26 July 2017 by Dennis Tourish
Infatuation with leadership myths is damaging to business, says Dennis Tourish of the University of Sussex.
Think of Robert Maxwell, Enron, Fred Goodwin, and Sir Philip Green. Toxic leadership is far from new and is all too common. But although toxic leaders have always been with us, and probably always will be, we can limit their effects.
The problem is that we are often encouraged to fixate on fantasies in which leaders only ever do good and are the most important factor in determining an organisation’s fortunes. These views have been framed by a great deal of writing about transformative leadership in the past 30 years.
This proposes that effective leaders must have enormous power. They must also be ‘charismatic’ – or, at least, able to fake it. An ability to work miracles daily is an essential part of the job description.
Clearly, there are examples of charismatic individuals who exercise a profoundly positive effect on organisations and society. We think of Nelson Mandela, Martin Luther King and President John F. Kennedy.
In business, whatever his defects, Steve Jobs seems to have had some degree of charisma as well. But there are also many examples of charismatic leaders inflicting enormous damage on people, organisations and society. Some scepticism is needed.
Infatuation with leadership myths is particularly troubling at board level, since it can allow powerful CEOs to have their way with minimal corrective input from others.
In the words of Sydney Finkelstein, professor at the Tuck School of Business, being a CEO today is the nearest thing you can get to being king of your own country. This is no more a formula for success in business than it was for the government in France in the 18th century.
The problem starts with how having even a modest level of power often unleashes our inner dictator. Look at the evidence. In 2010, the academic Joris Lammers and his colleagues conducted an ingenious set of experiments that manipulated individuals’ sense of power.
They were asked to recall a time when they felt either powerful or powerless. Levels of hypocrisy instantly increased, with those who felt more powerful more inclined to condemn cheating – but only in others.
When given the chance to decide how many lottery tickets they would receive by privately rolling dice they were more inclined to lie about their scores in order to obtain extra tickets.
They were also more likely to condemn tax dodging, speeding or holding onto stolen goods, but thought it less heinous if they did it themselves. Power, it seems, breeds a sense of entitlement and an inclination to hold others to standards of behaviour that we cannot live up to ourselves.
“Power breeds entitlement and an inclination to hold others to standards of behaviour that we cannot live up to ourselves”
In another experiment, people were given maths problems to solve as individuals. They were then given similar tasks in pairs. Some subjects were supplied with stopwatches and given the job of timing how long this took.
In some groups, they received neutral labels, such as ‘timer’. In other two-person groups the person with a stopwatch was called ‘the boss,’ while some subjects were given the label ‘assistant’.
Lastly, everyone once more solved problems on an individual basis. Those who had been given the label ‘boss’ showed a marked improvement in their performance. ‘Timers’ or ‘solvers’ showed no change in performance; those who had been ‘assistants’ showed a decrease in performance.
There are important implications for leadership. It seems that we are highly sensitive to either the presence or absence of power. When people have a label applied to them such as ‘boss’ they feel more responsible for the task at hand, and intensify their efforts accordingly.
However, when given a label such as ‘assistant’ competence goes down, possibly because they conclude that they are less responsible for the task. After all, there is a ‘boss’ to assume ultimate responsibility.
Regardless, most organisations seem to stress status differentials, and many managers long for large offices and imposing titles to describe their role. Grand titles may even be adding to the burden of expectation carried by their holders, while others assume less and less responsibility.
A major problem is that those in positions of power rarely receive sufficient criticism. Most of us shrink from telling powerful people what we really think of their latest brilliant idea. Senior executives often shield themselves from interaction with others.
My own research into the banking industry suggests that a key problem has been the reluctance of boards to understand the importance of sharp debate,and preventing the emergence of an unquestioned, all-powerful individual whose every wish becomes everyone else’s command.
I offer an example from General Motors. Steve Rattner was appointed by President Barack Obama to rescue the organisation after it filed for bankruptcy. He wrote an article in Fortune magazine about his experiences.
“GM executives hired private jets to tell the politicians in Washington that they needed state support”
One vignette says much: ‘At GM’s Renaissance Center headquarters, the top brass were sequestered on the uppermost floor, behind locked and guarded glass doors. Executives housed on that floor had elevator cards that allowed them to descend to their private garage without stopping at any of the intervening floors (no mixing with the drones).’
Such was their disconnect from reality that they hired private jets to tell the politicians in Washington that they needed state support. This did not go according to plan.
One consequence is that it becomes more and more difficult for leaders to know what is really going on inside their companies. Good news floats to the top, while bad news sinks down the drain.
Consider TV programmes like Back to the Floor or Undercover Boss where CEOs spend some time with lower-level employees, often doing their jobs alongside them. In every single episode, the leader is shocked at the reality of life on the ground. They have become out of touch, and the scope for bad behaviour and poor decision-making grows accordingly.
We need a different model of leadership, in which we recognise it is not about having all the answers. It is often about asking the right questions. It is recognising that the more difficult the situation we face, the more important that task is.
Faced with what can be termed ‘wicked problems’ – that is, problems that have not been encountered often or at all before, and where it is far from obvious what to do – Warwick Business School’s Professor Keith Grint argues that effective leaders must seek a more collective view on how to determine a way forward.
We cannot rely on the wisdom of a solitary genius surrounded by a multitude of marvelling minions. We need to recognise that in companies, as well as in countries, we need an active, engaged citizenry.
Total power in the hands of one person does not produce desirable outcomes in North Korea. Nor did it leave an impressive legacy in Iraq, Libya, Nazi Germany or Stalinist Russia. It is no different in business.
Although leadership matters, we need to recognise that it is only one ingredient from a long list of what makes organisations soar and prosper, or crash and burn. In trying to do it better, we need to do it with more humility, more input from other people, and much more awareness of the danger of hubris.