French Management

This week’s Economist is full of facts regarding “the French way of work” (Schumpeter, 19.11.11, www.economist.com).  BVA (a polling firm) says that two fifths of French employees actively dislike their firm’s top managers and that out of 10 countries surveyed France ranks last for workers’ opinion of company management. Separately, less than half of French staff consider that their managers help them reach their goals compared with two thirds worldwide. TNS Sofres (a market studies firm) showed that France is unique in that both middle management and the lower level workforce are “largely disengaged from their companies”. Further studies cite that contrary to popular myth both inside and outside France, French employees are far from lazy: there is a strong work ethic but the “problem” according to Schumpeter is that human resources are poorly managed.

The context of this problem is that French management practices might have to be improved if French firms are to remain competitive in the global market place. Schumpeter therefore goes on to describe French management and in reading the editorial I was reminded of a now old but evidently still very relevant article in the Harvard Business Review, “The Making of a French Manager” (1991, J.L. Barsoux and P. Lawrence, www.hbr.org). The key points that Schumpeter outlines are also detailed by these authors as the fundamental observations of what “makes” a French manager.

Here is a summary followed by my culturally biased critique (“et alors”).

French Management

The authors set out to research what made French management successful (within the context of the early 1990s when France was being hailed as the “new Japan”); however they concluded that the French model produces a mixture of strengths and weaknesses. Here are their key points:

Management as an intellectual activity

The emphasis is on intellect rather than action: “the French do not share the Anglo-Saxon view of management as an interpersonally demanding exercise where plans have to be sold upward and downward”. Instead, managers must be clever: “they must be able to grasp complex issues, analyse problems, manipulate ideas and evaluate solutions”. The downside for this is that it is assumed that with their engineering background, French managers can usually solve anything “assuming they can detect the problem”. This is not always the case since “spotting problems is less to do with IQ than talking to people, asking the right questions, listening to answers and sometimes improvising.”

Leadership and Organisation

Centralised, rigid and highly hierarchical, the organisation is based on respect for authority. With very little accountability at the top, “there is a clear connection between the intellectual manager and the organisational centralisation. Senior executives believe they owe their high position to their intelligence and cunning.” By implication, all the “critical” decisions are made centrally, and those at the centre have to be informed of everything “so they can check other people’s decisions.” Compartmentalised, there is little in the way of decentralisation or “empowerment” of the lower ranks.

Grand Ecoles

Intellectual superiority is confirmed early in life: the French education system is referred to as “mathematical Darwinism – survival of the most numerate” with a heavy emphasis on the sciences leading to a supposedly (cf. Schumpeter) meritocratic system where the best students become engineers and end up with the best grades at the best schools. The problem with this “meritocracy” is that it leaves little room for meritocracy in the workplace since senior management and leadership positions are “secured” for the grand ecole graduates with self-replicating replacement strategies and old-school ties.

Career Development

Development is “inegalitarian” and more “a case of sponsorship than ability”. It is expected that grand ecole graduates will stay with the same firm for life: Michelin is cited as not recruiting persons for jobs but instead seeking “to fit the job to the person”. For the end of careers, similarly “ill-defined posts are set aside to accommodate burnt-out managers.” Career development therefore principally means “acculturation”: “being schooled in the thought, ways and folklore of the company.” Back to intelligence – if you are “clever enough” then it is otherwise considered that you can cope with anything. “Formal training is largely irrelevant, reserved primarily for the lower echelons.”

Et alors?

The authors conclude that the French model of management with its emphasis on intellect “serves research and strategy formulation well but is perhaps less well suited to flexible responses in fast paced industries where planning from the top can be cumbersome”. Noting all the above points, a further conclusion might be that that if your business is complex project engineering that requires a lot of detailed planning, then France is potentially the place to be; if however you want a business which is nimble, innovative, practical and flexible, then France is perhaps not the place to be!

