It is the responsibility of leaders to bring about shifts in behavior by having both a vision of integrity for the organization and a strategic plan for ensuring such integrity. This vision must be articulated in a way that is relevant and actionable by employees. A vision that aims too high will not be taken seriously while one that is too pedestrian will not motivate employees. With the spectacle of court TV to avoid, what should a board of directors use to generate a proper picture? The style (or stance) of leadership the board wants to promote demonstrates a capacity to energize subordinates and the public to believe that the organization has risen above its singular contractual obligations and performs at the level for mutual benefit of civil society and stakeholder.
The principal finding of a McKinsey Quarterly survey of more than 1,000 board members is that having focused for a time on accounting-compliance issues, boards are now determined to play an active role in setting the strategy, assessing the risks, developing the leaders, and monitoring the long-term health of their companies.
At one level, the survey underlines the way the Sarbanes-Oxley Act is holding boards–not only in the United States, but also around the world–more responsible for meeting high standards in reporting and controlling the financial affairs of their companies. Yet the implications for governance are even far more reaching. To achieve as much involvement as directors say they want, they will have to use their time in meetings more effectively and develop a new understanding of their roles and responsibilities; otherwise, they will give management the impression they intend to take on day-to-day roles. Moreover, the composition and culture of boards, as well as the agendas of board meetings, will require fresh thinking.
Understanding and choosing the style of leadership necessary to create the desired environment for the organization begins with understanding the various leadership roles available to organizations today.
Leadership as Management: Developed by Friedrich Taylor, this is a managerial role that asks leaders to ensure group activity is timed, controlled, and predictable. This mind-set says little, if anything, about the leadership task of building shared values, trust, and vision. It is silent about the animating essence of business and business people. By relegating workers to the status of “cogs” in the corporate machine, it has scant appeal to the better educated, more aware, and ever-more-wanting people entering the workplace. The need to be rapidly responsive to changes in customer demand for products and services places a strain on the rigid, procedural, control mechanisms developed by this managerial mind-set — to produce traditional outputs with multiple units of the same product to high tolerances and low margins.
Leadership as Excellent (good) Management: This view of leadership, while maintaining the mechanistic operational inclination of the firm, changes the character of the core follower (responding to the pull of the quality movement) and enlarges the domain of the manager. Essentially it retains the idea that leaders and managers do much the same thing. It limits the scope of leadership to just one function — quality improvements — and ignores the full range of capacities of both leader and follower. It does not address the needs of the corporation beyond a focus on high quality.
Values Leadership: This conception of leadership is rooted in the reality of human nature and conduct. The essential human nature is simple; everyone has values and these values trigger behavior. Even as it recognizes the use and importance of values in shaping behavior, out of a false desire to let each person choose their own values, it refrains from advocating any values or even discussing relative merits of alternative value systems. Indeed, it teaches that any value is equal to any other. So it recognizes that values are shaping our lives but fails to address that we do not know how to consciously set our own values systems or evaluate the merits or results of those we see in others. Values leadership clearly has set aside a space to articulate values but seems too timid and unsure to make full use of the space.
Trust Leadership: This view sees its role not so much as a function of the individual leader but as a condition of the group culture. Leadership may be spontaneous at times. Most often, it is a result of specific, planned actions to create a culture conducive to internal harmony and interpersonal trust. The leader’s task is to build a culture of shared values where people can come to trust each other enough to sublimate their differing values so that they can work together. Those accepting this leadership reality see the need for a unified, effective, harmonious culture characterized by mutual trust that allows leadership to take place. It is a collective activity, shaped and controlled by the values-laden notion of harmony as defined by its history of domination by the majority culture. Without a broad and adroit set of critical skills, the trust leader’s search for unity will tend to exclude many important insights, tactics and especially people. This view is likely to accept conformity as consensus or, even worse; it needs conformity and needs to call it consensus.
