DEVELOPING AUTHENTIC LEADERSHIP WHITE PAPER
Dynamic Learning Network, 2003
Table of Contents
A. Truly Authentic Leadership
1.Definition of “authentic leadership”
2.Five key ingredients to demonstrate successful authentic leadership
3.The characteristics of an authentic leader
B. Creating best practice and make good decisions, while respecting the context
1.SARS – A leadership challenge
2.Breaking through the glass ceiling: Diversity and Race
3.Making tough choices with compassion
4.Corporate Social Responsibility – where are the limits?
5.The work-life debate: is balance achievable?
C. Conclusion
PART A.
TRULY AUTHENTIC LEADERSHIP
1. Definition of “authentic Leadership”
Something ignited in my soul,
Fever or unremembered wings,
And I went my own way,
Deciphering that burning fire.
Pablo Neruda
Current management best sellers address opposite ends of the leadership spectrum: the highlevel, charismatic leaders on the one hand, and books on starting out your career on the other.
But somewhere in the transition between middle management and CEO, there are a whole
host of leadership issues and challenges that are currently not addressed in popular literature.
The framework and principles for the “Developing Authentic Leadership” DLN did come
from a recently launched book by Bill George, former CEO and Chairman of the Board of
Medtronic, and current board member of the Goldman Sachs, Novartis and Target
Corporations. For Bill, authentic leadership is about being yourself; being the person you
were created to be. This is not what most of the literature on leadership says, nor is it what
the experts in corporate America teach.
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There is also something important, that authentic leadership is not about. It is not about
developing the image or persona of a leader.
2. Five key ingredients to demonstrate successful authentic leadership
2.1Purpose: What is your personal or corporate mission and vision
2.2Values: Do individuals or companies practice solid values while delivering on their
bottom line
2.3Heart: How to lead with heart and empower employees to fulfill themselves
2.4Relationships: How to build an enduring, committed organisation
2.5Self-discipline: Delivering results for all stakeholders
3. The characteristics of an authentic leader
For each of the above key ingredients of authentic leadership, a developmental quality is
required for leaders to be effective.
3.1To find your personal or corporate purpose, you require Passion to realise your mission
and to follow your vision.
3.2Whether an individual or a corporate practices solid values will be expressed through its
Behaviour (“walk the talk”).
3.3To lead with heart is to feel, show and to not be afraid of Compassion.
3.4To build enduring and committed relationships and organisations requires a strong degree
of Connectedness.
Delivering results and self-discipline in daily business life is all about Consistency.
PART B.
CREATING BEST PRACTICE AND MAKE GOOD DECISIONS, WHILE
RESPECTING THE CONTEXT
1. SARS – A leadership challenge
1.1Topic summary:
The first discussion of our DLN evolved around the leadership dilemmas that arose from the
Severe Acute Respiratory Syndrome (SARS) outbreak, earlier in the year. The DLN was
launched as the SARS tragedy was at its peak; hence the issues were pertinent and
contemporary and unfortunately not a phantasmagoria.
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Imagine yourself in Shanghai today working for a multinational, your government back home
warning people to return, the press being cagey about what it reports, your friends no wiser
than you are about what's really going on. Your employees and your family are counting on
you. Do you send your family out of this trouble-spot? What about your responsibility to
your staff? What decisions do you make about them? What are the trade offs? Finally, do you
stay or choose to take an obdurate stance and operate remotely from a safer place, because
you can…?
1.2 Forum participation – Discussion threads:
The enthusiastic response from our learned participants, of many metiers, about the Earth
shattering dilemmas surrounding leadership was a great beginning to our Dynamic Learning
Network
Many responses were related to the question: did the press exaggerate the situation (which
today, in hindsight, may be true). But is not one of the qualities of a leader to make decisions,
even relating to human life, without full information at hand? Do you just defenestrate your
values in these cases?
As one interviewee said “The worst thing was the lack of transparency and reliable
information. Making decisions without information is tough, and this contributed enormously
to the fear levels”. Certainly a situation of trepidation.
