The Future of Leadership: A Practitioner View: Lynne Chambers, John Drysdale, John Hughes
The Future of Leadership: A Practitioner View: Lynne Chambers, John Drysdale, John Hughes
The Future of Leadership: A Practitioner View: Lynne Chambers, John Drysdale, John Hughes
a,*
KEYWORDS
Responsible leadership;
Distributed leadership;
Leadership
development;
MIT;
Banking crisis;
Sony Europe;
PricewaterhouseCoopers;
Future of leadership
This article explores the crisis in leadership focusing on the period since the
banking crisis. It is written from a practitioner perspective and includes a review of a survey of 16 global companies and their attitudes and perspectives on leadership development. The article also explores applications of a framework developed at MIT looking
at leadership in an age of uncertainty. There are in-depth recent case studies on leadership development at Sony Europe and PricewaterhouseCoopers. Key assumptions include
the fact that leadership is distributed across an organisation and that leadership evolves
as an organisations environment shifts. The article concludes with some views on future
leadership development.
2010 Elsevier Ltd. All rights reserved.
Summary
Introduction
In 2006/2007, just before the global financial crisis, two of
the authors, surveyed the Heads of Leadership and Talent in
16 global companies (Chambers and Drysdale, 2007). These
companies came from a range of sectors including Banking,
Insurance, Technology, and Food. They had diverse national
ownership: Dutch, French, Swiss, US, UK and Japanese.
In the 2007 study we found that less than a quarter of
these companies were satisfied with the development of
their leadership talent and that senior stakeholders in less
than half of these companies had clear expectations of talent development.
* Corresponding author. Tel.: +44 0207 213 3393 (w), 0759 035
3917 (m).
E-mail address: [email protected] (L. Chambers).
The minority of companies that were satisfied with leadership development had a number of factors in common:
Strategic intent clearly articulated each companys
impact across a broad range of stakeholder interests
i.e. clients/customers, markets, financial performance,
culture, corporate and social responsibility.
Integrated business and people planning processes linked
performance and people development goals.
Leaders remuneration was linked to an assessment of
how they led as well as what business results they
achieved.
Three years ago the majority of leadership practitioners
were not satisfied with the impact of leadership and talent
0263-2373/$ - see front matter 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.emj.2010.05.005
A crisis of leadership
Since our first study, the global political and economic landscape has shifted considerably. In the autumn of 2008, after
the collapse of Lehman Brothers and the government rescues of what had been financial power houses, such as
AIG, RBS and Lloyds Banking Group, the financial crisis deepened. Since the Enron collapse, public opinion surveys have
shown deepening distrust in our business leaders, which in
turn caused a crisis of faith in our institutions and ultimately
in our government. The speed of the credit crisis was exemplified in the case of one of the companies in the 2007 survey. In the spring of 2008, the survey company held a top
Leadership Summit, exhorting its leaders to pursue opportunities for business growth in Asia. The same company six
months later was fighting for its very survival and had to
be bailed out by the national government. The speed of
the downturn took many leaders by surprise. It was difficult
for us all to comprehend how the financial system had begun
to unravel and had done so at such a deep-rooted level and
in such a short time.
A mood of deep uncertainty prevailed. Many questions
were asked about how and why Banking leaders had not just
caused their own organisations to falter, but also impacted
the whole economy and contributed to its downward spiral.
Press articles abounded about reckless leaders who showed
apparent disregard for their shareholders and for the general public, whilst rewarding themselves with substantial
bonuses and share options. Sample public commentary is included in our references to articles and speeches by Bain
et al., The Governor of the Bank of England and a special
issue from the Institute of Directors.
Some individual leaders received more criticism than
others perhaps because of a perceived lack of remorse
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or humility. The public, as well as the regulators, were in
no mood for excuses there was simply too much at stake.
The overall impact was an increased public focus on integrity, ethics and accountability leading to demands for greater scrutiny and stronger regulation of financial services
companies (those organisations who had dared to challenge
the underlying principles).
