Balanced Leadership: Blending Capabilities Across
Sectors
by Mark Lelliott and Marianne Broadbent
As 2010 evolves and we enter the ‘Year of the Tiger’ it is a time
to look forward and position our organisations for opportunities
for sustainable growth.
The new decade brings with it continuing fluidity between
market mechanisms and regulation, and consequent shifts in
the nature of leadership required to maximise opportunities
across public, private and not-for-profit sectors.
The balance of skills, experience and insights needed to deal
effectively with emerging opportunities in corporate, citizen and
community focused activities is shifting.
Public and private sector relationships have shifted
Over the past 18 months the role of the public sector in many
countries has changed. Governments have taken
unprecedented steps to strengthen and support financial
systems, stimulate markets, increase and accelerate
infrastructure investment, provide assistance to ailing
companies, and build community confidence. Governments
have taken on the role of building resilience into markets and
pro-actively increasing consumer confidence.
These actions have led to shifting relationships between the
public, private and not-for-profit sector organisations and their
leaders. A new fluidity and recognition of interdependence is
evolving in the interactions that are now essential and valued,
and in understanding and managing expectations. These
factors are influencing the rapid emergence of different
balances in the nature of leadership required for each sector.
How is this occurring? What are some of the shifts taking
place? What does it mean for current and future leaders in
different sectors?
The impact of government action is extensive
The United States had to “prop-up” the AIG Group, the largest
insurer in the world, with an injection of $US70 billion to prevent
the collapse of world insurance and invest $80 billion in GM
and Chrysler - as part of a $1.5 trillion stimulus package.
The Chinese Government allocated 4 trillion yuan in
infrastructure and social welfare stimulus and the UK
Government invested £37 billion of capital into several major
UK banks to avert a collapse of the financial sector. The public
sector share of GDP in the UK has risen from 37% in 2000 to
52% today.
Australia was unique in the Western World in
avoiding a technical recession during the Global
Financial Crisis through large and early economic
stimulus, underpinned by long term financial
resilience. Extensive government activity in
infrastructure supplemented private sector
investment. Recent reports show that Australia is
heading into an unexpected building boom this
year, as building approvals were at record levels
in the last months of 2009.
The drivers of market intervention have shifted
expectations
Market interventions have raised the bar for
broader and deeper accountability. Expectations of
the behaviours of business leaders and
professionals have shifted. It is no longer about
‘shareholder value’ but about much broader
‘stakeholder value’. When businesses have been
in receipt of taxpayer’s funds they must consider
the impact of their activities and actions in a much
wider context. Their businesses impact much more
broadly than on their own shareholders and
employees.
The fact that government action was required has
reinforced the populist view that business leaders
cannot be trusted, and that ‘executive excess’ was
rampant, even if this was the case in just a small
number of areas. It has highlighted the perception
that those in senior roles, particularly in some
financial organisations, did not take into account
the broader implications of their actions – or
inactions. There has been much debate
internationally and locally about excessive
executive bonuses and whether or not entities in
receipt of significant government support should
pay bonuses at all.
Private sector leadership involves greater
public accountability
Companies operate within a whole ecosystem,
with greater interdependence than was previously
acknowledged. For example, the collapse of
Timbercorp has impacted directly on the economy
of many regional towns, as well as on the income
of investors. Stifling consumer confidence in these
local economies has far-reaching impact on the
national and international economy.
The auto industry in the US had continued to build
thirsty SUVs in ageing and inefficient
manufacturing plants and was slow to reengineer
to smaller energy efficient vehicles. Whole cities
rely on the auto industry and the total collapse of
the US auto industry would have far reaching
social and economic impacts. The biggest US car
maker General Motors was allocated $US50 billion
by US Treasury to stay afloat and transition to a
new leaner entity.
The leaders of companies are now seen as more
publicly accountable for their impact on
communities and the broader environment. It’s
about the rights and expectations for ‘stewardship’
of assets - human, financial, physical, market
positioning, intellectual property and reputation rather than simply the more narrow ‘ownership’ of
and rights to those assets.
Thoughtful leaders have expanded the notion of
corporate social responsibility in their
organisations, realising that this is now part of their
broader brand and positioning in the market place.
Customers and partners want to know that their
values align with the organisations they deal with.
Reputational Risk is Real
Smart boards and executives have a greater focus
on reputational risk, with a stronger focus on the
potential impact of the actions of their business,
and the behaviour of their leaders. We are
increasingly living in a ‘world without secrets’ and
need to be aware that there are few places to hide
bad behaviour. When this is coupled with the flow
on effects of the recent Global Financial Crisis, we
start to see the real impact of broader stakeholder
and community expectations for probity,
transparency and performance.
Communities want a voice so that they can
influence decisions that affect them. Thoughtful
leaders see that genuine community engagement
builds reputation and trust.
In fact, not-for-profit leaders are in many ways
stewards for both identifying needs and delivering
services for significant parts of our community. It is
worth highlighting that the expectations of
business and professional leadership are now
closer to those of public sector and not-for-profit
leaders.
Public Sector leadership requires broader and
deeper capabilities
Meanwhile, with the different forms of intervention
that take place, our public sector leaders are now
involved in more cross-government policy,
decision making, and implementation. This is
changing the mix of capabilities required.
Restructuring and reform in areas such as health
care, taxation, disability services, defence,
telecommunications and broadband services
requires substantial input from private or not-forprofit sector leaders.
In many countries the realities of market
interventions and stimulus packages are testing
the breadth and depth of public sector capabilities.
At federal levels, policy-making has been seen as
the major role. But that is no longer enough.
