business leadership, business management

Before H.Ross Perot decided to make life miserable for George Bush by running for President, he provided equal nuisance value for the entire board of General Motors. Perot had joined their number when the car giant bought Electronic Data Services for an emperor's ransom. But from his new vantage point, Perot didn't like what he saw of GM's management - including the word itself. He wanted GM to decree that 'Starting today, the word "management" will no longer be used.'

It was to be replaced by 'leadership.' The feisty computer services billionaire wasn't just playing with words. Perot wanted managers to stop going through the motions and actually do things - leading others into action, 'making it happen.' That, by no coincidence, is the title of Sir John Harvey-Jones's book, subtitled 'Reflections on Leadership.' Search through its index and you won't find the M-word at all. The former ICI chairman makes his thoughts on the matter perfectly plain in his last two sentences:

'Management is about people, and manufacturing is about harnessing, motivating and leading people. It always has been, and I hope it always will be.'

Placing leading before managing, though, has a long and not especially honourable British tradition. The priority had its roots, like business management in general, in the armed services (where Harvey-Jones served his apprenticeship as a naval officer). Many managers went on courses like those run by John Adair, which emphasised the same leadership attributes that were seen as essential in war. The approach, while containing much of value, unfortunately played into the hands of a British tendency to undervalue planning, systematic organisation, detailed knowledge and the non-hierarchical approach.

If 'leadership' stands aloof from the above, that would spell its doom in contemporary conditions. Today, you have no chance in competitive markets without deep understanding of the business, the business system and business planning - and the IT system provides the detail which is indispensable to that understanding. Nor can understanding be turned into splendid business results without the ability to cut right across hierarchy and use flexible, participative, collegial methods. Yet doom hasn't struck: leadership courses are more popular than ever.

It is, however, a different kind of leadership, the kind you need for a different kind of company. The sea-change in management is driven by the need to achieve exactly what Perot found lacking at GM - swift and decisive action. Now that order-and-obey, command-and-control management has ceased to be desirable, leadership, far from being less important, has become crucial. Freer, more flexible, more argumentative patterns of management require truly expert hadling by people who lead by example, not exhortation: by delegation, not direction.

Modern management rests on the consent of the managed, who can even influence how they are managed. Their opinion of superiors is now widely thought to be no less important than the boss-eye's view of underlings. All the same, few firms have gone as far as Semco, the Brazilian engineering business run by the self-styled maverick, Ricardo Semler. All Semco managers are rated twice a year by their subordinates via three dozen multiple choice questions.

The inquisition relates directly to the leadership issue. Question Thirteen asks whether 'the subject' is (a) a weak leader, unable to motivate his team (b) a weak leader, but able to motivate his team (c) a strong leader, but unable to motivate his team (d) a strong leader, and able to motivate his team. Note that strength and weakness and the ability to motivate needn't go together. That stresses the change in ideas on leadership since the days when the strong 'man-on-horseback', with the power of absolute command, was considered enough for all purposes.

Some of the managers subjected to this trial get unbelievably high 90%-plus marks - but Semler says that it's the trend that counts. If the trend takes the manager below 70, his job is in jeopardy. He's losing the authority to manage: i.e., to lead. Today that authority requires the ability, not only to criticise subordinates, but to accept their criticism, too, as another Semco question makes clear: 'The subject reacts to criticism (a) Poorly, ignoring it (b) Poorly, rejecting it (c) Reasonably well (d) Well, accepting.'

The 'well, accepting' ability is required these days at all levels, not excluding the top. Bernard Fournier, managing director of Rank Xerox, is one of a growing number of bosses who are formally rated by their immediate reports and must take note of this 'upward appraisal'. Rank Xerox is deeply involved in Total Quality Management, for which the upward process is a perfect fit, like the new style of leadership in general: 'leadership', in fact, is the first of the criteria which govern the prestigious quality prizes on both sides of the Atlantic.

