Farewell, omniscient leader - from egocentric to ecocentric

Source: Management Scope (December 2017); Author: Katleen De Stobbeleir, Professor of Leadership at Vlerick Business School

A leader is charismatic and visionary: this CEO cult no longer fits in with today’s complex dynamics. Research has shown that modern leaders are successful if they adopt modest, vulnerable attitudes, asking people around them for feedback to achieve widespread support.

Charisma and vision: Jack Welch and Lee Iacocca have it, as did the late Steve Jobs. The former leaders of General Electric, Chrysler, and Apple, respectively, acted as important role models for budding CEOs for many years. Terms like ‘charismatic’ and ‘visionary’ evolved in the 1990s to the point that they were almost epitheton ornans: they were inextricably linked to strong, one-man leadership and were always referred to in the financial press in the same breath with well-known CEOs, like a corporate mantra.

The end of the CEO cult

The myth of the charismatic and visionary CEO is still alive and kicking in the 21st century. However, the external environment in which companies operate has changed profoundly through digitisation and disruptive innovation. Complexity and tempo have increased exponentially, and competition is increasingly coming from unexpected angles. For example, who would have thought that dating agencies would have to compete with former executive searchers, some of whom have now set their sights on the same market - with their core competencies in finding the right match - as ‘headhunters in love’? Companies are also operating in increasingly complex environments. This increased complexity demands different types of leaders. The CEO cult no longer fits in with current dynamics: top managers are simply no longer able to provide the right strategic response on their own to the many any complex challenges facing the organisation.

Actively asking for feedback

Ideally, today’s leaders no longer rely solely on themselves for vision development and strategy setting. Instead, they distinguish themselves by their cooperative abilities. They actively establish connections: externally with relevant networks and stakeholders to benefit from crowdsourcing, internally with co-directors, the management levels below the board of directors and with shop-floor workers to gather feedback about their own performance and the course to follow. However, many leaders suffer from the CEO disease: as soon as they take that seat, they stop getting honest feedback. To fight that disease, CEOs have to organise their own opposition, starting with their own team of leaders. That means that the CEO, the team and the rest of the organisation all have a barrier to overcome. The CEO must dare to be vulnerable and actively ask for feedback. The team and the other levels of organisation must dare to speak out honestly about the man or woman at the top’s performance and decision-making.

Call for a strong leader

Traditionally-minded CEOs often find it difficult to put themselves in a vulnerable position. They are afraid that asking for feedback will be seen as a sign of weakness. After all, the stereotype requires that leaders are charismatic, visionary, and have a monopoly on wisdom. In times of crisis, when people need a strong leader who can provide security, that is certainly the case. For example, this call for strong and heroic leadership has brought Donald Trump to the Oval Office. However, recent scientific research that I conducted with a team of American and Belgian colleagues (Two roads to effectiveness: CEO feedback seeking, vision articulation, and firm performance*) and about which we published an article this year in the Journal of Organizational Behavior, shows that it is not only charismatic and visionary CEOs who are successful: introverted top managers with a broadly supported and bottom-up vision can also be successful and book equally good business results. The research compared the effectiveness of CEOs with dominant visions with the effectiveness of CEOs who are more modest and ask feedback from their co-directors. The research was carried out with 69 businesses in the United States (45) and Belgium (18). The researchers asked top executives about the extent to which the CEO sought their feedback, the CEO’s visionary capacity, and the effectiveness of the team of leaders. The researchers also asked the directors responsible for strategic planning and finance to compare the company’s performance over the last three years with that of its competitors.

Positive effect on performance

The research revealed that CEOs who ask feedback from the people around them perform just as well as their visionary counterparts. In fact, they make optimal use of the strength of their team: the judgement and knowledge of their co-directors. Indirectly, that has a positive effect on the company’s performance. The team members also gain more self-confidence and take a more proactive approach when the CEO asks structurally for feedback. After all, they do not have to wait or sit back and relax until the CEO has made the decision: they can actively influence the decision-making process. Moreover, the good example set at the top of the company stimulates people at other organisational levels to ask for and give feedback, both within the walls of the company and outside. This feedback culture can also have a positive effect on the result, especially in the present age in which sharing and exchanging knowledge is becoming increasingly important to be able to make strategic shifts.

