Thursday, August 05, 2010

The mark of leadership

Are You Leadership Material?
There are different schools of thought on leadership. There is what is considered the 'old style' of leader who with single handed determination will change the direction of a business by shear force of will.

At the other end of the scale is the 'inspirational leader' who will inspire others to strive and accomplish great things. Many will argue that leadership in whatever form it takes cannot be taught. That leaders are born. In short; are good leaders born or created?

I feel this is an academic argument probably coming out of some business school where the students are studying business management. Surely there are people in the work place who never aspire to lead and sensibly so because they don't have the confidence, intellectual or strategic ability.

There are a great many people all around the world making worthwhile contributions in their employment with out the need to be seen as a leader. Equally there is a great need for leadership if these same people are going to be able to make their contribution.

This is where the argument rests; leadership determines that the person or persons responsible for any enterprise must have strategic vision to decide where the business is headed. An ability to plan and decide how to get there. Will power to see the mission through to completion while harnessing the talents of the people in the business to achieve the objectives.

Only by bringing these attributes into play will any leader be effective. So how do we grow or develop our future leaders. The truth surely is that to perform in the manner described leadership will come from those who want to lead, who have the intellectual ability and drive to lead their teams effectively.

No one is born with all of these and other skills. Leadership is a combination of natural ability (what we are born with in varying amounts), desire, education, training and experience.

Leaders are therefore neither born nor taught. They develop through there own ongoing efforts with the support of others, building on the fundamentals; ability, training, experience and self-belief.

In my view self-belief is the essential ingredient of leadership. Think! Winston Churchill.

Tip Knowing is no substitute for thinking.

The Mark of a Great Leader
Years ago, when most organizations were based on the hierarchical business model of the Industrial Age, great leaders were those who were unemotional, rational, even mechanistic. Those days are gone. Today's leader, especially one who is in charge of a dynamic, global organization, finds himself or herself in desperate need of one key trait — self-awareness.

An organization's success today depends on such a variety of talents and skills that no one leader could possibly be gifted in simultaneously. There are technological issues, global issues, financial issues, human resource issues, leadership issues, employee issues, legal issues, and more. A leader who is self-aware enough to know that he or she is not adept at everything is one who has taken the first step toward being a great leader.

This sort of personal mastery entails having a heightened understanding of one's own behavior, motivators, and competencies — and having "emotional intelligence" — to monitor and manage one's emotional responses in a variety of situations. This variety of situations is not limited to the home office, or the boardroom. It is of a global nature, across cultures which are very different and can be difficult to navigate, especially for those who are not comfortable, knowledgeable, or willing to admit their individual strengths and weaknesses. Everyone has a shortcoming or two — leaders who are willing to admit these, who strive to improve, and who seek out a consulting team to fill in the gaps will 1) encourage followers to do the same and 2) make room for others whose talents lie where theirs don't.


What Makes A Great Leader
Good leaders make people feel that they're at the very heart of things, not at the periphery. Everyone feels that he or she makes a difference to the success of the organization. When that happens people feel centered and that gives their work meaning.
- Warren G. Bennis

The most dangerous leadership myth is that leaders are born - that there is a genetic factor to leadership. This myth asserts that people simply either have certain charismatic qualities or not. That's nonsense; in fact, the opposite is true. Leaders are made rather than born. Failing organizations are usually over-managed and under-led.
- Warren G. Bennis

Leadership is an art and a science. It is an art because it continually evolves, changes form, and requires creativity. It is a science because there are certain essential principles and techniques required. A good leader knows when it is time to change shape because they are highly attentive to those around them. Coming from a position of strength, a great leader takes risks by freeing up the creative genius in their followers to build their capability and multiply the talents of the organization. This leads to community and greatness. By powerfully communicating a vision that animates, motivates, and inspires followers, a great leader is able to transform his or her organization. A good leader needs to be able to laugh; a great leader needs to be able to laugh at oneself.

What kind of leader are you being? Where is your organization in relation to your vision?

What do you think makes a great leader? Who do you think was a great leader?

