Sustainable Leadership - David Ducheyne - ebook

Sustainable Leadership ebook

David Ducheyne

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93,56 zł

Opis

How to lead efficiently in a volatile, uncertain, complex and ambiguous world?Leadership has never been as difficult as it is today. And it has never been as crucial. In this VUCA world people ask leaders to provide certainty. They cannot. In the volatile, uncertain, complex and ambiguous world certainty comes from character. Leaders can base their leadership on empathy, fairness, kindness and reciprocity. These basic human elements are under pressure. This book provides both emerging and established leaders with the ingredients they need to develop a Sustainable Leadership style.EXCERPTA newly appointed CEO wrote that she wants to find a balance between her own values and what is expected from her. I hope for her that both are not too far apart. The board of the company chose her to do the job because of who she is, not because of who she is not.And here is the main challenge for those who are in a leadership role. How can you be a leader and still remain yourself? Something in leadership or in its context seems to urge people to change and become someone else. But leaders are not actors. If I can give only one advice: do not change who you are. You can be (come more of) yourself and grow as a person. But the moment you try and change who you are, you lose the only thing that is sustainable and dearto you: your character. This book is about Sustainable Leadership based on character.ABOUT THE AUTHORDavid Ducheyne wrote this book as a source of inspiration for leaders who are looking for ways to maintain their leadership in VUCA times. It’s also a documented intention to try and do better.

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Dedicated to

My wife Pascale and my two daughters, Hannah and Ella.They inspire me every day.

The participants of the Senior Executive Program 85 of the London Business School and the LBS Faculty.

All those who try to make the VUCA world better through their character and leadership.

David DucheyneFebruary 2017

Thanks to Ellen Rogers for her work on the manuscript.

Leadership and learning areindispensable to each other.

John Fitzgerald Kennedy

Manifesto

The Leadership Challenge

What would you like to write down as your last words just before you die? You’d probably want to be able to say that you had a good life. We all want to look back and be able to say that we did well. But what’s that, a good life? And to whom was it good?

Every human being has to meander around the obstacles that life presents. Some of us are able to solve the problems that are thrown at us; others are not. Some of us take on more responsibility than is required; others do not. Some fully exploit their talents; others do not. There is no judgment whatsoever in that. We do what we do. We are who we are.

Some of us grow up to become leaders. Leaders face the same challenges as everybody else. They are leaders, not only at work but in any kind of situation. And like any other person they sometimes feel crushed by the life events that pass by.

A newly appointed CEO wrote that she wants to find a balance between her own values and what is expected from her. I hope for her that both are not too far apart. The board of the company chose her to do the job because of who she is, not because of who she is not.

And here is the main challenge for those who are in a leadership role. How can you be a leader and still remain yourself? Something in leadership or in its context seems to urge people to change and become someone else. But leaders are not actors. If I can give only one advice: do not change who you are. You can be (come more of) yourself and grow as a person. But the moment you try and change who you are, you lose the only thing that is sustainable and dear to you: your character.

This book is about sustainable leadership based on character. The idea is simple:

If you want (your) leadership to be sustainable,you need to base it on (your) character.

We urgently need to develop sustainable leadership. There are two main reasons for that:

Leadership is in a crisis, because the world has changed, and leadership seems to have fallen behind. Leadership has never been so difficult as now.

Leadership is crucial for the future of any organisation, nation, community, society and team.

This seems to be contradictory, but it isn’t. In the turmoil of the future, leadership becomes more important than ever. But given that turmoil, leadership becomes more difficult. I believe strongly that if and when leadership fails, the organisation and the community fails. And if we want to survive, we need to invest urgently in sustainable leadership.

Leadership Crisis

86 % of people surveyed by the World Economic Forum1 state there is a leadership crisis. The report states that it is increasingly difficult to emerge as a strong leader. Leaders have to follow the (existing) rules of the game. And these rules are there to perpetuate the system, rather than to promote the interests of the people who are part of the system. Leaders who want to change the rules of the game are sabotaged, boycotted and eventually removed.

And yet, leadership is seen as key to the solution of the multitude of challenges we face. It is therefore essential to solve the leadership crisis and to invest in our future.

Leadership Is Crucial

Two things shape the world: leadership and education. If either of them is absent there is human suffering, lack of progress, disaster. Education creates opportunities. It avoids ignorance and radicalization. Education emancipates and enables entrepreneurship. It reduces inequality. Because of education people are able to take their place in society. It creates inclusivity. And it drives the development of leadership. But education depends on leadership. It takes leadership to enable good education. Teachers have to act like leaders. And true leadership in itself is educational as it focuses on progress, movement and change.