Macho behaviour

The research results show leadership in a different light: not only visionaries but also - and perhaps especially - modest and vulnerable CEOs can be good leaders. This has significant consequences for selection policy and leadership development. We will have to broaden the criteria by which we select (future) leaders and provide in-house training. A shift is already noticeable: the emphasis in training budding leadership talent has shifted towards the ability to work well with others rather than individual excellence. The 360-degree feedback tool is also used more and more frequently. In practice, however, more modest personalities who are showing vulnerability often still lose out to the macho types with the gift of the gab in the rat race to the top. This calls for a review of the assessment and remuneration policy. This should not only look at the policy and results (what) but also the way this came about (how): to what extent did the leader ask for feedback from the people around them and focus on team performance?

Dissonant opinions

This also applies at the highest level: in the search for new executives, supervisory directors should not be guided by their natural tendency to appoint strong leaders with dominant visions based on their own needs for security and risk aversion as supervisors. Instead of pinning that vision to a single person, they would do better to work on putting together an effective top team, whose members develop the vision together and keep each other and the CEO on their toes by using feedback. This means that supervisory directors will have to ask themselves different questions when selecting senior executives: can the candidate CEO lead a strong team and strengthen it further, work together effectively, be vulnerable and open to criticism and dissonant opinions to arrive at a supported vision?

Cuddly CEOs

Are these new-style leaders already here or do they grow on trees? A good Belgian example is a group of six directors of established Flemish family businesses who have joined forces to create an informal association called the ‘CEO council,’ a network in which they share experiences and personal issues and develop a vision of modern leadership.
They meet twice a year to reflect on these topics. Doing so provides progressive insights into leadership, but also forges bonds: in a group interview with De Tijd, they said they fall into each other’s arms at conferences. The media promptly called them ‘cuddly CEOs’ in response, but they averse to the term themselves: “our message is too serious for that.” This spring, for example, they presented ‘the organisation of the future’ in partnership with communication network Choco and consultancy organisation Quinx: it was to be a ‘growing movement of like-minded people who share inspiration and insights about entrepreneurship, work and life in the 21st century.’ The organisation of the future is characterised by a sustainable and people-oriented organisational culture based on five pillars: inspired working, being yourself, power and trust, genuine partnership, and the energy of money. Within the organisation of the future, the CEO also constantly works on him or herself by focusing on introspection, adopting a vulnerable attitude, asking for feedback, and paying attention to personal growth.

Open about mistakes

Another good example of a new-style CEO is Françoise Chombar, CEO of the Belgian company Melexis, a global supplier of state-of-the-art technology. Chombar visits all business units to ask millennials how they see the future of the organisation. She has a clear view of the purpose - the business’ right to exist - and works from there to create a well-supported vision. Chombar is aware that her own vision as a CEO can no longer keep up with the rapid pace of change and increasing complexity. She protects herself against CEO disease by constantly asking the people around her for feedback: from egocentric to ecocentric. The leader no longer occupies the central position: the focus is on the ecosystem to which the business belongs part. The best Dutch example of a CEO who dared to take a vulnerable position was Paul Fentener van Vlissingen, senior executive and later the supervisory board chairman of SHV. In his a book ‘Entrepreneurs are asses’ he talked openly about his mistakes and misconceptions and raised self-reflection and team spirit to an entrepreneurial art form. Fentener van Vlissingen was well ahead of his time in his book that was published in 1995. That made him not only a leader who consciously dared to be vulnerable but also a visionary.

* Susan J. Ashford, Ned Wellman, Mary Sully de Luque, Katleen E.M. De Stobbeleir and Melody Wollan, ‘Two roads to effectiveness: CEO feedback seeking, vision articulation, and firm performance.’ In: Journal of Organizational Behavior, 2017.

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