Strategy is more dependent on courage and humility than talent and charisma

Strategy, courage and humility
Misconception: Leaders need to be charismatic.If you ask CEOs to nominate the business leaders they have most admired, they will invariably refer to a small group of well-known, highly entrepreneurial men at the top of large corporations: leaders such as Sir Richard Branson, Warren Buffett, Bill Gates, Steve Jobs and Alan Lafley.

If you then ask them to say what precisely they admire about these great figures, they will point to their bravery, their decisiveness, the boldness of their vision, their contrarian beliefs, the originality of their strategies, the courage of their convictions, their self-confidence and willpower.

But if you now inquire into what strategies and policies they themselves are advocating in their own businesses, the answers that you get are depressingly familiar: cost reduction, 360-degree feedback, outsourcing, downsizing, margin improvement, shared services, process re-engineering and change programmes.

Richard Rumelt, who invented this research ruse, makes the observation that the actions of most executives fall far short of their aspirations and ideals. He wonders why. How can such a yawning gap between the reality and the rhetoric of business be explained?
Rumelt defines strategy as ‘the predatory leap’ that transforms the competitive landscape and which is such a feature of the leaders that their peers admire. He describes the pedestrian policies that most business leaders actually adopt as doorknob polishing’.

So why, in positions of great power, do so many CEOs settle for polishing doorknobs?

When CEOs are asked at the end of their career, ‘What do you wish you’d done differently?’, they nearly all say something along these lines: ‘I wish I’d acted with greater speed and courage’ – though admittedly they now have the hindsight to reduce the uncertainties they felt at the time. So what is it about the context of business that inhibits CEOs from doing what they know needs doing? Why do they prevaricate? What is holding them back? Why the failure of nerve?

In keeping with our belief that performance is determined more by the system than by the individual, perhaps the CEO is placed in an impossible position. The notion of ‘charismatic leadership’ is a hellish burden to bear. Jeffrey Pfeffer has demonstrated that CEOs are encouraged to believe that they are ‘in control of their companies’. Politicians are placed in much the same bind.

As a result, leaders find themselves stuck between a rock and a hard place – that is, between their egotistical need to succeed and the overblown expectations that organisations place on them. The fear of failure erodes their self-confidence and standardises their thinking. The victim of society’s faith in leadership ends up being the leader himself. Followers could be forgiven for feeling some degree of Schadenfreude in the fall from grace of those they put on too high a pedestal.

Edited extract from Uncommon Sense, Common Nonsense, by Jules Goddard and Tony Eccles.
 
Taken from the March 2014 issue of Market Leader. Browse the archive here.