Gerd Pircher, an IMD MBA candidate, led the discussion by quoting another interviewee
with regard to the professional leadership responsibilities but with a mind to the fact that
leaders also have families "when you have children, statistics do not matter" extremely
powerful and true. An interesting and non-innocuous response.
Lino DiCuollo, another IMD MBA candidate, responded in gainsay: I too was moved by the
'statistics do not matter' quote. But, unfortunately, the law does not and cannot take such
matters into account - otherwise, the system would be unworkable. The legal system is a way
to create certainty for business ventures and provide redress when persons are injured; it is, in
other words, heartless.
Unfortunately many western managers left the region, but worse, without taking
responsibility for their employees left behind.
As described by Ormo Hugo, A DLN participant:
I can see two different approaches in the case. The first interviewed did honestly face the
situation and expose clearly her fears and decisions. Weighting also the overall impact of any
of the solutions (rules are different for locals or foreigners?).
The second interviewed, under the same circumstances showed different behaviour. He left
for planned vacations and mentioned that many foreigners did, probably because it was all
planned too...
If I would be in the first interviewed team and local I would feel even more bonded to the
company and to the team. In the second case I would feel frustrated and I wouldn't trust
anymore the interviewed. Do we detect animosity?
Our summation? Reverting back to the timely quote. When the times get tough, the tough get
going. Unfortunately the un-tough in this case, literally left. The issues are extremely
complex and quite possibly unique and difficult to measure with a fixed yard stick, but we
feel we covered a great deal. There is a lot to learn from the leadership experiences of the
SARS “era” and what a great start to our DLN experience!
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2. Breaking through the glass ceiling: Diversity and Race
2.1 Topic summary:
Roberto Goizueta (Cuban), former CEO of Coca-Cola, Rajat Gupta (Indian) former CEO of
McKinsey, Ken Chennault of American Express Company….are these mere minor ripples on
the ocean’s surface, or are they an indication of definite trend?
But, one has to ask two questions, (a) is this diversity indeed good and (b) how can real
diversity be achieved. These days, most of the companies seem to have a prevalent theme
around their ‘diversity policy’. Should a successful and intelligent person really be given a
pass for promotion, only because she is not from a minority community? However farfetched it might sound, this is happening in many companies.
2.2 Forum participation – Discussion threads:
Participants quickly resolved that there are two issues here, moral and business. Though the
first issue seems fairly obvious, there are certain fundamental (and often incorrect)
assumptions. How do you define minority? Should an affluent, third-generation, Harvardeducated African-American be considered a minority in the USA? Participants went on to
ask, whether - if the moral basis of diversity is equity, fairness and valuing difference - how
relevant are diversity indices measured on the basis of colours and races? The other issue is
equally unclear; what value can be derived out of tapping people from different cultural and
racial backgrounds? If the fundamental issue were that of ‘search for talent’, would diversity
add to the talent within an organization? There is a widely recognized view that no single
grouping has a monopoly over talent and in diversity we increase the chances of finding the
right talent for our organizations.
It was eventually resolved in a pertinent discussion thread that the question, of whether you
ensure diversity, through quota systems or through some other pre-determined framework, is
equally elusive. How do we make sure that those who are truly disadvantaged do compete on
a level playing field? Quota system seems to be a double-edged sword for many of our
experienced participants that has potential to do more harm than good. Quotas can ultimately
drive wrong behaviours and deliver wrong outcomes for the company. The real question is
that of merit. Recruitment for any position should be a competitive process. The teams should
consist of people who have different personalities, different perspectives and who think
differently.
It was discussed that many prominent companies, in the near past, have had to face civil
lawsuits due to work-place discrimination. Some CEOs, like Niall Fitzgerald of Unilever,
have been talking about their quest to increase the participation of women at senior levels. As
a statement of intent, it is quite impressive, but the proof of sincerity will have to be seen.