Spiritual Leadership: This view concludes that leadership is a function of the leader’s concern for the whole-soul — the inner sense of spirituality of self and others. The belief is that leadership comes out of the leader’s true self — his/her inner spiritual core. This inner framework, not facts or situation, determines what is good and true and beautiful, and therefore worthy of action. From this view, the notion of only looking at profit and productivity is unsatisfying as the guiding values focus on feeding the soul. It presumes that people are hungry for meaning in their lives and feel lost and empty. To fill this void, it attempts to blend an internal representation of the soul and the firm’s economic needs. This view represents one of the oldest of rationales in Western culture, that of Emanuel Kant. It understates the social value of being the best for an external customer in favor of the inner most space of the internal market — the soul. It may be true that the key operation is metaphysical but to link to a unified soul denies the multiplicity of the forces in action. What this view is especially good at is focusing all of its attention of an empowering relationship. A leader of a metaphysical experience defines a sense of one’s own spirituality and that of co-workers so as to have a greater transformational effect on the organization, its forms, structures and processes.
Contextual Leadership: This view is a celebration of “maturity”. Contextualism is a view of life that takes seriously the idea of maturity — a wide base of knowledge and a life filled with challenge. Maturity expresses a commitment to courageously choose to define and protect ones social space in the presence of hostile forces while maintaining an adroit process of self-criticism and accountability for those choices. A wide base of knowledge infers more than a mere accumulation of data but rather an ongoing quest to be conversant with the many discourses and varied articulations they entail. Challenge-filled refers to a belief in a bursting forth of possibilities. This belief in open possibilities, limited by responsibility, explains the relationship between management and contextual leadership. Simply put, contextual leadership calls into question the very core of historical management rationale that emphasize rules, universality, and impartiality over contingent ways of reasoning that emphasize relationships, particularity, and partiality. Most management systems seek to transcend the individual. Contextual leadership delights in the play of unfixedness, incompleteness, and temporally. From this view, the spectacle of the open forum represents the true reality of our time. All other versions of reality that call for the unity, objectivity, or a wholeness of social bodies as presupposed in most management systems, are systems used for domination and repression.
Style Creates Context: Each leadership style brings distinct philosophies and value systems to the practice of operating and leading an organization yet they all fail to address the experience of the leaders themselves. We believe that the keys to effectively leading transformational activities in an organization are first to recognize one’s own leadership style along with its strengths and weaknesses. Second, to identify the likely opportunities and issues created within the organization’s culture and its ability to be transparent and effective in and for society associated with that leadership style. And finally, to develop a point of reference, or “place to stand,” that allows leaders to act with confidence and consistency.
While the activities of transforming the ethical and compliance culture of an organization are important, fundamentally, the approach leaders take to demonstrate integrity and transparency will determine what the real cultural context will be.
It’s Up to You: Your leadership, its style and basis, create the context for the organization and guide the development and evolution of your organization’s culture in powerful and far reaching ways. As leaders, it is easy to become consumed by the day-to-day activities required by our roles within the organization. Meetings, clients, staff, and those we report to, all place demands for time and attention. Without the ability to create space for reflection and purposeful preparation, we simply lead based upon our historical experience of other leaders or, even worse, simply take as a given the historical culture of our organizations. While this may have been adequate in the past, the dynamics and demands of modern social expectations and the heightened expectations of compliance and oversight systems make that approach inadequate for the future. Whether you exercise your leadership as part of a Board of Directors, as a C-level executive, or as a leader responsible for a segment of an organization, you, more than any other person, have the ability to create a powerful context and culture that celebrates transparency, receives and demonstrates trust, and effectively guides employees as they make the myriad daily decisions necessary to grow and evolve your organization. Ultimately, compliance and risk management is a product of the choices made by individuals. Their guide through this minefield of temptations and challenges is the cultural context you have established supported by the policies, practices, and resources available to them.
I’m what my handle states – an Oldude. The problem with this acknowledgment is my thinking and ambitions have not quite got the message of my “oldness”. I’ve started an online behavioral clinic and my rant is about how to improve long term happiness – For the World. My thing, I believe I can change the world – isn’t that a hoot. The way I intend to change the world is to foster a wider and deeper appreciation for “hipness”: The daring, flair and grace of Jay Z; the political savvy of Cornel West; the creativity of Mos Def with the business and cultural daring of Richard Simmons. I’ve thought enough – being a philosopher of sorts – and trained hard with some of the sharpest minds ever on the planet – Cornel West and Michel Foucault to know the total absurdity of trying to change the world – but I do and I will. There it is showing my age again.