We need to invest in both leadership and education to create sustainable systems that serve people and society. This is necessary on all levels: society, countries, cities, companies, families, and individual citizens. This necessity has been growing stronger over the years for several reasons:

There are

more of us

on the face of the earth. Our planet is overcrowded. Cities explode and become megacities

2

with many consequences in terms of urban organisation, mobility, security, energy consumption and health.

Societies have become more

complex

and more interdependent. Political instability in many regions is more than problematic and terrorism seems to be unstoppable

3

. What happens on the other side of the world has a direct impact on us.

Globalisation

4

and hyper competition

5

change the way we do business.

Changes

come faster and are more disruptive than ever. Digitalization disrupts the traditional ways of doing things

6

.

Global warming

forces us to look for more sustainable ways of living such as renewable energy, sustainable food production, and clean technologies. Our planet is struck by disasters like heat waves, fires, hurricanes, disrupted ecosystems, and draughts. These climate changes are caused by global warming. Changing weather conditions also cause migration, affect our health and lead to political instability.

Many of the

jobs

we know today, will not exist in the future

7

.

Finally, the

increase of our life expectancy

8

drives changes in employment, retirement

9

, and health care.

In this vortex of change we can be either pessimistic or optimistic. However, we should not be naïve. Everything we know today will have become obsolete in a few years’ time. There is one thing we know for sure: if we’d only do what we are good at (today), we will be irrelevant (tomorrow). So learning (creativity, innovation) is the single most important human talent for the future. Leadership comes second because it enables learning and development.

If we’d only do what we are good at (today),we would be dead (tomorrow).

Parenthood – Parents Are Like Leaders

If you’re a parent, you might worry about the future of your children. Go back to the list with global challenges and you have to be worried. I remember that my mother told me in 1976 that I would have a difficult future, as there was a lot of (youth) unemployment, a crisis in the Middle East, Jimmy Carter got elected and there was an energy crisis10. I was 7. So I still had some time ahead of me before leaping into the labour market. But that’s what parents do: they worry.

And they worry because they want the best for their children. In normal situations there should be no ounce of self-interest in parenting as parents do everything in the best interest of their children.

They want to give them the

love

they need to develop into independent and strong men and women.

They want to make sure that all their

material needs

are fulfilled.

And they want to launch them into life by giving them as many

learning opportunities

as possible.

Figure 1.We Want to Provide Our Children with Love, Material Support and Learning Opportunities.

Parents are pretty much like leaders. They look at the future and act in the best interest of their children. And just like leaders, they are not perfect. Parents make the same mistakes as their parents have made. They want to do better than their parents, they usually don’t. They are confronted with the same problems and they react in the same way11.

The same is valid for leaders. They too want the best for their organisation and they look towards the future. (Emerging) leaders make the same mistakes as the leaders before them. There are very few people who are born as leaders12. Leaders use innate qualities but leadership develops over time. Leaders need to learn from the situations they are confronted with in order to develop their leadership skills step by step. And this takes time. And mistakes.

Leadership Development versus Repeating Mistakes

There are many leadership development programs around. These programs aim at improving leadership effectiveness through training. My take is that leadership does not get taught in a class or in programs. Leaders typically get a list of competencies which they need to acquire to become better. Most leaders follow a course at some point in their career.

Most parents don’t.

There are parental courses that help parents to conquer the diaper challenge, the tantrums, the puberty, the addictions and distractions, and the social pressures all children face. There are many books on how to become a good parent. Parents can seek advice or help from certified coaches. But most of them don’t. And all of those courses and books do not make people better parents. They may at best create awareness and give them some techniques they might use.

In my experience leaders are in search of such techniques to avoid the inevitable mistakes leaders must make on their path. But that’s the point. They need to make these mistakes to grow as leaders.

Why is it that leaders and parents repeat the mistakes their predecessors have made? Surely there must be enough information around to avoid both parenthood and leadership traps? There must be enough (scientific) evidence to be able to choose the best parental or leadership approach in any given situation? Why do we seem to repeat history? What causes this inability of generations to accumulate experience, transfer it and accelerate learning?

The answer is quite simple. We are human and we cannot program algorithms into our brains that change our human nature. We need to go through the same developmental phases as our ancestors and this leads to a lifetime of learning. These mistakes make us grow. Children have to fall in order to know how to walk. Students have to make mistakes in maths in order to understand fully. Parents need to conquer their clumsiness to handle a child. Leaders must go through difficult issues to grow. It’s by trying that we understand. It’s by persevering that we succeed.

