Epifini / Insights / Leadership Matters

Leadership Matters

Whether we like it or not, leaders have a strong influence in multiple areas of our lives. For this reason alone, the nature of leadership is worth considerable reflection and discussion.

We know intuitively that leadership is important simply because when it goes wrong the ramifications can be vast. The damage caused by bad leadership has real and tangible fallout. In business, this fallout impacts employees, families and our society. This is why in most cases, business leadership isn’t press-worthy until something fails.

When the leadership is working, we see or hear little about it. We don’t sit there analysing every move. The successful leader often presides quietly. Even when a company achieves a successful IPO or wins a major contract, people tend to look at company success rather than the role played by the leader.

We acknowledge the importance of leadership through its impact when it goes wrong.

Therefore, good leadership should not only be important to leaders themselves but to every person who is led. We can survive without great leaders, but we do need more good ones. This is what we’ll explore in this article.

When and where there is no visibility, leadership fails

To understand what leadership involves, it’s a good idea to look at our history.

Most political history centres on struggles to attain, maintain or usurp leadership. This presents countless examples of leadership success and failure that are so clear cut and, in many ways, repetitive. It is strange that we seem to have learned so little from them.

Long before Julius Caesar’s encounter with Brutus right up to the present day, leadership struggles repeat and will undoubtedly continue to do so long after we’re gone.

Recently, we were given yet another case study, by Australian political leaders. We saw again how leadership fails and how successors never seem to live up to expectations.  Seven Prime Ministers in eleven years is testament to that complete failure.

Business is no different. John Schnatter of Papa Johns fell foul of his board for a misplaced, racial epithet – or so the media would have us believe. Can we really believe that this was the only reason? If he had been universally supported and respected by his colleagues you can be sure this word (however repellent) would never have snuck out to the press and shareholders. Looking back at the various stories and media publications prior to his removal, it was pretty clear all was not well. The vultures had already begun to circle Schnatter’s position.

It’s difficult to believe all the failed leaders we’ve heard about were fools who were too ignorant to protect themselves from ambush. This is patently not the case. Even the late, great, Steve Jobs was once ousted from his beloved Apple by those much less able or visionary.

However, there is no single set of behaviours, attributes or morning rituals that magically make a good leader. Quite clearly that wasn’t the case with leaders as diverse as Steve Jobs, Winston Churchill, George Davies, or Kathryn Mishew, for example. They are/were completely different characters, considered excellent (or even great), by many. What unites them is that they all lost their position at one point. In some cases they regained it later, in others, they disappeared from public view completely. So what is the common link?

Despite what many people believe, the problem doesn’t lay in leaders’ capabilities but rather in the lack of visibility they have. Visibility of what?  Pretty much anything and everything their direct reports choose not to show them.

Visibility is not simply about people seeing the leader, but how much truth the leader can see and respond to.

Seeing the truth: the leadership catch 22

Visibility is what a leader needs most, yet  it is what almost every leader lacks or will lack eventually.

A leader’s role, by the very nature of the way business and society is structured, isolates them from operational activities, the groundswell of public opinion, middle management or unions. The higher they go, the less feedback they get. Leadership can be a lonely business.

Moreover, when a leader makes the attempt to gain more visibility of things around them and, for example: pays a call on the operations, steps into a management meeting or even a fundraiser, hierarchy takes over and behaviours change all round.

There are those subordinates who fear for their jobs, the sycophants, the ambitious, the troublemakers and the bystanders. Each group has its own agenda and by virtue of the way hierarchies work, only the most insightful leader will be able to unpick the real narrative from the play that is presented. So, in short, the truth is hidden.

If the truth was easy to see, great leaders would be far more numerous. The lack of great leaders illustrates just how hard seeing the truth is. How else can senior ‘colleagues’ pull fast ones on their bosses and so many CEOs be caught completely off guard by PR disasters and corporate scandals, time after time?