Although the crisis was averted, many questions remain
about the leadership of those organisations who had brought
the global economy to the brink of disaster to what extent
did they contribute to it? To what extent should they have
had greater foresight and be more attuned to the real risks
posed within their own businesses? This has led us to look at
leadership post the crisis in a new light and in particular
to focus on how organisations can prepare future leaders
for the extreme challenges of leadership in the 21st century
i.e. balancing increasing uncertainty and ambiguity whilst
handling greater regulation.
Leadership
Leadership
Leadership
Leadership
is distributed.
is personal and developmental.
is a process to create change.
develops over time.
262
Ancona et al. make an interesting point about the role
that polarity or paradox plays in leadership, which they refer to as tensions:
These capabilities can also create tensions that need to
be managed. It is difficult to hold an image of the future
and the present simultaneously. Balancing people and
processes, action and understanding, individual and collective aspirations, can be challenging. Yet it is inherent
in the framework that managing these very tensions is
the essence of leadership.(Ancona et al., 2007, p. 3.)
Examples of this dynamic emerged in our interviews with
leadership development practitioners, e.g., in every company we spoke with, the leaders who were performing best
were those who were able to manage that tension between
holding sight of the vision whilst delivering short term
results.
Signature style
The last component in the MIT framework is the individual
leaders signature style which they describe as . . . the
change signature that determines how and what the tool
is used for (Ancona et al., 2007, p. 3). While the capabilities focus on what leaders do, the change signature is about
who a leader is. It develops slowly based on experience and
skills. It is a key part of this leadership model because it represents who we are as leaders.
The change signature is made up of a credo and the characteristic way in which the leader creates change. The term
credo refers to a persons core values and beliefs both
for themselves and for their organisation (this concept is
built on that of Kouzes and Posner, 1993). The second aspect of the change signature is the way an individual typically embodies the four capabilities and the characteristic
way in which that person makes change happen. For example, what are the skills, abilities, tactics and modes of operating that characterize how you carry out your leadership
activities? Some people might carry out sense making in a
very interpersonal manner, moving from office to office
learning from everyone they meet. For others it might be
a purely analytic process that starts and ends on the
computer.
L. Chambers et al.
standardization and redundancies (20%) and outsourcing.
Operations were consolidated in low cost geographies to
support recovery of profitable growth.
Media Co was reducing costs and prices to enable them to
access new markets. Traditionally focused on large
developed markets, they were now assessing at which
point a new market becomes scalable.
Sony had seen a major downturn in sales in mature markets and growth in Eastern Europe not delivering
expected growth due to the credit crunch. Price competition had intensified. Cost reduction was achieved
through global/regional economies of scales, synergies
and transformation of business processes.
PwC are focusing on holding their nerve throughout the
downturn and on helping clients manage in a downturn.
There is a clear investment strategy in their chosen markets and a determination to apply lessons learned from
previous downturns.
Increasing customer focus ranked high in the list of
priorities.
In Telcos markets, customers had become more discerning. With market saturation, efforts were redirected
from customer acquisition to retention, clarification of
the customer service proposition, value for money
branding and a restructuring based on customer
segments.
Techco introduced a new global business model and organisation segmented around customer enterprise size.
Media Co developed new services to directly engage better with consumers
Sony was directly engaging with consumers, to understand their needs better.
PwC have renewed emphasis on client relationship skills
alongside technical expertise as a key business
differentiator.
Innovation was important in finding ways to work smarter
and more efficiently. In the companies we spoke with there
was less emphasis on innovation. In Mediacos case they
were cannibalising existing products, creatively destroying
old products to create something new.
PwC were looking at new ways of adding value to audit
clients, as the audit process itself becomes more commoditised and fee rates increasingly under pressure.
Business priorities
Changing requirements of leaders
In this section we look at the overall business context within
which leaders are currently operating. The dominant business priorities that were emerging as a result of the global
economic crisis were: cost reduction; customer focus and
innovation.
