How to tell if you're a good leader – or a bad one

Two decades ago, the key was to provide employees with perks and reward the most talented with generous pay packets. Companies would delegate and empower but there was never any doubt the boss was in charge.

"The leader of the future will empower people through ideas and innovation rather than through process."
Leon Gettler, Veteran and highly regarded management journalist

The post-GFC world looks very different. It's a world where banks are more reluctant to lend, share prices are weak and the economy is patchy and uneven. It's where diversity is becoming increasingly important, technology is driving a lot of innovation and there is a greater focus on the rate of change, embracing ambiguity and complexity. That needs a different kind of leader.

The best leaders today share similar traits in terms of innovative thinking and relentless focus on stakeholders – particularly customers.

The same names keep coming up: Jeff Bezos at Amazon, Anne Mulcahy at Xerox, Brad Smith at Intuit, Howard Schultz at Starbucks, Larry Page at Google, Tim Cook at Apple, Indra Nooyi at Pepsi, Warren Buffett at Berkshire Hathaway and Richard Branson at Virgin.

People follow them because they are true to what they believe in and act consistently in accordance with their beliefs, even when their actions might not win them any friends. Great leadership is about integrity, courage and resilience.

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SELF-AWARENESS

As emotional intelligence pioneer Daniel Goleman told Forbes magazine in March 2014, great leaders need self-awareness and they have to focus on others.

“Leaders need an inner focus to be aware of their own feelings, values and intuitions, and to manage themselves well," Goleman says.

“A focus on others allows a leader to read people well, which is key to managing relationships – the art of leading itself. And an outer focus lets the leader understand the larger forces and systems that (he or) she must navigate and to determine the best strategy going forward."

There is no shortage of leadership assessment tests around, many of them free on the web, asking such questions as whether you have a reputation for breaking new ground, whether you're a good listener and whether you are happiest at the start of big projects.

All up, these sorts of tests will assess people's character, vision, strategy, tactics and focus. They are all well and good but then, any self-assessment is only as good as the honesty of people taking it.

It only works for those who can check their egos in at the door and put themselves through an honest, no-holds-barred, introspective evaluation.

Alternately, there are courses available through external providers. The offerings at the Australian Institute of Management are built very much around self-discovery. This is consistent with the model developed by Harvard Business School professor Bill George.

George's leadership development blueprint is built on authenticity, where each leader has to develop their own style in line with their own personality and character. It's not the leadership style that is important – compare for example the different approaches of Barack Obama, Mother Teresa and Winston Churchill. What counts here is the authenticity.

AUTHENTICITY

So what is authenticity? It's being aware of one's strengths and weaknesses. Authentic leaders understand their purpose and why they are there. They have solid values, lead with their heart to ignite the souls of employees, establish long and deep relationships and demonstrate self-discipline. All these require self-awareness.

Business schools, like the Australian Graduate School of Management, focus on areas like project work, role play, scenario planning, feedback and experimenting in a safe environment, then going out to try it in the real world.

Frank Kennedy, the executive director for executive education at the AGSM, says good leaders recognise that they have certain acumen.

“That acumen has to be outcome driven,'' he says. “It might be a commercial acumen and there might be a business strategy or it could be leadership acumen around engagement where there is a very clear outcome."

So how can they tell the alpha from the beta - that is, how do they know it's their contribution and not the office culture that's creating the outcome? Kennedy says the answer lies in the difference between leadership and management.

“There are two components of that,'' he says. “One is that my personal intervention is creating value to the organisation or shareholders, so my idea my innovation, my ability to execute a strategy, my ability to bring in new clients, my ability to mobilise staff etcetera can be directly linked to either a shareholder outcome, a business outcome, a corporate responsibility outcome.

“That's how you tell the difference. You take a link between my own strategic view of the world and the outcome I produced as opposed to management which is more likely to be about managing a process and taking someone else's initiative and ideas and just project managing and seeing that through.

To be able to do that, Kennedy says, you need a point of view that is arguable and defendable through evidence.

“So I might have some economic thinking where I can go to a board and say I have looked at this scenario, here is the upside and this is where my numbers come from," he says. “Here is the downside and here are the risks that I've identified and here is the strategy that I will back and here is the evidence for that."

Kennedy says leaders being developed today have a certain quality that makes them different from the ones who emerged 20 years ago.

“What we are seeing more today is an entrepreneurial spirit and a huge desire to innovate and be creative,'' he says. They are also very self-aware.

“They have a very strong understanding of why they are a leader,'' Kennedy says. “It's not just about a business outcome but they have usually have a legacy they are working towards and that's a bigger formula for them and often it's about community, often it's about social responsibility. They are driven by that vision, they are really focussed."

A BRAND WITH A DIFFERENCE

Kennedy says like any great leader, they're building a brand. But it's one with a difference.

“It's not necessarily a personal brand,'' he says, “They're looking for some sustainable long term global impact. Some will realise that early and start by building an enterprise and then they will migrate to build something else, much like Branson.

“Others mature in their careers or in mature organisations want to be building that legacy and they want to be remembered and renowned for being a leader with a purpose, not principally being a leader of financial outcomes,"

The 21st century leader will have distinctive traits, Kennedy says.

“The leader of the future will be much more entrepreneurial and they will try to build on an environment that allows them to empower people through ideas and innovation rather than through process,'' he says.

“They will have the entrepreneurial spirit but the leadership capabilities will grow. And as the business will grow and their entrepreneurial spirit generates more activity and ideas, they will recognise what the next level is."

They'll also have the skills to look ahead.

“Maybe their company will have listed but that won't be the end game," he says. “They'll see what the next evolution is and it's often going to be their personal evolution rather than seeing themselves being the CEO of that organisation for the next 50 years.

“It will be a pattern where they can step back in their mid-50s and see what they have achieved for society, not just the economy."

And that will be a very different leader from what we have seen in the past.

Leon Gettler is a veteran and highly regarded management journalist, Leon blogs at leongettler.com.