3 Principles of Business Leadership

by Tony Ritchie on / No Comment

Category: Leadership, Mentoring Questions

Tony-RitchieSPECIAL GUEST BLOG By Tony Ritchie, Management Mentor, Mentors.ie

Whether you dream of starting your own business or you just want to enter the exciting world of Irish business, there are three basic tenants of leadership to follow in order to become successful.

1. The ‘entrepreneurial spirit’ must burn within.

The yearning of building a successful business will hinge on passion, innovation and enterprise.  Efficient business leaders possess the characteristics and mindset of an entrepreneur with the initiative to make money through risk.  The level of risk is highly critical and can determine the amount of success.  However, taking that initial risk is a must in order to profit in any new endeavor.  New and existing business owners and executives should continue to assess entrepreneurial opportunities in this knowledge-based economy by taking innovative ideas and commercializing them.

2. Business plays a fundamental role in society.

Social issues are always concerned in business dealings and relationships.  Society affects everything from internal ethics to external marketing and all other aspects of corporate behaviour and strategy.  Business creates employment and wealth, thus contributing to public services.  Issues like resources depletion, treatment of factory workers in developing countries and global warming are among the vast array of societal concerns that impact the decisions of business leaders.

3. Life-long learning fosters greater success.

Continuing advancement in personal development is also a key component of successful leadership in the modern business world.  Staying informed of news and technological advances in every niche of enterprise along with routine assessment and improvement in soft skills like diplomacy, interpersonal communication, conflict resolution, team-building and persuasion are integral to success and happiness as a business leader.  Life-long learning in the traditional form of continuing education happens in many settings but especially conferences, webinars and other meetings of business professionals.

That Which Does Not Kill Us… Part 1 of 2

by Harley Murphy on / No Comment

Category: Leadership

SPECIAL GUEST BLOG By Harley Murphy, Strategic Change Mentor, Mentors.ie

There may indeed be truth in Nietzsche’s statement based on a recent report in the Journal of Personality & Social Psychology. The study by Mark Seery of the State University of New York & others concluded that adverse experiences may foster subsequent resilience with resulting advantages for mental health and well being.

This possibly helps explain that those who experienced early recessions seem to be coping better with the current severe downturn. It may also ultimately help the country’s national psyche through what will be a bumpy recovery.

There has been much written about the current crises and how we got here. I felt it worthwhile, however, to bring a fresh perspective on the seeds of collapse from the corporate world. This is taken from a highly respected US author, Jim Collins, who has studied companies for many years and wrote the international bestseller – Good to Great.

How did it come to be so?

In simple terms we know that Ireland’s crises arose from a property bubble bursting – the result of overindulgence, accommodated by cheap money, and enabled by inept leadership and bad management in the political, banking and regulatory systems. However, as a general lesson it could be useful to gain some understanding of signs of decline and possible wider application for the future.

In his 2009 book – “How the Mighty FALL” – Jim Collins, writing about the corporate world, wrote of the five stages of decline and these can be applied equally well, I believe, to the Irish banking crisis, including its regulators, developers, and the many political failures:

Hubris, born of success – Collins says that Stage 1 kicks-in when people become arrogant, regarding success as their entitlement and lose sight of the underlying factors that created success in the first place. Senior bankers, developers and politicians overestimate their own merits and capabilities and forget the role that luck and circumstance played in their earlier success.

Undisciplined pursuit of more – The hubris from Stage 1 leads right into Stage 2 and results in more growth, more acclaim, more of whatever those in power see as “success”.  This results in undisciplined leaps beyond the ‘normal’ boundaries that were manageable and thus sharply increasing risk.

Denial of risk and peril – the internal warning signs mount, yet external results remain strong enough to “explain away” disturbing data. Leaders discount negative data, and amplify positive data.  Collins says that in this stage, those in power start to blame external factors (e.g.Lehman’s) for setbacks rather than accept responsibility. He adds that when those in power begin to imperil the entire enterprise by taking outsize risks and acting in a way that denies the consequences of those risks and are headed for Stage 4.

Grasping for salvation – at this Stage the emergence of cumulative peril and risks gone bad throw the enterprise into sharp decline visible to all. The crucial question is, – How does its leadership respond? Those who grasp for salvation have fallen into Stage 4. Common saviours include a bold but untested strategy, radical transformation or any number of other silver bullet solutions. Initial results from taking dramatic action may appear positive but they do not last.