Cost reduction featured strongly as a priority for the
companies we spoke with.
Telco was operating in a saturated market with intense
price competition and took the opportunity of a tough
market to focus attention on getting costs under control.
Techco was faced with a 3040% reduction in markets
and cost reduction was critical to weather the storm.
Operating costs were reduced through consolidation,
We now examine the key messages emerging in our interviews with leadership development practitioners and what
they revealed about the impact of the recent global economic crisis on the requirements that companies have of
their leaders.
We found from Executive interviews that Sony Europe
and PwC UK had both launched strategic leadership development programmes in 2007, which emphasised the development of an approach to leadership which has since
become a business imperative. We saw these programmes
as innovative, progressive and in line with the latest thinking on leadership development. We now believe that the
dramatic events of the last two years have brought the
Sense making
Sense making features strongly in the requirements of
leaders in all companies, particularly understanding and
working with interdependencies. The cost reduction drivers
have intensified the importance of sense making. For example, in Telco they are making decisions by taking more account of the broader cross company impact. They are
more disciplined in balancing costs and revenue a tough
challenge when they havent had to manage costs so much
in the past. In the face of greater complexity of relationships to manage inter-company and across the market,
focusing on fewer things with the greatest leverage has become their mantra.
In Techco, strategic agility has become critical, with the
need to locally interpret the new global strategy, whilst dramatically reducing costs and sustaining employee engagement. This balancing of running the business and managing
change at the same time has emerged as one of the key
leadership capabilities within five of the companies we
spoke with. In Mediaco, leaders have become more commercial, getting their heads around new business models
and managing ambiguity, as there is no right answer anymore and they can not reference the old ways of doing
things.
Relating
As leaders come to terms with the reality that there is no
known solution to most of the challenges they are facing;
they recognise that they need to work with others. Relating
features prominently in their approach. In Telco, they are
displaying a more enlightened approach. They are engaging
people, not just saying no, but rather heres what we need
to achieve, what can we stop or do differently?. As Techco
slashed costs, there were no longer budgets for large off
sites and specialist support staff (who in the past would
have provided programmes to support change), were
263
made redundant. Leaders now have to look to their own
people for the solutions. In the face of unrelenting commercial pressure, it has become essential to maintain a strong
focus on people and peer relationships across the organisation. It is only through collaboration that solutions are found
and that the commitment can be built to successfully execute. In Mediaco, a priority has been placed on maximising
assets by reconfiguring content. Such deep focus on content
specialism has meant that leaders are increasingly finding
that they are required to lead people whose jobs they do
not understand and they are having to build more trusting
relationships.
Inventing
In Telco and Techco, much effort has gone into creating the
processes and structures needed to translate company wide
visions into reality. In Telco, they are being more proactive,
putting issues on the table and taking responsibility for
developing and executing solutions. At Techco, the emphasis has been on translating global strategy into local action,
by rolling out the global vision, mission and values. Whilst in
Media Co there has been more scope for leaders to shape
strategy, particularly in reconfiguring products and services
with reduced costs and prices to enable the company to
access new markets.
Visioning
At Telco and Techco it has been about ownership, translating the global strategy into a compelling vision and selling it
locally. At Mediaco, a creative company there is less standardisation and more opportunity and requirement for leaders to be more strategic, thus creating the big picture.
We will now look at how the requirements of leaders
have changed in our two featured companies.
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L. Chambers et al.
People & Organisational Development @ Sony
3Cs of
Leadership
Competence
The ability to have and apply knowledge and
generate new learning in a situation. It is often
dependent on the processing power and overall
level of intellect of an individual. Both strategic and
analytical thinking processes are important within
this dimension.
Courage
This dimension refers to the decision making
required to take the right path not necessarily
the easy path. It also refers to the ability to
take personal responsibility to make things
happen. There are both moral and
motivational elements to this dimension.
