· Comment

Arcadia’s decline highlights the urgent need for humane leadership

If you have been following the fortunes of Arcadia Group, you probably won’t be shocked by the retail group’s rapid demise, including the recent acquisition of its signature brands by ASOS.

This fall from grace seemed inevitable, particularly given Sir Philip Green’s widely reported management style: stories of alleged hierarchical leadership, bullying, vanity, greed and stubbornness, which created an environment of deep-seated employee disengagement.

It is easy to recoil at these media stories, forgetting that at the heart of the Group’s decline is an all too familiar story of broken, outdated leadership which presents itself within the majority of UK organisations.

This leadership crisis has led to only 20% of the UK workforce trusting their managers and the UK sitting near the bottom of the G7 league in terms of productivity.

Further reading:

HR's leadership lessons to take into 2021

Making the leadership leap

Hot Topic: Female leadership in a time of crisis

My own research reveals that the consciousness of individual leaders is intrinsically linked with the culture of that organisation, moving through from level 1 (lifeless and apathetic) to level 5 (limitless and unbounded).

Every level is characterised by specific thinking patterns, language use and outcomes. The presence of levels 1 to 3 leadership styles can be clearly observed in the story of Arcadia and countless other organisations.

At Level 1 people are depressed and lifeless; at level 2 employees have a reluctant mindset, doing the minimum to get their pay cheque; Level 3 sees a command-and-control, environment dominated by big egos and often bullies.

A complete management shift - to level 4 - is required to enable organizations to survive and thrive.

At level 4, culture is collaborative, mindset enthusiastic and trust ever-present; there is a common purpose, as well as a collective desire to make a difference in the world.

Such companies attract talent, and the bottom line goes up steadily because people are the focus rather than numbers. Occasionally level 5 is possible – limitless mindset, working relentlessly on some amazing innovations (for example, Steve Jobs’ team working day and night until they invented Mac computer in the 1980s), often driven by love of humanity.

However, it is impossible to maintain this level without burning out, so tapping into this when possible is a fine balancing act.

Of course the need to shift to level 4 was already in motion pre-2020, but the pandemic has acted as an accelerant, making humane leadership even more critical. What matters now is autonomy, health, compassion, flexibility - showing genuine care for people and providing space for them to develop.

Despite 60-70% of employees saying they wouldn’t want to go back into an office full time post-pandemic, nothing can replace the human connection, so leaders must show up emotionally with empathy, compassion and courage, if they hope to nurture loyalty.

You might recognise level 1 to 3 behaviours in your company and feel despondent, because this detrimental culture is so deeply ingrained. Take heart that although it is a gradual process which requires training and facilitated discussion, there are practical actions you can take right now.

Begin by gradually weaving level 4 language - ‘we, us, teams’ – into everyday conversations, leaving self-serving rhetoric of ‘I and me’ behind. When you start using this language, collaborative working will start to become embedded within the fabric of your culture.

A second step is to think deeply about higher purpose reflecting on organisational values and how to articulate these through open, transparent communication.

As demonstrated by the woeful but familiar story of Arcadia old-style, authoritarian leadership is crumbling. It is not viable on a human or commercial level.

When we come out of this pandemic it will become increasingly difficult to operate in a climate where employees come to work but leave their head and heart behind. Importantly leadership is feeling – just like a stone skimming across a pond it spreads ripples.

Humane leaders will create the biggest ripples within organisations and play a critical role in creating a more just and prosperous new world.

Vlatka Hlupic is professor of leadership and organisational transformation at Hult Ashridge Executive Education and CEO of The Management Shift Consulting.