. Directors who advocate responsible and responsive leadership should clarify to whom a board should be responsible and accountable and what they should be responsive to.

Certain companies and other organizations seem to recruit a succession of people with similar attributes and educational and/or social backgrounds. When assembling candidates to be considered and short-listed, those who desire more inclusive and diverse leadership should cause the net to be cast more widely.

Some family members accustomed to family leadership of a family-owned company exert their power of patronage to limit selection to older close relatives rather than look more broadly. The future success of the company concerned may depend upon whether a family uses governance arrangements to ensure continuing control rather than open up possibilities.

LEADERSHIP CHANGES

Those who trigger and/or enforce changes at the top should think through their implications for the people of an organization and its stakeholders. Changing the allegiances of those who are led, their perspectives and approaches, and an organization’s values and culture may take longer. Leadership changes can be unsettling. Maintaining confidence may require careful communication.

In uncertain times, leaders who in the past endeavored to provide physical support and safe and healthy working environments might also turn their attention to mental illness and the provision of emotional support. Some approaches of leadership are complimentary. Others could represent alternatives that are in different positions on a spectrum. A balance might need to be struck, for example between proactive and reactive leadership.

Climate change and environmental, pandemic and sustainability challenges might necessitate a review of corporate purpose. The value of purposeful leadership for engaging and securing commitment can depend upon the nature of the purpose articulated. It might benefit from involving key stakeholders in the formulation or selection of a corporate purpose. It can be particularly relevant when there is a significant change of direction, purpose and priorities.

INNOVATION AND PRAGMATISM

Innovative leadership might be an approach that is different, distinctive or novel for some companies. It might be essential for a particular business, or a certain stage in the development of an enterprise. It could be an ad hoc change to address a challenge or seize an opportunity, or a more lasting requirement for coping with an altered situation, a significant shift of circumstances, requirements or resources, or a transition or transformation.