What qualities did or do they routinely exhibit? What do your followers want to know in order to believe in you? What are the words that lead them to believe you?

Consider the following as a beginning list of Qualities:

* Cooperation
* Collaboration
* Consistent
* Creative
* Conscious
* Caring

* Capable
* Courageous
* Innovation
* Understanding
* Integrity
* Sense of humor

Now consider the following Questions that relate to those Qualities:

Do you cooperate with the best in your people or do you demand from them?

Do you routinely work with them to bring innovation and best practices to your organization or do you push your ideas on them?

Are you consistent in demonstrating the principles of leadership you wish others to emulate, or do you vacillate in your own modeling?

Do you encourage creativity with brainstorming or are your ideas the only ones that work?

Are you conscious and present with your employees, or are you in a conversation in your head while with them?

Do you balance caring in the choices you make that effect your organization or are you only interested in the bottom line?

Are you the only one capable in your company, or do you unleash capability by empowerment through equality in responsibility and authority?

How courageous are you? What does risk look like to you? Does your organization go through frequent paradigm shifts continually advancing your corporate vision?

Do you foster a collaborative working environment or does your leadership style reflect mainly "telling?"

Do you balance understanding with expectations on deadlines when the circumstances dictate?

Do you model integrity? What does integrity look like to you?

Are you able to laugh at yourself and laugh freely and openly with your leadership team?

One of the joys of coaching emerging leaders is the well-spring of ideas that surface in the coaching conversation. I find that both new and the existing leaders understand the dynamics of leadership required for today's complex business environment. Many of them emulate the qualities covered above. Where do you stand?
Blah, blah, blah

How business can learn from great leaders in history
A leader's vision may or may not be that different from the next person's; what can set them apart is the vigour with which they pursue that strategy.

Zhou Enlai is one of history's great workhorses. He could have become the chairman of the Communist party of China, but gave his backing to Mao Zedong. When the party came to power, Zhou served as premier of the People's Republic of China for the rest of his life, and spent most of his time trying to reduce the damage done by the succession of foolish (and often murderous) programmes set in train by his boss, Chairman Mao.

Zhou argued early on that China needed the input of its intellectuals in order to modernise. Mao briefly espoused this idea, encouraging a campaign of criticism of the party by intellectuals. When the intellectuals obliged, Mao purged all "rightists" so viciously that this episode may have been merely a ploy by Mao to flush out his ideological enemies.

Mao went on to launch a series of disastrous programmes: the Great Leap Forward introduced agricultural collectivisation on a massive scale and created the world's worst famine; it also diverted resources on a huge scale to the technologically illiterate idea of manufacturing steel in backyard furnaces. Mao's cunning plan to exterminate sparrows (blamed for eating grain) led to a plague of locusts (sparrows eat locusts). Throughout this era, Zhou stayed in power, pursuing his moderate and pragmatic agenda and attempting to mitigate the worst effects of Mao's policies.

Mao finally unleashed the anarchy of the Cultural Revolution, in which young people were allowed free travel around the country and encouraged to destroy the Four Olds: old customs; old culture; old habits; old ideas. Priceless historical artefacts were destroyed; teachers were beaten; senior officials were denounced and often murdered.

Zhou took to sending party members at risk to a clinic reserved for senior party officials. They were diagnosed with illnesses sufficiently grave to keep them quarantined until the "revolution" came to end. Zhou came very close to being purged but, as China's industrial output plummeted, Mao backed off.

Zhou began to reassert his modernising agenda and instigated a diplomatic rapprochement with the United States. Zhou died in 1976, eight months before his chairman, Mao, who sent no message to his dying comrade. Zhou is seen as one of the fathers of modern China.

Investing in Stock Market Leaders
I always root for the underdog. However, when investing in stocks this is not always a good strategy.

It may be emotionally attractive to hope the small, unknown company slays the bloated giant and takes over market leadership. In the real world, it doesn’t work that way.

Investing in market leaders means betting on the long-term that the company has such a dominate advantage it will flourish for years to come. However, don’t go to sleep after investing in these leaders, because you may find they have done the same and fallen from glory.