We should forget the idea that we are rational beings. Scientific management did not solve the irrational behaviour of leaders and followers. Irrational means unpredictable. We are confronted with behaviours that are inappropriate, misplaced, irrelevant but so very human. Organisations and leaders often try and take distance from the essence of our being and replace it by a set of learned competencies and behaviours that are very often contradictory.

The list of desired parental competencies is long. So is the list of desired leadership competencies. Most parents do not know what parenthood is before their first child is born. They can read about it but it’s reality that educates more than training or literature. They just step into parenthood and in most cases they develop new skills very quickly. Most emerging leaders do not know what leadership is about before they set foot in the leadership arena.

And they do make mistakes. And that’s a good thing. Mistakes leave traces on the soul. People remember the emotions linked to those mistakes: the embarrassment, the shame, the guilt, and the stress. They remember less the glory and pride. Any career path is filled with painful and apparently avoidable mistakes.

Self-Confidence

What Does it Take to Be a Good Parent?

Here’s a list of parenting skills that aim at protecting the child13. True, this list is oriented towards the prevention or remediation of juvenile delinquency. Training of parents and families at risk might be indeed justified in light of the severe consequences of delinquency for society and the further development opportunities of the child. Imagine for a moment that all parents would enrol in that kind of course. It just does not make sense.

Table 1.List of Protective Parenting Skills

One of the oldest books on parenting is the best-selling book14 by Dr Spock. His main advice for happy parenthood is to trust oneself as basis for happy parenting.

Trust yourself. You know more than you think you do.Dr. SPOCK

You could expand this quote: “Trust yourself. You are able to do more than you think”. To trust oneself is probably the best advice there is. The rest follows. So the focus of a parenting course should not be so much on the development of competencies, but more on the self-confidence of parents. The same advice is valid for leaders. Trusting oneself means also that one can be oneself. And this is at the core of both leadership and parenthood.

Skills or Personality?

It’s difficult to trust oneself if you do not have the experience. Leaders that are overconfident will not be careful, will not listen, and will create problems. Experience boosts self-confidence. The contradiction is that you need to have experience to get experience. You have to start somewhere. And to get experience, an emerging leader has to overcome many challenges like:

Leaving the expert

role to become a leader;

Focusing on

collective performance

(of others) rather than on the (own) individual performance;

Being

at the service of others

rather than focusing on oneself;

Expanding influence

over others;

Leading

from a distance

;

Leading

across generations

;

Taking responsibility

for the actions of others;

Thinking

with and sometimes for others;

Managing the context

outside the team and

Accepting

not being able to know and control everything.

To tackle these challenges, many leaders abandon themselves to become someone they’re not. They develop a normative approach to good leadership and their behaviour is driven by external expectations. Very few emerging leaders start their reflection from their own personality and identity. They seek to acquire the necessary leadership competencies as fast as possible15. But learning cannot be compressed easily. Learning takes time.

This competency-based approach to leadership development has proven its value but its impact remains limited. Look at this list16 of competencies a leader should acquire.

Table 2.List of Leadership Competencies

The above list is certainly valuable. These are skills any leader could use. I just do not believe one person is capable of developing all of these skills. And I just do not believe that you can compress leadership development into a program. I have no doubt that these elements – and more - need to get done in any team or organisation, but not necessarily by one person. Leadership is a process that allows the required competencies and activities to be distributed within the team, according to the talent and personality of its members.

Leadership development is too much oriented to ticking off the boxes. Learning is reduced to transplanting competencies as fast as possible. It’s too much about becoming a superhero.

There are two fundamental problems with this approach:

These programs do not take the qualities of the leader and his or her qualities as point of departure. This includes developmental skills (cf. footnote 15). The basis of those programs is a mould, a model, or an ideal. The only thing a leader needs to do, is to conform.

These programs usually do not take the work context of the leader into consideration. Every context requires a certain kind of leadership. The context makes the leader.

Strangely enough the further people go in their career, the more they need to make use of their personality, rather than of their competencies. But before they become an executive leader they have to go through a lot of moulding, and they run the risk of changing who they are. To climb the ladder they need to adapt to the system they are part of17. What they need later in their career to succeed has been put under a lot of pressure in the earlier stages of a career. Only the strongest can continue for years, climbing the ladder, wandering through corporate life whilst preserving their own sense of identity. Organisations had better watch out for people with leadership potential by creating space to resist assimilation.