Whilst this article and Schumpeter’s are similar they were both looking at French management through different lenses: in 1991 it was what can the world learn from France; twenty years later it is what can France learn from the world? Knowing that many Anglo-Saxon management theories simply do not work in the French culture (ref. any other article in this blog) and vice versa, then Schumpeter’s “problem” becomes highly nuanced. Do French management methods have to change? Possibly not! Even with low employee engagement and low work-satisfaction, an engineering-style management culture appears to be durable in France. Can French management methods be exported? Probably not! The same engineering-style management culture does not appear to be viable anywhere other than France.

The challenge therefore materialises for French companies operating internationally. Whilst French multinational companies might have exported their management methods twenty years ago, a multinational French company will today have to adapt its management methods to remain competitive globally!

Leadership: Selection versus Development

Only !0% of the development of talent (leaders or otherwise) comes from training (or “education”): another 20% comes from “exposure” (such as special projects and ad-hoc assignments); whereas the 70% majority of development comes from experience (Ref R.White) which is otherwise known as “on the job” training. Unfortunately however, it is rare when a large company can coordinate all three aspects to ensure an integrated and holistic development offer. Whilst there might be succession planning for key positions, plans rarely consider the experience as part of the development; more likely the next “experience” is considered as a trial where the candidate will either sink or swim. It is then left to the training department to take care of the “development”. Moreover, when it comes to leadership development, the training is often awarded to the successful candidate post-experience rather than before or during the “experience”.

Research into the possible root causes of this dilemma led me to Morgan W. McCall Jr.’s book “High Flyers: Developing the Next Generation of Leaders”, Harvard Business School Press, 1998. His extensive research of organisational cultures led him to conclude that there are two widespread, fundamental and self-perpetuating myths about leadership. The first is that “a single (and usually short) list of generic qualities can be used to describe all effective leaders and that those qualities are relatively stable over the course of a person’s career.” (In other words leaders are born rather than made.) The second is that those who have the “right stuff” will “through the survival of the fittest, eventually rise to the top.” This becomes a self-perpetuating myth by those already at the “top”. As a solution to this problem, he highlights the difference between leadership selection and leadership development.

Here is a summary followed by my culturally biased critique (“et alors”).

Leadership: Selection versus Development

The author describes the symptoms, the assumptions and implications of these two different perspectives.

Symptoms

Selection: once in challenging assignments, people are on their own. Performance reveals whether they really have the “right stuff”.

Development: once in challenging assignments, people are given help to improve the chances that they will learn. The goal is to help people succeed.

Assumptions

Selection: Leadership attributes (or “competencies”) are fixed. You either have them or you don’t. Experience is used to test the attributes.

Development: Leadership attributes are complex and are acquired. What you don’t have now, you might have later. Experience becomes the source of attributes.

Implications

Selection: Identify the key attributes and develop measures for them. Search for candidates with said attributes. Give them challenging assignments to test their skills. Darwinian: survival of the fittest.

Development: Identify the strategic challenges the leaders must face. Identify experiences which can prepare people for those challenges. Seek candidates who can learn from experience and support them to learn. “Agricultural”: development of the fittest.

Et alors?

Where a culture has the occasional “great man” in history cited as the example of leadership; where leadership is only associated with charisma; where there is a high power distance (where the followers accept the leader’s “natural” rather than acquired right to power); and finally where the culture is implicit (the “right stuff” is understood amongst those who have it but not otherwise explicitly communicated), then that culture is likely to support the belief that leadership attributes are fixed. Moving away from a leadership selection culture to a leadership development culture would therefore be a challenge in such an environment.

Everyone likes to believe that notwithstanding the quirks and foibles of their immediate boss, the boss of all bosses, (i.e. the person at the "top") must surely have the “right stuff”! In terms of corporate culture, it is not only the people at the "top" who perpetuate the myth, but people in the “system” who want to believe in the “system”. This makes it particularly problematic to move from a leadership selection culture to a leadership development culture and this is even before you get into the issue of just how many resources would be required to move away from a Darwinian model to an “Agricultural” model.