Following the great (stock market) leader — China
Forget the US. China is now your stock market leader.

Citi analysts Geoffrey Dennis and Jason Press have just declared it so:

China is the biggest emerging market in the world, currently accounting for 18.6% of the MSCI GEMs index. We have noticed how, since the end of the last bull market in 2007, the Chinese market has often seemed to reach an inflexion point before other leading global market indices. As equity markets should act as a leading indicator of broader economic growth trends, it seems, therefore, that the Chinese equity market has recently become ‘the leading indicator of the leading indicators’. Given that the local Shanghai Composite index and MSCI China have both rebounded by 13-15% from their recent lows and our China strategist, Minggao Shen, has just turned more bullish on the market1, these events are a positive mix for global emerging markets as a whole. This is, therefore, a good time to consider the Chinese market’s role as a signaling mechanism for GEMs as a whole.

Some of those inflexion points include October 2007 — when the Shanghai Composite reached an all-time high on October 16 and the MSCI GEM and AC World indices peaked some two weeks later.

Or in 2008, when the Chinese market hit bottom on November 4 — beating the AC index by two weeks again, though not the MSCI. The Shanghai Composite peaked again on November 23, 2009 — a full seven weeks before the AC World and MSCI. And then it turned on May 25, 2010, about two weeks before the other indices.

Are you sensing a pattern?

What to make of the China as leading indicator thesis?

Here’s what Citi’s reasoning:

To summarize, at the four major turning points of global equity markets since (and including) the peak of October 2007, the Shanghai Composite has led AC World at three out of four turning points (and turned on the same day on the fourth occasion) and has led GEMs on two of the four occasions. The evidence of Chinese market leadership at marketing turning points is convincing, if not overwhelming . . . anecdotal evidence can also be drawn upon to suggest that the local Chinese equity market acts as a major driver of investor sentiment at turning points in the market.

What could account for this apparent new role of the Chinese equity market as a leading indicator of global equity markets as a whole? We think some of the following factors may be at play:

* China is now a very large economy (the second biggest in the world, accounting for an estimated 9% of global GDP in 2010) and a big stock market (the ninth biggest in the world). The Chinese economy is also expected to account for as much as 23%10 of global growth (i.e., the rise in global GDP) in 2010, a share that is higher at present due to the weakness of developed economies . . .

* China not only now accounts for a significant proportion of global growth in a but it is, by far, the biggest consumer of commodities. Our commodities analyst, Alan Heap11, reports that China currently accounts for the consumption of around 40% of several major metals including copper, nickel, and aluminum . . .

* Given the above, the signaling mechanism of the Chinese market may be particularly relevant given the tendency of the Chinese equity market to move to extremes of sentiment – such as in the bubble of October 2007 (over 6,000 on the Shanghai Composite) and the subsequent low (1,706 in November 2008). These extremes may encourage global investors to see turning points in the Chinese markets as indicators of upcoming turning points in global markets.

Needless to say, they think that will spur global markets too.

Guambat's take?

History is written by winners, not whiners. Nor prognosticators. Certainly individuals at critical junctures get credit, above their boxing weight. That's the winners' cult.

Guambat is a big believer in the notions of chance, chaos and spoils. All the rest is the detritus of followers, fable and romanticism.

Guambat, by the bye, is a bit of a romanticist and lover of fable, with a strong streak of cynic. As his reader could have told you long ago.

Guambat reckons that China is too big for its britches, as is the US. Both will find themselves short of stitches to keep the britches together in the coming century.

The US, however, does have a bit of a leg up on social cohesion, Republicans notwithstanding. China, on the other hand, has a stronger (of the two) propensity to strong arming the minority, which, in an ever shrinking world, Guambat reckons to be a bit of a weak suit.

Guambat, looking out beyond his natural horizons, reckons the Chinese will overplay their hand and the US will overplay their moral high ground. In the end, both will be critically weakened. A leveler playing field will result, from which a new dear and fearless leader may emerge. The contenders for that role could include either the newly constituted China or US.

This post will self destruct in 5 seconds.

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