Figure 1
to the vision of doing the right thing for our clients. PwC
hope and expect to take business relationships to new levels
by demonstrating commitment to clients by staying alongside them during the downturn and helping them find robust
business solutions. Another cultural signature is tell it how
it is. These statements mean that all at PwC can download these messages and create a cultural change signature through following clear principles. This is indicative
of the leadership belief that key principles clearly communicated coupled with trust in individual partners will allow
the organisation to be agile and responsive to the changing
requirements of leadership.
Sony Europe
In 2007, revitalisation of Sony Electronics was the number
one corporate priority: the way in which this was to be
achieved was by getting even closer to consumers, understanding and responding better to their needs; increasing
creativity in engineering; reducing costs through global/regional economies of scales, leveraging synergies and
streamlining business processes. Leadership capability was
recognised as directly impacting the companys ability to
execute its strategic priorities.
Fujio Nishida, President of Sony Europe, articulated this
vision of leadership in November 2006 at the launch of the
Sony Europe Leadership Programme:
We must continue to develop our leadership capability, build a culture that focuses on growth and encourage more creativity and risk-taking in our business.
The business case for the investment in leadership development was supported by two major pieces of research.
Corporate Leadership Council found in 2003 that organisations with a strong leadership bench over a 3 year period
Confidence
This dimension refers to the emotional
intelligence of an individual and their ability to
develop people within their teams and generate
followship. Self-confidence and self-awareness
are key aspects of this dimension.
Communication is also a factor in this
dimension.
3 Cs of leadership.
Table 1
From
To
265
Figure 3
Figure 2
different parts of the organisation together to create efficiencies and synergies for the benefit of the consumer. This
shift in culture was seen as crucial to the companys transformation and to regain the magic of Sony.
These expectations were influenced by the results of the
companys open survey of all employees and key people
assessments. The 2007 survey results confirmed that
employees were proud to work for Sony, felt part of the
company and found their jobs challenging. Needs for
improvement were identified in the following areas: managers to provide more motivation and guidance; more career
development opportunities; increasing emphasis on excellence, creativity and innovation. Employees considered it
was important for them to have pride, passion and belief
in the organisation but less than a third actually felt that
way.
Sony Europe has since updated their leadership model. It
was felt that the 3 Cs model had been valuable but no longer captured the leadership requirements for the business
going forward. Specifically, the new model, which is described above (Figures 2 and 3), is intended to reflect future
business needs, including speed of change, drive to deliver,
and external market awareness as key attributes.
266
meet the challenges they now face. We will then look at our
featured companies in more detail.
With the deep cost cutting at Telco and Techco, leadership development budgets were drastically cut and no specific programmes were planned to help leaders develop
the required capabilities. Local HR and training departments were providing some tactical support and group wide
leadership development programmes were under review. It
is likely that new programmes and strategies will emerge on
the back of the learning of this period. In these companies,
one year since the start of the crisis, those leaders who
were performing best were displaying the following Cultural Signatures:
Ownership: Taking more responsibility. Owning the goal.
Being more choiceful and engaging people in those
choices.
Strong and courageous. Demonstrating personal strength,
clear views and pushing them but also being prepared to
be flexible. What makes the difference is the extent to
which leaders have moved away from ego.
In Mediaco, levels of investment in strategic leadership
programmes had been maintained. This company had always been very focused and selective in its investments
which had high levels of credibility and support. They had
decided to segment their development offerings, targeting
investment more on key talent, segmenting programmes
more on specific types of leaders and specific leadership
challenges.
L. Chambers et al.
leaders to understand their leadership signature and
develop personal vision. This is all in service of building
a cadre of leaders within PwC that are able to relate to
an increasingly diverse range of stakeholders and deal
with high complexity, balancing polarity and working
with paradox as required.
The programme is a 6 week development process starting
with a Foundation Workshop preparing the Partners for their
Field Experience with the organisations hosting the Partners Field Projects. During weeks 25, the Partners develop
their leadership skills in a very different environment during
their Field Experience. Each project has two or three Partners working with a leader from the host organisation on
particular areas of focus which are designed to be open
ended, systemically complex and challenging. They are also
100% live and real: there is no element of simulation. Host
organisations have varied from national charities to emergency services and issues have had a strong social inclusion
focus ranging from homelessness, domestic violence and
prostitution to economic deprivation.
