Is there a formula to being a great leader?
04 May 2016
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Hello and welcome to another edition of Old Mutual Live Business, my name is Chris Gibbons. In this episode we’re once again talking about leadership and in particular, what qualities are shared by the world’s top leaders. Someone who has spent many years studying this is Professor Nick Binedell.
Professor in the area of strategy and leadership at GIBS, which is, of course, one of South Africa’s top business schools. Nick Binedell, welcome, thank you once again for joining us on Old Mutual Live Business. First off, can we really look for common threads between the great leaders?
Nick Binedell: Well thanks Chris, it’s good to be with you. I suppose there are some commonalities, of course there’s as many definitions about leadership as there are books. But there are commonalities that are shared because I think in a global world, many companies face, many executives face similar challenges.
CG: How would you define those qualities?
The qualities of a great leader
NB: Of course it very much depends on your industry and your context. Someone running a business in Bangladesh may have different issues than someone in Belgium or Brazil. But if we look for some generic things that I think are relevant in the 21st century.
As we deal both with the opportunities we have as well as the tough challenges to chew on. There are five that I’ve drawn out that I think may help people think about their own leadership. May help them take action more effectively.
The first of these is resilience. Certainly in South Africa, but I think generally around the world. Leaders are under enormous pressure to deal with the short and the long term. To deal with financial and non-financial matters.
There’s a kind of a stubborn stamina that’s needed to survive. So, South Africa’s had a lot of these kinds of challenges in our history. I think resilience and determination and energy, the ability to get up every day and get back into the battle is key.
CG: All right, that’s the first one, what else have you got?
The ability to understand the frontline
NB: The second is insight and mainly for innovation, but the ability to understand the frontline of the business. What customers are experiencing, what markets are experiencing. The Germans have a lovely word called ‘Fingerspitzen Geful’ and it means the feeling in the tips of your fingers. Very often we get stuck in offices and spreadsheets and meetings. We’re losing the nature of the battle in the frontline which is where all the action is.
CG: From insight would flow something like perspective?
NB: That’s the third one on my list is that you need to have a big picture view, not just of the battle, but of the campaign or the war. Again, it’s very easy to come under budgetary or other pressures and to focus on delivery. As Alice in Wonderland said: if you’re not careful, you land up where you’re headed.
Keeping perspective is very important and that means taking time outside the business, outside your market, to look at it from another angle. To build a set of networks and connectivity that will allow you to keep that fresh and up to date. Things are moving so quickly these days. That was good for 2014 is absolutely not good for 2016.
CG: I would guess that a top business leader in the 21st century, like any other century, would have to have a great feeling for the numbers?
Having a great feel for numbers
NB: Absolutely. That financial acuity, the ability to master the numbers, to understand the cricket score, is key. I think at the moment, certainly in a low growth environment, frugality becomes a key skill. The ability to understand the value of things and how they create value or how they destroy value is very, very important. Of course, many of us are under cost pressure.
It’s more about value that cost though, it’s about understanding. In your services, or in your products, what it is that adds value. Then making sure that you’re able to trim the fat. Keep the sales tight and make sure you’re going forward efficiently. It’s about ownership of the value that’s created. About a sense of being a proprietor of the business. That would you spend this money in your family if it was yours to spend.
CG: Resilience, insight, perspective, frugality, four of the five, what’s number five?
NB: The last one is organisational skills. In my view, of course we’re all asked to innovate. We’re all asked to lead and inspire people and make good decisions. But managerial skills, being able to manage the process. The machinery, run good meetings, make decisions, get good information, provide feedback. I’d call it sort of muscle memory of getting things done. South African business is quite good at this, in fact, but it’s a key skill.
You’ve got to keep changing the shape of the organisation, but keep it focused. We’ve got a bit too much hierarchy, a bit too many levels, too much coordination. It’s the ability to run a leaner, faster organisation as a vehicle. The way to think about an organisation is a vehicle en route to a destination. It’s the ability to get the gears to work and to steer the steering wheel while looking out the front window.
CG: Nick, where does a grasp of your other speciality, a grasp of strategy fit into this?
The importance of having a grasp for strategy
NB: I think it fits across all of these categories because ultimately, strategy is a very simple question. A damn difficult answer which is, what are we going to do next in a way that adds value and is competitive. Strategy maybe is a cross cutting theme. I am very interested in what I call ‘strategic leadership.’
