It's a cruel world leaders live in now. Celebrity-style 'hot or not' judgments have made the crossover from the gossip pages to the business pages. Lauded CEOs, it seems, are only an incident or strike away from being the latest corporate villains.
Some might say this exactly describes BP CEO Tony Hayward's inglorious fall from favour. This month the embattled boss is being replaced by American Bob Dudley, after failing to recover from the oil spill fiasco that made him appear impotent in the eyes of the media. And yet, all accepted HR theory up to that point pointed to him being the perfect candidate for the job. He was a BP lifer (joined in 1982), coming to the direct attention of former CEO Lord Browne at (ironically) a BP leadership conference in Phoenix in 1990. After this he quickly became Browne's executive assistant. The former rig geologist then became BP treasurer in 2000, and for the past three years oversaw huge continued growth, including negotiating two massive contracts for drilling in Russia. Did he really become a poor leader overnight?
It's not outdated leadership truisms that suggest Haywood had all the right skills. According to new research by the Institute of Leadership and Management (ILM), which asked 50 HRDs for the skills leaders must possess, Hayward seemingly had them all; he is a maven (technical/professional skills top the list); he comes from within (working in similar industries is also highly favoured); is professionally qualified (viewed three times more important than holding an MBA); and, until the spill, was regarded as a motivator (the characteristic HRDs most want). In fact he epitomises the perfect leader.
So are these 50 HRDs wrong? Is leadership about more than this; is it changing too fast for HR professionals to know what to covet most; and can it be taught? To test its findings ILM hosted a roundtable discussion, which HR magazine exclusively attended, to ask a few more eminent HRDs what they thought. It was an opinionated affair, not least because, as all observed, the subject matter remains so difficult to define.
"The very word 'leadership' still causes huge problems for HR professionals, as it still means so many different things to different people, in different situations," grumbled Michael Ferndale, HRD, Harvey Nash. He added: "Great leadership in one situation doesn't make great leadership in another." It was on this 'what is leadership?' question that Imelda Walsh, just-retired HRD of Sainsbury's, also noted how one part of the research's observations - the notion there are 'natural leaders' - was particularly erroneous. "It's lazy," she condemned. "In fact, the term natural born leader can be very frightening."
John Renz, HRD at insurance group Novae, concurred: "We have all experienced people who are charismatic and great communicators, but are rubbish leaders." Strangely, it seems, HRDs cannot define leadership, but they seem to know what it is when they see it. So surely there must be some form of checklist they need to look out for?
"A piece of advice I've always stuck to is that leadership is when someone can do extraordinary things with ordinary people," said Walsh. But, argued James Chalmers, head of strategy and talent, PricewaterhouseCoopers, this is not at all scientific. "And how an earth do you spot these people?" he asked. "How do you get underneath somebody who may not appear to be a leader but actually is a 'natural' leader? It's a huge problem."
"I've long wondered if we, as HR professionals, are missing finding great leadership talent, because we are putting misguided brackets around what talent is, and saying 'this is how it must be'," observed Ferndale. Yet, as he and other panellists were forced to admit, the problem is they have to, because it can be too risky going with better unknowns. "I think when there is risk involved, HR does revert to type," he said. "You sometimes need people that you think are tried and tested," added Walsh. "It's why I'm less surprised the research favours having leaders with technical/professional skills over communication skills right now. Businesses have been in crisis; imaginative ideas have to be put on the back burner." But it also means, concedes David Pardey, ILM senior researcher, HR is unwittingly (or wittingly) perpetuating a narrow idea of what a leader should be right now - namely white, middle-aged and male. Is this the way things should be?
Starbucks' HRD Sandra Porter perhaps summed up most succinctly what she thought the traits of a leader should be. "I believe it is the self awareness and ability to identify their strengths and weaknesses across their normal traits, but then find how that fits within the organisation," she said. It certainly drew on a recurring feature of the ILM research, that there is some sort of mythical 'whole package' that exists.
"Our focus has been around the people who are able to stand up, make great engaging presentations and win the hearts and minds of staff," said Renz. "In this sense, I think there is a baseline below which no one should be if they are deemed a 'leader'." American Express's director, global leadership development, Chrissy Amure-Butcher, said: "I think an old-fashioned quality, courage, is also really important - the courage to take reasonable risks, to learn from mistakes, and to be transparent about them."
Because some potential leaders don't often identify themselves, or know they have it in them, some HRDs on the panel believed stretching some candidates they think could 'make it' still has a place. "People that you 'throw into the deep end' and actually swim are clearly ready to be leaders; they just didn't know it," argued Ferndale. But Narendra Laljani, director of qualification programmes and director of executive education, Ashridge Business School, countered this: "The problem with sink or swim is that it is expensive. The cost of failure is high; we cannot rely on this method to develop our next generation of leaders."
Laljani, unsurprisingly, wants leadership development to be codified, based around an agreed set of skills/expectations that can be taught (this is despite the lack of demand for leaders to have MBAs, and the other HRD representatives believing leadership is organisationally contextual). "Formal education has to play a role; I accept it's a limited role, but a very valuable role," he said. "It's simply not the case that a passage of time - say, 15 years - in a company automatically gives you the capability to lead. "The most successful leaders," he added, "have a repertoire of behaviours; they need to learn how to use their judgment to reflect the context they find themselves in."