Programs aimed at strengthening markets, and
building or shaping infrastructure, now demand a
better understanding of businesses and markets.
They require the ability to truly engage business,
gather together a broader range of resources and,
in many cases the ability to implement and
execute programs, or at least oversee these
effectively.
Citizens want to understand the tangible outcomes
and longer term impacts. Public sector leaders
need to explain progress clearly to the community
to ensure confidence and transparency.
At the same time, there is a higher expectation
that governments will monitor and regulate to
ensure fairness and equity in citizens’ interactions
with organisations.
BALANCED LEADERSHIP
There is a new fluidity and interdependence between
public, private and not-for-profit sector leadership
which can enrich experiences and outcomes in all
sectors
CORPORATE LEADERSHIP
The bar has been raised for broader and deeper
accountability for recognising that companies are part
of a broader ecosystem. ‘Shareholder value’ must be
balanced by ‘stakeholder value’
CITIZEN LEADERSHIP
Public Sector leadership requires a broader and
deeper range of capabilities – to engage others, make
informed decisions, and be implemented in a timely
way using a broader range of resources
COMMUNITY LEADERSHIP
Both Public and Private sector leadership can
benefit from transferable experience
In some countries, such as the USA, there has
always been some fluidity between engagement
and employment across public, not-for-profit, and
private sectors. This is much less the case in
Australia and in many European countries. AICD
Chief Executive John Colvin observed recently
that it is getting harder to find business experience
in government.
More than ever before, public sector leadership
can be greatly enriched by experienced
executives, managers and professionals with
private, government business enterprise or not-forprofit experience. This has been recognised by the
Australian Commonwealth Government with the
net now being cast wider in an effort to encourage
those with private sector experience to see a
period of time in the public sector as a careerenhancing move.
Capable people are starting to move more readily
from one sector to another. Sometimes it is
because of the potential impact they can have in a
key public sector or NFP role. At other times, it is
to broaden their base of experience and to
understand a different perspective. When they
move back to the private sector it will be with a
whole new lens through which to understand and
interpret the actions of government in relation to
their industry, business or profession.
Not-for-profit leaders are stewards for both identifying
needs and delivering services for significant parts of
our community.
In some areas the public sector leads the
private sector
There are some areas where the private sector
has much to learn from the public sector. In
Australia the public sector leads the private sector
in recognising and using the talent of women. In
some Australian states women now account for
over 40% of public sector and government
enterprise board membership (33% of
Membership of Australian Government Boards and
Bodies). The comparable figure in the private
sector among the country’s top 200 companies is
8%. In the public sector the percentage is
increasing - in the private sector it has declined
over the past two years.
The public sector has focused very deliberately on
attracting and appointing candidates from a more
diverse candidate pool to both boards and senior
leadership roles. However, the fact that there is
well documented evidence of the financial and firm
performance benefits from a greater
representation of women in these areas, seems to
have had little impact, overall, in changing private
sector practice. The success of public sector
practice can be expected to shape future policy
relevant to the private sector (like women on
boards in Norway and France) - unless those
lagging firms take action themselves. Again there
is a shift in expectations in an environment where
government action to bring about change in the
private sector is now much more acceptable to the
community.
Ensure your leaders lead with thoughtful
stewardship
A different kind of ‘due diligence’ about crosssector interaction and leadership is timely for
boards and executives. For individuals, we can
reflect on what leadership is for, and what effective
leadership now looks like. There will be a cost for
leaders who do not strike a balance between
‘ownership’ and ‘stewardship’. The bar has been
raised on the expectations of governments,
employees, shareholders, and the community
about appropriate behaviours, probity and
transparency. In a business sense, respect, good
values and behaviours matter more.
Balanced leadership blends positive values,
mutual respect, focus on performance and
leadership by example. It’s what keeps people
committed and keeps customers engaged. They
do notice and it will affect reputations and
performance.
Mark Lelliott is Managing Partner and Dr Marianne
Broadbent is a Senior Partner at EWK
International, Executive Leadership Consultants
EWK International is a leadership capability, executive search and strategic human capital consulting
firm. Our distinctive approach to both Executive Search and Leadership Assessment enables our clients
to identify, develop, reward and retain individuals who will succeed and grow as executives in their
organisation.
Who we are
A global executive leadership consultancy firm created by some of the world’s most
experienced, respected search and assessment consultants with 20 offices in 15
countries
What we do
Advocacy > Identification > Selection > Development
How we work
Leadership Insights powered by Arbiter Leadership Technologies™. This is a
unique approach to matching internal and external talent with client requirements
and managing risk effectively
Market strengths
International experience in consulting to Corporate, Government and NFP
organisations with particular focus on emerging markets for internationally operating
firms, and on organisations in dynamic, growing and changing environments
Mark Lelliott is EWK’s Founding and Managing Partner, and also leads EWK’s Leadership Assessment
practice globally. He has over twenty years executive leadership advisory and assessment, team
development and search experience across a wide range of enterprises. Over the past decade his focus
has been the development and application of a Leadership and Management Assessment approach which
focuses on objectivity, consistency and sustainability in evaluating, recruiting and developing organisational
leaders both for the global market and within a firm’s strategic significant executive population.
Dr. Marianne Broadbent is a Senior Partner at EWK International, where she has both regional and global
responsibilities. She has particular expertise in linking individual, team and division capabilities to the
strategy and operations of organisations. Marianne works in both the commercial and government sectors,
and has deep experience with technology, professional services and education related businesses and
executives, including those involved in corporate services and shared services groups. Prior to joining
EWK, Marianne held global executive positions with Gartner, Inc., the world’s leading information
technology research and advice organisation, and was Associate Dean at Melbourne Business School.
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