All change at the top

As business moves away from the stereotypical older, white, male boss, could we be ready to do away with the CEO and traditional management structure altogether?  

‘Endangered species’ isn’t a term you normally associate with men who’ve dominated leadership since the East India Company established the modern multinational in 1600. More than four centuries later, a look at Harvard Business Review’s annual list of leading CEOs offers overwhelming evidence that those jokingly described as ‘pale, male and stale’ remain in the driving seat.

Yet recently, Tesco Chairman John Allan suggested the old guard is endangered, because the signs are that leadership is starting to look very different. 

And that could mean doing away with the CEO altogether, giving employees far more autonomy.

As technology and globalisation have accelerated the pace of business, many organisations have restructured in response to these trends. According to Deloitte’s latest Human Capital Trends report, The new organization: Different by design: “In some ways, businesses are becoming more like Hollywood movie production teams and less like traditional corporations, with people coming together to tackle projects, then disbanding and moving on to new assignments once the project is complete.” 

Hence the need for distributed or ‘federated’ leadership – a model that at the anti-hierarchical extreme is known as ‘holacracy’. 

Add to this the changing expectations of employees. As Julie Fairclough, Director at trust business Zedra in Jersey, points out: “The internet, combined with a younger generation brought up to be less respectful and deferential towards authority, has meant that leaders are having to become much more accountable. Increasingly, employees want to know about their values and ethics, and ask: ‘Why should I follow you? Why do you deserve to be my leader?’.” 

At the same time, says Daina Middleton, author of Grace Meets Grit: How to Bring Out the Remarkable, Courageous Leader Within, millennials “want to be coached more frequently and regularly, and to have a close relationship with that leader; to have them be interested and invested in helping them be more successful, not just the organisation overall”.

This may be hard to swallow for senior executives still invested in the ‘Great Man theory’ that’s very much associated with power and ego, says Phil Eyre, Founder of Leaders consultancy in Guernsey. Yet there are huge business benefits in moving away from the command-and-control model – which Eyre believes millennials find “borderline repulsive” and may cause problems for businesses trying to attract talent and reduce staff turnover. 

“Leaders who move away from focusing only on their technical skills to take a more human, holistic approach to leadership, who allow people the autonomy to find their own way within good boundaries, deliver the best business results,” he says. 

Decision making

Supporting teams further down the food chain to make their own decisions enables organisations to respond faster, in line with local conditions, adds Fairclough. 

Gone are the days when leaders can expect to know everything. She sees no point in trying to develop a social media strategy, for instance – an area about which she admits to knowing nothing – if it makes sense to hand that over to someone younger. 

“A significant part of leadership today, yesterday and certainly tomorrow is the responsibility to grow your people,” she says. “Development used to be around how much water you could put in the glass. Going forward, it will be about how you make the glass bigger.” 

But there are potential pitfalls associated with distributing responsibility too broadly, as a case study entitled ‘Is Holacracy for Us?’ in a recent Harvard Business Review identified. Criticisms of decentralised power and authority include that it “creates silos, does little to remove hierarchy, and is difficult to organise and maintain”. 

Worse still, Dutch engineering services company Royal Imtech, the company on which this case was based, was bankrupted in 2015, following a series of localised accounting fraud scandals resulting from the leaders’ unswerving belief in promoting local entrepreneurship and autonomy. 

Visionary role

This only highlights what’s always been important for leaders – to clarify and hold onto the organisation’s vision, values and culture – and why doing away with leadership is unlikely, even if we’ll see those roles increasingly filled by women and those whose strength is collaboration, communication and foresight.
   
Futurist Joel Barker, the man who introduced the concept of paradigms to the business world, defines a leader as someone others choose to follow to a place they would not go to by themselves. “The ideal leader is a visionary leader/manager who inspires people to take risks because if they had to make the decision themselves, they wouldn’t do it.” 

This requires not only the capacity to look into the future and see appropriate ways forward, he says, but to have a track record of making good decisions and instil a supportive culture where innovation and autonomous decision making can thrive.  

This is very much the way Chris Clark, Managing Director of Prosperity 24.7, sees the role of the modern chief executive. “There’s a large fund business in the Channel Islands that’s seen as an organisation everyone wants to work with – they make big personal development investments in their people and have a very supportive and permissive culture. 

“When leaders help to shape and influence a trusting, enabling and engaging workplace, people know they can innovate and maybe get things wrong, but not be hung, drawn and quartered when they make mistakes,” he says. 

There’s an argument that it’s easier to share responsibilities across a smaller business than in a big corporate. But multinationals such as US manufacturer WL Gore or GE Appliances company Haier in China have created happier, more trusting ecosystems by, as Clark puts it, “carving off chunks of the ship, putting them in a speedboat and allowing them to be intrepreneurial”.
 
However, one of the reasons he thinks it’s difficult to have an organisation with no leadership is that “shareholders and clients still want that throat to choke if anything should go wrong”.

Emerging models

So, if the concept of leadership is safe, at least for the time being, what kind of models are we likely to see emerging? 

Daina Middleton believes we’re in a transitional period in which many different models will operate simultaneously, succeeding (or not) depending on what’s best for the company concerned. But outcomes won’t necessarily be focused on how past and present leaders rate success. 

“My largest client is a private equity firm, the type of business usually focused on productivity and efficiency and cost-cutting,” Middleton says. “But they absolutely believe that their ‘secret sauce’ is getting leaders to become better leaders and to think about power and leadership as influence potential and empowering others, rather than success being all about their own personal wealth. This includes asking: ‘How can I be a better human being, not just at work but at home and in my community?’ or ‘What type of impact am I going to make in the world?’.”

As demand increases for diverse decision making and employee autonomy, and anti-elitist sentiment percolates through society, it’s debatable whether ‘pale, male and stale’ can – or should – survive these transitional times.