A new blueprint for leaders

The old model of the charismatic boss has taken a beating since the downturn - what's needed now is a fresh approach.

by Stefan Stern
Last Updated: 09 Oct 2013

The notion of heroic leadership has taken quite a beating recently. Consider the sorry figure of Tony Hayward, the former chief executive of BP. His rise and fall over the past three years has been dramatic. When his predecessor, Lord Browne, suddenly resigned in May 2007, Hayward was thrust into the top job, a few months earlier than planned.

At first his calmer, less grandiose style seemed refreshing. He got on with the serious task of cost-cutting. He had declared, ahead of taking on the top job, that BP's leadership had not listened carefully enough to the concerns of staff. But, as time went on, there were more worrying developments. A number of senior female colleagues, including Vivienne Cox, head of the company's alternative energy business, decided BP was no longer the right place for them to pursue their careers. Hayward made a notorious speech, claiming that the company had contained too many people who were trying to save the world.

And then disaster struck in the Gulf of Mexico. Hayward, fed up with all the hassle, wanted to get his life back. His sheepish, limp expressions of regret infuriated the American public. He was soon dead in the water, just like all that oil-soaked birdlife in Louisiana. The pleasing self-effacing tone of 2007 just didn't cut it at the height of the crisis of 2010. A reminder that the best leaders do not simply adopt one fixed (heroic) pose, but are able to adapt to suit the circumstances.

The leadership arc pursued by former prime minister Tony Blair between 1997 and 2007 is an extreme example of what can happen to apparently heroic figures. Blair is front-of-mind right now after last month's publication of his memoirs, A Journey. He was always presented to us, ever since becoming Labour leader in 1994 at the age of 41, as a youthful, dynamic figure, one who was not afraid to lead. His was going to be a heroic narrative. His speeches and rehearsed, off-the-cuff comments often revealed how conscious he was of his image as A Leader.

Blair defines his sort of brave leadership in his new book. He believes that at times it involves delivering tough messages to people, 'not knowing what the people wanted and trying to satisfy them, but knowing what I thought was in their best interests and trying to do it'. Indeed he has often remarked that leaders may be at their least effective when they are at their most popular. The great, heroic leader courts unpopularity. Blair describes the period in 2006 when he strove to reform the country while facing opposition on all sides. He writes: 'In my eyrie, high in the trees, with my soulmates, we could replenish mind and body before venturing back out in to the undergrowth below.'

Change is difficult. That's why we expect that great leaders will possess certain heroic qualities: courage, resilience, perspicacity and calmness under pressure. In difficult economic times, business leaders are tested and we look to them to provide something extra. As Vijay Govindarajan and Chris Trimble point out in their new book, The Other Side of Innovation: Solving the execution challenge, incrementalism - steady-state leadership - while necessary, will not be enough to make the most of the opportunities opening up in the world's fastest growing markets of China and India. The sort of radical innovation which these authors call for requires a kind of heroic leadership. But this is easier said than done. Bold new ideas can easily be killed off early on. As Niccolo Machiavelli pointed out five centuries ago in The Prince, there is nothing simple about bringing about change: 'It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things,' he wrote. 'Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new.'

No wonder that boards of directors and investors, aided by their friends the headhunters, launch expensive searches for a heroic deus ex machina chief executive to come and rescue their companies. But the record of these parachuted-in heroes is mixed. Harvard Business School's Rakesh Khurana, in his 2002 publication Searching for a Corporate Saviour: The irrational quest for charismatic CEOs, argued that trying to inject heroism from outside could be misguided. (His HBS colleague Joe Bower, in his more recent title The CEO Within, reinforced this argument: nurturing your own future leaders could be a lot more effective, and cheaper.)

In a Harvard Business Review paper in 2002, The Curse of the Superstar CEO, Professor Khurana attacked the myth of the charismatic hero-leader head on. 'I have concluded that the widespread quasi-religious belief in the powers of charismatic leaders is problematic for a number of reasons,' he wrote. 'First, faith exaggerates the impact that CEOs have on companies. Second, the idea that CEOs must have charisma leads companies to overlook many promising candidates and to consider others who are unsuited to the job. Finally, the charismatic leader can destabilise organisations in dangerous ways ... Today's extraordinary trust in the power of the charismatic CEO resembles less a mature faith than it does a belief in magic.'

Are there no heroes left in business? Or at least, should we be suspicious of those leaders who get described in heroic terms? The Washington Post recently invited a wide range of gurus to pronounce on this subject. The mature responses of the experts put the heroism question into a useful context.

Warren Bennis, perhaps the world's leading leadership guru, was phlegmatic. 'I do not believe that the CEOs of today are any worse or better than they were, let's say, a hundred years ago,' he said. 'It's just that the stakes are higher and more of us are affected by the dominance of free market economy.'

The always entertaining coach Marshall Goldsmith was a little more forthright, as he usually is. 'Have you ever read a history book?' he asked. 'Corrupt leaders have been with us for many centuries. Throughout history, most CEOs have been older men. Is there anything in the history of the world that would lead you to believe that when old men are given lots of status, money and power they always become more sane and rational? I missed that book. Great leaders and terrible leaders have been with us throughout our history. Some things never change.'