Consider Donald Trump. I don’t think his advisors tell him exactly what they think openly, honestly and at every occasion.  Let’s face it, jobs are important, salaries are important and, for the majority, social status is very important. Who but the very brave (or those with many supporters backing them) would put themselves in the firing line? Better to hold off and save it for a best-selling book later.

Those who see the truth and make the right call based on that truth are called great leaders.

The great leader has the ability to see what needs to be seen and the wisdom and imagination to act on it. The truth can result in a single small device that changes the way we communicate and consume media in the case of Steve Jobs, right through to the emancipation of an entire people thanks to Abraham Lincoln.

Seeing the truth and acting upon it correctly can result in important change, growth, and societal advancement. So, how can we remove barriers to seeing the truth, such as hierarchy, emotions, behaviours, and hidden agendas? Artificial Intelligence may be one answer.

AI has a significant advantage from human counterparts in one critical area: its independence from human bias. AI relies on inbound information to make an assessment – it does not believe in politics, promotion, job security or billable hours. These advantages make it a perfect vehicle for presenting an unbiased picture to leaders.

This is exactly why Epifini was created: to give business leaders the information they need to make the right decisions. It reveals the true state of a business in a systematic and repeatable way by giving an unbiased view of how the organisation is going.

To see or not to see, the consequences for leaders are real

To understand why some leaders are defined as great, we must really look at how they achieved what they achieved. As mentioned above, it’s not about their magnetic personality nor about whether they were universally loved or feared. All of these are fleeting. Their success was built on how much truth they could see around them. When the veil came down and they could no longer ‘see’, the end of their leadership quickly followed.

Here are two of my favourite examples; one of failure and one of success.

Winston Churchill – Britain’s greatest wartime leader didn’t have the universal support of every member of the wartime coalition. Nevertheless, he stayed off a disastrous political coup by keeping senior coalition leaders close to him.

Both the Secretary of State of the Admiralty and the Minister for Air were members of the opposition. Moreover, his deputy was the Leader of the Opposition.

Churchill didn’t simply keep them close. He gave each of them tremendous power. This seems counter-intuitive, but each member of the coalition knew that if they failed individually, the result, in all likelihood, would be the loss of the war. There were enormous levels of personal accountability and there was nowhere to hide.

Being together in meeting rooms with Churchill, planning and strategising, allowed Churchill to see every move and spot every political plot well in advance. He had the visibility necessary to do so.

However, within months of Victory Day in 1945 and the dissolution of the coalition, political maneuvering began once again within the Conservative Party. This, coupled with an enormous anti-Conservative propaganda campaign by Labour, resulted in Churchill’s ability to ‘see’ the truth vanishing, along with his leadership of Great Britain.

Winston Churchill famously said, “The nation will find it very hard to look up to the leaders who are keeping their ears to the ground.” Ironically, once he no longer had his ears to the ground, his popularity faded rapidly and contributed to his downfall.

Warren Buffett – Mr Buffett is surely one of the greatest business leaders of the 20th and 21st century. At the ripe age of 85 he still has the energy to work but, more importantly, he still has the respect, trust and admiration of his colleagues and partners.

So, how many people run his 300+ Billion dollar company from his head office?

25.

Yes, 25 people hired by Buffett directly and to whom he dedicates his leadership; with humility, democracy and self-empowerment. He has built a staff who are equal, mutually accountable and very, very good at what they do.

When you’re part of a team of 25 with (not under) Warren Buffett, would you really try to bite the hand that feeds? Similarly, when you are surrounded by 25 people who you have nurtured and developed, it’s more likely that you’ll spot any cracks in the relationship very early on and be able to deal with them. This unique head office culture gives Warren Buffett extraordinary visibility.

Visibility and de-risking leadership

There is no such thing as zero risk, but there are ways to reduce risk and there is an expectation that the leader has a major role in this ‘risk mitigation’. As a matter of fact any good leader should have a strategy to limit their business’s exposure to risk.

The global standard of ‘risk management’ has four key steps. This is the framework.

