CEOs affect business performance by less than 5%. Diverse teams are up to 35% more likely to outperform their peers on profitability. The age of the “heroic leader” is over – long live the team.

In the age of absolute monarchy, kings and queens used to claim a divine right: that they were the direct emissaries of a higher power, and accordingly their word was sacrosanct. We’ve thankfully moved away from the notion of an infallible leader in the sphere of politics; whether we have in the world of business is up for debate.

Visionaries like Elon Musk, Mark Zuckerberg and Carlos Ghosn have highlighted the dangers of unchecked power combined with unfailing self-belief. Such leaders, however, remain prevalent.

“For a long time, there have been myths about what makes a great leader and they boil down to some pretty unhelpful assumptions about what the greatest leaders do and who they are,” reflects Zara Bates, head of consulting and training at Strengthscope, a skills assessment and development system headquartered at The Print Rooms in Southwark.

The Strengthscope teamat The Print Rooms, Southwark

Humility vs. bravado

It’s important to avoid the trap of expecting or encouraging leaders to conform to archetypes. Building an organisation around who they really are and creating an environment in which staff feel positive and committed will foster better results.

The cost of not doing so can be high. Countless studies show the negative effects of low engagement – in performance, turnover, and even employee health. On the other hand, research from Harvard Business School’s professor of leadership and management, Amy C. Edmondson, shows that leaders who foster a culture of humility – and encourage staff to ask for help – achieve better results.

Dr Bernice Ledbetter is the chair of the Leadership and Management programme at Pepperdine University’s Graziadio Business School in California. She also moves to dispel the myths that cloud our perception of what constitutes good leadership. “People often associate bravado with effective leadership. Actually, that trait might be an indication of a deficit. Charisma alone does not qualify a person for leadership. The most effective leaders are humble, have a clearly defined and articulated moral compass, and possess the poise to communicate with clarity and inspiration.”

These principles are backed up by numbers. A 2015 study by consulting firm KRW found that companies led by CEOs who are deemed to be moral by their employees performed better. The World Economic Forum called having a strong moral compass “the most overlooked leadership skill”.

Fearless Futures CEO Hana Naima McCloskey

Hanna Naima McCloskey is CEO of Fearless Futures, a leadership education organisation focused on tackling inequality, based at Canalot Studios in Ladbroke Grove. She believes that being uncompromising with core values is key to good leadership – for example, prioritising equity in our workplace cultures.

Vulnerability is also important. She says, “It’s okay not to know the answers – indeed that’s the point of a team. Saying ‘I don’t know’ more often is probably healthy for us all, but particularly those in formal leadership roles.”

The Fearless Futures teamCanalot Studios, Ladbroke Grove

Lead at all levels

We can measure business performance more effectively by looking more closely at the people around a leader. Apple’s shock profit warning in January left some wondering if Steve Jobs would have let it come to this. Contemporary management theory, however – namely Phil Rosenzweig’s Halo Effect – argues that a chief executive has limited impact. A 2003 study by Marianne Bertrand at University of Chicago and Antoinette Schoar at MIT quantified this, finding that CEOs can directly affect performance by no more than 2–4%.

The role of a leader, then, becomes about getting the most out of other people. Leaders must foster an egalitarian culture, says McCloskey.

“Challenging inequality is essential to leaders because they are ultimately stewards of the people in their organisation. Building cultures of equity and belonging is a priority. Leaders who are really committed to challenging inequality in all its guises are those whose values shine bright and are there for all to see.”

Once again, the figures back this up; a McKinsey study found that companies that are in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians.

A culture of equality and respect will allow those at all levels of an organisation to perform to their full potential. “The function of leadership is to produce more leaders, not more followers,” as political activist Ralph Nader put it. This is important. The realities of contemporary business mean that leadership does not need to be concentrated solely at the top.

Bates at Strengthscope says, “Everyone can build their [own] leadership brand and ultimately change and impact the culture before rising to the ‘top leadership roles’ of any business. Seniority or pay grade does not assume leadership. [Those at all levels] can positively impact the organisation through challenging traditional and negative leadership traits, and creating positive waves in the organisation.”

Refresh our idea of what a leader looks like

The 2019 Edelman Trust Barometer shows that half of all employees want their employer to be a trustworthy source of information on social issues. Look beyond the workplace for examples of leadership to powerful societal movements, such as #MeToo or the move against plastic. Bates says, “Energy, impetus, momentum and people actively talking about and participating in powerful messages is how change and leadership happens.”

We certainly need to move towards a more inclusive vision, says McCloskey, like the group of 300 dinner ladies in Camden who successfully lobbied to be paid the London Living Wage in 2015, or the founders of Black Girl Fest, who created a platform to celebrate the overlooked achievements of black women. She says, “All around there are people who deviate from the default by courageously building the kind of world that will be that bit more just – and they aren’t the archetype.”

And really, isn’t that what we should be looking for in our leaders? People who are helping to build a better world – not singlehandedly, nor simply for their own benefit, but by working with and bringing others along with them.

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