Cult of leadership

Despite the current fashion for openness through the enabling technologies that can connect us all, the cult of leadership - the idea that an individual running a company makes all the key decisions - appears to be approaching another  zenith.

From the good (Steve Jobs at Apple & Pixar), to the bad (Wall Street CEO's en masse) to the indifferent, the idea that leadership is shaping the intricacies of the way enterprises function is a popular conception.

Like the special effects psychedelic clip above from the 1956 'The Ten Commandments' movie, the mystical powers expected from leadership are remarkably out of step with our current era.

Steve Jobs of course is in a league of his own, brilliantly steering Apple into a global communications and media powerhouse on the back of pace setting innovation packaged in cutting edge industrial design and user experience - and of course excellent, consistent brand marketing.

Bob Lutz, one of the few recent US automobile executives who understand the power of styling and presentation, outlines some harsh realities and challenges of providing higher quality and innovation in his excellent new book 'Car Guys vs Bean Counters -The battle for the soul of American Business'.

'It's time to stop the the dominance of the number crunchers, living in their perfect, predictable, financially projected world  (who fail, time and time again) and give the reins to the product guys, those with vision and passion for the customers and their product or service' says Lutz who was widely credited with turned Chrysler around before joining General Motors as a VP, the major topic of this, his latest book.

One of my personal business heroes is Sir William Lyons who founded Jaguar Cars, taking it from a tiny motorcycle sidecar company, through a 1930's coach built body era and on to post war global brand brilliance both mechanically and stylistically.

Lyons was arguably the Steve jobs of his era, brilliantly designing vehicles that were priced low enough for the mass market to enjoy then sensational quality, innovation and style. "The car is the closest thing we will ever create to something that is alive." is a famous Lyons quote, and I'd say computer and mobile hardware and associated user interfaces are equivalent today. The dashboards of our lives are being defined by Apple.

Lutz's bean counter book is a depressing but important read: as the title suggests Lutz goes into plenty of detail of the designed by non creative account managers penny pinching products that gave General Motors such a lousy reputation before they succumbed to bankruptcy in 2009.

Lutz describes the epic battles to regain some modicum of style and quality back into GM vehicles against a bureaucratic culture dedicated to cost cutting at all levels.

General Motors is a company with a glorious past of creative design and panache until their 1970's decline. Lutz notes the Buick brand is huge in China, largely due to the halo effect still enjoyed from that brand's design glory years when Buicks were a huge status symbol there. (Buick is a major US made export to China again today).

Lutz denigrates the MBA number crunchers in his book, but a successful business is typically tuned for toleration between factions with different goals within the same organization, presumably a role he played at GM.

Andrew Campbell, a director of the UK 'Ashridge Strategic Management Centre' wrote a perceptive piece on the Harvard Business Review website in favor of more formal teams.

....people confuse collaboration with teamwork.

....so long as the team has someone with the authority to resolve disputes, ensure coordinated action and remove disruptive or incompetent members, teams work well. Team members may dislike each other. They may disagree about important issues. They may argue disruptively. But with a good leader they can still perform. Collaborators face a different challenge. They will have some shared goals, but they often also have competing goals. Also, the shared goal is usually only a small part of their responsibilities. Unlike a team, collaborators cannot rely on a leader to resolve differences. Unlike a customer-supplier relationship, collaborators cannot walk away from each other, when they disagree.

So a collaborative relationship is necessary when you cannot use a team or a customer-supplier relationship. It is a form of customer-supplier relationship in which the participants have all the difficulties of contracting with each other without the power to walk away if the other party is being unreasonable or insensitive.

Given the reality of the distributed, fragmented global work spaces many of us work in in our increasingly global economy, leadership decision making at these levels are typically inefficient and challenging.  GL Gore's Team-Based, Flat Lattice Organization is a good example of a global business entity with a highly collaborative, team based culture.

The success of organizations like GL Gore rely on the efficacy of the much maligned middle manager, who at Gore carries far more interconnected responsibility than at the the typical firm on the direction and success of the company.

As the Economist noted last month

The cult of the chief executive has reached absurd proportions. Business magazines splash their smug faces on glossy covers...

(including the Economist...)

...and give them all the credit for achievements to which thousands of others have contributed. Yet a recent study by Antoinette Schoar, an economist at MIT, found that the person at the top accounted for just 5% of a Fortune 500 firm’s performance.

Some bosses believe their own hype: a survey by the Economist Intelligence Unit, our sister company, found that many were convinced that their own words and actions were the key to motivating employees. Yet when the same survey asked workers what they thought, more said that it was their relationship with their line manager that counted. As Marcus Buckingham, a management writer, once quipped, “People join companies but leave managers.”

Every company culture is different and it's dangerous to generalize, but all to often the tangible certainty of the data from core enterprise systems - the business process bean counter information flow - can turn out to be a boat anchor that snuffs out innovation. The timeless old proverbs 'Spoiling the ship for a ha'porth of tar' & 'for want of a nail' apply here.

Jaguar Cars figurehead William Lyons was a legendary skinflint - he used to roam the car plant listening for compressed air escaping from pneumatic tools and had the show room carpets rotated every few weeks to minimize wear patterns - but the entire focus of all his employees and suppliers was on providing the most amazing experience to the consumer for a relatively modest amount of money.

Lutz rightly points out the hideous Pontiac Aztec, the legendarily ugly vehicle clearly designed by an aesthetically challenged  committee of accountants, as an example of GM's low point.

Thanks to modern technologies leadership can drill down through internal workflows and conversations online (assuming they can operate a computer and the internet) anywhere on the planet, and there are huge advantages to configuring a business to enable this.

The collaborative tools are viable, the larger question is to what extent organizational units are allowed to self organize and monitor. Given the parlous state of global business and the astonishing gilded age style pay packages gun slinging CEO's currently enjoy, surely the path forward is a more egalitarian in the interests of progress and success...