Narcissism and confidence, it can be a fine line

The more narcissistic a CEO the more likely it is their organisation’s share price will lag behind their competitors.  This was the finding of the Macquarie School of Management after reviewing 18 months performance through to March 2013 (reported in last weeks Australian Financial Review).

These finding surprised some who feel that, particularly in more challenging environments, a leader who has a strong ego is essential to success.  When the interviewer Andrew Denton asked the former Australian Prime Minister Bob Hawke “How important is it to have a healthy ego? Hawke responded “Well look if you haven’t got confidence in yourself how in the hell can you expect other people to have confidence in you?”  Hawke makes a very good point but the key to understanding this is when does confidence become arrogance and then narcissism.  The answer lies in the leaders motivation, is it all for themselves or is it for overall success?

Narcissistic leaders have a common focus with leaders who are at the other end of the scale, i.e. those who are afraid.  The number one priority for both is a concern for how they will be perceived by others (see table below).  It is this personal priority that will derail their impact on organisational performance.  They will do things for the wrong reasons and they will not be trusted by others; two key issues that will hamstring their ability to add value.  While it is easy to weed out leaders who are afraid it is more challenging to identify the narcissists, particularly in business scenarios that require strong and confident leadership.

Frame of Mind

Afraid

Confident

Narcissistic

Main area of concern

Themselves

The organisation and others

Themselves

Score

1

5

10

A confident leader will not be afraid of taking a stance for the wider good, they will seek the input of others, they will be happy to explain themselves and when they do get it wrong, they will have the confidence to admit so.  The old adage that a good leader will talk about themselves when addressing poor performance and the collective when referring to successes is always a good indicator.

By Simon Tedstone

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Poor leadership will cost Australian organisations dearly

“Only one in four employees in Australian workplaces believe their managers do a good job,” These findings are the result of a new survey into management by the Centre for Workplace Leadership, a federally funded research centre at Melbourne University and reported in today’s Age newspaper.

Three quarters of staff think they are poorly led.  This has huge ramifications for organisational performance.  Change management, evolution, innovation and restructuring are all things that need to happen to ensure survival let alone success and they all depend on good leadership.  If people do not believe in their leaders these activities are going to be less successful at best and utter failures at worst.

Why has Australian corporate leadership fallen to such a low point?

The wrong people are being promoted and recruited.  Many organisations don’t know or understand what skills and abilities they require in their middle to senior roles.  Furthermore even if they do have some concept of what they need they are not good at assessing potential leaders for it.  Too many organisations are simply putting high potential selection and promotion down to an online survey and good internal relationships.

When new leaders start their roles they are not always set up for success.  They are not supported or guided and helped to understand how their new role requires different abilities to their previous one.  With this lack of “on boarding” new leaders will be inclined to simply keep doing what made then successful in their previous role, after all it helped to get them promoted.  This means new senior leaders (and very often not so new ones as well) keep working at a micro level within the organisation rather than moving to a more macro focus.  This again can be a major impediment to organisational evolution and innovation, i.e. the organisation gets left behind.

Due to a variety of reasons Australia has escaped the worst of recent global financial trends.  However, Australia is no longer in the fortunate economic position it was several years ago.  This is at a time when many of Australia’s global competitors are finally moving forward economically after years of stagnation.  This is a time when Australian businesses need to be well lead, from the top and within.  This is not a time to take a tick in a box approach to high potential identification and promotion, this is a time to do it properly to get the best leaders, deliver the best organisational performance and ultimately the best shareholder return.

by Simon Tedstone

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Poor leadership will cost Australian organisations dearly

“Only one in four employees in Australian workplaces believe their managers do a good job,” These findings are the result of a new survey into management by the Centre for Workplace Leadership, a federally funded research centre at Melbourne University and reported in today’s Age newspaper.

Three quarters of staff think they are poorly led.  This has huge ramifications for organisational performance.  Change management, evolution, innovation and restructuring are all things that need to happen to ensure survival let alone success and they all depend on good leadership.  If people do not believe in their leaders these activities are going to be less successful at best and utter failures at worst.

Why has Australian corporate leadership fallen to such a low point?

The wrong people are being promoted and recruited.  Many organisations don’t know or understand what skills and abilities they require in their middle to senior roles.  Furthermore even if they do have some concept of what they need they are not good at assessing potential leaders for it.  Too many organisations are simply putting high potential selection and promotion down to an online survey and good internal relationships.

When new leaders start their roles they are not always set up for success.  They are not supported or guided and helped to understand how their new role requires different abilities to their previous one.  With this lack of “on boarding” new leaders will be inclined to simply keep doing what made then successful in their previous role, after all it helped to get them promoted.  This means new senior leaders (and very often not so new ones as well) keep working at a micro level within the organisation rather than moving to a more macro focus.  This again can be a major impediment to organisational evolution and innovation, i.e. the organisation gets left behind.