Many companies are looking to improve innovation. Extending the author’s theory I would postulate that when the leadership model is one of selection and therefore based on survival, in such an environment, most leaders will not take risks; they will not be creative; they will not step outside of their profession or “safety” zone; and they will not allocate any time to anything other than surviving. If leaders themselves are not allowed to fail in relative safety then creativity and innovation are bound to suffer. On the contrary, a development model could not only help the leaders to succeed and to learn, but for the whole organisation to learn and innovate!

A leadership selection culture can go some way to explaining why so many “foreign national” expatriations fail. Quite often in a centralised multinational company there is a startling difference between the failure rates of head office “locals” expatriated overseas and the failure rates of “foreign nationalities” who are expatriated as staffers to head office. The former have low failure rates in terms of career progression (even though the overseas experience might not have been considered a success by all involved); whereas the latter have a higher failure rate in terms of career progression (derailment, “repatriation” etc.). This seems to be explainable in the context of a leadership selection culture in which the “right stuff” is intrinsically related to the head office culture and/or the national culture of where the head office is located.

If a company wants to achieve strategic success, if a company wants to attract, develop and retain talent, if a company wants to innovate and successfully expatriate all nationalities, then there are some very strong arguments to move to a development culture to include experience as well as education and no longer rely on just leadership selection!  

High Potential Leaders

As discussed recently (Oct 28), using performance to assess leadership potential is a Catch 22 situation: the person can’t be seen to be a leader without having been given the opportunity, but how does the person get the opportunity to lead without having already been seen as a leader? There evidently needs to be an assessment of leadership potential in order to make sure that leaders actually get the opportunity to perform. Current thinking on leadership tends to favour identifying and developing “high potentials”. But how do you assess and identify a high potential leader?

October’s Harvard Business Review has an article entitled “How to Hang on to Your High Potentials” by Fernandez-Araoz, Groysberg and Nohria (Reprint R111OD www.hbr.org). Their key answers to the headline question are to 1. Align the leaders with the organisation’s strategy (so the leaders are adding the value as needed); 2. “Thoughtfully” develop and reward (targeted, balanced and specific); and 3. Communicate honestly (since “companies are often reluctant to acknowledge who has made the “list”, [because] their process is overly subjective or unfair.”) Their fourth and final answer is “select with care”, and accordingly half the article is dedicated to “what is potential”?

Here’s a summary followed by my culturally biased critique (“et alors”).

High Potential Leaders

Potential is a person’s “ability to grow and to handle responsibilities of greater scale and scope”. Scale can be measured in terms of budget or staff; scope can be defined with reference to breadth and complexity. To identify this potential in a leadership context, the authors make reference to the Egon Zehnder International model for assessing potential for which the main parts are as follows:

1. Individual’s Motives

·    This “inner core” predicts consistent patterns of behaviour over time, and relates to the “social motivators” – need for achievement, affiliation or influence.

·    One key social motivator related to leadership is “socialised influence (or having a positive impact on others for the good of the larger organisation).”

2. Leadership Assets

·    These “assets” predict how far and how fast a leader can grow.

·    The four key assets are “deriving insight”, “engaging others”, “demonstrating resolve” and “seeking understanding”.

3. Sense of Identity

·    “Identity” is how the high potential sees themself on the “stage”.

·    Engaging with the future, the high potential should envision a senior role to achieve one of the motivations (and not just for prestige or status).

4. Skills and Knowledge

·    Unlike the three “innermost” items which are hard to learn or change, skills and knowledge can be “easily” acquired.

·    To assess potential, the ability to learn and acquire new knowledge and skills should be considered.

Et alors?