'Leadership' counts 10% towards the European Quality Award; its definition shows quite specifically how the new leadership differs from the old and remote 'do as I say' system. This is leadership by example and from the front: leader-managers are ranked on their behaviour, on their ability to inspire and drive: among other things, they have to show visible involvement, consistency, and timely recognition and appreciation of the efforts and successes of others.

All this, true, consists of fine words, which aren't supposed to butter any parsnips. But practical results do follow. At the telecommunications colossus, ATT, chief executive Robert Allen, on asking, found that fellow-members of his executive committee weren't wholly satisfied with the way he managed its affairs. Among other things, they felt that he didn't contribute enough himself or give a sufficiently positive lead (that word again) to the discussions. So Allen, a powerful and successful boss, set out to mend his ways - with his subordinates acting as judge and jury.

You can't easily imagine Napoleon or Bismarck acting on criticism from below, let alone seeking it out. And what about the dynamic wartime leaders who have largely created the heroic ideal of leadership? What about Field Marshal Montgomery, say? Isn't the new school of participative, humanistic, collegial leadership namby-pamby stuff that gets in the way of decisiveness - mush which Monty would have rejected out of hand? The fascinating answer is that the Montgomery style, memorably encapsulated in a 400-word self-introduction to his Eighth Army officers, is another perfect fit with the new leadership consensus.

The key elements of leadership which the new commander stressed were two-way trust, teamwork, clear objectives, equally clear communication, self-belief, back-up with adequate resources, insistence on good performance, humanity, controlled aggression towards the opposition, and 'atmosphere'. The latter equates with corporate culture: the innumerable cultural change programmes now in progress are all endeavours to turn the Montgomery principles - enunciated over 50 years ago - into present-day practice.

What's new is that today's leadership is very often team-leadership, in which the boss (unlike Monty) is a first among equals. The Belbin classification of seven essential team roles has stood the test of time: coordinator, ideas person, external contact, critic, inspector, implementer, team-builder. Note the absence of 'leader'. The team-leader at different times has to play each of these roles in the process of acting as 'facilitator' - somebody who enables others to perform their tasks to the very best of their ability.

That accurately describes the modern leadership model. The purpose is to mobilise all the talents at your disposal, which may well mean deferring at times to the talented. In a major IT project, for instance, the 'lead' will rightly go at different moments to team-members who know most about networking, say, or software, or hardware, or telecomms. Thus the lead is passing today to people who are not designated leaders in the traditional, hierarchical mould. That's why, in addition to their special expertise, they plainly need training in leadership - in 'making things happen.'

The overall, official leaders, though, can't just sit back, put their feet on the desk and wait for the happening. At the highly successful Heineken, greatly influenced by the 'professional team thinking' ideas of Ben Heirs, the leader has an onerous commission: 'the ultimate responsibility for the quality of the decision taken - and therefore for the quality of the team-thinking effort that has led up to the decision.' That means no ego-trips, no petty office politics, no 'not-invented-here' rigidity, no competition between people - only between ideas.

Not only does this place heavy demands on the leader: it's strenuous for the team-members, too. The incidental advantage of one-man bands and great dictators is that nobody else has to think. Everything is handed down from on high. If the great man is a great genius, that may work - for a while. But the Japanese learnt long ago that the final test of leadership, which is whether success continues long after the leader has gone, can't be passed by one-man bands. That's why, like Heirs, Japanese companies expect everybody else to contribute fully before the leader takes that 'ultimate responsibility' for the ultimate choice.

None of this rules out the appearance of the 'natural leader' (such as Harvey-Jones), the person who instinctively and effectively takes charge and has the charisma to create what such leaders must have: followers. Once upon a time, their appearance (or non-appearance) ended the matter. But today, in business or politics, leaders are judged, not on their charisma, but by their results. Exactly the same judgment, of course applies to managers. Ross Perot was barking up the wrong tree. Good managers lead. Bad managers don't.