Due to a variety of reasons Australia has escaped the worst of recent global financial trends.  However, Australia is no longer in the fortunate economic position it was several years ago.  This is at a time when many of Australia’s global competitors are finally moving forward economically after years of stagnation.  This is a time when Australian businesses need to be well lead, from the top and within.  This is not a time to take a tick in a box approach to high potential identification and promotion, this is a time to do it properly to get the best leaders, deliver the best organisational performance and ultimately the best shareholder return.

by Simon Tedstone

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Staff Rationalisation in Challenging Times

You would have to be living under one very large rock not to be aware of the current economic stresses faced by many organisations, public as well as private. Some organisations are looking to cut staff costs by in excess of 20%.  As noted in the Economist, as a general rule cutting 10% of your workforce can lead to a leaner more efficient organisation, more than 10% can detract from an organisation’s ability to operate as its remaining customers expect.  

You can call it restructuring, rightsizing, realigning, organisational rationalisation or any of the other catch phrases that organisations use to make staff retrenchments sound more palatable.  What ever name you use there are three key and sequential steps to staff reduction; firstly what’s your business strategy, secondly where to reduce resources and finally which resources to reduce. 

The sole purposes of the second and third steps, is to drive the first step.  It is therefore crucial that this first step is done effectively and done first.  The second step involves looking for the fat spots in relation to your strategy.  The third and most painful step is to decide which individuals you want on your bus and conversely, who you do not. 

There is a high degree of emotion in these decisions.  At the top of the organisation a decision needs to be made as to what sort of leadership you need to drive your strategy.  This is a difficult task, particularly for those who are close to the outcome.  Outside consultants who are experts in interpreting and quantifying leadership needs and individual abilities can provide significant value.  Not only do they help make a difference to the quality of decisions but they also add a level of transparency and objectivity that makes the outcome easier to justify and implement.

Organisations who have the right leaders remaining will be able to identify opportunities in the market place.  They will have the ability in their staff to leverage those opportunities far more quickly and effectively than their competitors.  Therefore firms need to understand the capacity they need from their human capital, the capacity they have and how to close the gaps through staff rationalisation and development.  Making the wrong decisions, or no decision at all, will simply widen the gap. 

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Blinkered Boards doom organisations

Cut 20% of costs out of a business and you will be considered a great leader, with an equally impressive bonus.  This is currently a common message to CEOs from their Boards. 

Irrefutably there are situations when the need to cut costs does exist.  But why do so many CEOs put their blinkers on in relation to everything else in their inevitably complex organisation when they have to cut costs.  Because this is the one thing for which the equally blinkered Board will punish them, as such it is the Board that dictates how holistic or simplistic a leader they want their CEO and senior executives to be.

No organisation is so simplistic that cost is the only business priority.  Any Board or CEO who manages their organisation along those lines dooms it to very poor performance in the mid to long-term, regardless of the cost savings they make.  More often than not the price is paid, in declining profitability and job losses, long after the Chair of the Board and the CEO have gone onto pastures new.

Boards must decide what sort of leadership they want from their CEO and senior executives.   They then need to support and actively encourage this sort of leadership to build a strategically leaner business that gets more, rather than less opportunistic value from their senior managers.  The Boards that do this well will be the ones that cut costs today but simultaneously build foundations for tomorrow’s success.

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A tale of two firms

Take two, well established, financially secure firms with aspirations for growth.  The Managing Directors of each firm realises their own leadership ability, and that of their fellow Directors, is critical to success.  Their first need is to understand what leadership capability is required, the second need is to understand the level of current ability and the final need is to close the gap between the two.  To do this they both draw on the expertise of Simon Tedstone, Managing Director at Leading Change, specialists’ in organisational leadership. 

Simon develops a leadership model for each firm and assesses the current performance of all Directors against this model.  Confidential development feedback is provided to each director and the results for each director group is collated to identify collective strengths and weaknesses.  Both sets of Directors are strong strategically and inspirationally, both sets of Directors are also poor at collaboration and communication.  Here the similarities end.

Firm A grasps the information and commit to closing their leadership gap.  Individual Directors focus on leadership development that relates to their unique needs and challenges.  The firm as a whole works with Simon to develop a succession management and high potential program based on the current and potential leadership of its Senior Associates and Managers.  Firm A not only closes their leadership gap but they also put in place actions to keep it closed.

Firm B cannot agree among the Director group the importance of this information and its ramifications.  Instead they prefer to blame the poor results on one another.  There they stop.  There is no development of Director’s leadership capability, let alone identifying and developing the firm’s future leaders. 

Fast forward 10 years.  Firm A has gone from being a significant local player to a global player many times its original size.  Firm B is a fraction its original size and has fallen into obscurity. 

Sadly for Firm B, this tale is in fact a true story.

What is evident from this example is that all firms operate in a dynamic environment that requires change and evolution; those that adapt better than others will be more successful.  Change and evolution requires decisions and actions i.e. it requires leadership.  An organisation’s leadership is therefore its greatest predictor of future performance. 

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