In a culture with high power distance, it is likely that the motives of the individual are quite often overlooked. It can be the equivalent of the "head of the family", or the hierarchy who decides who has potential without involving the individual. If from experience, those with the authority to decide do assume to understand the individual's motives then special care needs to be taken to understand the motives of individuals in a multicultural environment! The chances are that the “second guessing” of what motivates an individual will be done in a mono- (rather than multi-) cultural context; however motivations can be one of the key areas of intercultural misunderstandings. In a culture with low power distance, the individual is more likely to be consulted directly which can reduce the risk of “miscasting” someone as a high potential leader, especially in a multicultural environment.

Some cultures are implicit, others are explicit. Reviewing potential with the individual concerned, communicating status and being transparent are all “success” factors of the above potential review and identification system. This process can work well in an explicit (sometimes known as “direct”) culture whereas it is more of a challenge in an implicit (sometimes known as “indirect”) culture. Similarly some cultures place more emphasis on the past rather than the present or the future. Accordingly it can become more of a challenge to review potential when the reference point is automatically past performance. In this context, there is also the perennial debate about “born” or “made”. Implicit, past-orientated cultures might conjecture that leaders are “born” whereas explicit future-orientated cultures might postulate that leaders are “made”. As the authors say, “select with care” and in a multicultural environment extra care has to be taken to communicate transparently and objectively across all cultures whether implicit, explicit, high or low power distance and past, present or future orientated!

Leadership Derailment in a Global Context

Derailment is defined as when talented or hitherto successful people fail to live up to expectations. The research into leadership derailment usually focuses on the individual. Why did the leader fail to live up to expectations? What “went” wrong? What did they not do that they should have done and what did they do that they should not have done? It’s usually all about the leader’s behaviours whilst contextual and cultural considerations are often marginalised. Unfortunately for international executives working across borders in a global environment, there are potentially many more “derailers” than to be found “domestically”.

Not just limited to derailment, it is seldom that I have found research that has taken a management theory from the USA and then tried to apply it globally, comparing and contrasting the results. I was therefore delighted to come across Chapter 7, “When things go wrong” (pp. 153-170) in McCall Jr. and Hollenbecks’ “Developing Global Executives,” Harvard Business School Press, 2002. The “American” theory which is criticised is McCall’s from a previous work where he studied why American executives derail in the USA; the authors then take that study, expand the research worldwide and see if the results are still valid in a global context.

Here is a summary followed by my (and essentially their) culturally biased critique (“et alors”).

The Dynamics of Derailment

The authors describe four key dynamics which can derail leaders along with seven “universal fatal flaws” which are defined as “troublemakers”.

Bad Timing

Areté Hamartia, or “a unique excellence becomes a fatal flaw”. In other words the strengths that previously propelled the executive become weaknesses later on.

Overlooked Flaws

The executive was getting good results so flaws were tolerated up to a certain point beyond which they were no longer acceptable.

Arrogance

Hubris or wanton arrogance. Similar flaws include being overly ambitious or political along with an inability to listen.

Bad Luck

Wrong person in the wrong place at the wrong time. Even the most flawless executive is liable to this risk.

In amongst all these “dynamics” there are seven “universal fatal flaws” which cause “trouble”:

·         Failure to learn or adapt to change

·         Bungled relationships with key people

·         Failure to take needed actions (and/or ask for help) to deliver on promises

·         Narrow or parochial perspective

·         Lack of people skills

·         Loss of contact with the rest of the company

·         Selecting a team of ineffective people

Et alors?

There are plenty of cultural references already in this study. For example, “arrogance” can be considered in the context of a culture’s acceptability of arrogance, so it is difficult to see how these dynamics can be directly transposed into other cultures. Similarly, whilst noteworthy, the universal flaws do not actually appear to be “universal”: some cultures will place more emphasis on some points than on others. Nevertheless, the authors applied the same research to see if this theory could be applied globally and their initial finding was that it could be. The same dynamics are prevalent in a global context and apply as equally to international executives overseas as to “domestic” executives at home. However, “while some global derailments were straightforward and the flaws obvious, many others were not”. The authors conclude that besides the flaws of the individual and their actions (where the derailment dynamics still hold true), in a global context, the international executive is at risk of derailment due to two other forces: "Contextual Factors" and "Organisational Mistakes".

