Why some organisations fail
When businesses go under, bad leadership is usually to blame. So, how do your leaders measure up?
INNOVATION & IMPROVEMENT
Image: Istock
Terry Fuller
Former Executive Director, Homes England; former Managing Director, Taylor Wimpey; current non-executive director, Building Better
Terry Fuller
Former Executive Director, Homes England; former Managing Director, Taylor Wimpey; current non-executive director, Building Better
Issue 67 | September 2023
This year we have seen a major bank in the USA fail, while others are under stress. Meanwhile back in Blighty, building contractors and house builders are going into liquidation. In the past, we have seen various housing associations collapse and be taken over by other providers, while some local housing companies and councils have become bankrupt.
What is the common denominator for many of these organisations? Leadership. Or the lack of it.
The importance of leadership
Leadership from the very top – the CEO, the accounting officer, the person accountable to investors, workforce and customers – can make the difference between success and failure.
Professor Edgar Schein of MIT wrote in his book Organisational Culture and Leadership that leaders are the architects of culture; of behaviour and values; sub-culture clashes and futile mergers just to get bigger but not better; and not recognising what the market needs and wants.
In The Leadership Challenge Kouzes and Posner highlighted the 10 key elements that make you a leader – tick those boxes to confirm your status. They also set out six leadership styles. The correct answer to give in that hot job interview is: “I use all six styles depending upon the person and circumstance.” Meanwhile anyone citing the need for ‘democratic leadership’ in a crisis can expect to fail: you are never managed out of a crisis; you are only led.
Key qualities
In my experience, the four greatest leadership qualities are:
- Honesty
- Competence
- Forward-looking
- Inspirational
And inspiration is not just about words, deeds, and energy. It’s about delivering in a different way. Not repeating what’s been done again and again for umpteen years.
So how does your boss compare? How do you compare?
If you have punished yourself by watching The Apprentice on TV, observing a 1980s ‘management by fear’ boss putting the UK’s future business leaders through their paces, you will learn nothing, apart from how not to lead.
Limited CEO tenure
Unfortunately, one in five CEOs are supposedly sociopaths. Such leaders tend to set a bullying-passive-aggressive-control-freak culture; occasionally being nice but always resulting in high team turnover, low morale and fear of repercussions.
Organisations develop from a start-up to a performing culture, before, too often, becoming mediocre, leading to downfall. The three great risks of people, market and reputation are under constant movement, like mercury in a thermometer.
Perhaps, just perhaps, many CEOs get stuck. According to recent research, “CEOs are only good for 4.8 years, then they need to move on”, allowing the organisation to become refreshed. CEO tenure can affect performance through its impact on two critical groups of stakeholders: employees and customers. Wates changes its CEO every five years, Taylor Woodrow used to.
Servant leaders
On your reading list should be Simon Sinek’s Leaders Eat Last. He talks about modern leaders being ‘servant leaders’.
Make it easy on yourself: break away from Maslow and Herzberg, become the best servant leader you can be. Become the leader you always wanted in your life. Become the leader who leaves positive ripples and creates more leaders to benefit your customers and your colleagues.
“The three great risks of people, market and reputation are under constant movement, like mercury in a thermometer.”
