Introduction to Management

Fourth edition

by Richard Pettinger

Leadership in Practice
Lessons in Leadership and Direction from Successful Leaders

Introduction

The purpose of this paper is to illustrate the relationship between successful and effective leadership in practice and enduring high levels of political, organisation and strategic performance in a range of spheres and areas of activities.

This is a particular concern when studying and learning the lessons from iconic figures from all walks of life, as well as those directly related to business and management. Reference is made throughout the book to the contribution, influence and expertise of the Roddicks in the continuous case study of the Body Shop. Reference is made also to presently admired figures such as Richard Branson (Virgin), Michael O'Leary (Ryanair) and Stelios Hadjouannou (easyJet and the east group of companies). With characters such as these, it is vital to distinguish between:

  • the ways in which they use their personality, influence and expertise
  • their styles of leadership, and their weaknesses and controversies as well as inherent strengths
  • the nature of their achievements and the ways in which these are delivered and sustained
  • the mistakes that they make.

It is further essential to draw the distinction between evaluation of their achievements, and seeking to model or copy their behaviour and performance. Everyone who studies leadership and management needs to be able to separate principles from individual performance; and this is the primary lesson.

It is additionally the case that all leaders and managers have a 'best by' date, and that many in top, senior and key positions outlive their usefulness, effectiveness and value. In these cases, anything that has previously been a strength can be latched on to and translated into a weakness by those who now seek to replace the particular individual. Thus for example:

  • Michael O'Leary's larger than life character and strident public manner could easily become a public and perceptual nuisance
  • Richard Branson's publicity stunts could become perceived as self-indulgent showing off
  • Tony Blair's command of the media has caused people to question the substance as well as presentation of what he has actually delivered
  • when they sold up to L'Oreal, the Roddicks were described as having sold out

In previous times:

  • Arnold Weinstock went from being a careful and expert chief executive at GEC Marconi, to a miser who would not squander the cash pile that he had so carefully accrued; and when he was sacked by vested interests, his successor George Simpson was greatly admired for spending this cash pile (until it had all gone and he had bankrupted the company
  • Robert Maxwell crossed the line from being a maverick to a criminal in the hours and days after his death, when it became clear that he had systematically stolen from the pension funds of his own group of companies.

So there is a complexity of factors to be studied, and the outcomes are not always predictable; and the outcomes can and do change. And very much of this is to do with collective and individual human perception and expectations, and is not just to do with the facts of the successes and failures. This is the context in which this material should be used.


Within the above context, the approach is to identify the key traits and characteristics, and their applications, of those who have been and remain successful in their positions of leadership and influence. These are then used to illustrate the relationship between the presence and existence of these characteristics, and their effectiveness in practice and application. The examples used are taken from:

  • world and international figures
  • well known organisational figures
  • those who have had profound effects on popular thinking and culture
  • those who have had profound effects on professional management and expert thinking.

While the main examples come from the political and commercial areas, there are major lessons for all those responsible for the present and future delivery of public services in general, and for the central banking sector in particular.


Confidence

Confidence is the key issue; and without the confidence of followers, supporters and backers, there is no effective position from which to sustain any form of leadership.

All leaders must therefore have the confidence of those whom they lead; and they must make sure that this confidence is retained and developed. They must be able to sustain and develop the confidence of key stakeholders and constituents, especially those who depend on the support of specific groups for their continued position as leader.

For those in top positions, the loss of support of key constituents normally means that they must relinquish their position. Thus for example:

  • Margaret Thatcher lost her position as UK Prime Minister in 1990 within a week of it becoming apparent that she no longer enjoyed the full support of her party in Parliament;
  • John Akers left IBM in 1993 on the day that a $5 billion loss was declared;
  • Robert Ayling left British Airways in 1998 on the day that the company declared an operating loss for the first time
  • Jupp Heynckes, the coach of Real Madrid Football Club, won the European Champions Cup in 1999 for the club. This was the club's first triumph in this competition for nearly forty years. This did not prevent his being dismissed because the club's overall performance over the full season was not considered to have been good enough, and the club did not have sufficient confidence in him to keep him on, on the strength of one extraordinary triumph.

The need for support and confidence requires the ability to develop relationships and reconcile conflicting and divergent priorities and demands. Clearly this is not always possible or feasible, and neither is it always in the best interests of the organisation as a whole. This does not, however, prevent many organisation CEOs being pressured or coerced into particular courses of action by dominant or influential stakeholder groups in the pursuit of their own narrow interests. Many top managers have found themselves having to pursue takeovers, mergers, divestments and other expedient activities in response to such pressures, knowing that their future position depends on following these courses of action.