Figure 2.Competencies Versus Personality18.

Finding the Right Context

If most people cannot acquire all the competencies a strong leader would need, does this mean there aren’t many strong leaders? Does this mean it’s impossible to be a good and effective leader? Not at all. In a way, leadership is more than a set of competencies. It’s a way of being.

Successful leaders base their leadership on their personal style and do not wish to become someone they’re not. So who you are has an enormous impact on how you lead. It also has a high impact on the culture in a team or – if you are the CEO – your organisation19.

Let me give you an example. In today’s world being an extrovert seems to be the best option for a leader. In fact, it seems to be the best option for any role in corporate life. Extroverted people have more confidence, dominance, are more enthusiastic. These are excellent characteristics for a leader. But there are also dark sides to being an extrovert20. Extroverted leaders have the tendency not to listen and take more risks.

Most (top) leaders however seem to be extroverted21. It seems to be a condition for success. But although many organisations still adhere to this belief, there is more and more appreciation for the contribution of people that are introverted. Intuitively you would say that it’s very difficult if not impossible for an introvert to become a good leader. But there are many examples of allegedly introverted leaders: Bill Gates (Microsoft), Richard Branson (Virgin), Tim Cook (Apple), Mark Zuckerberg (Facebook), Marissa Mayer (Yahoo), Warren Buffett (Berkshire Hathaway) and even Barack Obama. The message is that both introverted and extroverted leaders may thrive, if the context lets them.

Let’s take the example of a (soccer) coach. Successful coaches are often seduced to leave their team after a successful season to join another, less successful team. They are transferred to another club that is willing to pay a large sum of money. Hopes are high. And what often happens? The coach fails at turning the new club around. And the reason for this is simple. It’s the context that defines the success of the leader. And an important aspect of that context is the players and the culture of the sports team. It is often strange to see how a club has several coaches in one season. This approach does not improve results22. The main reason to fire the incumbent coach and get another one is to satisfy the fans and sponsors.

Organisations act in just the same way. CEOs get fired when the company underperforms according to the expectations of the investors and shareholders. It’s rare – but it happens – that a CEO gets ousted because employees demand it. To solve the problem a new CEO is appointed.

CEOs that come from the inside have higher chances to be successful than CEOs who come from the outside23. It’s not that easy to transfer leaders. Leaders who change organisations tend to copy what they’ve done in previous assignments. They come with a recipe, and forget that they need to cook with the available ingredients24. They repeat themselves. So their earlier successes become the basis for later failure because they fail to integrate.

And why is that? It’s because a leader can only be successful by interacting with a context. And that context is usually stronger than the leader. I always say to new leaders that they cannot change the organisation based on their personal energy alone. They don’t have to adapt, but they do need to integrate.

So the better deal is to remain who you are and find a context where your personality can be a part of the solution. Changing who you are is not sustainable. Being yourself is. But to be ourselves we need to remain agile and learn. This book hopes to contribute to that learning.

About This Book

There are so many books about leadership that if you applied all insights you would probably come to a standstill. Moreover, some of those insights are contradictory and very specific to the company (the context) of the writer.

This book is yet another attempt to help you accelerate your leadership development. It’s an attempt because it only triggers learning for leaders. The reader does the learning. And there is my limited responsibility. This book offers experiences and insights that I have gathered over the years. It’s based on various exchanges with leaders coming from various countries. It’s not a scientific book although I have backed my insights as much as possible with what science tells us25.

This book will not tell you what to do exactly. If you apply everything that is written in this book, you will surely fail as a leader. This is not a cook book full of recipes. This is a book full of ingredients. Take what you can use and integrate it in your own leadership style.

This book does not pretend to have all the answers. You can look at this book as a kind of compagnon de route, a travel mate, who asks you the questions that help you to think. You are invited to keep on making mistakes, as they will shape your leadership far better than any book on this subject, including this one.

Chapter 1 is about the leadership context. I present a model that I call the sustainable leadership value chain that can help you think about where leadership fits in. In the same chapter I provide a definition of leadership.

In chapter 2 I talk about your personal experiences with leaders and I ask the question what makes someone a good leader.

The theme of chapter 3 is character, the basis of leadership. The quality of leadership is indeed closely linked to the strength of character.

As character is the only sustainable basis for leadership it’s important to discuss how character can erode. That’s the topic of chapter 4.

Before I discuss the rules of sustainable leadership in chapter 6, I go through a list of misconceptions or myths about leadership in chapter 5.

