leadership development

A new century and a new age call logically for a new kind of leadership. That's the emphatic view of Tom Peters, the corporate gadfly-in-chief. In his latest book, Re-Imagine!, the unflagging iconoclast calls for 'New Leadership….The Ultimate New Mandate'. Leaders and led alike, Peters believes, 'don't have a clue' about what the 'new mandate' entails. That's not altogether surprising, since Peters offers a novel menu of no less than 50 excited ideas for leaders to absorb and activate.

They must learn, for example, to say 'I don't know'; to honour rebels; to hang out with freaks. While practising these eccentricities, though, the New Leaders must not ignore older, squarer demands. Far from it. They must both convey the Grand Design and attend to the logistical details. They must push their organizations into 'the Value-Added Stratosphere' and also create new markets. The image of the business, moreover, is their own identity. They are not just the boss, but 'the Brand'.

How much of the Peters catechism should be taken seriously? Disarmingly, Peters concludes that all leadership literature 'stinks'. That anathema, moreover, includes 'much of the stuff I've written'. You can see one major difficulty from the above quotations. Powerful new forces are driving leaders in the direction of sharing authority, disrupting hierarchy (the traditional support system for leaders), and freeing up the flow of radical initiatives. At the same time, though, potent old forces are loading larger burdens on leaders and aggrandizing their status.

The leaders of Enron, WorldCom, Hollinger and Parmalat certainly acted as both boss and Brand, There are plenty of other cautionary examples which likewise share common factors: either lack of leadership or much too much of the wrong kind. Continuing efforts on both sides of the Atlantic to strengthen corporate governance largely aim at preventing wrong, rather than stimulating the right. But the dilemma typified by Peters can't be ignored. The demands of authority and creative anarchy pull in opposite directions.

Leadership is changing, however, as the balance shifts from the centre to the periphery, or (to use a political analogy) from Right to Left. Leaders could hardly stay immune from the great waves of change that are sweeping the business, social, technological and political worlds. You can clearly see one of the most fundamental changes at the personal level. Younger people today are more ambitious, readier to vote with their feet, highly techno-literate, less respectful, less hierarchical. Leaders who can't come to terms with these facts will be unable to lead the new generation.

You sorely need the talents of the young to cope with the increased complexity and scale of 21st century business, which have inevitably made the task of the chief executive more complex and larger, too. The jump from national to multinational companies was big enough, to be sure. But a much longer leap has followed: from multinational to supranational. The former is basically a powerful domestic company with a string of satellites acting as outlets in several overseas economies. The supranational is moving steadily towards a new paradigm - a single but multi-headed organization, a kind of corporate hydra, covering the world from centres of excellence that can be located in any country.

Sourcing and global marketing are the key concepts in this new paradigm. The supranational obtains the needed goods and services from wherever makes most economic sense, and then markets its production or services on the same global business logic. The new leader conducts a whole orchestra of economies of scale (not all owned by the company), and exploits them via vigorous promotion of global brands in national markets. The orchestra needn't be a diversified giant, either. These days relatively small, concentrated firms, especially in high tech, may fit the above description. Like them, leadership has to operate across many languages, in many cultures, in many time zones.

In the early development of globalism, some thought that stability would be enhanced by its evolution. Instead, the pace of change and degree of uncertainty have escalated, as customers have become more demanding in an individualistic, captious world. The leader needs new skills to work across and within shifting cultures, and to fuse them within the global empire. The need to reconcile the many heads of the hydra suggests a collective approach, in which the chief executive works through colleagues, delegates power down the line and draws back from operations. He or she becomes a leader of leaders, at all levels of the firm.

Globalism or no globalism, this collectivism has long seemed to be the natural habitat of the new leadership. It makes obvious sense. Psychologists have long known that many minds working together outdo a single mind, however brilliant, working alone. Elements of the collegiate approach have certainly appeared in many companies. At the same time, however, and very remarkably, the dominance of individual leaders has become more marked. That's been reflected in quite amazing rises in top management's pay and perquisites. Nobody has seriously defended the indefensible contracts - but they go on getting signed.