For those of lesser rank or status, questions of full confidence need not lead to job loss. However, in the short term at least, it is likely that questions over confidence will lead to loss of effectiveness in production, service delivery, and managerial strength.


Power and Effective Leadership

All leaders exert power and influence; this is a key part of their job. The key issue is the relationship between power, authority, responsibility and accountability. Alongside this is the need to be able to take effective decisions which can be implemented and followed through. Decision making is a key priority in the use of power and authority. Decision making and implementation is the main area in which those in leadership positions are called to account. Constituents, followers and supporters expect decisions taken to lead to the results intended, and will call those in key positions to account if the results are not delivered. For example:

  • football club managers are judged on the results achieved by the teams that they put out on to the field
  • those involved in merger and takeover activity are judged on the share price rises of the organisations involved
  • in public services, NHS CEOs and regional directors are judged on the effectiveness with which they meet the targets set by government.

Each of the above is demanded and assessed, whether or not it is actually 'right', feasible, effective, or the best long term use of resources and expertise.

Organisational and leadership power cultures do tend to form where each of the above sets of circumstances occurs. Power cultures consequently exist in organisations of all kinds and of any size or shape in all sectors. At their best, power cultures are vibrant, dynamic and exciting. At their worst, organisational resources are squandered on organisational realpolitik, infighting, lobbying and counter-lobbying.

Power cultures are found most commonly in the following circumstances:

  • small business start ups where the centre of power is the pioneer or entrepreneur
  • large complex and sophisticated organisations in all sectors, where local, regional and functional managers have to be given a certain amount of freedom and autonomy to act. The consequence of this is that such managers can become 'over-mighty', running their division or locality in the name only of the organisation, but operating de facto fully autonomously
  • project based activities, where the particular project comes to be identified with the individual in charge rather than the organisation
  • key public service activities, where the delivery of school, hospital and medical services come to be identified with the individual post holder rather than the institution
  • growing functions and service areas, where the achievements to date become identified with an individual rather than with the organisation as a whole

Persons in senior and leadership positions who exercise power and authority without responsibility maintain the confidence of their subordinates through fear or coercion only; though it is true that vested interests will go along with forms of tyranny so long as their own narrow interests are also being served.

Consequently, the ability to operate effectively and to deliver operational and functional leadership, performance and results, is dependent upon the whim or perception of the figure of power. So the more junior manager's ability to operate effectively is dependent upon the support and confidence (and in some cases personal likes and dislikes) of the person at the centre of power.


Visibility

The best leaders lead and manage through visibility. This is often referred to as leading or managing 'by walking around' - the practice of visiting and making oneself known to all staff and company and organisation locations. It is also very much easier to build relationships based on full confidence, mutual understanding and trust, if there is a personal relationship and identity, as well as a working commitment. People are much more likely to commit themselves to a leader whom they know, understand and trust, than to one who is remote. A key feature in the building of this kind of relationship is generating relationships through meeting the staff and creating the conditions in which any employee is able to approach the leader at any time on any matter. For example:

  • when he was Executive Chairman of Marks and Spencer, Michael Marks made a point of visiting each one of his stores and depots at least once a year, and of talking to the shop floor staff. He would proudly boast that as many of his good ideas came from the shop staff as from management, and used to pride himself on getting in touch directly with any employee once their ideas had been implemented to congratulate them. He would also contact any employee whose ideas were not implemented to explain why. He made sure that any member of staff could speak to him by telephone during working hours; and on this he built the unique reputation of the company as a very high quality employer which endured until the late 1990s
  • when he took over Semco, the Brazilian capital goods company, from his father, Ricardo Semler removed the physical and psychological distance between himself and the top management of the company, and the rest of the staff, by removing walls and divides, and doing away with all 'unnecessary perks and privileges and dead end jobs' that he stated 'fed the ego but harmed the balance sheet'. Staff were given access to Semler and other senior managers at any time on any matter, including company productivity and finances. As a consequence the company survived a period of recession when one in three went bankrupt, and grew seven fold net of inflation during a period of inflation of 3000%.

In each case, the leaders used their presence to build relationships based on trust and mutual understanding. Both found this much easier with an open and approachable style. In both companies, all staff subsequently found it much easier to raise problems and concerns. This in turn made it much easier to deal with such matters, rather than waiting for them to become serious issues and major crises.