Chapter 7 is about the various themes of sustainable leadership. The 5 chapters after that elaborate on what a leader can do to maintain sustainability: building trust (chapter 8), making sense (chapter 9), helping others grow (chapter 10), boosting engagement (chapter 11) and taking care of oneself (chapter 12).

As we live in digital times I take a sidestep to digital leadership in chapter 13. In Chapter 14 I put everything together into a model of sustainable leadership.

Takeaways

The world is facing many challenges. Leadership and education are key to cope with them. But unfortunately we find ourselves in a leadership crisis.

Leaders make mistakes. That is inevitable.

Mistakes leave traces on the soul, given the emotions they create. But these mistakes are necessary to develop leadership.

Leadership development programs focus too much on competencies. However, it’s impossible to acquire all of those and become a super(wo)man.

Leadership is about who you are. Self-confidence is more important than competence.

Character is the basis of sustainable leadership.

Throughout the career there are many obstacles that may cause a leader to abandon his true self. Changing yourself – your character – is however not very sustainable.

Leadership success largely depends on the context.

Every leader needs to find a context where he can be successful.

Checks

Do you worry about your future? The future of your children?

Which mistakes have you made as a leader? As a parent?

What have you learned from these mistakes?

What have you done to avoid these mistakes?

What are the compromises you made to climb the career ladder?

Looking at the list of leadership competencies, which of those would you like to acquire. Which of those have already been acquired? Which of those will never be acquired?

Story 01

Interview With an Old-School Manager

On a rainy Monday morning I met an Old-School Manager (OSM). There was a bit of sadness in the air. The windows were pearled with drops of rain and in the pub there was this cosy but nostalgic smell of damp clothing mingled with coffee. The Old-School Manager was sitting in a corner. His attire was impeccable: fashionable suit, strong coloured tie and a perfect haircut. I greeted him26 and sat down in the chair in front of him. He radiated success, self-confidence …

Me: What is to you the essence of leadership?

OSM: The first rule of leadership is not to show that you are weak. Weakness undermines you as a leader and makes you unreliable.

Me : Why is that?

OSM: If you show signs of weakness, you lose respect. People will stop following you. As a manager people need to respect you. And where there is weakness, there is no respect.

Me: But is that even possible? Every human being has moments of weakness, frailty. Everyone has a personal problem from time to time. Everyone faces situations that seem to be insurmountable.

OSM: That may be so, but you cannot show that you are in doubt, or that you are stumbling. Hide it at all cost, because respect is the only capital a manager has.

Me: Do you think people cannot respect you if they see that you are like them. Facing the same issues, having areas of improvement …? Could that not be a sign that you are close to them, and as a person not that different?

OSM: But that’s the point. You cannot be one of them. You need to keep distance. They cannot see that you are …

Me: Mortal?

OSM: Well, if you put it like that, yes.

Me: But you get ill from time to time. And after all, you are mortal, aren’t you?

OSM: Physical illness is OK. That can happen. But let’s make it a severe illness. One that overcomes you and is not related to your personal doing. And still, you will show up at work. Or you will be on the phone. It must be a very tough virus that puts you down. By resisting illness, you will be a hero. And you show the example. You’d better expect others to resist illness as much as you do. I like to compare myself with the robots in The Terminator. They got shot to pieces, but still they went on and pursued their target. Relentless, ruthless, remorseless.

Me: And what about mental illness?

OSM: I do not understand that. A good manager does not have that. There’s a lot of talk about burnout these days. In the past, you could not talk about that. And I believe it did not exist. And that was a good thing. Today it seems to be fashionable that you have a burnout. Everyone talks about it. Been there, done that. But to me, burnout does not exist. And all those people testifying about it in the newspapers, it puzzles me, because they commit seppuku.

Me: Seppuku?

OSM: Don’t you know about seppuku? It’s ritual suicide for the samurai in Japan. How can you expect to be employed again or be respected after you have revealed you are an utter failure in front of everyone? If someone googles you, they will know immediately that you’ve failed big time.

Me: You mentioned that burnout does not exist. What do you mean, it does not exist?

OSM: Burnout is an escape route for managers who are in trouble. It’s capitulation. They run away. Instead they should stay on board, with their heads in the wind and lead the way in whatever storm. I’d rather say that I’ve failed than to run away in cowardice and say that I’m burning up. That would be more honourable. Face up the problems, but don’t look for excuses. Hey guys, it wasn’t me, it was my body or mind that collapsed. Poppycock.

