MBA Lessons from an MD: Module 2 – Leadership

Posted on 10/06/2021 by Jake Third

Part 2 in my series of blogs sharing what I have learnt whilst studying for an executive MBA at Nottingham Business School. My aim is that you get as much value as I'm getting without giving up your weekends!

This post will focus on three components of leadership theory that I hope gives you the most value:

  1. Core principles of leadership
  2. Practical Frameworks
  3. Future leadership skills

Core Principles of Leadership

There are more than 15,000 books on leadership! From this, two things are clear: (1) leadership is perennially important and (2) everyone has an opinion.

If everyone has an opinion, how can core principles of leadership be distilled? Looking at what the research shows is effective and by how well it has stood the test of time.

Based on this, I have chosen three core principles of leadership:

  1. Trust
  2. Emotional intelligence
  3. Creating a shared vision

Principle 1: Trust

Only half of UK employees trust their employer (source). 26% of the population trust the media. And only 15% of UK voters trust politicians…  (source).

It is not hyperbolic to say that we have a crisis of trust. This is worrying on a societal level, but low trust work environments have been shown to impact innovation, productivity, employee engagement and customer loyalty.

Three questions arise:

  1. How can we become more trustworthy?
  2. How do we extend this to our team?
  3. How do we hire and identify high trust individuals?

How can we become more trustworthy?

The global financial crisis and subsequent scandals have undermined trust in organisations. It is the responsibility of leaders to build organisational trustworthiness.

But trust is an ambiguous concept that seems intrinsic, making it hard to teach. Recent research from Aston University has codified nine behavioural habits leaders need to demonstrate to inspire trust.

These nine habits break into three categories; ability, integrity, and benevolence. They are:

Ability

  1. Be consistent
  2. Coach
  3. Deliver

Integrity

  1. Be humble
  2. Be open
  3. Be honest

Benevolence

  1. Be kind
  2. Be brave
  3. Evangelise

It is our responsibility as leaders to model these behaviours to build organisational trustworthiness.

Trusting your team makes them more trustworthy

How can we increase the trust within our teams? Well, a good place to start is to look at your own starting assumptions. It has been shown that the assumptions a manager holds about their team profoundly alters how their team behaves.

Research by Douglas McGregor looked at two common groups of assumptions that different managers hold on their teams – he called these ” Theory X and Theory Y”.

Theory X Assumptions

  1. People do not like work and try to avoid it
  2. Managers, therefore, need to control, direct and coerce employees towards goals
  3. People actually prefer to manage this way as they want to avoid responsibility

Theory Y Assumptions

  1. People like work and it’s a natural part of their lives
  2. People are internally motivated to reach goals
  3. People become motivated towards goals when they are rewarded fairly for achieving them
  4. People are bright but most organisations underutilise their potential

If your assumptions are similar to Theory X, you will act in an authoritarian manner.  If your assumptions are closer to Theory Y, you will act in a participative manner. Authoritarian leaders tend to micromanage their teams, which conditions them not to take initiative. This confirms the start assumptions of the manager, that people try to avoid responsibility, and the cycle continues.

Conversely, if you trust your team they will become more trustworthy.

This is not a new finding – it was articulated more than 2,500 years ago in the Tao Te Ching:

When a truly leader governs, the people
are hardly aware that she exists.
Next best is a leader who is loved.
next, one who is feared.
The worst is one who is despised.

If you don’t trust the people,
you make them untrustworthy.

A true leader doesn’t talk, she acts.
When her work is done,
the people say, “Amazing:
we did it, all by ourselves!”

How to identify and promote leaders based on trust

The importance of trust is backed up by the Navy Seals in how they select leaders to join elite units. Instead of picking the individuals with the highest individual performance, they select for trust.

They would prefer an individual with medium performance and high trust than a star performer. In fact, high performance and low trust individuals are deemed as toxic team members and they actively manage them out of the units.

This is better articulated by Simon Sinek in this video.

Principle 2: Emotional intelligence (EQ)

We all know highly competent people who are experts in their field. Due to their individual performance, they are promoted into leadership positions only to fail at the job.

Why does this happen?  Because they have been promoted for the wrong attributes.

Daniel Goleman’s team has conducted comprehensive research on the attributes that make a good leader. In the Havard Business Review, Goleman writes that emotional intelligence counts for twice as much as IQ and technical skills.

And the importance of EQ compounds with seniority. 90% of the reasons given for the effectiveness of the star performers in senior leadership could be attributed to emotional intelligence.

But this concept of emotional intelligence can seem a bit vague – what do we actually mean?

Emotional intelligence is a skill that can be learned. It can be defined in terms of the knowledge and management of self and other, as seen below.

Credit: https://www.brittandreatta.com/wired-to-survive-belong-and-become/eq-4-wuadrants/

 

Think about the impact of a momentary loss of self-control. Imagine a company boss losing their temper, shouting, and pounding the table. Contrast this with someone who picks their words carefully and who remains calm, even in the most testing of circumstances.