Leaders have paid a price for their swelling wealth. CEOs are now much more likely to be deposed for under-performance. But that, too, reflects the vesting of total responsibility in individuals who, single-handed, can't even begin to manage the resulting multiple burdens. You could argue that superstardom turns the leader in exactly the wrong directions. It makes him (or her) unduly sensitive to movements in the share price, more dependent on corporate spin doctors, readier to follow the crowd (and this in an age when differentiation is king), less willing to take risks - including those of genuine delegation.

Leaders like Jacques Nasser of Ford, Gerald Levin of Time Warner AOL, and Michael Eisner of Walt Disney have ruled their roosts unchallenged. Both their personal conduct and their strategic failures apparently had full boardroom endorsement: even though the AOL merger, for example, eventually wiped out the entire value of Time Warner's equity. The signs are that boards are now moving, or being moved, towards a more proactive stance, just as the enlightened chief executive now recognises that true leadership demands the common touch more than the purple robe.

It's significant that Europe's Businessman of the Year, Britain's Most Admired Business Leader, and the head of Britain's Most Admired Company were one and the same - Tesco's Sir Terry Leahy. A Tesco employee since 1979, still only 47, with seven superb years of CEO service behind him, Leahy lives and leads in a modest style. His annual programme includes a week spent working at different daily jobs in one of the stores. 'I learn an enormous amount', he told Fortune magazine, 'because we employ 200,000 people, and the vast majority do those sort of jobs. So I have to understand what it's like to work for Tesco'.

The basic definition of leadership involves acting in and through a group, a community. Without followers, there can be no leader. Leahy's week away from his desk reflects awareness that the role and quality of 'followership' are vital to the nature and success of leadership. It used to be enough for the leader to order and the follower to obey. Not any more. Leaders need understanding of themselves, of their followers and of the reaction between leader and led in circumstances which are bound to be changeable.

The interrelationships are the essence of real leadership. When the Harvard Business Review recently devoted an entire issue to leadership (January 2004), its major emphasis went on 'dissonance between an executive's inside and outside'. The conclusion was that 'it's absolutely essential to keep the two aligned'. That represents a huge requirement for leaders caught in the multi-cultural, multi-business, multi-lingual environment, in which alliances, partnerships, outsourcing and other long-term arrangements are crucial - and still growing fast.

Adjusting to those surroundings is a searching test of so-called 'emotional intelligence', but one that has to be applied. Indeed, a group of 'business leaders, scholars and other experts' advised HBR readers on 'how to cultivate and manage' this vital faculty. However, the coiner of the concept, Daniel Goleman, has severe doubts about their chances of success. 'Organisations often implicitly discourage their people from cultivating emotional intelligence. Its chief components - self-awareness, self-regulation, motivation, empathy and social skills - can be learned, but it's not easy'. Indeed, many people would find it very hard to pass Goleman's tests. Leaders should be…

• fully aware of their own abilities, character and limitations• in full control of their behaviour - including behaviour towards others• highly motivated towards achieving constructive purposes• aware of, and considerate towards, the feelings and thoughts of others• good mixers, highly effective in groups• able and willing to correct their faults, especially on the five counts above

These attributes, as Goleman says, can be learned: cognitive behavioural psychologists spend their lives teaching them. They certainly make leaders more congenial characters, easier to work with, and ideally suited to the new conditions in which, to give one example, vigorous competitors in one business may well be collaborators in another. But are these specifically leadership qualities? Followers surely need them just as much. Yet the leaders they follow most willingly and to the greatest effect often have personalities that are admirable in very different ways. These traits are not so much super-normal (like Goleman's ideal) as distinctly abnormal.

One famous abnormality is charisma, the larger-than- life self-projection that turns heads when the charismatic leader enters a room - and that turns heads in another sense, when followers are overwhelmed by the sheer force of charismatic personality. Winston Churchill was such a leader, and a leader for good. But Adolf Hitler was also charismatic, and the author of great evils (and incompetence). Experts on leadership tend to downplay charisma's role: it can certainly help a leader to attain his aims, but that's no use if the aims are not worth attaining.