  1. Identifying the hazard or threat.
  2. Assessing the risk associated with that threat. The risk is the likelihood of coming into contact with the hazard (or threat) and the consequences if it happens.
  3. Putting controls in place to avoid the risk or at least limit the damage it might cause.
  4. Reviewing the controls to make sure they’re working, and improving them if they aren’t.

The most difficult part of this process is the first step, identifying the hazard or threat. This challenge is twofold: Either people don’t see a threat for what it is, it exists but they fail to recognise it. Or, they don’t proactively look for the threats. Some threats are hidden, some develop over time and some just seem to leap out of nowhere.

In both situations, the outcome is the same: the leader doesn’t see the threat, therefore they don’t put controls in place before it’s too late.

It all comes back to the one critical leadership success factor. Leaders must have visibility and see things for what they are: the true picture. It doesn’t matter how big or small the business is, the leaders need a risk mitigation process comprising accurate information, based on good visibility, otherwise they’ll find themselves in trouble.

Epifini at its essence is probably one of the best ways of de-risking a business. It helps with the threat identification process. It alerts the leader and says, “You have a problem here, Sunshine”.

Seeing the truth isn’t a game, it’s survival.

Three ways to increase visibility

So that brings us to the question about how leaders can prepare for these challenges as they attain the heights of power.

Can leadership skills be taught? Yes, indeed they can. We see countless courses about creating the right cultures, leading rather than managing, spotting and nurturing talent, etc. These are all very important skills to acquire, but they are of little use if you can’t see how to use them correctly, with the right people, in the right way.

There isn’t a course available on seeing the truth, but there are some very useful ways of accessing it. For instance, technology and data can provide a great deal of truth. The successful leader needs to be able to access it, understand it, and then act upon it. Epifini is a tool that enables leaders to understand unbiased information and act on insights.

In the end, it’s easy to point at a successful leader – they’re one whose percentage of correct decisions are significantly higher than their poor ones.

The questions is, how do they do it? Simply looking at the end balance sheet or the size of the company is a lag indicator but doesn’t show the ‘how’.

Great leadership comprises three ‘hows’ – all leading to increased visibility for the leader.

  1. Limited hierarchy

This doesn’t mean no hierarchy (the leader still makes the big calls). But it’s limited and the teams work with the leader, they don’t defer to him or her.  Limited hierarchy means the leader’s ego needs to take a back seat and they need to trust people, because no one can do it alone for extended periods.

Who can you rely on? Select your people carefully (and directly) to establish sustainable trust. Take the time to nurture and develop them. Successful leaders have teams that are independent but also know that if they fail there is no hiding place. High levels of accountability are expected and offered from every person.

  1. Structure

Successful leaders, more often than not, run with a small flat structure without layers of management.

This creates easy touch-points where a leader can engage with enough frequency that their other skills (coaching, mentoring, talent spotting and the like) are actually utilised.  Those who create complexity at the top almost always fail. Simplicity extends to processes and information flow.

  1. The right information

Access to the right information is absolutely essential if a leader has any chance of success. But they also need to be able to understand what the information is telling them.

No leader can unravel all the information alone. That’s where their open, capable and accountable team comes in – to filter and present proactively, openly and honestly. If politics, ego and fear get in the way, a leader can say goodbye to getting the right information. They are left to make decisions based on fluff, hearsay and gut. This may work for a while but eventually it fails.

It takes time to reshape a business to allow the quality of visibility described above. Many leaders will never have the time, power or influence to create a Buffett-like environment. For many businesses, old systems and processes simply prevent an ideal structure from ever taking shape.

In the meantime, the leadership still needs to function. The right decisions still need to be made quickly, based on a truthful picture, or leaders will quickly find themselves in jeopardy.

Epifini is potentially the fastest and easiest method for business leaders to gain the visibility they so desperately need. It is unlikely that Artificial Intelligence will ever replace leadership, but for the foreseeable future it can certainly help to make the vast majority of leaders better.

If you’d like to know more please contact us on 1300 374346. You can also read case studies and try our demo.