Leadership in Companies (continued)

March 16, 2015

In my previous article I was discussing what necessary conditions had to exist for a company to be a leader. Of course a company is not human: it is composed of people. It takes its direction from the man or woman at the top.

That person has to be a leader before a company can be a leader. The person who starts the company is, by definition a leader and the company will be shaped by his or her personality. What is more interesting though is how to create leadership when the company is already mature but is run by bureaucrats rather than leaders.

What characteristics are needed of the new chief executive when he tries to turn round a hidebound company? There will be many thoughts on this but I would pitch for the following attributes: First, a leader must be able to listen. If he can’t understand the world in which his company exists and pick up the interaction between his company and the environment in which it operates, how can he formulate plans to exploit it?

Secondly he needs to be an effective communicator. If you cannot get across to both staff and customers what you are doing and what you want them to do, don’t expect success. Clearly, in a large corporation, listening becomes quite hard, so successful organisations have formal and informal feedback loops built into them.

These are designed to carry information up through the organisational hierarchy so that the people at the top have a clear understanding of what is going on. This is extremely difficult to achieve since many chief executives reward people who tell them what they want to hear, rather than what they should hear.

So my third suggested attribute is modesty (you won’t find this in the books but I believe nevertheless it is crucial). The leader can then agree any necessary changes to policy and communicate with his staff showing that he has a clear grip on the company’s issues. This creates, everything else being equal, a motivated and successful organisation. I seem to use a lot of battle analogies but they are relevant.

A classic example of the success of this approach was the night before the Battle of Agincourt11. Henry V had a lot fewer troops than his opponents and he knew his soldiers were nervous and apprehensive. So the night before, he went out in disguise into the camp and sat round the camp-fires talking to soldiers.

By the time he got back to the royal tent he knew exactly what their concerns were and also the strengths and weaknesses of his troops. The next day, on the morning of the battle he delivered his famous St Crispin’s Day speech where he was able to raise the morale of his troops because he knew what their concerns were and he knew just what to say to motivate them.

One leadership element that is often lacking in Oman is a true and deep understanding of business. As I have mentioned before, while people understand the need to train welders and electricians, there is often a lack of understanding of the need for professional management.

You can be charismatic, and have all the above qualities, but if you do not understand how a modern business should be run, you will probably fail. Operating in a modern global environment means that you have to be efficient, understand finance, understand the motivation and management of people and understand how the pieces of your company fit together as in a complex and ever changing jigsaw. You also need clarity and a strategic mind-set.

And if you think that is tough, your customers and staff have one final demand of you, the leader. That is that you have compassion, principles and integrity.