With doubts over how the UK’s decision to leave the EU will play out and concerns over the health of the wider economy, these are uncertain times. For businesses, this makes life especially tricky, affecting everything from sourcing and export strategy to hiring and expansion plans.
At times like these effective leadership becomes essential, although what works best will depend on the organisation in question and its particular circumstances and challenges. Dylan Jones-Evans, professor of entrepreneurship and strategy at Bristol Business School, says there are four common leadership styles – autocratic, persuasive, consultative and democratic – and each one has advantages and drawbacks.
“Autocratic leadership can be beneficial when decisions need to be made quickly without consulting with a large group of people,” he says. “In contrast, consultative or participative and democratic leadership can lead to better ideas and more creative solutions as people feel more involved and committed to projects, making them more likely to care about the end results. Many consider democratic leadership to be the most effective, although it can lead to communication failures and delays if roles are unclear or projects are time-specific. The persuasive style works best when leaders are given the opportunity to connect to audiences by demonstrating both intellectual and emotional commitment to their position.”
In recent years, the general trend has been towards a more consensual style of leadership, where leaders demonstrate strong emotional intelligence and look to empower employees. “The best leaders are aware of their strengths, limitations and resilience levels,” says Lucy Whitehall, HR and well-being consultant at CABA. “As opposed to a domineering character, they demonstrate a high level of empathy and the ability to connect with their team. A prime example is Microsoft founder Bill Gates, who is an introvert but exudes a quiet confidence.”
This has led to a change in the requirements for senior positions, suggests Mark Freebairn, partner and head of the CFO practice at executive search firm Odgers Berndtson, both for CEOs and those in board-level positions.
“There are better people in the functional and business leadership roles across an organisation and the CEO who doesn’t use that skillset runs things worse than when they do,” he says. “In the CFO and CEO relationship, the CFO is really a partner to the CEO. The briefs we get given in the support roles to a leader are more about finding someone who can do more of the job, be more of a sounding board, more of a conscience and more proactive in bringing ideas to the table.”
Yet there can be a tendency when times are uncertain to look for more of an autocratic leader; something that perhaps contributed to the election of Donald Trump as US president. “He presented himself as a saviour and a voice for a certain part of society,” says Bernd Vogel, associate professor and director of the Henley Centre for Engaging Leadership. “He used this idea that he is the strong man who can step up against the establishment.” The problem with this kind of leadership is how to make this work in practice when coping with the realities of running a business, he says, or in this case, a country.
This leadership style is often deployed in privately-owned firms, he adds, where founders or owners of companies tend to take on the role of patriarchs. “It works in a way if your employees and managers are happy to give up a lot of their freedom, because this guy will decide everything for you,” says Vogel. “But that might not sit well with a share of the employees. Younger generations expect more from their work and want to be more involved, so if you have a manager or leader who is seen as a saviour who has all the answers, that wouldn’t relate to large chunks of a now growing part of the workforce.”
Working alongside such individuals can be challenging, however. When these are the leaders, they can prove highly effective at particular elements, suggests Janice Haddon, business and leadership coach and founder of Morgan Redwood. “In a climate of uncertainty someone who is not afraid of risk and has a limited level of stress can be very good at getting businesses out of trouble,” she says.
“It’s more the companies that are in a steady state and where you’re focusing on engaging individuals and business growth that this style can fall down.” Such leaders can be quite aggressive to more junior members of staff, she adds, meaning those who report into them need to have high levels of resilience.
Managing such individuals can also prove difficult, particularly for more introverted leaders. “Because extroverts feed off the energy of an engaged audience, and tend to bounce ideas off them, it is crucial that their listener is not passive, and is encouraging their thought process with physical signals such as leaning in, nodding or making facial expressions,” says Karl Moore, associate professor of strategy and organisations at the Desautels Faculty of Management at McGill University in Montreal. “This is not the typical style of listening for an introverted person, yet managing those around them and encouraging their moments of inspiration is crucial to the team’s innovation.”
The underlying message for leaders and managers is that they need to be able to adapt, both to the changing external situation and the individual requirements of their job and the teams they lead. This can mean switching from one style to the other, says Jones-Evans. “There is an appreciation that there may not be one best way of leading and that a leadership style that is effective in some situations may not be successful in others,” he says. “The challenge for potential leaders is to understand the advantages and disadvantages of different types of leadership styles in different situations and to apply them accordingly. But leaders should only alter their style when it does not reflect what is required within the organisation.”