The greatest businessman of all time, John D.Rockefeller I, only achieved charisma through the fact of becoming by far the world's richest man. He achieved that fabulous wealth, though, by the patient and bold application of deep understanding of business economics. He surrounded himself with truly able colleagues who jointly managed a collegiate system, in which Rockefeller listened far more than he spoke. His behaviour towards employees was impeccable, and his mastery of human resources innate. As he said, he owed his success to putting his trust in people whom he had given reason to trust him.

To cap it all, Rockefeller retired from active management in his 50s. He thus anticipated one of Tom Peters' 50 leadership ideas: 'Leaders Know When to Leave'. Notoriously, many of them don't. They cling to power as long as they can, especially if they fit the description offered by Michael Maccoby: 'grandiose, actively self-promoting and genuinely narcissistic…emotionally isolated and highly distrustful… usually poor listeners….who lack empathy'. These people are also prone to rage. Yet they have the very 'important characteristic mentioned above: 'a great ability to attract and inspire followers'.

Maccoby is author of The Productive Narcissist; The Promise and Peril of Visionary Leadership. In 2000 he identified three types of leader in the Harvard Business Review (the piece was reprinted this January because of its relevance to the swelling of the superstar CEO bubble). The thesis directly contradicts the humane portrait painted by Goleman. The narcissistic leader, moreover, is the most likely to win the rat race to the top - and to maintain personal dominance after arrival at the summit. Once there, the narcissist naturally exhibits the same drive and vision that won the race. These qualities can achieve genuine marvels (The Promise), but can equally destroy both the company and the leader (The Peril).

Organisations may understandably be tempted to look elsewhere. But the main psychological alternatives, according to Maccoby, while less perilous, are also less promising. The humane 'erotic' type (see Goleman) tends to be too dependent on the approval of others, which makes for weak leadership. The third personality, the 'obsessive', makes a better leader, but is too heavily oriented towards operations. As a result, the obsessives prove too 'critical and cautious' for entrepreneurial success.

That's the nub of the issue. The narcissist bulls, led by thinkers like Peters and Maccoby, see all other needs as outweighed by the necessity of seizing the super-abundant opportunities of the new age. The bears are influenced much more by the long-term global trends described above. And there seems to be little room for compromise. At first sight, subservience to a dominant, untrammelled overlord looks incompatible with the liberal view of the future of management. In this view, the future lies with collective, collegiate, bottom-up organizations, which are headed by those leaders of leaders - non-bossy bosses who support and facilitate intelligent leadership throughout the organization.

Maccoby brooks no argument, however. Whatever the long-term trends may seem to imply for the future, the present pressures increase the demand for totalitarian managers. True, everyone, including the narcissists, will stress the importance of teamwork; but in practice the super-boss wants only yes-men. Nevertheless, more and more large corporations are 'getting into bed' with the narcissists, because they are indispensable at a time when innovation holds the key to growth, profit and very survival.

This observation certainly has some truth. But there's also a truth in Peters' condemnation of all leadership literature. Its writers (including Peters) inevitably err by generalising about an activity that has as many faces and facets as there are leaders. There are no absolutes. The emotionally intelligent leader as described by Goleman is no sissy, but a highly effective individual who combines a self-deprecating sense of humour, openness to change, expertise in both building and retaining talent, and persuasiveness. So adept and well-equipped a performer sounds like just the man (or woman) to unlock growth and profit.

The reality is that today's (and tomorrow's) leader needs to play many parts. The emotionally intelligent person even at times needs to play narcissus, and the narcissus often needs to act with emotional intelligence. These and other roles are all governed by the 50th and final idea on leadership propounded by Tom Peters: 'Leaders Do Stuff that Matters'. By extension, that means not doing what doesn't matter, which very obviously includes self-aggrandisement. Whatever the psychological profile, the leader has to do what really matters: establish purpose, collectively plan strategy, tactics and execution, monitor and spur progress, look after and develop people, insist on high performance.

Those tasks build the hard foundations on which the leader can deploy and demonstrate the soft powers: imagination, innovation and inspiration. It's tempting (both for leader and led) to treat these 21st century essentials as the monopoly of a sole chieftain. But that's irrational - who is to know that equal visionary powers within the organization are not being suppressed by the dominance of the autocrat? The same reasoning applies to the exercise of leadership. The more widely it is shared, the better - not just for the present, but for the future, when organizations are going to need all the leadership they can get.