The rising price of Leadership

 

Super-Priced Business Leaders vs Super-Performing Teams

What does the extraordinary performance potential of “High Performing Teams” tell us about the commercial world’s fascination with exceptional and expensive leaders? 

The business media is constantly full of the debate about the value of those at the top of the pile.  The general press loves nothing better than complaining about inflated pay packages.

Supply and Demand of Talent

Why on earth has this competition for talent reached such apparently extreme levels? Of course, we all know the theoretical answer.  We are told that a company can’t simply trade one outstanding leader for three slightly better than average people working on a job-share.  Even if it were cheaper, we are told that the results could never be as good.  The logical consequence has been for organisations to “out-employ” their competitors.  When one obtains a better leader then the rest, it will win; or so runs the argument. 

In practice, although the inflation of senior remuneration packages has looked unsustainable for many years, I have no doubt that the market can rise for a while yet.  That said, the whole thing does look questionable in the longer-term, both from a financial and moral perspective.  Even shareholders are beginning to have their doubts.

Is it possible that the financial competition has run its course?

High Performing Teams

It’s now reasonably well accepted that the results produced by a “High Performing Team” are far greater than the sum of the individual capabilities of its members.  Is there a way in which such teams can compete with the traditional leadership roles of the “big men”?

Management 4.0

The Chartered Management Institute’s most recent magazine (November 2019) is entitled “Rip Up Everything You Know – the remodelling of modern management”.  One key theme that reappears again and again is the growing success of modern companies that ignore traditional hierarchies and manage through flat organisational structures.  Let’s put aside for the moment any debate about whether it’s possible for an established “traditional” business to change in such a radical way – although demonstrably it is!  The emerging truth is that businesses set up with flatter structures can flourish to the discomfort of their more traditional competitors.

Who should Lead Big Business?

Now, I am not for a moment arguing that we should get rid of the heads of our companies and replace them with High Performing Teams – or with soviet style committees for that matter.  It is quite clear that the demands of leading a large organisation of many people are, in many ways, different from those of leading a small group of people in a “true team”.  Some of the characteristics required for each might even be exclusive.

What I am arguing is that senior leaders are only as good as the performance of the people beneath them.  Organisational success is the result of overall performance, not that of one totemic hero.  A business based on the idea that a single authoritative leader is the best solution is likely to develop an organisational culture that reflects this at all subordinate levels.  It will be in danger of encouraging character based, “hero leadership” at the expense of team development. 

Is “Hero Based Leadership” incompatible with High Performing Teams?

In my view, such businesses will find it difficult, probably impossible, to become the natural home of teams that achieve “high performance” status.  

In short, if the traditional companies continue to fixate on employing the lion kings of the commercial-world they may find that the next generation of flatter, more team-oriented businesses will rapidly outperform them.   

What Can be Done?

The good news for traditional businesses is that it is entirely possible to change their culture and to learn to benefit from the genius of teams.  All it takes is a conscious decision and a lot of hard work.

 

This article was written by UAG coach James Hall  

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