Charismatic leaders seem to be naturals. What we need is a way of producing them. By James Dunn
In the movie Back to School, starring US comedian Rodney Dangerfield, the main character finds himself in a business lecture at a university. The scene is a comic version of the challenges that face Australia’s leaders, challenges that will not be solved by attending business courses on leadership.
Dangerfield is a self-made millionaire men’s wear retailer in his fifties who has gone to university to try to coax his troubled son through the academic year. He is fidgeting through a business lecture that exemplifies the classic Ivy League “bus school” approach.
The stuffy lecturer is describing the costs of a theoretical business start-up: wages, factory, power, and so on. Dangerfield rolls his eyes and groans to the point where he can take no more, and interrupts with, “No, you left out heaps of stuff!” At which point the lecturer sneeringly demands to know what he has left out.
“You left out bribes to the planning authority for your factory, kickbacks to the council and greasing the palms of the union officials and the Teamsters,” Dangerfield says, emphasising his points with the air of a man who knows. Then comes the coup de grace: “And I haven’t even mentioned waste disposal. I don’t know if you are familiar with who runs that business, but lemme tell ya, it ain’t the Boy Scouts!”
Following the Karpin report, it is widely acknowledged that Australian management education is also “leaving out heaps of stuff”. Karpin, and the New South Wales state training survey released the same year, emphasised the need for better “people skills” in the management strata from which Australia’s corporate leaders are drawn.
Dangerfield’s businessman, in his indignation that the “people skills” he had been called upon to practise in management seem to be unwelcome real-world intrusions into the cosy study of the business school, neatly satirises the quandary in which management (thus leadership) education finds itself.
The emphasis on the theoretical side of management, the finance, accounting, marketing and strategy, has been at the expense of those elements of the leadership package that actually influence people to be led, and to do.
James Sarros, associate Professor of Management at Monash University, says that since the Karpin report, business educators in Australia have been trying to redress the inattention to relationship skills which the report revealed. “It has been a continual process since then of developing programs in leadership and management development that look at values, ethical issues and leadership as an all-encompassing aspect of a person’s life, not only their working life.
“We have to look at leadership in terms of how it can be developed so that the needs of the organisation’s workers are satisfied as well as those of the organisation’s leader. We have been looking at corporate leadership in terms of delivering the goods to shareholders and other constituents. Corporate leaders are too accountable to boards and shareholders and we saw that in the resignation of John Prescott as managing director of BHP.
“Senior Australian executives really have not understood that they have to balance their professional and private lives. They need to realise that there is also a bottom line in terms of family and other relationships outside the workplace.”
John Bailey, lecturer at Melbourne Business School, believes the penny is dropping in companies and in the universities. He says: “Shell, for example, was telling me recently it has found that no matter how brilliant people are analytically, if they can’t relate to people, they don’t manage well. They now realise that their top people must be chosen by three criteria: their track record, their natural competence in analytical skills, and their relationship management skills. In the past it was only the first two.”
Bailey says that one of the main problems is the proliferation of management programs particularly MBAs in Australia in the last decade. “I criticise many MBAs for not having taken this relationship issue seriously. They teach the analytical stuff the finance, the strategy, the marketing, the management in the belief that that is what a corporate leader needs. But what is management, and leadership, if not relating to people?
“We have to train our management candidates to relate effectively to other people then they can lead. It doesn’t matter how many books they read, or how many papers are written about it nowadays the MBA students themselves write papers about the importance of interpersonal relationships if they can’t do it.
Moot board rooms mooted
“It happens over at the medical school: the students have had all the theoretical education, but they then go and do it. Rightly so, because when I am on the operating table, I am glad that that person has done it.”
Bailey says that after the models of finance, strategy, marketing, management, and so on, have been taught, then the student must be challenged to use them. “The next step we must take as professors is to take the student into a quasi-boardroom like a moot court and say, Right, you are in charge. Now how would you bring about change? How would you change the views of the board or your senior executives? How would you handle a meeting in which you were trying to pass on this new model and get acceptance of it?”
The emphasis on theoretical training, he says, has led to brilliantly analytical people coming out of the universities who believe that change is brought about by gathering the board, putting up 37 slides and telling them why change has to happen. “That doesn’t change behavior in corporations. What does is when somebody takes the trouble to help those executives being given this new model to understand why they are resisting it and facilitate a process of change.
“Even the educated in management and leadership have come to the conclusion that all a leader needs to have are the analytical skills, the capacity to strategise, to think about the big picture and have helicopter vision. All of these are good things, but we have not until now in the development of our leaders and managers seen the relationship issue as important.”