Capitulation to irrelevance or death – the longer the ‘enterprise’ remains in Stage 4, repeatedly grasping for silver bullets, the more likely it will spiral downward. In Stage 5, accumulated setbacks and expensive false starts erode the financial position and individual spirit to such an extent that all hope is abandoned of building a successful future.  In extreme cases the enterprise simply dies outright. Obviously the latter can be applied to Anglo and Irish Nationwide but a sovereign country cannot die. It can, however, become moribund unless we find the national capacity to become successful again.

I'll return in a couple of days to let you know – Where do we go from here?

Obama and Hayward – Leadership in Crisis

by Harley Murphy on / 4 Comments

Category: Leadership

SPECIAL GUEST BLOG By Harley Murphy, Strategic Change Mentor, Mentors.ie

What makes a good leader?  Is there a ‘best’ leadership style?

These are two leaders, one of a leading country and the other of a leading company, with very different leadership styles. Are there lessons in leadership practice we can identify from these leaders in looking at how they have dealt with the oil pollution crisis ?  Can we identify their styles of leadership?

In their book Primal Leadership, authors Goleman, Boyatzis and McKee identified 6 leadership styles: – Visionary, Coaching, Affiliative, Democratic, Pacesetting and Commanding.

Based on the evidence it would be reasonable for us to presume that Barack Obama would be a strong contender for the Visionary style. The Visionary Leader moves people towards a shared vision, telling them where to go but not how to get there – thus motivating them to struggle forward.. In other parlance, the Visionary leader would be termed the Charismatic Leader.

It is more difficult to place Tony Hayward in any of these categories but based on his background, the reasons why BP appointed him, press reports and TV appearances it would be reasonable to cast him in the Pacesetting style of leadership. The Pacesetting Leader builds challenges and exciting goals for people, expecting excellence and often exemplifying it themselves. They identify poor performers and demand more of them. If necessary, they will roll up their sleeves and rescue the situation themselves. They tend to be low on guidance, expecting people to know what to do. They get short term results but over the long term this style can lead to decline. Done badly, the Pacesetting  style  lacks Emotional Intelligence, especially self-management. A classic problem happens when the ‘star techie’ gets promoted. Tony Hayward was a geologist, brought in to improve BPs technical competence, particularly (& ironically) their safety record, following their Texas Refinery fatalities & problems, 2005-9.

Why then has Tony Hayward so spectacularly failed his shareholders, when, on paper, he appears to have acted in accordance with ‘best practice’ in dealing with company disasters? He apologized, took responsibility on behalf of BP, committed massive amounts of company assets to rectify and dealt with the media head-on. Technically he did everything right. However, he came across on TV as wooden, he focused on the impact the disaster was having on his life and thus totally failed the PR test in every respect. The result is a 50% drop in BP’s share price since April and the necessity to move Tony Hayward aside in the day-to-day management of the clean-up operation.

In his fascinating book, The Leader on the Couch, Manfried Kets de Vries considers, among others, individuals with a tendency towards having a detached disposition.  Typically people with such a disposition when faced with a need to respond to problematic situations, they generally:

  • deflect response through rumination, intellectualization and conflict avoidance
  • diminish emotional events
  • withdraw into fantasy (or go sailing)

Let’s compare that to Barack Obama. Considered an inspirational leader but who has seen his leadership rating plummet from 70%, when he was elected, to 49%, based on a recent poll? Since January this year, his rating dropped a full 8 percentage points, as the oil spilled into the Gulf.

As usual his rhetoric has been strong and inspired but the American people have failed to see results,  in terms of stopping the oil gushing out of the seabed and landing on the Louisiana coast. This apparent impotency of such a charismatic individual leads not to the normal disappointment that one might expect among followers, but to a collapse in confidence which could be likened to that of a bad religious experience. If  our leader Obama is powerless to solve this then who is left to turn to.

Leadership is a complex and multi-dimensional concept and I personally side with those who believe there is no one ‘best’ style. Situational leadership makes sense – it’s about matching leadership skills to the central challenges that a company or country must address at the time. Another good example was the great wartime leader, Winston Churchill,  who failed to convince the British people that he could lead in peacetime.

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