When Partners have completed their field experience
they return to the office for a couple of weeks before
attending the final element of the programme: the Review
Workshop. The host leaders join PwC Partners for a deep
dive to make sense of leadership learning at the individual,
group and organisation levels. They prepare to share their
insights and leadership development with a panel of PwC
UK Executive Leaders. All of this planned leadership development activity has a specific focus on leading through
ambiguity.
The PwC leadership development strategy follows the findings of the Centre for Creative Leadership that 70% of learning takes place on-the-job. The culture at PwC encourages
people to learn hour by hour through fresh approaches to
familiar tasks and being regularly exposed to new challenges and situations. There is a strong belief that leaders
never stop learning, and if they do, they will very likely also
stop being leaders.
PwC started their exploration of Responsible Leadership
with their Global Ulysses (GU) programme. GU started in
2001 and 120 international partners have experienced the
programme. The GU programme sourced challenging international projects in which partners could experiment with
and expand their leadership repertoire. This often resulted
in personal transformations and deep learning. This was the
start of the process to create the PwC UK Responsible Leadership Programme (RLP), which has now been successfully
trialled for three years, 200709, with the same outcomes
many partners experiencing major shifts and breakthroughs in their leadership approach.
PwC has long recognised the need to invest in developing
leaders able to deal with increasing complexity and
ambiguity.
The purpose of PWCs Responsible Leadership Programme
is summed up by the Programme sponsor:
PwC have maintained commitment to the Responsible Leadership Programme. After the second year they completed a
series of structured interviews with participants and a sample of their clients and colleagues to check the business impact of the programme.
Leading Beyond Authority was a key theme of the
Responsible Leadership Programme at PwC, and recent research found that many partners have taken up discretionary roles following their attendance on the programme.
After the second year of the programme, Individuals
reported a diverse range of enhanced abilities including:
setting the agenda; working with the big picture; suspending
judgement; entrepreneurial activity; being true to self;
inspiring others.
Partners also reported a strong desire to step up and take
on new responsibilities to support the firms strategy. At the
heart of all of this was a clear sense of leadership based on
clear values and a desire to create exceptional results supported by a broadened perspective and the ability to set priorities and maintain focus.
RLP Partners are on a rapid journey of sense making and
orientation as they enter the Host organisations worlds
and discover new forms of leadership. During their time on
RLP, Partners are encouraged to suspend their existing
frameworks and remain open to the new situation, taking
in many new sources of data. A key outcome of the
programme has been the chance to explode stereotypes.
Impact
The commitments made by participants following the programme are focused on Visioning, Sense making, Connecting
and Inventing. Here are some examples:
We will establish a new style of leadership.
We will start to recruit for emotional intelligence (not
just technical skills).
267
We will build/grow our One Idea initiative (to ensure
that the network and learning continues after the
programme).
We will make our people strategy management a core
part of our budget and business planning.
We will cascade EQ and coaching in the organisation
create an ask not tell environment to create a
significant change in how we interact with our
customers.
The comments made by participants are consistent with
the assumptions that Leadership is distributed, personal,
about creating change and develops over time:
This has been an experience like no other for me and
impacts positively both my personal and professional life.
I am richer in so many ways for this.
Tools and approaches to coaching are hugely valuable.
The strong personal network that is built during the programme is extremely valuable.
External Coach helps to reinforce learning.
People have much greater insights into their leadership
role and own strengths and weaknesses.
Visible differences in behaviour for some impacting on
culture.
Personal approach is challenging and stimulating (emotional hard work) and has increased peoples confidence
in being a leader.
Bringing your whole self to the leadership role really is
the key to inspiring others.