Me: So burnout is a choice?

OSM: Of course it is. It’s only between the ears. And it’s weak. Very weak.

Me: Have you had it?

OSM: How dare you even ask that question. Of course not. That would be the day. I am too strong to have it. You see, when you are like me, you cannot have it. Maybe it’s a genetic or a moral thing. But weakness in general is not part of my code.

Me: Have you seen it in your team?

OSM: Sure. I have had weak people in my team, yes. And they told me that they had problems. But if I look at it, these were not related to work. The thing is, people want to have everything. They do not make choices. And it’s unacceptable that their private problems have an impact on the job. Job first. The rest will follow.

Me: But what did you do?

OSM: Nothing. It went away. They went away. And that was OK. Good riddance. Teams are like ecosystems. They get rid of their problems. Herds do that too. If a weak animal threatens the entire group, the weak animal gets expelled. It becomes a solitary animal. That animal is often very dangerous.

Me: But is that not a loss to the team?

OSM: Everyone is replaceable, you know. The cemetery is full of people who thought they were not. Even I am replaceable. As unlikely as this may seem, one day I will no longer be there. And yes, you need to solve the problem. But a company is a like a machine. You need to have the right pieces and put them together in the right way. And then it functions. A leader is sometimes an engineer of his company. He assembles his company in a brilliant way.

Me: Assembly is one thing. But how do you get “the pieces” to work well together?

OSM: It’s not rocket science. You only need two things: focus and motivation. You need to make people look at only one point. That’s their focus. It’s like with horses in the street. You put these things, what are they called, blinkers or blinders on their heads so that they can only look ahead and not be startled by the traffic. That’s what you need to do with employees. Put blinders on them. Make sure they look at the focal point you want them to look at. And then you need to have some carrot that makes them want to move on. With a horse you can use the whip, with employees you need to be a little more subtle. Whipping is illegal (laughs). But once they are motivated they run.

Me: That sounds like Gallipoli27.

OSM: I resent that comparison. Gallipoli was a slaughterhouse. I take care of my subordinates.

Me: How?

OSM: By giving them a good job and a good salary. It’s still about the money. People work for money, you know. And so, they can earn really well if they get their targets. And that’s how I motivate them. They can buy a second car, by working well. If they work more, they earn more money. That’s our HR philosophy.

Me: As long as they do not get ill?

OSM: Exactly. A healthy mind in a healthy body. That’s their responsibility. And like this they can have good careers in my company.

Me: Do you think you have a part of the responsibility in that healthy mind in a healthy body?

OSM: There’s a fitness room. And the pizzas we order at night are of sublime quality.

Me: And what about the quality of work?

OSM: I do not measure the quality of their work, I only measure results. I know that I ask people to run marathons for me. But they are really eager to do that.

Me: How do you know?

OSM: I just know. Do I sense a certain criticism in your voice?

Me: It’s just … you talk about distance but also about motivation. And If I get it right, the motivation is based on financials?

OSM: right.

Me: But aren’t you afraid that people will start to behave like mercenaries? And that they will not want to help you if you need them to?

OSM: They will help me, because I pay them. If you want to call them mercenaries, that’s fine with me.

Me: But sometimes you do not know that you need help.

OSM: If I don’t know it, I don’t need it.

Me: How will you have people do something extra, just because it’s right. Or because there is an opportunity? To go beyond their job descriptions?

OSM: Maybe I forget a third thing. Next to focus and motivation you need to have order and discipline. Everyone has to know his place. Everyone must be focused on the part he is responsible for and must follow instructions. If they started doing other things, that would be chaos. Total chaos. I don’t want that. Focus, Motivations and Order?

Me: And what’s the fourth thing?

OSM: There’s no fourth thing. Three things is enough. Focus, Motivation and Order. F-M-O. Besides, people cannot keep more than three things in their heads. Corporate Life is really simple: I tell them what to do and give them focus, I make sure they want to run towards the target and I keep order and discipline.

Me: How do you involve people?

OSM: They are involved through the work.

Me: I mean how can they voice their thoughts, ideas, suggestions?

OSM: There is actually no time for that. I am like the architect. I decide which building we are going to put down, I define the construction, I choose the contractors and I tell them how to work. If they don’t like it, they can leave. There will be other contractors. And frankly speaking, there is no time for involvement. Do you know what that costs? We need to make the most of it in a short time. So there is no time for discussions. People love to work for me and my company, because it looks good on their CV.

Me: You’re a career maker.

