Twenty years ago, an article on leadership would have reflected the domination of boardrooms by alpha males who believed that emotions and feelings in an office environment were about as relevant as children’s storybooks and as welcome as T-shirts, and probably kicked off with something like: “A good leader recognizes that business strategy is a highly rational process of eliminating variables and maximizing opportunities.”
Leadership these days is a much more holistic concept: leadership training institutions such as Deloitte’s Leadership Academy use the analogy of children’s stories to encourage business leaders to tap into their own stories in order to become more open, honest, transparent and real—whereas employees wearing T-shirts is now a universal sign in major corporations around the globe, showing that a relaxed dress code lifts staff morale, acknowledges individuality, and potentially increases creativity and productivity.
Today, as expressed in the opening quote by Deloitte’s Leadership Academy chief and founder, Tom Richardson, good leadership engages the heart as well as the intellect, and encompasses a number of key qualities.
Richardson established the Deloitte Leadership Academy to expand the capabilities of leaders after recognizing that ‘people, not PowerPoint’ drove organizational performance. He has years of experience in the leadership stratosphere—working intimately with 15,000 top business leaders—and so is uniquely placed to explain why leadership is a people game.
“The characteristics and capabilities of good leadership are universal across almost all industries,” he says. “But it’s become more and more important in the insurance industry because of the pressure around bonuses and remuneration.
“People will only stay in an organization if they feel connected and engaged. They’re not being paid to stay there with bonuses anymore. The need for leaders in the insurance services industry to build up their people skills has become increasingly important.”
Andrew Henderson, a veteran of leadership management, introduces the term ‘leadership charisma.’
“It’s to do with connection: a connection that makes me feel that my leader is charismatic and the only way that connection will be established is if my leader has the emotional intelligence to understand me—what motivates me, why I’m here, how I react.
“Unless leaders understand and invest in their people, they will not be able to influence them because when they want to rally their team to do something, the reaction will be ‘you only want us to do this because of what you will gain,’ ” he adds.
“But, if each individual knows from experience that their boss is invested in them, listens to them (consultative leadership) and honestly cares about them, they will trust the leader’s decision on behalf of the team. That’s leadership charisma,” Henderson maintains.
Neuroscience in action
A high-trust factor is paramount in the leader employee equation in the insurance industry, says John Toohey, professor of business psychology at the Graduate School of Business and Law, RMIT University, because of the nature of the business and the fact that a culture initiated and practiced at the top is mirrored down the line and will eventually shape customer relations.
Toohey familiarizes his graduate MBA students with neuroscience to add weight and credibility to the argument that the most effective, charismatic leaders function from their emotions.
“Through neuroscience, which looks at how the brain operates, we have come to realize that decision-making is primarily emotion-based,” explains Toohey. “The emotional parts of our brain kick in long before the rational parts. The rational parts follow and try to make sense and contextualize.
“A lot of men in business are afraid of that component, and don’t want to know about it. The executive education I’ve done in this area is fascinating: people have quite bemused smiles when I first tell them this, but as they dig into it and I show them the research they begin to look more bewildered than amused.”
Toohey contends that an area of critical importance in business education is the nature of beliefs and biases. He teaches that the brain is highly plastic/durable. Beliefs belong to the irrational/ emotional world, and a strongly held belief can change the neural pathways of the brain (thus the plasticity).
“Leaders usually don’t understand this and therefore don’t get the impact,” he says.
The significance of all this, Toohey says, is to highlight the relevance of self-awareness (what we believe, how we behave, and why) in what he refers to as the “psychology of strategy” for leaders to “inspire people to act in predictable ways.”
“I challenge managers and executive MBA students because usually they are very good at identifying biases in others, and very poor at identifying them in themselves,” adds Toohey. “I tell them, ‘If you don’t understand yourself, go and grow cabbages or do some other solo job.’
“Don’t pretend that you can go into a business and take a leadership role, because you’ll only make a mess of it. If you don’t understand yourself you’re never going to understand others; you’re never going to be able to motivate them.”
“A good leader possesses two key attributes, the ability to set direction and the skill to drive people towards that direction, motivate and align them and ensure that the direction appeals to their hearts as well as their heads.”