Leading during the ‘Good times' and in the 'not so Good times'

The fundamental question that continues to baffle us is about leaders being born or an acquired trait – nature vs. nurture. While the jury is still out on the final verdict but in the meantime, it would be worthwhile to look at leadership from a different angle. Leaders, who thrive during a growth phase or abundance, do you think they will all do well in a crisis and vice-versa – are firefighters always equipped to lead when there's no fire? Let us look at a few leadership theories.

Great Man Theory

We've often heard the phrase, "Born to Lead," and it has its origin in the 19th century when leaders were mostly men who were in the army. Descriptors like mythic and heroic did rounds, and the belief was that such people were born with these traits.

Trait Theory 

It's a continuation of the earlier one – are traits inherited? Extroversion, self-confidence, courage – the usual stuff we associate with leadership. But it fails to answer why people who have all these qualities or at least some of them never become leaders?

Contingency Theory

We now move to the zone of nurture. According to this theory, there's no perfect leadership style. Studies in this style indicate that leadership is not only about qualities but equally about striking the right balance between behaviors, needs, and contexts.  

Situational Theory

It posits situations aren't constant; they are variable, while in one case, an authoritarian style of leadership may fetch results but may not hold up while leading a team of highly-skilled people in a democratic environment. 

Behavioral Theory 

This idea is precisely the opposite of the Great Man Theory. The theory emphasizes that leaders are made, not born. People can "learn" to become leaders – a somewhat comforting thought. 

Participative Theory

Now it goes the democratic way. It says take inputs from others and involve them in the decision-making process. However, the leader retains the right to engage the team and the extent to which he/she wants them involved. 

Transactional Theory

A classic Carrot and Stick approach where you do well; you get rewarded. You don't, and you get reprimanded. 

Relationship Theory

It establishes a connection between the leader and their people. At its purest form, the theory focuses on inspiration and motivation, but at its lowest ebb, it may lead to "inner circles" and cliques getting developed, leading to erosion of organizational culture.

These theories are fascinating and show the entire range of leadership styles and how principles have evolved in each type. But in reality, it's never quite as strait-jacketed as this. It's a very porous area, and frequently these attributes fight for elbow room, leading to friction and confrontational behavior. There are no quick fixes, either. Culture develops gradually and is a reflection of the leadership attributes. 

King of Good Times

Leading in 'Good times' may sound easy, but it's not the case. Leading in good times and sustaining, it can be a huge ask. There's no looming challenge to speak of, growth is profitable, investor relations are stable, and clients love your work. But if one slackens and does it for two consecutive quarters, things can go downhill very quickly. Complacency is the scourge of humans, and without external stimuli, remaining focused requires excellent discipline and honesty of purpose. Growth can be unruly, especially if it's inorganic. 

Two classic examples stand out. When Jack Welch handed the reins to Jeff Immelt in 2000, GE was a great company. Today it's a pale shadow of its former self. In 2011, after the tragic and untimely demise of Steve Jobs, there were doubts if Apple would continue its journey towards excellence. Tim Cook has taken it to a valuation of 2 trillion dollars. There are only ten countries in the world that have a GDP of over 2 trillion dollars. Same company, two very different leadership styles, but growth and excellence haven't slackened. Or take the case of Wirecard – it got embroiled in one of the biggest accounting scandals in recent times. It was a good company, and did it have to go down that path? 

What's wrong with Tik Tok (ByteDance)? Nothing really, but a general perception that Chinese companies are stalking people and stealing data. The CEO has had to step down. The company proposes to sell its US operations soon with several suitors lining up. In the wake of the GCSE grades blunder in the UK due to a bias in AI algorithm that downgraded students from underprivileged backgrounds, the Chief of Ofqual (the company which made the algorithm), Sally Collier has stepped down and taken ownership.

Something went wrong, and suddenly these were not good times after all. Indeed, it's a collective failure, and Gavin Williamson, the Education Secretary, is on a lifeline. Anything can happen. Does the buck stop with Willamson or at the desk of Boris Johnson? Mind you; this "crisis" is only less than a month old. The tables have turned in a matter of days. Even three weeks back, the Education Secretary had announced that there had to be no U-turn, but soon he had to eat his words. 

Leadership During Crisis

A crisis is when a human is up against two alternatives – fight or flight. As part of the corporate parlance, it's always the latter, unless external forces do the ousting. Sometimes, leaders may also choose to exist when they realize that water has risen above the danger mark. It's about survival, and there is no other goal that's competing or is compelling enough. 

In a sense, it's a great unifier and binds the business unit. We've seen that leaders may not have all the answers during these last six months, and it's okay to say so. Transparency of this nature creates a great deal of confidence in the team members. Secondly, in such times, empathy plays a pivotal role. Leaders will need to understand the challenges faced by their teams and will have to reach out to them accordingly. Communication channels have to remain open, and it's wiser to communicate more often than one does in "normal" times. Thirdly, there has to be a centralized approach to communication. When things are in disarray, people would probably relate better to one voice - this is not to imply one individual, but it is really about constant and consistent communication.

When leaders ride the crisis well enough, growth returns, but the same set of practical earlier actions needs a different lens. Most people realize by now that the Great Man Theory is extremely limited in its study, and it's the context that defines leadership success. It's a combination of all these theories but in varying degrees, and that's why we have so few leaders and more followers. It's challenging to get that mix right all the time. There are a few who do, and they are the ones who become legends.