OSM: Exactly. So there’s a lot of benefit for them to work for me. Working for me is the best thing that will ever happen to them in their career. The hardship they have working in my company moulds them, gives them backbone. Just like the army does. They will be better persons once they leave. And they do leave, to take on important positions elsewhere. But you need to be tough and strong. No talk about weakness. Companies are built on strengths, not on weaknesses. We do not make money through weaknesses.

This interview is fictional and all resemblance to existing leaders is purely coincidental and not intended. The problem is that fiction is reality and in our lifetime we meet leaders who think like this OSM. This book is about not being like them.

Situational power triumphs overindividual power in given contexts.

Philip Zimbardo

01The Context

Context and Personal Choice

Throughout this book I will often talk about context. Context defines our behaviour. The context enables and/or changes behaviour. And context is also the product of behaviour. We often overestimate the power of individual qualities over contextual qualities. We are convinced that we are stronger than the context and that we can change it. This conviction probably comes from our upbringing. We are taught that being independent and self-reliant is important. But it’s an illusion. The power of the context is so big that it even determines our morality28.

Leadership is contextual. It is part of the context, it shapes the context and it is influenced by the context. The leadership crisis is pretty much about how the context leads to certain behaviour and how leadership tolerates or stimulates that contextual behaviour. Despite the strong contextual influence, there is always personal choice. Context is never an excuse to understand, accept or minimise deviating behaviour. Strong leaders will base their actions on personal choice. Weak leaders will hide behind the internal or external context, the circumstances, other people.

The Sustainable Leadership Value Chain

Where does leadership fit in the context? To understand that we need to look at the value chain of which leadership is the start. It’s not a classical value chain29. It’s more a psychological value chain, that I call the Sustainable Leadership Value Chain (SLVC)30. This value chain has the same purpose as the classical one: to create value. The SLVC provides a framework to ask 5 fundamental questions, that define leadership in your organisation.

What

is the value your organisation wants to create

for whom

?

How

can you deliver that value? In other words, which behaviour do you need within your organisation to create that value?

What is the

context

you need to create to foster that kind of behaviour?

How does the

external world

influence this value chain?

How can your

leadership style

create the internal context and drive the SLVC?

These are simple questions but they are tough to answer. But if you do answer them you have a recipe that reinforces your leadership and that helps you to execute the strategy of your organisation. My philosophical point of departure is that it is people who create value and not organisations as such. People make the difference.

External Context (VUCA)

© David Ducheyne

Figure 3.The Sustainable Leadership Value Chain.

Which Value for Whom?

Any strategy starts with defining whom you want to serve and what it is you want to deliver31. Creating value for someone is the single most important source of purpose and meaningfulness. Every organisation or organisational unit needs to be clear on the value it wants to create and the target groups it wants to reach.

It’s better not to limit the definition of value to economic value alone. Economic value such as profit, future cash flow and shareholder return usually provoke a huge “so what?” feeling. People are not sustainably motivated by economic and financial targets32. These targets lack emotional value. Of course, the performance of the firm is what ultimately creates sustainability and all that is derived from it (like employment). But in my experience, most people are just not interested in that. So you can do all it takes to inform about financials and get them involved. It simply is not enough.

Value is about customer value. What do you offer to customers that they are willing to pay for? What makes a customer return to your organisation to purchase more of your products or services? Of course this is also valid for non-profit or public service organisations, and for any unit or function within an organisation.

Story 02

The Purpose of HR

I have been working for over two decades in the field of people management within organisations. The function I hold is often called HR33. What’s the purpose of HR in an organisation? Many people seem to doubt HR can contribute to the success of an organisation. But it can. Let’s take the case of a hospital. The purpose of HR could be to decrease patient mortality34. If reducing patient mortality is the value you want to deliver, you are lucky. It’s a target most people will buy in to. And as a leader – be it in HR or not – you can tap into that purpose to create your story.

HR needs to return to its essence: ensuring that people are willing and able to perform sustainably. HR has buried that essence under layers of procedures, systems and statistics. In its desire to be taken seriously and to conquer a seat at the executive table, HR has betrayed itself.

“Yes, but”, an HR professional told me, “If you do not have systems, you lack control and impact. You cannot show results if you do not fold everything into systems.”

HR needs to show leadership itself in the first place. And HR will never succeed if it continues to base its identity on systems that too often do not meet up to expectations. HR needs a compelling story.

