Humans have known for millenia that neglecting to lead by example does not lead to sustainable success. As many a tyrant has discovered, the orgies and conspicuous consumption may be fun while they last, but the ultimate price is high.
I can’t think of a corporate leader today who comes close to repeating the spectacular mistakes of a Nero or a Ceausescu or a Gaddafi — but there are subtler ways to fail.
Contemporary management jargon is full of words like “alignment” and “integrity” which basically come down to this: If the entire organisation, from the Board on down, is not playing by the same rules, with the same goals in mind, you can expect trouble. A Board that demands accountability, ownership, strict financial discipline and similar good things, but does not deliver these things in its turn, is inviting cynicism and disloyalty. Such leaders should not be surprised to find their organisations filled with people intent on working every situation to their own personal advantage.
So what do things look like, when executives and managers are leading by example? One of the most important telltale clues can be found in how information moves up, down and across an organisation. Do senior managers make decisions based on gut instinct, personal whim or hard information? If they use information, does it accurately reflect what’s really going on? Do mid-level and junior employees understand the rules of the decision making process and trust its efficacy?
If the answer to any of these questions is “no”, or even “ermmm…”, the red flags should go up immediately.
Of course, making decisions based on hard information is not always easy. The data may be saying that a leader’s personal pet project is failing, or that customers hate the new packaging you were so excited about, or that you made the wrong call on a new product line. We all have cherished ideas about how the world should be — it’s all too easy to ignore the clues that tell us we’re wrong. Sadly, reality has a way of asserting itself no matter how hard we protest.
Effective leadership requires, firstly, having accurate information — and secondly, that leaders should act on that information. The first can be delivered by good systems; the second is where the real test of leadership comes in.