It seems this is something businesses are becoming better at. According to the State of Leadership & Change report by Full Potential Group, conducted in the wake of the decision to leave the EU, 90% of senior management figures expect organisational change as a result of Brexit, but 68% are not worried.
“It’s a sign of greater investment in developing leaders’ skills,” says Carole Gaskell, managing director of Full Potential Group. “Our own work is finding a strong shift in leadership across many organisations, with a move away from the traditional command-and-control style to a more inclusive, collaborative one, which is why organisations and people are becoming more agile and better at embracing change.”
Part of this progress is due to a greater emphasis on investing in and encouraging a new generation of leaders, where the culture is to empower people to make their own decisions. This was a theme picked up on by Gary Coombe, European president at Procter & Gamble, in a recent blog. “The buck stops with us,” he says. “In increasingly tough times, this creates the temptation to maintain a tight leash and centralise power and decision-making close
to home. This will no longer work.
“We have to empower decision-making at the lowest possible level. We have to nurture creativity and encourage risk-taking. Great leaders create a culture of enterprise and adventure where the only failure is the absence of learning. Free your people from the constraints of fear and you will benefit from the new approaches, innovations and breakthrough ideas they will bring to the table.” Such a culture is even more vital in the digital age, he adds, where the younger generation can act as a source of innovation.
It was this desire to empower the next generation that led Odgers Berndtson to develop its CEO for a day initiative, which saw 15 people in their final year at university shadow a CEO to find out more about the job. “We did it for a variety of reasons,” explains Freebairn. “Firstly, it’s a group of people who rarely get the chance to see what a CEO’s life is like. Secondly, CEOs rarely get the chance to meet Millennials who aren’t in their family. We thought it could be valuable to give them the chance to engage.
“Thirdly, this is a group of people who can be cynical about the role of business, and my view was that if we give even a small group of people the chance to spend some proper time with people running a business so they come away thinking differently, then that would be helpful.”
The firm is currently working on running an extended version of this and has already attracted interest from a number of new CEOs who were unable to be involved in the first event.
One Millenial who took part was Oliver Scholten, currently a final-year computer sciences student at the University of Hull, who found himself thrust into a full-on day with Kester Scrope, CEO of Odgers Berndtson’s UK and Asian offices, which included an interview on Sky News’ Ian King Live show.
“I had a rough idea of what I thought a CEO did but the day really broadened my horizons and opened my eyes to exactly how it works in a corporate environment,” he says.
“It gave me an insight into what management entails and at which levels different skills are required. Some of those skills we learn at university, but the majority we don’t, so it was a wake-up call, because I realised that if I was going to continue on this path in the future then I would need some skills that I don’t currently have.”
He has remained in touch with Odgers since the day, and is even now thinking of a career in executive recruitment.
Yet the danger for organisations, believes Haddon, is that they respond to the challenges of the current climate in exactly the wrong way, by failing to involve people more in decisions and reverting back to old-school management styles. “When there is a high level of challenge around, people’s stress levels go up and that’s when people tend to go into more directive styles of leadership,” she says. “It’s a natural thing for people to do because we want to get things done but it’s actually the very time when people need to put more focus on how they engage people. If you can enable people to work in a pressured environment you will get the best out of them.”
Pushing the boundaries
ICAEW’s Academy of Professional Development is helping to prepare the next generation of business and finance leaders through its talent development programmes.
There are a number on offer, including the Financial Talent Executive Network (F-TEN) designed for senior finance professionals who are one or two career stages away from a group CFO or equivalent-level role; the Network of Finance Leaders course for first-line managers and senior managers; and a dedicated Women in Leadership programme.
Deepak Jayaprakash, 42, is finance director at Expedia and attended the F-TEN programme in 2016. The course comprised a number of learning days and peer-to-peer sessions and also saw him paired with a senior vice president for internal audit from a large hotel group.
“I want to become a CFO of either a divisional or mid-size firm,” he says. “I wasn’t sure what steps were required to get there but this programme helped me think more strategically about the difference between the two roles and the steps, actions and behaviours that I need to start thinking about.”
He remains in touch with his mentor and says it has already given him the confidence to challenge himself more in his job. “I made an effort to contact the different CFOs we had in our business just to establish a relationship,” he says.
This has since seen him working with ICAEW to set up a training programme for Expedia Group within Europe, as well as taking on more responsibility around global pricing and for the financial reporting of a newly acquired business.
There are three further pillars to the academy, says Dharmesh Chheda, head of professional development at ICAEW: technical and financial reporting; business performance; and leadership and management. “All aim to really drive the behaviours that finance professionals need to develop to get to leadership positions,” he says.