THE HUMAN FACTOR: British business has bred a generation of managers rather than leaders. They focus on the figures rather than the visionary side

THE HUMAN FACTOR: British business has bred a generation of managers rather than leaders. They focus on the figures rather than the visionary side - The phrase 'business leaders' is a favourite of the media. Business leaders are busy chaps, meeting minist

by PATIENCE WHEATCROFT, is business and City editor of The Times
Last Updated: 31 Aug 2010

The phrase 'business leaders' is a favourite of the media. Business leaders are busy chaps, meeting ministers, taking a stance on the euro, complaining about red tape or enjoying large increases in their remuneration. But the phrase is usually misleading, for Britain is desperately short of business leaders.

There are chairmen and chief executives a-plenty, but those who can inspire and innovate are scarce. The Government, hardly awash with leadership talent itself, has spotted the gap and in 2000 it established the grandly titled Council for Excellence in Management and Leadership. Since then, the secretaries of state for education and employment and for trade and industry who were behind its inauguration have been reshuffled, and the latter, one Stephen Byers, has amply demonstrated the chaos that can be created when power is handed to someone incapable of leading even a couple of spin doctors to a common goal.

Ministers move on, but the Council has continued its quest to define what is lacking at the top of British business. The result of its deliberations, led by Sir Martin Sorrell, is likely to be proposals for reforming business education. The architect of WPP credits Harvard with helping on the way to his success. Yet I suspect Sir Martin would be leading his marketeers to world domination whether or not he'd been to business school. The most effective business leaders tend to have achieved greatness without it and, in many cases, without much schooling at all.

What they do have is determination and confidence and an ability to generate fierce loyalty. Workforces happily respond to such qualities. And with so many uncertainties affecting modern lives, there is a strong desire to be led.

A true leader cannot spend every day closeted in an office. He or she must be seen and heard if staff are to respond. Visiting the outposts of an organisation allows those running a business to see how it really operates and those who operate it to see who really runs it. Most people like to think they work for someone they respect.

When Matt Barrett took over as chief executive of Barclays, staff had been through a period of upheaval, with the loss of one chief executive followed by the appointment of another who failed to take up the job.

Barrett introduced himself to as many staff as possible, and embarked on a tough schedule of meetings around the country. Chatty newsletters backed up the exercise and insiders say his approach has engendered a more purposeful feel. People know where they are going because they are being led.

At Safeway, Argentinian-born Carlos Criado-Perez spends much time on the shop floor. He is a flamboyant character who conveys an excitement about retailing that has lifted spirits in the group. For years Safeway was seen as an also-ran in the supermarket wars, but Criado-Perez changed the agenda. His vision for Safeway involved it creating its own identity and purpose, so that it could be judged a winner on its own terms.

Both these individuals, relaxed, approachable and open to ideas, are very different characters from the textbook British corporate boss. British business seems to have bred a generation of managers rather than leaders.

A combination of training, the tough economic climate, and the heavy demands of shareholders and corporate governance police, has forced a focus on the figures rather than the visionary side of business. That can produce tough managers, capable of downsizing a business without flinching. Managers, however, are not leaders.

Both abilities are necessary at the top of a business, and sometimes they can be found in a single individual, as in Barrett and Criado-Perez. But although Richard Branson is a leader, he is not a manager. He is an ideas man who fulfils the leader's role of being a big presence in the business. Staff are likely to say they work for Branson rather than for Virgin.

The charismatic leader who is light on management ability can find commercial success if teamed with the right partner. This may be happening at Marks & Spencer. Luc Vandevelde is said to be proving a hit on the shop floor. Two years into his reign as chairman, he appears to be raising morale within the business.

That could not have been achieved without an improving trading picture, and this is credited to Roger Holmes, who was hired from Kingfisher. Charisma was not part of the vocabulary that Holmes acquired as a management consultant, but his other skills are improving results at M&S.

Efforts to turn managers, however skilled, into leaders may produce little more than burnt toes as they try to walk across burning coals in search of leadership skills. Charisma cannot be taught or bought; management skills can.

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