It’s no good having a strategy if you don’t have the leadership and organisational abilities. But it’s no good having the leadership and organisational abilities if you don’t have the strategy. In other words, you know what you need to do next and you’re prepared to go and fight that battle. To make sure that that agenda is bought into, is shared and people will act on it.
CG: What about intellect? Great leaders always, men or women with super-sized brains?
NB: The research shows, in fact, that intellect does matter, that kind of raw intelligence, the ability to process lots of information, to connect dots and to be creative. But I’ve met many CEO’s who are great intellectuals who aren’t able to capture people’s imaginations or aren’t able to organise well. I think there is a kind of raw kind of intellect.
But there’s a different kind of intelligence which is the ability to understand the battle in front of you. That’s very industry or company specific. That’s the kind of emotional intellect, to understand reality and to separate hope from reality. Ambition is great, but it better be grounded in the realities. There I think your intellectual ability, your insight, your acuity, to use a different word, your acumen is key.
Being able to connect with people
CG: Great leaders, Mandela was one in this regard, do seem to have the ability to touch the common man. To connect, if only for a moment or two, with ordinary people. I’ve met Mandela, I saw him practice this, I’m told Bill Clinton in his day had it too. Is that vital?
NB: Hugely important. As I said, you can be a great technocrat, but not capture the imagination of people. Mandela had that in buckets, as did Clinton, two good examples. As did Lee Kuan Yew, as did Deng Xiaoping in China. It’s that ability to communicate. We have much of that skill in South Africa, people who have to connect with people about their common concerns and ultimately, business is a human activity. It’s a social activity.
It’s not just a spreadsheet and an economic activity. Business needs a license from society and from individuals, from clients or from people in the organisation to practice. That does require a good connectivity and being a mensch, being a human being. Showing, from time to time, that you don’t know the answer and showing some of the vulnerabilities also and making a genuine connection with people.
CG: I think in Mandela’s case he was a genuinely humble man. But I’m less convinced about Bill Clinton, where does humility, authenticity is another way of looking at it, fit into the great leader mould? A lot of great leaders are a long way, in my opinion, from humble. Steve Jobs, Jack Welch, Donald Trump, humility doesn’t come into it.
NB: Well, these are very complex topics because on the one hand you have to have self-confidence and the problem is self-confidence. If you’re successful for a long period becomes arrogance and people sniff that from many a mile away.
On the other hand, if you’re so humble that no one thinks you’ve got any vooma, that’s also a challenge. It’s finding that sweet spot between them. A very successful CEO once said to me that of the problems that come to you. You should deflect most of them because they don’t bet your job. If they bet your job, you better take action. But most of the time you can deflect them and ask people the questions about what they’re going to do.
In the second category, it is strategic. You’ve got to bet the job, so you must make that call, but if you can get your team to make the right call, you let the team make the right call. The third category is decisions you have to make where you bet the business. You alone have to make that decision.
If you look at what happens in a busy week, he used to say to me, 60-70% are in the first category. They are decisions that aren’t going to bet the job. That can be made by the people and you build the muscle in your team by forcing them to make the decision.
You hold up a mirror and you say: so that’s interesting, what are you going to do. In the second category, if you’ve got muscles in the team, the team and you will make the same decision. But from time to time, you’ve got to impose your will by making the hard call yourself and that’s true leadership.
CG: One thing great leaders seem to do, I believe, correct me if you disagree, is spot and cultivate talent.
Spotting and cultivating talent
NB: Right, absolutely critical. In this country now, we’re facing a new generation of talent that are coming through, at GIBS I see it every week. We have a new generation, of course we’ve got a big problem with the general education system. But this generation are hungry. They’re ready to roll up their sleeves and get to work. Very interestingly, they’re very representative of our demography.
So, there is a new generation and there is a bit of a challenge in our companies around age. Every generation that’s older faces a challenge from a younger generation, that’s as true for lions as it is for humans. That’s a good thing, that’s an energy that we mustn’t lose sight of in this country.
On the other hand, we need the experience of a generation who have been there and done some of it. The challenge we’ve got is the nature of business is moving so quickly. In my view, because of technology, because of science, because of engineering, because of speed and because of integration and globalisation. The nature of the game is changing as we speak. We need far more agile organisations and I think younger people are probably generally better able to network horizontally. Whereas older generations tend to work hierarchically.
CG: Resilience, insight, perspective, frugality, organisational skills, the five common threads that run between the great leaders. Great business leaders according to Professor Nick Binedell who is a Professor in the area of strategy and leadership at GIBS, one of South Africa’s top business schools. Nick, thank you for being with me on Old Mutual Live Business.