The leading management thinker Michael Maccoby was a little more hopeful. He cited Steve Jobs at Apple, Warren Buffett at Berkshire Hathaway, Alan Mulally at Ford, Sam Palmisano at IBM and Jamie Dimon at JP Morgan Chase as leaders who were all in their different ways providing something close to heroic inspiration.

Lastly, the distinguished Harvard psychologist Howard Gardner touched on something crucial. 'I suspect that the true heroes are largely unsung and prefer to remain that way,' he said. 'They prefer to give credit to others, to remain behind the scenes, to avoid grandiose statements and predictions and promises, and to perform better than anyone expected them to. And the ultimate test of these individuals may be the extent to which they plan for an orderly succession to individuals who share the desire to remain out of the limelight, rather than to attempt to dominate it, and quietly but responsibly do good work.'

Does this, too, sound familiar? It ought to. It is a near paraphrase of the theory of 'level five leadership' set out by Jim Collins in his best-selling management book Good to Great. Level five leaders, you may remember, tend to be found in those companies which Collins and colleagues tracked on a journey (that word again) from decent to stellar performance.

Level five leaders, Collins wrote, 'build enduring greatness through a paradoxical blend of personal humility and professional will ... (they) channel their ego needs away from themselves and into the larger goal of building a great company. It's not that level five leaders have no ego or self-interest. Indeed, they are incredibly ambitious - but their ambition is first and foremost for the institution, not themselves.'

This of course is a very different take on leadership than the conventional one which suggests that lonely, heroic leaders achieve great feats almost singlehanded. That is the popular and enduring myth. Even when a leader has achieved great things with a team of great people, as Jack Welch did at GE, it is tempting for that leader to embellish the myth that he was a solo player. The myth of 'Jack Welch' is much cruder than the sophisticated reality. But it is a myth that Welch, in his writing and public utterances, does much to preserve. Collins's great leaders, on the other hand, explicitly succeed with and through other people.

There's more. 'Level five leaders look out of the window to apportion credit to factors outside themselves when things go well (and if they cannot find a specific person or event to give credit to, they credit good luck). At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly.'

And then there is a (potentially) deadly paradox. Level five leaders tend to be self-effacing. But how many self-effacing leaders do you know who fought their way to the top of a large organisation? As Collins puts it: 'The great irony is the personal ambition that often drives people to positions of power stand at odds with the humility required for level five leadership. When you combine that irony with the fact that boards of directors frequently operate under the false belief that they need to hire a larger-than-life, egocentric leader to make an organisation great, you can quickly see why level five leaders rarely appear at the top of our organisations.'

It's not all gloom. One British chief executive, who recently announced his upcoming retirement after over a decade in the top job, exemplifies the sort of down-to-earth, results-driven heroism that other business leaders would do well to emulate.

Sir Terry Leahy (of course) embodies a no-nonsense, no-frills style of leadership which does not necessarily endear him to journalists but which has kept Tesco's shareholders and staff pretty happy in the 13 years he has been chief executive - and in fairness he inherited a successfully transformed business from his predecessor, Lord (Iain) MacLaurin.

Does Sir Terry boast about his business prowess? Is he constantly on the TV and radio explaining his world view? Are we familiar with the details of his private life? How much do we really know about him, in fact? Very little is the answer. And yet, because of the company's impressive international growth and terrific financial results, his leadership of Tesco will be studied for years to come. If you want to be seen as a business hero, prove it with results first, before trying to become a celebrity.

Jim Collins would recognise Leahy at once. Diligent, obsessive, relentless, driven: the Tesco boss is all these things. But the cause is not Leahy's. It is Tesco's. He will slip away from the company next March, his (internal) successor Phil Clarke already in place. Somehow I don't think Sir Terry will be making a very big fuss about it all. (The key question for business leaders, Collins once explained, is this: 'What are you in it for?' We know how Sir Terry would answer that question.)

What are you in it for? In Tony Blair's account of his own life in politics, we get a strong sense that his own reputation and standing were crucial to him. Here he is talking about other 'world leaders' and what they thought of him:

'I always reckoned that even the ones who didn't like me (quite a few) or didn't agree with me (a large proportion) still admired the fact I counted, was a big player, was a world and not just a national leader,' he writes. 'Our (British) leaders should stand out, and if not cut a dash, at least make an impact.'

And in an interview around the time of the book's launch he explained that, as a jet-setting citizen of the world, the ties of his home country had been loosened somewhat: 'It doesn't make any difference to me where I am, as long as I'm making progress in the work,' he said.

This is another view of heroic leadership, more romantic, more Hollywood, but less grounded than the version propounded by Jim Collins and displayed by Sir Terry Leahy. MT readers will have to make up their own minds which is the role model they find more compelling.

Some heroism, though, we can probably all do without. Telling the boss he or she has to be a hero sets the bar impossibly high. And, as the management writer George Binney has pointed out, it lets the rest of us off the hook - we can sit back and wait for our hero to save us. As the German playwright Bertolt Brecht didn't quite say: 'Unhappy the company that needs its leader to be a hero'.

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