Do you know how to hire the best CEO for your company?

Let’s imagine you are the founder of a major advertising agency. The agency manages a portfolio of several global clients and has won a number of advertising awards.?

Things have not been going well for the past three years and the company is going through a restructuring and realignment process.

You are looking to replace the current CEO with a new leader. Who would be the right person for the job? What type of leader should be more suited to lead the team at this particular time?

Before we discover the answer let’s talk about Fiedler’s Contingency Model of Leadership.

Fiedler’s Contingency Model of Leadership is a business framework that evaluates a leader's effectiveness in an organisation.?

The model states that a leader’s effectiveness is based on the situation and offers this solution: instead of trying to change one’s leadership style, the organization should match a particular leadership style to a specific situation.

What are the two types of leadership styles according to Fiedler’s Contingency Model of Leadership?

Fiedler’s theory of leadership is based on two factors:

• LEADERSHIP STYLE
• SITUATIONAL FAVORABLENESS

How do you measure one's leadership style?

By using the Least-Preferred Co-Worker (LPC) Scale, a questionnaire that helps the leader understand their specific leadership style.?

The leader is asked to think of all the people they have worked with and then describe the person with whom they have worked least well, using a series of scales of 1 to 8.

• Leaders who score 64 and above have a relationship-oriented leadership style. These leaders derive satisfaction from interpersonal relationships and tend to rate their least preferred coworkers in a more positive manner.
• Leaders who score 57 or below have a task-oriented leadership style. These leaders tend to rate their least preferred coworkers in a more negative manner and get satisfaction out of successful task performance.

Situational favorableness or situational control

Situational favorableness describes the leader’s ability to control the group situation. More specifically, the degree to which the leader can influence the behaviour of group members in order to face the current situation.

The factors that determine the favourableness of a situation are:

• Leader-Member Relations (LMR) = the degree of mutual trust, respect and confidence between the leader and the subordinates
• Task Structure = the extent to which group tasks are clear and structured
• Leader Position Power (LPC) = the amount of power the leader has over the group

Now let’s get back to our imagination exercise and see what type of leader should you choose based on Fiedler’s Contingency Model of Leadership.

Before you begin looking for a person to hire, analyze the situation according to situational favorableness.

Since you are looking to bring a new person to lead the team, this person is at a disadvantage: the team doesn’t know nor trust them, and respect & confidence are earned.

So the new leader has poor leader-member relations but has a strong position of power since they control resources and can reward or reprimand the team’s members.

Working in an advertising agency requires a high level of creativity therefore the team’s members perform tasks that are not structured. So the agency environment has a low task structure.

According to Fiedler’s Contingency Model of Leadership, the most effective leader in this particular situation is high-LMR or relationship-oriented.

This type of leader will focus on building relationships with the team members first. When the relationship between the leader and team members is based on confidence and trust, everyone’s work is easier.

Learn how to provide clear communication and ‘sell’ your Strategy to your team so they buy into it at the 6-hour BUSINESS STRATEGY MASTERCLASS with Costas Markides, Professor of Strategy & Entrepreneurship at London Business School.

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