Expertise

Alongside confidence, those in leadership positions must have the necessary levels of functional, situational and leadership expertise. This has to be learned. The best leader/ managers establish in their own mind the axiom:

'Blessed are those who know their own limitations'

Such leaders recognise that it is impossible for them to know everything about their own sphere of activity; and that there are always new things to be learned in any case. It is also necessary to be able to:

  • identify problems and issues early
  • respond to events and occurrences, both those which can be controlled and influenced to a greater or lesser extent, and also those which cannot
  • develop new approaches to present and existing issues
  • develop new expertise to enhance the total capability of the organisation, both from within the organisation and also from elsewhere
  • understand and respond to the demands of stakeholders and constituents; and understand that these can and do change
  • understand the pressures and demands incurred in balancing the drives of tasks, production and services delivery; staffing issues and concerns; and those of the financial interests and backers

To meet all of this effectively, the best leaders and managers surround themselves with experts brought in from elsewhere. For example:

  • at Virgin, Richard Branson has employed leading figures from the worlds of publishing, rail and air transport, to ensure that these parts of the company have the best possible leadership expertise available
  • at easyJet and the easy Group of companies, Stelios Hadjioannou has recognised that his own capabilities do not extend to running a company in the steady state of operations. He has therefore withdrawn from any senior executive role, and appointed a professional CEO
  • over the period 1998 - 2001, following the retirement of Marcus Sieff and withdrawal from the Board of Directors of the last member of the company's founding family Marks and Spencer tried to retain direction through their existing expertise. This was quickly proven to be insufficient as the company lost reputation, market share and turnover. At the end of 2000, therefore, the company appointed a CEO form outside, Luc Vandervelde. Vandervelde had a current rather than historic expertise in department store retail, and

Pride

Pride in leadership refers to the need for self-worth, self-respect, and pride in the achievements of the organisation and all those who work in it.

For example Imran Khan captained the Pakistan cricket team on what was then a record 33 occasions. He declared his great pride in leading his national team, in meeting the political and other leaders of his country and those against whom they were playing, and in ensuring that everyone in his own team played to the greatest level of their ability. He went on to say: 'I always believed that I was the best person for the job. This is not vanity. But if you have any doubts that you should be captain, then you should not take the job. You need to be absolutely confident of your position and your ability to do the job in the present set of circumstances, and that you have the support of your players and the cricket authorities. If you have all of this, and you think you can do the job, then you should do it. If you have all of this, and don't think you can do the job, then you should not do it. Above all, you should not do it just because you are senior player, or looking for the prestige. It is pride in your country that should drive you, not your own vanity'.

Pride in leadership does not mean arrogance or vanity. Indeed the presence of either of these qualities is a sure sign of decline in leadership substance, quality and integrity. For example, Napoleon Bonaparte rose through the ranks of the French Revolutionary Army to become first a great military general, and subsequently Emperor of the post-monarchy French Empire. He built his rise to success on attention to detail, pride and conviction in everything that he did, and in taking time to gain the support of others. He lost his success and effectiveness when he came to believe in his own destiny, infallibility and immortality. These he substituted for the hard work and absolute commitment that he had always practised on his way up.


Mission Control

'Mission Control' is the phrase used by the historian Andrew Roberts to describe the need for overall strategic direction and control and operational autonomy. In particular this involves the relationship between those in top and senior leadership positions responsible for overall strategy and direction, and those in operational leadership positions responsible for delivering results in one or more areas and spheres of activity. Roberts used the era of Hitler and the Nazis in Germany in the 1930s to illustrate:

  • the effectiveness of the rise of the Nazis when the top leadership left civil service and military functions to get on with things in their spheres of interest and activity
  • the ineffectiveness and ultimate destruction caused when Hitler began to take a personal involvement in areas in which he had neither expertise nor active involvement.

The key lesson here is the nature of the relationship between those in overall command of things, and those who are responsible for delivering particular results and activities.

Consequently, those in overall command of things must have full confidence in their subordinates. They must be able to leave operational issues to those directly responsible at the front line. Reporting relationships that support and develop the total approach are essential.

This needs to be underpinned still further by the development of leadership expertise, as well as administrative and managerial capability, at all levels of hierarchy and responsibility. The key lesson here is that a critical part of managerial effectiveness is based on the presence of those with both expertise and also the confidence of their superiors to deliver that expertise in the precise and required context.


Crises and Emergencies

Until 1940, when he became Prime Minister, Churchill was regarded as unsafe and unstable. Immediately before he became Prime Minister, he had seriously failed in the campaign to protect Norway from invasion by the Wehrmacht, making every mistake possible in the circumstances. He never visited the front line, but remained in his office. During the week of the campaign, he rather remained in London, and issued up to 30 contradictory and conflicting directives per day to those at the front line. When he became Prime Minister, he was widely expected to fail, and there were those in the political and commercial establishment who were not unhappy with this prospect.

