Manage-Wise

Branding leadership

First, leaders versus leadership. They are not the same thing. Both matter. Focusing on the leader emphasizes the qualities of the individual and how he or she leads and engages others. A leader focus works on the knowledge, skills, and values a leader demonstrates and works to help individuals become more proficient in their ability to direct others. Focusing on leadership emphasizes the quality of leaders throughout an organization, not just an individual leader and the systems and processes that create these leaders. Great individual leaders may come and go, but great leadership endures over time. An effective individual leader may not be very good at building leadership—that is, at developing process that help other leaders grow and develop.

An exceptional individual leader may deliver outstanding results for a while, but the quality of leadership is what sustains results, allows organizations to align with changing strategies, and builds confidence from employees, customers, and investors. Here are some cases in point:

Case 1: The footsteps of a giant make deep holes

A large and successful firm grew through the innovation and energy of its founder, who was creative, insightful, and prescient. He gained acclaim as the ultimate entrepreneur—someone who knew what to do and how to do it. He was renowned as a leader, but he insisted on making most of the firm’s strategic choices even as the firm grew. Most of the information about the firm flowed to, from, and through him, and most of the authority to act came from him. When others gained influence, he directly or indirectly undermined them, even to the point of having them removed from the company. When he left, the board had to go outside for the next leader—and brought in someone who meandered both personally and strategically, thus beginning the demise of the firm.

Case 2: What we do is what we know how to do

Another firm succeeded for many years by efficiently producing products. Its leaders were masters of the supply chain, the production process, and the distribution channel. Eventually, however, increasing competition pushed the firm to seek more revenue from services. Realizing that current customers saw it as a source of products and nothing else, its leaders wanted to change the firm’s image—but they themselves had grown up and succeeded with a product mentality. They had good instincts for designing, manufacturing, and delivering products but not for providing exceptional customer service, and the firm lost its footing in the new economy.

Case 3: Paring back to the bone leaves no muscle

For the last five years, a third firm has been working to do more with less. Its leaders have recognized competitive pressures and responded by reengineering, downsizing, delayering, outplacing, and outsourcing. All the numbers look great—except one. In the past the firm could always count on its leadership bench—the top fifty leaders and leadership positions each had at least one backup fully qualified to move into the next higher job. With all the consolidation, however, the ratio of backups to key positions is now under 0.5:1—and still sliding. Competent and productive as the leaders in place are, the firm faces a leadership crisis: its current leaders are moving toward retirement, and the potential leaders in the next generation lack the experience that builds a leadership bench.

Case 4: Everything we know we want isn’t all we want

Yet another firm did spot the impending leadership crisis and—well aware that leaders make a difference in sustained business results—set out to find out what leaders know and do that matters most. It built a competence model by identifying both high-and low-performing leaders, then specifying specific behaviors that distinguished the two groups. It used the resulting list of competencies to hire, pay, and train leaders… but something was still missing. The survivors pass all the competency tests, but some-how they don’t inspire much confidence in their ability to respond to future business challenges.

The message is the same all four times. Real leadership is not just about the person, it’s also about the process. People today may be good leaders, but the firm may lack leadership. Leaders today may be fully competent, but the firm may have gaping holes in the next generation of leadership. Firms plan to source future leaders internally but often find it necessary to go outside for the next round of talent. Leaders matter and so does leadership. Both are necessary for leadership to become an organization capability.

Where do firms go wrong? It often comes down to the basic difference between leaders and leadership. Recent approaches tend to focus on building individuals as leaders rather than building leadership as an organization capability for the firm. While we admire and learn from individuals who are magnificent leaders, the ultimate test of a firm’s leadership strength comes from its overall capacity to produce leadership that delivers stakeholder confidence in future results. To better understand leadership as an institutional process rather than an individual set of traits, we draw on a simple concept. Being a leader focuses on the person; building leadership focuses on the organization that creates leaders.

Most efforts to build leaders and leadership concentrate on what happens inside the person and/or inside the organization. Internal studies of leaders emphasize the attributes of effective leaders and show that leaders need to possess strong intellectual, emotional and social intelligence. Internal studies of leadership emphasize the leadership pipeline and how to invest in the next generation of leadership. But these internally focused studies of both leaders and leadership often miss a simple point, and that is that leadership can and should also focus on the things that go on outside the company as much as or more than what goes on inside the company.

Excerpt from ‘Leadership Brand’ by Dave Unrich and Norm Smallwood. Reproduced with permission © 2007, Tata McGraw-Hill Publishing Company Limited. Price: Rs 1272. Vishwanath_Ghanekar@mcgraw-hill.com