Bailey says the future of management education may be seen in programs such as RMIT’s Graduate Diploma of Management, which leads on to a Master of Management. “They teach the traditional analytical stuff the finance, the strategy, the marketing, the management as evening classes, but also give great emphasis to relationship issues. Over three years, in regular weekend workshops, the students learn about facilitating leadership, conflict resolution, understanding themselves and creating dialogue. That is the type of management program that will produce the leaders of the future.”
But it comes back to the individual executive. Sarros says that until people sit down and think about what they want out of themselves and their organisations, there will be no progress. “One of the fundamental things they must address is what are their value orientations: what do they want out of work, and what do their workers want out of work?
“Above all, we need to get some of the liberal arts for example, philosophy, literature into the business education curriculum. If the curriculum is based on finance, accounting, macro-economics and marketing, you will turn out a certain kind of person. But if you throw in a bit of Shakespeare or Chaucer, or what the ancient philosophers have to say about the human condition, you will turn out a better kind of person, and a better kind of leader.”
Ends of the earth
The process is particularly important to Australian managers in the context of globalisation. Sarros has conducted two studies with senior executives from Australia’s top 500 companies (one in association with Oleg Butchatsky for the Australian Institute of Management), surveying 205 top-ranking executives all together. When asked to nominate their most pressing leadership challenges, 41% opted for “going global, becoming and sustaining competitive(ness)”.
In the global context, Bailey says, Australian managers are not going to make it if they do not learn relationship skills of a very high order. “It is insufficient to take Australian leaders and tell them that they have to be better at relating to people in different cultures, and understanding workforces and strategic alliance partners in different cultures.
“They don’t understand themselves sufficiently to be able to understand other people. In quite a lot of big companies around the nation, I am finding that relationship management is the fatal flaw at the senior levels of corporate Australia. We don’t bother to develop it because of the resistance along the lines of you can’t subject senior executives to that kind of stuff. I say, if you don’t, you can probably expect some major debacles in international markets.
“We are talking about people who have been chosen to lead the company or a subsidiary or a division on the grounds of track record and their undoubted skills, but they actually lack the ability to manage people in the dynamics of the corporation. If someone like this is asked to operate overseas, with a cross-cultural factor layered over the top, the company is asking for trouble. It has got to change in the domestic context, let alone in the global arena.”
Sally Rundle, chief executive of Rundle Partners, wrote her PhD thesis in 1997 on what determines success for Australian companies in new-market entry in South-East Asia. Rundle interviewed almost 300 Australian general managers running operations in the region. She says those that failed to foster a “global mindset” in the people sent to lead their operations were struggling to adapt.
“The style of leadership that we have developed in this country based on the laconic, self-reliant Australian myth is not useful during high levels of turbulence and change. When Australian managers go into, say, Asia, for the first time, they are going in with a completely different cultural profile.
“They are going in as highly individualistic, consultative managers, into an environment that is very hierarchical and group-oriented. That is why the global mindset is very important: to give managers the capacity to adjust and adapt their style depending on the market they are in.”
What is leadership?
In assessing whether Australian management education is working, one of the problems that must first be tackled is just what constitutes leadership in the Australian corporate context. Sarros says that, unfortunately, most of our leadership models are imported.
“Australia was settled first by the British, whose model of leadership is based on hierarchy and aristocracy and the right to rule, and then by the Europeans, whose model is similar. This model is more platonic than that which has become probably the predominant one in Australia, the American model, where the leader is charismatic, and out in front on the steed charging into battle. Australian executives are unsure about what Australian leadership is.
“Many Australian executives don’t understand themselves well enough to be effective leaders. We have come to a hiatus in the development of Australian leaders: I think we are frustrated by the models we have adopted, but we have very little with which to replace them.”
Sarros says the Australian leadership model is an amalgam, but with an additional layer derived from the image that Australians have of themselves. “You only have to look at the laconic, easy-going style of a John Singleton, a John Laws, a Bob Hawke, and so on. But senior executives who have the capacity to relate to their fellow workers and the Australian public at large on that everyday level are rare.
“Most executives, I find, are still protected by the nature of the job and reluctant to be seen too much out of the role they feel they have to adopt in a position of authority. We have seen evidence recently that they don’t really have a family life, and I think we as a society really have to come to terms with that.”
Traditional notions of leadership hold that certain “great men” come to the fore, with natural analytical and strategic abilities, and who also inherently understand their effect on situations. This “charismatic” type of leader innately knows how to build relationships so as to bring out the best from others. Alexander the Great and Napoleon personify this type.
Then there is the “contingency” theory, that leadership is a function of destiny. Given the right circumstances and the right person, you have a leader. For an example of this type, look no further than Churchill.