In some quarters this drew nods. Some felt it would address 'institutionalism' and lack of outside world experience that comes from a default 'hiring leaders from within' policy. "I'm doing lots of work with the BBC at the moment," said Ferndale. "One of its big challenges is the fact there is no natural wastage." Simon Walker, managing director at organisational development firm Talent Smoothie, added: "I read recently that the dean of Harvard believes the new role of business schools should be instilling an ethical, sustainable approach to business and leadership behaviour." But with Gary Browning, chief executive of Penna, declaring that if he "had an internal candidate, who was 80% there, versus a 100% outside candidate, I would go with the internal one, precisely because you reduce the risk around cultural fit", panellists were naturally wondering what skills they would want them to have. And this led to a lively debate about whether leadership is changing.
"Leadership requirements have changed, and they are about to change again," argued Browning. "The skill leaders need to be taught and assessed on is speed of reaction. Business gets shocks to the system now. Being able to react has become increasingly important. This goes against the grain of a lot of leadership thinking - of being strategists, and long-term planners." Not all of the panellists agreed, though. "My theory says times have changed, but what we require from leadership has not changed," argues Ferndale. "If you boil leadership down to its essence, most of it is getting other people to do what you want."
It was this that brought up concepts like 'emotional intelligence' (a skill that the ILM research found was wanted in leaders less than technical knowledge). "I think the requirement to be emotionally intelligent has gone off the Richter Scale," said Walsh. "This is where I think the role of leadership has changed" She added: "I see a real neediness in employees; that is a new pressure - an ability to react to events. This neediness did not exist 10 or 20 years ago." Whether HRDs think they can develop leadership, therefore, depends on whether they think emotional intelligence can itself be developed.
"The successful leaders I see tend to have a repertoire of behaviours they can draw on depending on the context they find themselves in," argued Laljani. "It's about having judgment appropriate to the setting. At the risk of using jargon, it's a branch of 'behavioural complexity'. This suggests people have a selection of behaviours they can adapt to. I'm fascinated by this ideal that leaders are actually quite elastic and not just a one-trick pony."
All of the panellists noted that there was no mention in the research about mentors for leaders - something Laljani expressed surprise about, because "experience is a slippery detail - often people do not know what they have learned from it by themselves", he said.
Genevieve Glover, executive director, AEG Europe, the organisation that owns the O2 in London, cited her own company as an example in this connection: "Three years ago we hired precisely for the technical skills of leaders. Since then, and in the past six months particularly, our expectations of our leaders have changed considerably. We weren't initially thinking about how we were going to shape our culture. I am in a minority at the moment in thinking that perhaps we should have identified this sooner."
Glover says she is trying to use measurements to first identify and then assess leadership performance. How to measure leaders could have been an entire debate on its own. It was Einstein after all, who famously said: "Not everything that can be counted counts, and not everything that counts can be counted." But Walsh said some measurement is possible - just that it's deliberately not 100% scientific: "One of the first things I did was put all our leadership behaviours on one piece of paper. I resisted any attempt to turn them into competencies, because they do not work well and become a pseudo-science," she said. "We've never had a rule about how you lead in Sainsbury's, but there are principles and behaviours and we run training around these behaviours."
Renz was one of the most vocal on this, arguing HR should not bow to pressure to measure everything just because someone asks for it: "There is a lack of confidence in the HR profession to argue the point that there is no system of measurement in performance management that does not ultimately require a judgment," he proclaimed. "We, ourselves, need to have the courage to say, 'This is what good looks like, and there are some behavioural characteristics in there, some of which can be measured, and some of which cannot'. We have to exercise judgment."
"I think leaders have to realise that being a leader is not an individual thing; by definition you can't be a leader unless there are lots of people around you," argued Ferndale, who used this as a way of saying team measurement is what leadership measurement is really about. But, hang on, what's happened to leaders making decisions, because, they are, well, the 'leader'. Is consensus killing the ability to take a leadership role?
"I could not agree more," said Walker. "Maybe companies need benevolent despots - the role of a leader is to make a decision and be smart enough to change it. Uncertainty is corrosive." Some thought this was a very American view of what leaders should be, but Pardey had his own opinion. "Judgment is very different from decision-making. If you talk about decision-making it somehow has connotations of being a formalised, information-heavy structure. Judgment, however, is about personal qualities. I think this closes the circle of what we first started talking about - about the kind of person whose judgment brings in a lot of values that are hard to pin down, to make a decision. Judgment is more than a decision; it is tinged with things that are more subjective." Walsh said: "Judgment is not fact-free, it is 'fact-plus' - judgment is what we want in our business."
Maybe judgment is ultimately what HRDs really want from their leaders. Maybe this comes from experience, or from having charisma, or, what some interviewers might call having a 'sparkle'. Maybe education cancels out or enhances these attributes. It is clear, though, that leadership is no simple topic and what is required of leaders will continue to warrant more debate. The good news is that HR directors are not expected to have all the answers just yet - but they do at least need to have their own concept of what leadership means to them in the context of their businesses.
WHAT HRDS WANT IN A LEADER
- Technical skills/qualifications rather than people skills; some 56% of respondents put professional/technical attributes, closely followed by commercial acumen (54%); less than a quarter cited communication skills
- Undergraduate or professional qualifications were the top two requirements, at 46% and 38% respectively; post-graduate qualifications or MBAs were of less importance (just 16% and 12% respectively)
- Someone who has worked in a different industry was cited by 26% of respondents; while the same percentage wanted someone who has worked in a similar industry
- Motivational people. Inspirational topped a list of popular traits HRDs require in their leaders (at 36%); next was a emotional intelligence (34%); third was a demand they are 'natural leaders' (24%), whatever is meant by that