Leadership Paradoxes

“Research shows that the most successful organisations, over the long term, consistently focus on ‘enabling’ things (leadership, purpose, employee motivation) whose immediate benefits are not always clear”. So says Price in the latest McKinsey Quarterly (Nov 2012) in “Leadership and the art of plate spinning.” The article centres on the principle paradox of organisational performance and organisational health: the best performance is not achieved by only focusing on short-term shareholder value at the expense of the long-term health of the organisation. To achieve a “healthy” organisation, the leaders need to be able to continually reconcile three paradoxes.

Here’s a summary of those leadership paradoxes followed by further implications (“et alors”).

Leadership Paradoxes

Leaders will have to “come to grips” with the following paradoxes when trying to keep their “people and priorities” in balance at times when cultural and leadership change sometimes “seems an existential imperative”:

Change and Stability

With competitive threats, a dynamic environment and evolving regulations, organisational change is often inevitable if not imperative…

… but constant or sudden change is unsettling and destabilizing for companies and individuals.

The leader should therefore promote a sense of stability and make changes seem relatively small, incremental or even peripheral.

Control and Empowerment

Companies that neglect mechanisms that enforce discipline, common standards, or compliance with external regulations do so at their peril…

… but excessive control can prompt dysfunctional behaviour, undermine sense of purpose and reduce employee motivation.

The leader should therefore control and empower their employees (think: “trust but verify”).

Consistency and Variability

Delivering operational excellence with the same level of consistency at every point in the value chain is critical to success in most companies…

… but consistency too often hardens into rigid mind-sets characterized by fear of personal and organisational failure leaving little or no space for change and innovation.

The leader should therefore encourage consistency (in the quality of services and products) and allow for the sort of variability (read: “failures”) that go with innovation and experimentation.

Et alors

As the author states, far from reconciling these paradoxes, most executives are frustrated and choose an extreme: “either they try to stifle complex behaviour by building powerful and rigid top-down structures; or they express puzzlement and disappointment when looser, more laissez-faire styles of management expose the messy realities of human endeavour.” The inconvenient contradictions of organisational life have to be accepted by the leaders if they are to going to achieve good performance. By focusing on the long-term “health” of the organisation, performance can be sustained and improved, but only if the leaders can “come to grips” with the three paradoxes.

How are these paradoxes reconciled when one particular side of the paradox has become institutionalised by the leaders of today? The author cites an example of an organisation which had focused too much on stability, control and consistency. Managers became so used to being told what to do that they “eventually lost the ability to experiment”! The “tree” of top management had grown so large that “nothing could grow in its shade”. The organisation’s solution was to define “envelopes” within which the future leaders had complete autonomy to innovate and grow. For this empowerment, a sponsor was needed: someone in the “leadership of today” but willing to embrace change and champion the “leaders of tomorrow”. Leaders of tomorrow finding it difficult to reconcile the paradoxes should therefore seek out that key sponsor!