Churchill learned quickly from his mistakes. He adopted the position of crisis leader and manager. He rallied the UK population with a series of staged speeches - above all, the speech which ended: 'We shall fight them on the beaches; we shall fight them in the streets; we shall fight them in the hills. We shall never surrender'. For the first time, the people understood what they were to be let in for as the result of his leadership. This speech also gave confidence to those who at the time felt deeply the potential threat of persecution. Simon Wiesenthal, the man responsible for hunting down many of the Nazi war criminals, subsequently stated: 'It was only at this point (ie: after this speech by Churchill) that the Jewish people in Britain had confidence that there would not be a peace, and there would not be the mass deportations that were happening even at that time in France and elsewhere in Europe'.


Achievement

The great leaders all have achievements to mark their time in top positions. This sounds trite and obvious; however, those who truly aspire to these positions do so because they have the vision, ambition and drive required to make and leave their mark.

Certainly all those who are effective in top positions for any period of time generate results; and this enhances their reputation and value. It is also the case that lesser people in these positions seek to do the things that they can do, rather than seeking to achieve what is required for the wider good.

'Achievement' therefore has to be seen in its full context. Additionally, in many cases 'achievement' is a mark of vanity as well as, or as much as, conviction. Those who gain leadership and top positions are always assured and confident; and it is only a short step from this to perceptions and feelings of vanity, immortality and complacency.

This leads in turn to the feeling that particular people are irreplaceable; and this feeling can as easily be transmitted by the person as well as by their followers and supporters. This gains more life still when the person in question has demonstrable reputation or achievements. For example:

  • there were those who thought that Winston Churchill would be irreplaceable after the military successes of the second world war
  • there were those who thought that Margaret Thatcher was irreplaceable as leader of the Conservative Party, even after she lost this job in 1990

The Need for Identity

All leaders need to generate an identity with their followers, and among those who work for them. This identity is ideally required on the part of junior managers and supervisors. Identity is an absolute necessity for those who work at the head of organisations.

As a key part of the creation of his leadership style, Churchill carefully built up a public persona and image. He used his cigar and walking stick as props - badges and marks of identity - in order to build a an enduring impression of permanence, stability and immovability in the face of a great crisis.

Others follow this pattern. Richard Branson, founder and CEO of Virgin, has gained an identity for himself based on a series of planned, orderly and carefully controlled activities including:

  • several attempts at a non-stop, round the world balloon flight
  • holding the blue riband for the fastest sea crossing of the Atlantic Ocean
  • dressing as a pirate and being photographed sitting stride Concorde, the flagship of British Airways and one of Branson's key business adversaries
  • dressing as a bride and jumping fully clothed in to a swimming pool on the day of the launch of his 'Virgin Brides' brand

On each occasion, and whatever the specific purpose, Branson has ensured that his style of delivery and trademark hairstyle, beard and smile have all been prominent in the coverage. This carefully crafted approach has ensured that Branson remains one of the most recognised figures in the UK as a whole; and more specifically in the business world. This approach has ensured a high level of sustained confidence in Branson on the part of the business and financial community in the UK and elsewhere.

More generally, Branson has a clear image and identity among the UK population at large, based on wholesomeness, honesty, integrity and a sense of fun, cheekiness and rebellion. His level of identity is clearly very high; and clearly also not to the taste of everyone. However, on each of the two occasions when the UK National Lottery franchise was opened up to bidders, Branson was the public choice to run it; and this was based on the public's perception of him as being overwhelmingly honest and open. This kind of identity sets a very high standard and set of expectations, and consequently much to live up to.


Charisma

Charisma is the force of personality that gives a real or perceived identity and personal relationship between the leader, constituent groups, stakeholders and followers. Charisma is a combination of personality, appearance, demeanour and presentation. This is reinforced through their real and believed achievements, as well as stories about them (both true and untrue), myths and legends, their telling and retelling.

For example:

  • Sam Moore Walton, the founder of the WalMart supermarket chain, used to turn up at midnight on the loading bays of his depots with coffee and doughnuts for every member of staff working there at the time
  • Prince Charles turned up at a village bed and breakfast guest house in the North of England, and told the owners that he had nowhere to stay for the night
  • Bill Clinton, former President of the United States of America, during a visit to England, turned up at a wedding reception and made himself welcome; and later on the same visit dropped in at a London branch of McDonalds.

Each of these stories has enhanced the perceived personality in the telling and retelling; and without doubt the telling and retelling have been very carefully managed in order to gain the desired effect. This is not to condemn any of the above as deceitful or manipulative; but these examples do illustrate the value of having these kinds of myths and legends grow up.