Impulsivity drives poor company performance. Self-regulation enhances integrity.

Even when considering this one component of emotional intelligence, it is clear why emotional intelligence is so important in leadership and in life.

This principle is articulated best by Daniel Goleman, who first introduced the concept of emotional intelligence.

Principle 3: Creating a shared vision

Trust and emotional intelligence may help motivate your team towards a goal – but what use is that if you do not know the destination?

A simple, unifying, and bold vision creates a focal point for the team to organise around. And you don’t have to be the CEO to do this – translating your company’s vision and making it relevant to your own team is critically important.

And Goleman’s research suggests visionary leadership has a positive impact on culture and company performance if you can avoid the pitfalls.

Avoiding the pitfalls of the visionary

  1. Have a credible vision – This doesn’t mean you shouldn’t be bold and dream big. However, it does mean having a vision that you truly believe in and that the team can imagine.
  2. Embrace continuity – there is nothing more undermining to the visionary style than it changing at every quarterly meeting. This means repeating the vision and demonstrating progress towards it over sustained periods of time.
  3. Seek feedback – visionary leadership works best when the leader is self-confident. But this self-confidence can assume that everyone is behind you. Ask for feedback – it will help you course correct.

Principle 4: Taking ownership

Here is a bonus leadership principle with a video of yours truly speaking to agency leaders about the importance of ownership:

Practical Frameworks

Conceptual models provide you with a map to navigate ambiguous situations.

Here are some of my favourites:

Schein’s Model of Organisational Culture

This model helps you analyse and build the culture of your organisation.

According to Shein, culture exists on three levels: surface-level ‘artefacts’ (observable behaviours and symbols), underneath artefacts (the espoused values and cultural norms), and at the deepest layer are basic assumptions, widely shared and unconscious.

For example, an artefact of our culture is a monthly award for the best mistake. This is predicated upon the espoused value of psychological safety and the basic underlying assumption that people are fundamentally trustworthy.

When applied to Hallam:

Goleman’s Leadership Styles

Research has shown that the leadership style you adopt has a +-20% swing on your company performance.

This is based on Daniel Goleman’s research across 4,000 different leaders where they identified six distinct leadership styles.

These are:

  1. Commanding – demand compliance
  2. Pacesetting – expert excellence and self-direction
  3. Visionary – mobilize towards a vision
  4. Coaching – develop people for the future
  5. Affiliative – builds harmonious culture and relationships
  6. Democratic – build consensus through participation

Commanding and pacesetting styles were shown to have as much as a 20% downward swing on performance. Conversely, visionary, affiliative, democratic, and coaching had a 20% upward swing.

The real skill is to have all six styles in your repertoire and know when to use them.  In times of crisis, for example, coaching your team is not going to work, a commanding style is better-suited in that situation. But if you deploy commanding as your natural default, it will kill ideas arising spontaneously from the team.

The Leadership Pipeline

I found Ram Charan’s leadership pipeline very useful in helping my transition into a Managing Director role.

The leadership pipeline articulates the values, time application, and skills that are needed as you rise in seniority in management positions.

From leading self to leading others and eventually, to leading businesses, it breaks down the skills and outlook needed at every stage.

The big shift in my mindset has been away from valuing my own individual contribution, towards valuing how I influence the team’s performance. This requires a letting go of certain mindsets, attitudes, and behaviours.

Future Leadership Skills

So what skills will the leaders of the future need? They will need the right skills for the context and environment in which they operate.

Below is a look at what that future context may be.

So one thing we can say about the future (and present) is it’s what the military termed a “VUCA” environment – volatile, uncertain, complex, and ambiguous.

If you do not believe we live in a VUCA world, just think about the Covid-19 pandemic.

So what skills does a leader need in this environment?

Professor Vicki Culpin from Ashridge gives 5:

  1. Developing a shared purpose
  2. Learning agility
  3. Self-awareness
  4. Leading based on influence and collaboration
  5. Confidence to lean in uncertainty

The takeaway here – the ability to stretch yourself beyond your comfort zone, embrace new concepts, and then communicate this to the team is essential in a rapidly changing environment. 

Servant Leadership

In an uncertain future, leaders will seek reassurance in tried and tested models. The dynamic skills needed for the future can be fused with universal principles. For example, servant leadership, with its roots in 5th century China, is based on perennial moral principles that engender trust, respect, and followership.

Servant leadership is characterised by fundamental moral behaviours, such as truth, courage, and service. These are ubiquitous across time and culture. They can act as guiding stars to leaders who have the courage to adopt humility in rapidly changing times.

If you have any questions about the topics discussed, don’t hesitate to get in touch.


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MBA Lessons from an MD: Module 2 – Leadership

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