Contextual Factors start with the fact that the context is “significantly enriched in international settings by the added stress of a foreign environment and by differences in language, culture and belief systems that make inappropriate behaviour and misunderstandings more likely.” If we consider that one of the keys to success is “fitting in” then it can be seen that this “rich” context is likely to increase the risk of derailment. The more complexities there are the more chance that something can go wrong. This is compounded with implicit cultures since the “hosts” might be reticent to give feedback whilst the “visitors” might find it impossible to read subtle clues. This is all the more reason to argue that the organisation should help and assist international executives on global assignments. This is something which, whilst not deliberate, is nevertheless avoidable and therefore noted by the authors as another derailment force: “Organisational Mistakes”.

Organisational Mistakes include “the absence of feedback, little monitoring, the tolerance of existing flaws and a lack of support”. Their study notes that the risk of organisational “negligence” can be particularly acute for foreign nationals coming to the company’s headquarters and for executives returning home. The authors suggest that in the domestic arena, the company is only complicit in the derailment of the executive; whereas in a global context they are often the culprits. Sometimes support was implied but then not forthcoming when really needed; expectations were often unclear; feedback (if forthcoming) was seldom honest; and their home contacts often did not understand the local situation (or at worse did not care) and did not stay in contact unless problems arose.

As the authors state, “the combination of personal, contextual and organisational forces makes international derailments much harder to codify than their simpler domestic counterparts…” There are a lot of cultural implications which increase the risk of derailment so the next question is what happens in a mono-cultural organisation operating globally: could the"mono-culture" of the organisation actually decrease the derailment forces to a “domestic” equivalent?

The Performance / Potential Matrix

In an organisation which requires future leaders, how do you identify those whom you will invest in? There are many common pitfalls in this arena not least that the assessment of future potential is usually based on past performance without any reference to the potential of the individual. Another common pitfall is that “potential” is only categorised in terms of “promotability” but leaving the assessor to rely on anecdotal or subjective references as to how the person might achieve promotion. There are many ways to objectively assess potential but before turning to that I was reminded last week of the overall performance / potential matrix from which it can be conjectured that only “stars” should be developed as leaders.

The matrix is referenced to Kavanaugh, Duffy and Lilly, however when researching talent development, there is no more apposite and comprehensive an article than the special report published by RMG consulting in September 2008, “Making it Happen: Developing Talent in the Workplace”. In that article, amongst many other things, the author details the performance / potential matrix.

Here is a summary followed by my culturally biased critique (“et alors”).

The Performance / Potential Matrix

The matrix has four categories which are formed by the axes of performance and potential being marked as either “high” or “low”:

Deadwood

·         Low potential and low performance

·         If any development is required here, it is usually remedial

Question Mark

·         High potential but low performance

·         Accordingly the development “risk” is high

Solid Citizens

·         High performance but low potential

·         Also known as “well placed” or “plateau-ed” this is usually a low development category

Stars

·         High performance and high potential

·         Usually the target of high impact, high investment leadership development

Et alors?

So what if the organisational culture is a mirror of the educational culture in which the members of the organisation have already been formed? If that educational culture is one of critical feedback, defending opinions and avoiding mistakes, then the cursor of assessment tends to move towards performance at the expense of potential. Further, if the educational system is so intense and so hierarchical (with some diplomas from some schools being “worth” so much more than diplomas from other schools) then graduation day can often be the end of the learning journey! Development “stops” at the university gate and potential is assessed according to the “quality” of the diploma. In that context the performance / potential matrix starts to lose its value. “Stars” and “solid citizens” form one category and in the other “deadwood” and “question marks” are also forced together. At once and at the same time, potential in “question marks” is overlooked and “solid citizens” might be “forced” to develop as leaders.

