Fred Goodwin: was his 'assertive' management style a factor in RBS's downfall?


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The FSA report into the downfall of the Royal Bank late last year, highlighted the former chief executive, (no-longer-Sir) Fred Goodwin’s ‘assertive and robust’ management style as a contributing factor.

It would seem that the bombastic, 'shouty', alpha-male genre of management, characteristic of the City and financial institutions, is going out of vogue.

What are the new tenets of leadership that we should be looking for in 2012?

Let's be clear, a big ego is typically a pre-requisite for the top job in any business or organisation, but there is a fine line between self-confidence and over-confidence. Leaders can be very confident, but it must be real not bluster.

Confidence must be based on technical expertise and experience, important factors for establishing a leader's credibility to a variety of audiences not least investors and employees. But whilst technical knowledge of a given market or subject is important, there are some other more fundamental characteristics that a leader should have.

Leaders need vision. They need the ability to set their sights on the strategic, long-term view and not get side-tracked by short-term tactics and problems. This doesn't mean not listening to advice or taking new information into consideration, but it does mean not indulging in flashy quick-wins that ultimately don't take the company forward.

They need moral courage to stick to their vision. Sometimes leaders have to make very unpopular decisions but they must act in a way that they believe to be right whatever other people think. In order to carry this off and keep people loyal, leaders need to be able to inspire.

Personal integrity is a fundamental characteristic of inspirational leaders. Employees, investors, peers, suppliers and advisers must believe that a leader will do exactly what he or she promises to do, rather than say one thing and then do another, or even go behind backs. People cannot be led by someone they don't respect and to gain respect would-be leaders must set a good example and be seen to deliver on their claims.

Caring is not a description one often sees in job advertising for CEOs and managing directors, but inspirational leaders need to care as much about the people they lead as achieving success. In the modern workplace, leaders will be followed more readily if they take steps not to undermine the welfare and well-being of their workforce.

Good communication skills are critical. These days when a leader needs to engage with his team or workforce, pitch for new business, or negotiate across a Boardroom table, a softer two-way approach is often needed - it's not just about telling people what to do, it's about listening, too.

While delegation is a key part of leading and managing, the lubricant is two-way trust. When leaders set the broad parameters of a project and give responsibility to their managers for its execution, they must trust the team to get the job done. The team trusts that the leader is taking them in the right direction. There are mutual benefits: employees work much better if they feel valued by their boss, increasing their self esteem and sense of pride in their job, and leaders' self esteem is boosted by the success of the project. On the other hand, lack of trust can result in a leader micro-managing projects and bickering, blame-laying and back-stabbing from the unhappy team.

A good leader is someone that employees want to follow, not somebody they have no choice but to follow. Employees that feel coerced or fearful in their roles or actions tend to be resentful which can result in unpredictable outcomes, whereas employees that are inspired by respect tend to take more responsibility. The report from the FSA would seem to concur.

Jack Downton is the MD of The Influence Business and a former colonel in the Royal Marines


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