Like corporate responsibility, issues related to diversity are quite easy to spin some positive
propaganda around. As a kind of parting question, participants left the thread with a doubt
whether it might be worth thinking about whether corporate scandals of similar magnitude as
the ones seen over the past 24 months would have happened, if more women had been on the
boards of companies like Enron, WorldCom or Tyco. After all, most of the whistle blowers
are women…
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Finally, there was also a discussion thread on mobbing. Participants gave mostly personal
examples of mobbing, which can happen not only through colleagues but also through
unhappy customers, suppliers, and others. What comes more - the internet supports that.
There exist many websites, which only aim at damaging companies/individuals. This can be
done anonymously, and it is almost impossible to enforce the existing laws (e.g. prohibiting
damaging publication etc). Suggestions as to how mobbing can be reduced included clear
internal company guidelines, an open culture of communication within a company and clear
guidelines as to what is to be done about mobbing cases that have occurred.
3. Making tough choices with compassion
This topic of the White Paper has the thread discussions woven into the summary of the
topic, as essentially the threads further discussed and refined the “to do list” of layoffs, which
we proposed at the outset of this topic.
Layoffs, are they right or wrong?
They are right because:
in a situation of underperforming employees within a team, a layoff of that person can
actually improve team morale;
a less clear reason: in unforeseen economic/business circumstances, they allow to respond
to changes in demand.
They are wrong because:
large scale dismissals are a great waste of resources;
they can kill staff dedication and commitment of the remaining staff;
they reflect a lack of senior management planning and foresight (e.g. Swiss International
hiring then firing, and now suffering from a lack of pilots);
can be a result of unrealistic performance expectations driven by stock market;
potential loss of knowledge;
loss of motivation and work overload for remaining employees.
Why do employees become poor performers?
performance bar is raising while employees are not growing;
employees are promoted without appropriate skills or training;
personal issues;
outsiders of social group (set up to fail syndrome).
How to execute layoffs – An attempt to draft a “to do” list:
provide managers training on how to execute them (e.g. case of merger of Sandoz and Ciba
into Novartis, managers were given specific training);
be open about market downturns;
if possible communicate number and type of positions to be laid off;
offer voluntary resignation;
establish layoff rules/guidelines;
ensure quick execution of communicated layoffs;
relocate employees (does not always work: managers do not hire dismissed employees, they
fear they have lost commitment towards the company and prefer to hire new blood
instead);
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avoid typical HR approach: focus on numbers (rather than on individuals) and on meeting
legal procedures.
Who do you lay off?
underperformers
oexecuted through forced ranking (fire the bottom);
oDownside: i) what motivation and morale creates in employees, and ii) lack of
subjective evaluation procedures.
cheaper to fire, last in first out, over 55 (depends on legal system and country).
Alternatives to layoffs:
Part time working
Reasons:
onot to loose talented team members;
oensuring that we have enough team members once the business picks up again;
okeeping team members employed instead of them loosing their jobs;
oReducing recruitment costs once the business picks up again ;
Caveats: may not work in countries with high unemployment, and only for blue collars
and at the end of the downturn.
Focus on new business opportunities rather than layoffs (easy way out)
Dismissals are as much a cultural thing as anything else. In some countries it is quite normal
to have been laid off and there is little or no stigma attached. Likewise, there is little
bitterness felt by those laid off.
By way of a conclusion, a participant left us with a particularly daring thought: as a sign of
true leadership, should an authentic leader also resign?
4. Corporate Social Responsibility – where are the limits?
Participants gave examples where corporates can bear the responsibility to help authorities to
regulate a market. Participants strongly supported the view that corporates run business in
their industrial fields and have much more management experience than the authorities. They
know standards of procedure to get a qualified product and thus, they can share these
standards with the authorities so that government can enact legislation for health protection.
For example, a corporate in the food industry can suggest to authorities to set up a disposal
rule by which spoilt food cannot return from shops direct to producers but via a third party
body.
Participants asserted that there can be big advantages for corporates to collaborate with
government. It is a chance to tell the community that you are a leader in the given industry
and your product is trustworthy. Most corporate leaders produce and transport their products
here and there.