Three years since its launch the programme continues to
have considerable impact. Firstly, alumni from the programme have been promoted to very significant positions
of responsibility. Secondly, alumni of the programme have
continued to connect and have demonstrated ownership
leading initiatives to help the company get closer to customers. At a time when there has been an overall reduction in the amount spent on training and development,
the proportion spent on leadership development has increased. In line with its strategic priorities, the company
will have a more consistent approach to leadership development across Europe with less country specific programmes.
Interestingly Sony, like PwC, are planning to include Corporate and Social Responsibility projects in future leadership
development programmes.
Conclusions
In conclusion, we highlight three major themes which have
emerged in our review and which we believe are significant
in terms of developing future leaders.
Given the increasing levels of ambiguity and complexity,
it is now essential that leaders can manage the tensions
which are inevitably present in organisational life. To manage these polarities between, e.g., creating an inspiring vision and managing costs, between regulatory requirements
and pioneering new ways of serving customers, requires a
high degree of sense making, of asking the right type of
questions and most of all, having the humility to acknowledge the need to ask questions of others.
268
It takes a certain type of leader to inspire others with a
sense of purpose inside and beyond the organisation. This is
a critical foundation for building long-term trust and
engagement. We believe this requires a level of authentic
leadership, which is strongly rooted in the leaders personal
signature. The important feature here, we believe, is a
transparent link between the leaders values and what they
say and do in practice. This in turn will align cultural norms
and values within the organisation. The endgame is a situation where employees, shareholders and other key stakeholders begin to relate to the organisation and what it
stands for, as well as rallying behind the leader. The model
then potentially becomes a virtuous circle of success, with
confidence in the leader leading to confidence in the organisation and so on.
The question then remains as to whether one can build
this level of authenticity in future leaders change signatures or whether it is a personal characteristic, which is unique to the individual. We believe that it is possible to
develop authenticity, though it takes a particular type of
intervention to bring out this characteristic. In the case of
PwC, it is about giving leaders the opportunity to make a
difference in the third sector, to grapple with challenging
social issues and to come face to face and relate to people
who have none of their privileges. It is this very personal
reaction to difficult social issues that is the pivotal point
for personal insight and growth.
In Sony, the focus of the Senior Leadership Programme
is on the leaders impact at a number of different levels.
This programme again reinforces the link between the individual leader, the context within which they are operating
and the change signature by which they bridge the gap between their own sense of the world and the organisational
view.
We have seen how both companies have anticipated
the future needs of their leaders and have been bold in
providing radical solutions, which remain ahead of their
time. Since then the financial crisis has ensured that
the content of the programmes is mainstreamed and of
significant importance for the new business environment.
The leaders themselves have to make sense of and shape
their own worlds and create an engaging vision for the
future, which people will want to be part of and help
build.
As ever, our role as practitioners is to help leaders to develop a sense of their own identity and purpose and to motivate them to inspire others through their example.
L. Chambers et al.
References
Ancona, D. (2005). Leading in an Age of Uncertainty Vol. VI. MIT
Centre for eBusiness.
Bain, Bird, Buchanan, Rogers and Blenko (2004) Putting your
leaders where it counts. Handbook of Business Strategy, Bain
& Co.
Chambers, L. & Drysdale, J. (2007) The 2007 momentum report on
talent and leadership practices, unpublished.
Corporate Leadership Council. (2003) Leadership survey (CLC),
December 2003.
Institute of Directors. (2010) International corporate rescue
special issue: Company law, corporate governance and the
banking crisis. Chase Cambria Company.
Kouzes and Posner (1993) Credibility: How leaders gain and lose it,
why people demand it. Jossey-Bass, San Francisco.
LYNNE CHAMBERS is a Fellow of the Windsor Leadership Trust. She is a regular presenter and facilitator, specialising in
leadership, talent, culture change and
diversity. She has held various senior level
HR positions within leading Financial and
Professional Services companies. Currently
she is on assignment as Head of Talent and
People Development at PricewaterhouseCoopers.