Corporate Leadership: the art and the science

4 mins read

The FINANCIAL — Corporate leadership is a relatively new concept, which is being researched extensively. It is an off-shoot of the general leadership paradigm taught across most management schools and programs in many countries.Researchers have painfully analysed and presented leadership “chromosomes” which are essential characteristics of a born leader or characteristics of an aspiring leader should possess.

 

The concept of management which was essentially based on the body of knowledge and set of skills, has through the last several years drifted toward corporate leadership styles and content in which the modern manager is a charismatic leader, thinker, agenda setter and transformer of people and their lives.

Defining corporate leadership as opposed to political and religious leaderships, or leaderships in communities and other non-profit organisations, is more complex. A typical goal of a corporation is to make profits and increase shareholder value. In a highly competitive environment, it can only do so by maintaining cost leadership where costs of goods are low and quality is equal or higher. In its pursuit of corporate leadership, companies are beginning to innovate new ideas, processes and business practices, are designing strategies to create new demands rather than attempting to meet existing demands, are creating new products, services and new markets and are constantly fighting two wars: one of survival and the other of increasing profits and shareholder value.

The standard bottom line for most corporations for years has been profits. The board of directors was commended or derided, Chief Executive Officers were rewarded or punished on the basis of profits and losses.  Now, there are more bottom lines to take care of: the environmental bottom line which addresses carbon emissions and protection of the environment, energy saving, clean development mechanisms; the social bottom line which addresses the overall issues related to research and development, quality of goods and services and the overall public welfare; the human capital development bottom line which views all employees as essential corporate capital and develops core competencies through a mix of specialisations within a corporation.

The view that corporate leadership rested with the Board of Directors and the CEO or the COO is fast diminishing. It is taking an interesting, exciting and immensely rewarding turn where every employee, whether at the front desk, or the back room, out in the field or at the middle and higher management levels, need to understand corporate leadership traits and must be able to lead teams and groups. Obviously, this concept of each and every employee in a corporation being able to demonstrate leadership qualities not merely has a measurable advantage by way of increase in productivity and profits, but demands that the corporate thinking changes from a simple top-to-bottom management approach to flat management where each employee has a clearly defined and identified area of expertise and operation and understands the multidimensional linkages to all aspects of a corporation’s life and stake in society.

At the heart of corporate leadership is the human being, that volatile individual whose education, social, cultural, religious and growth experiences need to be formatted within an organisation to conform to corporate goals and objectives in such a way that individuality is harnessed in a corporate fabric instead of being either made a thorn in the flesh or destroyed completely. Thus it is not that simple and requires first grade human resources development expertise to structure an organisation which functions smoothly and effectively.

During my work in countries and cultures – from China to Africa, from Middle East to Europe, from Asia to the Caucuses, I have noticed an interesting phenomenon. In China, corporate leadership is a collective process rather than an individual excellence where mainly the state owned companies strive to outperform their own targets through a rigid communication, command and control system. In the Middle East, it is often the big wigs of business and finance who dictate how a corporation is to be run and how its employees should behave and contribute. In India, despite the veneration of elders and their traditional wisdom, young technocrats are breaking out to provide strategic leadership in manufacturing, exports and sales. In Europe, there is a great deal of emphasis on individual qualifications, performances and the evolution of a distinct corporate culture. In Japan, there is still the traditional adherence to the concept of corporate loyalty and most Japanese regard their corporations as power houses which determine the level of social benefits they all ought to have.

The basis of corporate leadership is a clear understanding of one’s role in a corporation, not merely as a functionary performing a set of tasks during an 8-hour period, at whatever intensity, but knowing clearly the ramifications and effect of one’s performance to the overall growth and profitability of a company and all its stakeholders, including other staff members in a group and in the larger corporation. In societies where work is not valued as an important part of daily life and where wages and benefits are viewed as fundamental human rights and where there is no real understanding of the need to add value to one’s work, the concept of corporate leadership may sound alien.

In newly emerging countries such as Georgia, the concept of work, key performance indicators, need for specialisation to format core competencies, the need for strengthening group-think and collective intelligence may not necessarily be understood. There is also the cultural norms and values which have significant impact on work discipline and performance levels as well as on the ability to learn and adapt fast. The service industry in Georgia, compared to the UK where thousands of immigrants are eager to make a living, or compared to Sri Lanka or Thailand where providing service is regarded as a cultural strength, is significantly weak on account a cultural underpinning which may not value the service industry as important.

Corporate leadership, getting things right and leading people to greater heights in innovation, business processes and practice, in contributing to all the different bottom lines of achievements, and the ability to transform members of a corporation from mere functionaries to collective contributors to planned growth and profitability, will soon become a fundamental requirement for all students of management and business administration. Developing corporate leadership capacities in individuals and groups is perhaps the best tool available to ensure growth and productivity across a nation. It is both an art and a science.  It is art because it works at the level of human emotions and capacities and it is science because it is intrinsically linked to both the internal and external environment of the global market place, in all its complexities of resources, politics and a world which is now in an economic whirlpool.

 

 

Leave a Reply