Forcing “solid citizens” to develop as leaders presents a strong argument to have a dual talent pool system where not only are the leaders selected into a leadership “pool” according to performance and potential but also by reference to their own wishes and motivations! In many scientific and engineering companies there are those who are very technically skilled and are of enormous value to the organisation (like all “solid citizens”) but who do not want to become leaders and could be well placed in an “expert talent pool”. In organisational cultures which value technical skills more than anything else, there is a strong risk of miscasting: consequently, not only might you get an unmotivated leader but you might actually lose some of the technical skills.

The “solid citizen” category normally represents 60-70% of the population of any average organisation (with 10-20% for each other category). Besides being “B” players, “ex” leaders and other “plateau-ed” staff, a lot of people might be in this category not only by “choice” but by “circumstance” (ref. R. White). In other words there is a lot of talent which is not being developed just because of circumstances: missed opportunities, overlooked potential or personal constraints which hinder the person’s experiences, exposure or education. Taking this a step further however, it might now therefore be logical to say that development should be targeted according to past performance in order to avoid this risk! Yes for general development; but not necessarily for leadership development.

Beyond the performance / potential matrix, in order to target leadership development, there needs to be an objective assessment of the individual’s motivations and “drive” in addition to a consideration of leadership aptitudes (i.e. potential). Likewise, there is a need for the assessment of performance but not necessarily an assessment of leadership performance. There is too much of a risk that the organisation could find itself in a Catch 22 situation where the person can’t be seen to be a leader without having been given the opportunity, but how do you get the leadership opportunity without having been already seen as a leader? In other words, a lot would be left to luck! Performance can be measured against other objectives but if the organisational culture is one that is based on a “performance” education culture and one that emphasises technical skills, without dual talent pools for the separate development of experts and leaders, the risk of forcing well-qualified experts to become leaders is a very real risk!

Different Levels of Leadership

A leadership development program I attended this week highlighted the fact that leadership development is relative. There does not appear to be a “standard” development that can be applied to any leader at any given moment. The leaders themselves and everyone else involved in the development process must know where the leaders are and where they need to go both from a personal and an organisational perspective. Different leaders are at different stages in their personal development and the organisation might have different leadership needs according to the applicable strategies and objectives at any one time.

In researching how to frame those levels of development, I came across John Maxwell’s recently published book entitled “The 5 Levels of Leadership: Proven Steps to Maximize Your Potential” (2011, Hachette). The target audience is global but a lot of the cultural references are American and it is not immediately evident that these “levels” can be applied in other cultures. Nevertheless, this book is a clear and practical guide amongst many books on leadership development.  

Here’s a summary followed by my culturally biased critique (“et alors”).

The Five Levels of Leadership

Position

·         People follow because they have to. The authority goes with the desk rather than the person.

Permission

·         People follow because they want to. This is the beginning of influence where people start to follow you voluntarily.

Production

·         People follow you because of what you have done for the organisation. It could be argued that this is performance in addition to the “permission” or influence.

People Development

·         People follow you because you have invested in them and developed them.

Pinnacle

·         People follow you because of what you are and what you represent. This mirrors the popular notion of “authenticity” in leadership theories.

Et alors?

Napoleon’s definition of leadership was “first define reality then give hope”. In large, complex corporations for leaders in a “position” level, there is a lot of emphasis on defining reality and not necessarily a lot of hope-giving! For the other levels, a common thread in Maxwell’s book is the “giving of hope”: with the emphasis on a potential future, people see that you are capable of achievement, that you can lead change, that you can develop talents and ultimately that you can have a vision and take people there. However, the common theme of hope does not apply consistently in all cultures.