Corporate leaders should bear the obligation to respond to a community’s concerns and
protect our environment. However, one single corporate cannot do much for the environment
or a community. There must be an organization, preferably coordinated by an official body
such as the government, to lead these campaigns. So collaboration with the government or its
agencies is an important social responsibility in itself.
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A very interesting example was given by participants, as follows. Since 1990’s, Safety &
Regulatory officers from Ciba, BASF, 3M and Kodak set up a regular technical forum twice
a year for SEPA (China EPA). SEPA was proposed to adopt an international harmonized
procedure to replace the old Chinese system of chemical materials monitoring. The new
reporting system included a safety database of chemical materials. Moreover the safety data
can be used by the National Emergency Response Center. Such kind of cooperation benefits
both. The government can utilize resources from leader companies in the industry to set up
its system fast and effectively and protect the environment and community. By cooperating
proactively, corporates also minimize regulation compliance difficulties so that they can save
operation costs.
However, participants expressed a high degree of cynicism towards the large number of
corporates who apparently use CSR for mere propaganda or, even worse, for dishonest
purposes. One given example was that of some Taiwanese corporate that established a nonfor-profit foundation, essentially only to save tax and to have some money that can be paid
“under the table”. In another case, the chairman of a public company used the authorities to
establish a Charity foundation. However, the foundation was actually managed by the
relatives of that Chairman, so that it became a secret channel for money transfers of
convenience.5. The work-life debate: is balance achievable?
5.1 Topic summary:
Work life balance is a contentious topic. The debate used to focus largely around working
mothers, but has now widened to include the entire working population. Employees now cite
a reasonable work life balance as a major factor in their choice of employer and career, and
few companies can afford to ignore this trend.
While there exists plenty of good will in the business world already, most companies do
struggle to fundamentally rethink work cultures in which hours worked and volume of
tasks/work covered are often directly or indirectly measured as attributes of effective
working. A culture of “presenteeism” in many industries has meant that while people spend
long hours in the office, their overall productivity has been negatively impacted as many of
these hours are wasted. In other industries there is an aggressive business model which treats
people as expendable, and calculates average burnout time to help with staffing requirements.
Little research exists yet, which shows the societal and economic cost from stress related
illnesses, other psychological problems, divorce, etc.
Achieving balance is a two way street though, and employees must carry some of the
responsibility. Employees need to communicate what may be happening in their lives and
jointly agree ways to achieve a reasonable balance. There is also no room in this arrangement
to take advantage of an employer who has made significant changes to help an employee find
a good work life balance, which means no more sick days when they are not really necessary,
working productively rather than spending hours on personal calls or email and being flexible
whenever possible. Those who take advantage can damage an entire employee base, as the
true cost of giving people space to balance their lives becomes inflated and perceived as
something an employer cannot afford.
5.2 Forum participation – Discussion threads:
This topic was the only one during our seminar, where all discussion took place in only one
discussion thread, with more than the average share of emotions flowing in between the lines.
It became very quickly very obvious that this is a massively relevant issue for the young,
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talented leader of today. The themes were recurring ones and concerned mostly the issue of
what is expected from the employer and what needs to be done by the employee.
The most discussed issues were:
5.2.1Peer pressure – Presenteeism: Most participants had already lived situations were
people were only staying in the office because their boss was still there or an
office situation had been created that made any other behaviour unacceptable.
Participants mostly cried out for having performance recognised on the basis of
effectiveness and efficiency rather than face time.
5.2.2The reward for good work too often is … more work. When this is not matched with
more responsibility and more rewards, this is a real issue and will push the best
people out of a company into the hands of a competitor.
5.2.3Some participants argued that work-life balance was not an issue at all as it is only
given up by people who want to succeed and who do place their career more
highly than their quality of life. Most participants did react quite negatively to
this, and given that most DLN participants are young talent, this would suggest
that finding balance is a leadership challenge indeed, even for the ambitious ones
amongst us.
