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Monday, August 14, 2020

The Dangerous Myth of the Heroic Leader

Some of you may already have discovered Bob Sutton’s website “Work Matters.” If you haven’t, it’s well worth taking a look. I recently found this posting, which set me thinking about how easily we misunderstand reality and the true causes of organizational success. The high-pressure, anxiety-ridden workplace culture this creates is the root cause of much of today’s obsessive, “macho” management style.

Briefly, Bob’s point is that while the actions of CEOs and top teams are usually treated as the primary causes of organizational performance, this is not the case. Linked to this error is the equally common assumption that providing “suitable” incentives, such as share options, will encourage top executives to work harder, ensuring rising profit goals are met. This is often described as aligning the executives’ interests with those of the shareholders. They both want money, and the shareholders believe the executives’ actions are the key to producing it..

As Bob writes:
The problem with these arguments is that they all are based on the assumption that CEOs have a lot of influence over performance. After all, if CEOs didn’t have much influence, tying their rewards to performance or getting rid of bad leaders wouldn’t matter much. It is instructive to compare this unwavering faith in the power of CEOs with the best evidence. Yes, leaders do have some impact, but far less than most people think. My colleague Jeff Pfeffer published a paper in 1977 in the Academy of Management Review showing that leader's actions rarely account for more than 10% of the variation in organizational performance, and often account for much less. Subsequent studies have confirmed this general pattern.
If the actions of top teams and leaders really have such a limited impact on the business, does Slow Leadership matter either?

I think it does, and here’s why. What Bob says matches my own experience when it comes to the success of the business in market and financial terms. There are far too many variables, complications, and sheer unknowns for any one person—or even a whole group of senior executives—to be able to impose what they want on the world at large. And that’s without the fact that for every Company A that wants the market to go in one direction, there will be a Company B (and probably Companies C, D, E, and F too) who wants more or less the opposite, and is working just as hard to bring that about. Only one could be the winner in this game of changing reality; unless the truth is that none of them have much effect on the universe, but when chance turns one of them into a temporary success, they happily take the credit.

However, when it comes to creating the culture of a company, the position is reversed. The actions of people at the top have enormous influence. Ever since hierarchies came about in the world, those below have studied, and copied, what those above them do. It’s usually seen as the best way to make it up the ladder. People emulate the boss’s behavior (after all, it worked for him or her, didn’t it?) and apply some subtly flattery at the same time. Besides, going against what the boss thinks is right isn’t a smart way to win favor. Subordinates study, analyze, and copy the boss all the time. No boss thinks of copying their subordinates.

Let’s bring the two points of this article together and see what we have. First, we have the basic assumption that the actions of leaders are the main determinant of corporate success. It’s false, but everyone seems to believe it, including most of the leaders themselves. That puts them under a great deal of pressure. Whether the business succeeds or fails, they’ll be seen as the cause. Then their remuneration is closely tied to business outcomes. Take these two facts together and you can see why it is inevitable that leaders will try to keep everything they can under their close control. In a very small business, that level of personal involvement might just be possible, but in a huge, multi-national corporation . . . ?

I think the outcome of this erroneous belief in the superman-type leader is two-fold: it makes leaders devote just about all their waking hours to the impossible task of trying to force the future to turn out exactly as they want it to; and causes subordinates who watch this happening to get the idea that doing the same is the key to making it to the top.

The mad belief in the leader as corporate hero and savior, or source of every failure and setback, is the first stage in creating today’s barbaric workplaces values. The second is adding the common practice of linking leaders’ financial rewards to measures such as profitability or share price, in the mistaken belief that these are primarily determined by those same leaders’ actions. Knowing they will be blamed for every failure, and richly rewarded for every success, leaders become extremely anxious about the future. They assume their actions are what determines events, so they strain every nerve to try to bring about favorable results, including hounding and harassing all those around and below them. The resulting corporate culture is high-pressured, full of long hours and constant anxiety, and riddled with stress. It cannot be otherwise, since everyone is devoting themselves to doing the impossible: to making reality move according to their personal wishes by sheer willpower and effort.

The truth is that actual organizational results come in the main part from a shifting combination of luck, being in the right place at the right time, and favorable effects from a myriad of people you don’t even know about. All this anxious striving and worrying is mostly for nothing. Copying the actions of successful leaders of the past, following the latest management panaceas, hiring expensive consultants: none of them have more than a marginal impact. However, the continual anxiety and stress at the top quickly gets replicated throughout the organization, until everyone, at every level, is straining and obsessing over how to impose their will on the future. No one stops to ask the simple question: Does any of this make any measurable difference to reality? If they did, maybe they would notice that, once again, the emperor has no clothes.

Calm down. The future will be what it will be. You can maybe have some limited impact on the small part of it that directly surrounds you, but the further away the thing you desire lies, the less you will be able to make it happen. Hard work might help you get good grades, but it cannot ensure you health, happiness, or ultimate success. What you can be fairly sure is that constant stress, anxiety, and obsessive attempts to control the uncontrollable will ruin your life, your well being, and your relationships. And, if you hold a leadership position, your bad habits will be copied by those beneath you. Whatever you do, you aren’t directly responsible for the way the future develops, but you may end up accountable for messing up other people’s lives as well as your own.

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4 Comments:

Richard Rowan said...

With the possible exception of successful new companies started by charismatic leaders, I disagree that the “actions of people at the top have enormous influence” in creating the culture of a company. Over time, companies acquire various cultural attributes that take on a life of their own. They have been influenced by a variety of environmental and societal factors, including, as you mentioned, luck.

Executives are hired into established companies to play a part in achieving short-term, performance-oriented goals that are largely unrelated to culture: cut costs, do big deals, launch a new division. They are specialists. The best new executives quick-study the existing culture and figure out how to succeed within it (like the sphere of influence you mention). Culturally, they are just along for the ride.

8:16 AM  
Carmine Coyote said...

Thanks for your comment, Richard.

I partly agree. I think some leaders are just along for the ride and don't have much lasting influence on the culture (though it may affect them).

But leaders who stay for more than a year or so can't really avoid impacting the culture. Organizations sometimes like to boast that they have their own, long-term and distinctive culture (like the HP way), but even they aren't immune to individual leaders who want to make a mark.

In my experience, the first thing many executives do is change or destroy the work of their predecessor to stamp their own personality on their area of responsibility—rather like tom cats marking their territory. It would be far better if they did as you said and simply fitted into the existing culture, but that would not produce the attention they crave.

Besides, the factors I am drawing attention to—especially increased proportions of payment by incentives and stock options—affect all leaders in all cultures. They are increasingly widespread phenomena and add their malign influence to even the most traditional organizations.

9:29 AM  
Dan said...

The best top folks I know have had a profound impact on both culture and performance. The way they got to performance was through culture. They are secure, often quietly courageous people who like and value the potentials in others and aren't afraid of dealing with pain -- the pain of others or their own. They express a certain nobility of purpose through their actions without wearing it on their sleeves. They are truthful, politically savvy, and they care. When they work on the future they do so collaboratively, not competitively, generating optimism not fear. They don't play people off each other, as individuals or as groups. Their own sense of security helps others feel secure, in turn releasing people to be their best selves and do their best work.

I've been lucky enough to know a few of these people in my career and enjoy being around them professionally and personally.

6:32 AM  
Carmine Coyote said...

Dan

You make a great point. Individuals can have a deep impact on organizations when they make it by the way they affect others. One or two individuals won't have much impact on their own, but when they join in creating a sound community, the effect can be very large.

The danger of the "heroic leader" myth is that it focuses on a single person, not on the community as a whole.

6:47 AM  

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