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I manage CIPFA Finance Advisory Networks and I am a very experienced accountant,manager, facilitator, trainer and presenter with a very wide experience of local authority and not for profit finance, accounting,management and leadership.

Saturday 8 June 2013

OUR BUSINESS LEADERS -- HOW WELL LOVED AND EFFECTIVE ARE THEY?



 
 
Is this Leader as popular and effective as he thinks he is? - Image from the Economist
 
Research by Sebastien Brion a professor at IESE has demonstrated that leaders greatly overestimate the support they receive from their subordinates. In group experiments carried out, those people primed with high power were convinced that those primed with lower power were on their side and supported them enthusiastically. In another group he found that lowly primed participants made alliances against the powerful even if it may not have been in their financial interests to do so.The powerful were blissfully unaware of this. They thought they were universally loved. This is a mistake that historical figures from Julius Caesar to Adolf Hitler have often made. Are we surprised? In an interesting aside when a boss tells a joke to a subordinate the boss loses the ability to discern whether the subordinate really finds it to be funny or not. This is a crucial element. Bosses do need to be aware of this bias and they do need to give employees the chance to say what they think -- but this is seldom the case unfortunately.
 

Some underlings see it is in their interest to support powerful leaders who are in situ because they see this as simultaneously advancing their own position in the organisation.Leaders then misinterpret this behaviour as support for their own actions and vision when in reality it is just self seeking on the part of the subordinates.We get to a position where the underlings will not publicly criticise their leaders out of fear for their own position and the leaders misconstrue the silence of their subordinates as acquiescence and support for their own actions, even when these actions put the organisation at risk.
 
It takes a brave underling to argue against the position of such a leader -- but that is precisely what must be done in many cases for the wider good of the organisation as a whole. The actions of some leaders need to be thwarted for the wider good but unfortunately few people have the courage to do this and later on down the line the whole situation of the organisation often ends in tears which very often could have been avoided.
 
Similar things can be said about the effectiveness of leaders. How many times are we told to focus on our strengths but according to " Kaplan and Kaiser" that can also lead to problems.
 
How often times have we seen being forceful turn into bullying or being decisive turn into being pig headed? A leader who is nice and all things to all men can develop into an indecisive person who is really no good for the organisation. People are often very comfortable in practising the skills which got them where they are  now -- but they do not acquire the new skills to move them forward.
 
If someone gets your former position when you move up can you resist the temptation to micro manage them even though you should be concentrating on your new job?
 
Part of the problem with the 2008 crash was that many of the banking leaders had been traders who were more used to taking risks -- rather than planning for the long term. This produced the obvious consequences. Leaders need to receive feedback on their performance in an open and honest way and be prepared to act on it.
 
Leaders like Richard Branson and even Margaret Thatched played only to their strengths but this does work in certain circumstances of crisis and when immediate action is required - though possibly less so in the long term when these preures have abated.
 
Leaders need to be able to build bridges as well as break down walls. It does take a very rare skill of effective judgement to realise when you need to pull out all the stops and when you need to moderate some of your approaches.
 
Being smart is always a virtue but according to Kaipa and Raida some of the most recent business scandals have involved very smart people who thought they were bullet proof and outside the normal rules covering decency and integrity, this is never the case.
 
Leaders need to be effective and they need to possess good judgement -- which unfortunately is not always readily available in large quantities.
 
Please read the attached articles from the Economist to learn more.
 
 
 
 
 

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