5.2.4Many participants raised relevant concerns about the cost/loss to an economy and
society of stress-related illnesses and behaviours. While there seems to exist little
empirical data it is clear, that stress-related illnesses, psychological problems and
other disorders that result from an unbalanced life carry a huge price tag with
them and that it is hence in everybody’s interest to try and positively influence
their organisations and themselves in this regard. As a sub-point to this discussion
topic, it was also often mentioned that essentially, the effectiveness curve of a
normal human slopes sharply downwards after 9-12 hours of work per day.
5.2.5An interesting topic that was also quite hotly, if often humorously discussed was
work-life balance and the competitiveness of nations; mainly mentioning as an
example the 2-3 week yearly holidays in the USA vs. the 4-6 week yearly
holidays in many European countries. The participants did not really reach any
kind of final conclusion, other than to have some light-hearted fun with each
other, which we were grateful for in our otherwise often very heavy DLN.
5.2.6Finally, the forum went into discussing semantics, when it was proposed not to talk
about work-life balance but about work-life integration. The suggestion was that
these are not really two separate things that need to be equally weighted when put
on a scale, but that work should really be an integral part of our lives, in the same
way as family, sports and sleep are. Most participants quite liked the idea and
many started using the new term immediately.
Ultimately, work-life balance (or integration) is a personal matter and everyone needs to take
their own position. This involves two steps, in the eyes of many participants: first, the balance
between work and (non-work) life has to be determined; second, once determined, it has to be
acted upon. If, in doing so, leaders find that their position is unacceptable to the company or
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outside the country’s cultural norms, individuals – according to most of this thread’s
participants - need to be prepared to vote with their feet.PART C. CONCLUSION
Authentic leadership is acutely necessary
The leaders of tomorrow are starting on their path today. Our discussion threads over the past
two and a half months, and well over 1,500 (yes, that is one thousand and five hundred) site
contributions, have given perspectives of recent corporate scandals and greed while offering
hope for the future. That hope is illustrated through specific stories and telling examples that
touched a cord in many, which was proven by the huge number of contributions made on our
site.
Not surprisingly, we found that the call to action seems easy, but it may turn out to be harder
than fixing weak marketing or fine-tuning corporate strategy. Being a successful leader is not
about adopting the latest style or persona, but about being yourself, being the person you
were created to be.
Authentic leadership is about the heart and values that today's young and old leaders need as
desperately as CEOs do. This DLN has only just scratched the surface of issues at hand, but
the amazing level of participation has proven that the issues are current and real and that
many young leaders crave a discussion platform. It will not be long until many of this DLN’s
participants will be asked to move to the front pew and take charge. The incredible interest in
this particular seminar suggests that today’s young leaders do not want to wait to be asked.
They do not want to wait until they get the top job to start thinking about the associated
problems.
Final thoughts for today’s young leaders
The Authentic Leaders DLN team at IMD would like to leave you with some thoughts that
Prof Bill George, whose recently published book served as discussion basis and “red thread”
throughout this DLN, spoke to the IMD MBA class of 2003 during his course’s last lecture:
“To live your life with such discipline that you would be proud to read about your behaviour
on the front page of the New York Times.
As a leader, your task is to engage the hearts of those you serve and align their interests with
the interests of the organisation you lead. Engaging the hearts of others requires a sense of
purpose and an understanding of where you are going. When you find that special alignment,
you and your team will have the power to move mountains. Nothing will be able to stand in
your way.
As an authentic leader, you can change things. You only need to be your own person, to lead
in your own style with purpose and passion, to be true to your values, to build your
relationships, to practice self-discipline, and to lead with your heart.
As much as we want to insure a happy, secure future for our families and ourselves, we have
learned the hard way that money alone is insufficient to provide either security or happiness.
But making a difference in the lives of others can bring you unlimited joy. Leading a life of
significant service can bring you unlimited fulfilment. Sharing yourself with others
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authentically can bring you unlimited love. At the end of the day, what is more important
than joy, fulfilment, and love?
When we experience them, we will arrive where we started and know the place for the first
time.”
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