The problem with historical examples is the changing context. John Micklethwait and Adrian Wooldridge of The Economist have some fun with this in their book, The Witch Doctors, subtitled, what the management gurus are saying, why it matters and how to make sense of it. They ask: would Winston Churchill have been a good teacher leader in a multinational corporation; would Alexander have been prepared to let squadrons of T-shirted “knowledge workers” disappear to follow their own ideas for a couple of years? The answer to both questions is no.
Max De Pree, the former head of the Miller Corporation who wrote Leadership is an Art, contended that leadership was fundamentally about assisting people to develop a shared vision. No corporate leaders worth their salt today would quibble with that. But where they may part company with De Pree is in his belief that, having done this, the leader must “abandon himself” to the talents of others.
What De Pree meant, Bailey says, was that the leader must understand that a shared vision can only be arrived at through dialogue, not debate. “Then, the leader has to be capable of abandoning himself to the talents of others; to give others the opportunity to be as bright and intelligent as they can be to facilitate their growth, to involve them in decisions to which they can contribute. That’s leadership.
“But in this country I see leaders who believe they are more than capable of strategising and arriving at a vision, but shudder at the thought of developing a shared vision. They say, Those people work for us, and we will tell them what the vision is going to be. But then the people don’t get excited by the vision, and why should they: it wasn’t shared with them.”
Sarros likes to cite Sir Edward “Weary” Dunlop’s “empathetic” approach to leadership, developed in Japanese POW camps during World War Two. “Dunlop identified 11 desirable aspects of leadership: motivation, courage, decisiveness, responsibility, initiative, integrity, judgment, knowledge, loyalty, selflessness and the ability to communicate.
“Dunlop was thinking in terms of military-specific leadership, but you can’t differentiate these concepts from those desirable in the corporate sphere. Any one of those qualities would make our chief executives fundamentally better leaders, but I don’t believe they are present in great numbers.”
Learning to lead
The “nature versus nurture” debate is alive and well in management education. Bailey says that although there has been a tendency to see leadership as “you’ve either got it or you haven’t”, the focus has shifted to “relationship capacity” which, he says, can be developed in people.
“We can make people more aware of the impact they have on others, and make them aware of the process issues that they can take control of when they are engaged in relationship building. It is a matter of intentionally building those skills.
“If we are looking for charismatic leaders, well, you can’t teach them how to be more charismatic. But if we are looking for much better communicators as we now are you can teach people how to communicate well. It is up to us to identify who the right people are, so that with the right amount of training we have a supply of fairly good leaders.”
Rundle says her study of the managers working in Asia convinced her that leadership can be taught. For the purposes of her study, she divided her subjects into three distinct types of managers:
- The “very international” group, who had operated in four or five countries and were flexible, adaptive, responsive confident people.
- The “balancers”, who had worked in two or three countries, and were good at localising Australian operations. To do this, they had to understand the culture of the parent company and the local culture. They were not as flexible, adaptive and responsive as the first group.
- The “nationalisers”, whom she describes as typically having worked outside Australia once or twice and depended heavily on head office. They only took their latest posting because it would look good on their CV.
Rundle says: “The difference between the first and the third group was a set of values, and also their experiences. It led me to believe that we could grow these managers. While personality is important things like resourcefulness and resilience we can grow international managers.”
The managers could change, she says, through a combination of learning and experience. “The academic side could only take them so far: from being a domestic-thinking manager, a nationaliser, to a balancer, where they have different frames of reference, the cross-cultural models and the awareness of differences. To get to the third group, the international group, they needed experience.”
What achieved this, Rundle says, is a technique called EOM: experience-orientated management; developed by business consultants Jan Kelly and Gary Yardley. She says EOM could fast-track managers through that experience factor. “In effect, what might have taken two years in experience-gathering can be done in two weeks. They looked at what the managers had in terms of the values, beliefs and attitudes the maps that they carry out into the world and they changed them. For me, it was the end of the myth managers are born, not made.
Kelly, a psychologist and director of the business consultancy Tenfold, says EOM works by modelling the skills and experiences of a successful leader within the organisation and transferring them to anyone in the organisation. It can be widened to model successful teams. From that, models can be extrapolated on how to build integrity, trust and loyalty; in fact, how to build any value that the company itself values.
“People need experiences of substance and relationships that are rewarding. That is what EOM looks at,” Kelly says. “It is purely concerned with the process of developing company integrity the trust, loyalty and enthusiasm within the company and how to identify and maximise people’s potential. We take EOM into corporate environments where a team or department is extremely dysfunctional, and look at the specific functional dynamics that we can replace these with.”
Does it work? “We are a private company, so if it didn’t work, we would be out of business. I believe we are filling a need that is not met by mainstream management education. It is not about designing a change and dumping it on the individuals, because if an individual or team or department doesn’t own the change, and accept responsibility for it, then that change will be short-lived.”