IN MY OPINION: Chartered Management Institute

Chartered Management Institute companion Andrew Kakabadse, deputy director of Cranfield, highlights the need for unity of purpose at the top

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Last Updated: 31 Aug 2010

Too often over the past year, details of the expedited departures of chief executives of multinationals have filled the business pages.

At the end of 2003, the spotlight was on Philip Condit, who abruptly resigned as chairman and chief executive of Boeing in early December.

A brilliant engineer with a compulsive discipline for project completion and a sophisticated eye for design, Condit faces wide-ranging accusations from being late and overshooting budgets to supposed inappropriate conduct relating to bid tendering at the Pentagon.

However, Business Week has questioned whether Condit has been made the fall guy at a time when commercial aviation is facing a downturn. There is noticeably no mention of a strong team supporting Condit. Instead, accusations of a weak board and the dismissal of key executives for supposed poor performance spring to the surface. So was Condit a poor appointment - an issue that should have been confronted earlier by the board - or a 'lone warrior' shouldering too much responsibility, or both?

Whatever the truth, research at Cranfield School of Management seriously questions the strong man (or woman) model of leadership. Boeing's acquisition and questionable integration of McDonald Douglas, competition from the likes of Airbus and Lockheed Martin, and the need to be zealously attentive to costs are complexities that would elude the capability of any one person.

Emerging evidence suggests that the pulling together of key executives responsible for the critical parts of the business is fundamental to success.

Yet pulling people together is no easy matter. The Cranfield data highlights that 33% of senior executives across thousands of organisations spanning 17 countries hold fundamentally different views concerning the vision, shape, philosophy and sustainability of the enterprise.

That is not the whole story. The quality of debate at senior levels is also found to be wanting. On average, 66% of top teams experience discussion and debate as inhibitive, to the point where critical concerns are not discussed but are allowed to fester. Such issues are deemed 'too sensitive to raise'. Chinese and top Japanese executives emerge as most likely to suppress dialogue, followed by UK health service directors, senior civil servants in the Australian public service, and Irish, Spanish, Austrian and American senior private-sector executives.

Ironically, where dialogue is poor, the vision for the future may well be firmly shared by the members of the top team. Yet the inability to translate vision and aspiration into practical, well-managed steps can mean that known challenges are not confronted. The inability to realise synergies across the enterprise is compounded by neglect of a mounting number of simple and transactional managerial concerns, which ultimately sap the corporation's resources and the morale of its management.

The concept of cadre - a strong top management - popularised by Napoleon is gaining favour in the development of leaders. His Blitzkrieg approach, which relied on inflicting greater casualties on the enemy than it could inflict on you, depended on nurturing a strong officer corp where all think as one. Such cohesion requires executives to be robust enough to challenge each other, while retaining the flexibility to adjust to new circumstances.

Such thinking has merit. Consider the innovations and improvements most organisations have applied over the past two decades. Many enterprises have 'right-sized', or initiated quality programmes, customer relations innovations, sales drives and service initiatives, as well as dramatically attended to the poor performance of managers and operatives.

With so many pursuing similar avenues of change, the question is: 'What differentiates one competitor from the next?' In maturing markets, attaining differentiation is a daunting challenge. Most end up competing on price, but this can't be indefinitely sustained. There is always someone more efficient at applying cost disciplines.

Instead, creating and sustaining value require cohesive leadership that transparently addresses the external and internal concerns facing the organisation. It's critical that firms can respond to challenge and meet the demands for nurturing a mindset of continuous improvement. To meet these aims requires robust debate. There is little in the stories concerning Condit's leadership to suggest he had a robust team supporting him.

The emerging impression of Boeing under his stewardship is of ineffectual leadership on his part and that of others. Yet, in his defence, two-thirds of the world's enterprises display similar habits. The difference is that these other organisations don't face the media scrutiny that can accentuate the weaknesses of the corporation. This highlights the need to build a strong team of leaders in order to stand apart from the competition and guarantee long-term sustainability.

When all other improvements have been made, a 1% extra enhancement of the leadership can make a 10% difference in the performance of the organisation.

CV

Andrew Kakabadse, Cranfield School of Management's deputy director is also professor of international development. Author of 23 books, Kakabadse consults and lectures worldwide. His focus includes improving top executives' performance, corporate governance, CSR and international relations, and he is to conduct a global survey of the effectiveness of boards and NEDs.

For information on the Cranfield research, read Essence of Leadership by Andrew and Nada Kakabadse.

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