Determination

Every great and successful leader in every sphere has always had determination and ambition. It is impossible to infuse others with vision, enthusiasm, commitment and direction if the leader has none of these qualities.

For example, in 1992, Elaine Vaughan became CEO of Sandals Inc, the exclusive holiday company, and tour and resort operator. She had started at the company as a junior clerk, and subsequently worked as secretary and sales representative. She offered her services as CEO when acting as secretary to a senior management meeting. Commenting on her appointment afterwards, she said: 'I have always been determined. I have always had great energy, enthusiasm, ambition and drive. You cannot do a job like this without these qualities. We are after all selling people their dreams. It is the best job in the world. And if you do not believe this, and are not prepared to put in the effort to make sure that these dreams come true, you should not be here'.

Elsewhere, when the new rugby stadium at Twickenham was built in 1996, Paul Franks was appointed as Project Director. Speaking at the time of the completion of the project, he said: 'Before I came here, I had no interest in rugby. Now, I am the world's greatest enthusiast for the game. It is impossible not to be. You need to understand that this is what the client expects from you; and if you are not prepared to be like that, you should not be here. I have been incredibly lucky - I now get to see all of the major internationals and cup finals. To me, that is part of the deal of leading this project and seeing it through to completion'.


Summary

It becomes clear from looking at examples that there is a great range of approaches that can and need to be taken by everyone who aspires to a position of leadership, or who is placed in one. The commercial world is moving towards a position of ensuring that all of the top managers of the next generation are leaders. The key requirements are for strategists, visionaries and activists, whose priorities are producing high quality products and services which people are going to be proud to be associated with, whether as customers, clients, staff or suppliers.

As indicated above, much of this also applies to public services. Like the commercial world, public services are facing major challenges and changes in their constitution, funding, direction and delivery. It follows from this that strategic and operational leadership qualities and expertise are certain to become very much more highly prized and rewarded than before. It is also true that those responsible for designing, delivering and resourcing public services are going to have to become much more aware of the need to market themselves to people with these qualities.

In order to address this effectively, those in top positions of responsibility and authority in commercial organisations and public services have themselves to be able to clarify the nature, coverage and delivery of their own particular areas of responsibility. They have then to be able to present and offer these in such ways that are attractive to persons with the high levels of expertise, drive, ambition and vision illustrated above and available elsewhere. There also has to be a collective commitment that commercial organisations are going to be driven by clear long term and assured strategy; and that in the public sector, services are not to be made the subject of political whim or fancy.

In practice, much of this may itself seem almost fanciful at present! This is therefore a serious issue for all of those concerned with the present and future leadership and direction of all organisations. There is also plenty of anecdotal evidence that the lack of clear leadership and direction is itself contributing to the further decline in real and perceived organisation effectiveness in all sectors. The overwhelming need is therefore to accept that these qualities and expertise are required in all areas, and to learn the lessons from the examples given above.


Further Reading

  • J Adair (1990) Effective Leadership John Adair Press
  • J Adair (1992) Great Leaders Talbot Adair
  • D Abodaher (1989) Iacocca Star
  • R Cartwright (2002) Mastering Team Leadership Palgrave
  • W Churchill (1999) The Valiant Years Allen and Unwin
  • H Davies (2002) The Eddie Stobart Story HarperCollins
  • P Drucker (2000) Management Challenges for the Twenty First Century HarperCollins
  • P Griseri (1996) Managing Values Macmillan
  • G Hame l (2000) Leading the Revolution Harvard University Press
  • R Heller (1998) In Search of European Excellence Harper Collins
  • C Hilton (1968) Be My Guest Fontana
  • C Kennedy (2000) The Merchant Princes Piatkus
  • I Khan (1990) All Round View Chatto and Windus
  • A McAlpine (1999) The New Machiavelli John Wiley
  • J Mendzela (2004) Leadership and Change in the Central Banking Sector Harper
  • J Owen (2002) Management Stripped Bare Kogan Page
  • T Peters and N Austin (1986) A Passion for Excellence Harper Business
  • R Pettinger (2001) Mastering Management Skills Palgrave
  • R Pettinger (2004) Contemporary Strategic Management Palgrave
  • F Pujol (2002) Napoleon Bonaparte Channel Four
  • A Roberts (2003) The Secrets of Leadership BBC
  • R Semler (1992) Maverick Century Press
  • M Sieff (1994) Management, Marks and Spencer Century Press
  • N Whymer (1989) Thomas Barnardo: Father of Nobody's Children Arrow
  • S Wiesenthal (1990) Nazi Hunter Allen and Unwin

Richard Pettinger
November 2006