Maybe it’s easier for a leader working in a field like health care to make the purpose of the organisation appealing. It might be easier to define this appealing value. But ask yourself how that same leader should explain budget cuts to the nurses that have chosen to serve patients as a profession, and not to increase the occupation rate of hospital beds or to increase productivity by reducing the service time per patient. They want to help people in the first place.

This is no easy game for anybody. So leaders should define or at least be very aware of the value their organisation wants to deliver35. And it’s very often not about the what, but more about the who and the how.

Story 03

It’s Not About Coffee

I was once in the Starbucks Coffee Shop in the railway station in Gent, Belgium. The place was very crowded. There was only one seat available at the table where the manager of the shop was talking to a group of new team members. I asked if I could join them. The manager said that it was OK. As long as I would not disclose any company secret I could overhear, she added with a big smile. What I heard was very interesting. She was not talking about coffee. She was talking about what each member of the staff should deliver every time a customer comes in. And that was not about serving coffee, it was about being there for the customer.

This is what you find about them on their corporate website

We’re not just passionate purveyors of coffee, but everything else that goes with a full and rewarding coffeehouse experience. We also offer a selection of premium teas, fine pastries and other delectable treats to please the taste buds. And the music you hear in store is chosen for its artistry and appeal.

It’s not unusual to see people coming to Starbucks to chat, meet up or even work. We’re a neighbourhood gathering place, a part of the daily routine – and we couldn’t be happier about it. Get to know us and you’ll see: we are so much more than what we brew.

We make sure everything we do is through the lens of humanity – from our commitment to the highest quality coffee in the world, to the way we engage with our customers and communities to do business responsibly.

The people behind the counter always ask your name when you order. That’s not only to get the right order to the right person. They ask your name so they can connect to the customer. It personalizes the way they talk to you. That sounds easy but it’s not if you want to create this approach consistently and sustainably throughout the organisation. Everyone has to do it, every time, for every customer in a way that is not artificial. How many people work for Starbucks?

Based on visits to Starbucks in Gent, London, Brugge, New York, and San Francisco

Shareholder Value

Creating value is not limited to shareholder value. An exclusive focus on shareholder value is very limiting. The argument in favour of this focus that it’s the shareholder who takes the risks and who should be compensated for that risk through dividends or an increase of the share price. So in the end it’s about the generation of future cash flow.

I understand this reasoning. But it is not satisfactory. And it is not sufficient.

The shareholder cannot achieve a return without the creation of value for a customer. The creation of shareholder value is derived from the creation of customer value.

The problem with shareholder value is that if we use this as the ultimate definition of value, the actual purpose is internal to the company. Shareholders tend to think of themselves as an external party, like customers, but they’re not. They are owners and therefore they are part of the internal organisational system. That’s the tragedy of investors and stock markets. Investors look at companies as a source of financial revenue. But in reality, companies are sources of customer value. It all starts with creating customer value and then the rest follows. And that’s why shareholders should not be put first. It’s the customer you serve, even when you’re a shareholder. And before that, it’s the people who generate the customer value.

It’s difficult to develop sustainable leadership within an organisation that puts shareholder value on top of the list, before customer value.

Story 04

Patient Value

The Belgian Pharma Company UCB has taken as motto “Inspired by Patients. Driven by Science”. Everything they do starts with the question “How can we create more value for people living with severe diseases?” For that it’s necessary to listen to patients and their families and to work closely with healthcare professionals. If you read the vision and strategy on their website, there is not much about shareholder value. It’s all about creating value for patients.

Story 05

A Company Without Shareholders

I started working for Securex in 2007. Securex is a company that delivers broad HR services. It has no shareholders. When I first started it was kind of difficult to understand how a company employing 1600 people could survive without a capital provider. The company has to build its own capital to be able to invest in the future. There are only two stakeholders: employees and customers.

The problem is that it’s not possible to attract external capital in the market. Every investment has to be financed by the organisation itself. A company without shareholders has to define its own ambitions. There is no shareholder breathing down your neck. The ambition comes from within. And the inspiration comes from the customer.

Now let’s not be naïve. Companies that do not satisfy their shareholders will not survive. Investors will not put their money into a company that does not give a return on equity that is sufficiently high to cover the cost of capital, including the compensation for the risks. But shareholders increasingly understand that they depend on the people in the company generating results through customer value. People determine the sustainability of shareholder value. Financial analysts look more and more at intangibles like company culture, corporate social responsibility and other non-financial aspects of the organisation to assess its attractiveness as an investment. There’s enough research that proves that intangibles like culture and engagement yield economic results36.

Story 06

Working Capital