Imagine a culture where the emphasis is on the past and the present as much if not more than the future; a culture where the emphasis is on sensing the details rather than imagining the concept; and a culture where the hierarchy is very important… In that culture, there is a risk that leadership stops at level one! To progress to level two however, the type of influencing might be different than having future-orientated and conceptual ideas, being willing to take a risk and motivating people to believe in the idea itself. You cannot just sell the idea; instead you would have to spend a lot of time relating the “idea” to the past, firmly rooting it in the present with facts and figures and then having the support of someone with a “position”. It could be argued that this is just a different type of influencing, but the focus on facts and details might not lend itself to leaders or followers interacting on the personal or “human” level with reference to future possibilities.

A further problem arises not only attempting to apply a leadership theory from one culture to another but when actually trying to “apply” a leader from one culture to another. One thing is to lead in the original or similar culture (and some leaders do appear to be “transferable”), but in a truly global environment, to lead across different cultures is extremely difficult especially if the style of leadership in one culture is not recognised by followers in the other culture. When this happens, there is a tendency to rely on the authority of the position than the person, or in other words, regress to level one!

Whether Maxwell’s levels are applicable universally or not, he has emphasised two very important points in terms of relative leadership development. When principally engaged as managers planning and organising complex tasks in complex environments, leaders can often overlook the levels “permission” and “people development”. Position is literally just that and performance (or “production”) can always be achieved with technical or expert skills in such an environment; but in order to genuinely progress as a leader, there has to be some ability to influence on a personal level howsoever that “influence” might manifest. In addition, for more “advanced” leaders, turning to their staff and becoming the leader of leaders-both-current-and-future is a good point of development to ensure that they and their organisation can reach their “pinnacle”.

Superstar Leaders and the Myth of Intelligence

Last week in The Economist, “Schumpeter” cited a paper by Cazier and McInnis presented at the annual conference of the American Accounting Association in August wherein the authors studied 192 CEOs who had been externally recruited to their new company between 1993 and 2005. They found that past performance was usually good and that a premium was usually paid to recruit. They then analysed the performance in the new role and found that the pay premium to recruit was negatively correlated with performance. The “better” the recruit, the “worse” the performance! Schumpeter goes on to conclude that corporate culture is the key since these “superstar” CEOs usually assume credit for their successes in their old companies when in fact, many others were involved in that success. Accordingly, the superstars tend to have an inflated opinion of their own abilities and they tend to think that in their new companies they can change corporate cultures single-handed when usually they cannot.

So where do these superstars come from and are they only to be found in the C suite? Is it just a case of superlative performance or are there other factors at play which mean that a leader can “snowball” up to a superstar status? This reminded me of the book: The Halo Effect ... and the Eight Other Business Delusions That Deceive Managers, by Phil Rosenzweig (2007, Knowledge@Wharton). Whilst the focus is on the corporate entity in a competitive landscape, the theories are equally applicable to the leadership of the company itself.

Here’s a summary followed by my culturally biased critique (“et alors”).

The Halo Effect… and the Eight Other Business Delusions That Deceive Managers

The eight “delusions” include: 1) difficulties with data: garbage in equals garbage out; 2) finding the real causal link to correlations; 3) singling out the key influencing “success” factor amongst many connected variables; 4) success is reviewed in isolation and not relatively compared to the “unsuccessful”; 5) success is seen as sustainable but is invariably short-term; 6) performance is relative, not absolute; 7) measuring success is not scientific; and 8) success might come from focused strategies but focused strategies do not always lead to success.

His key point linking all the other “delusions” is the “halo effect” which is described as: the tendency to make attributions about a company’s culture, leadership, values, etc. based simply on the overall performance of the company. This builds on the origin of the “halo effect”: in 1920, Edward Thorndike found that when army officers were asked to rate their charges in terms of intelligence, physique, leadership and character, there was a high cross-correlation. In other words, when we consider someone good (or bad) in one category, we are likely to make a similar evaluation in other categories. Rosenzweig concludes with advice:

1.       Chance plays a greater role in success than managers may want to admit; and

2.       Bad outcomes do not always mean that managers made mistakes. Likewise, favourable outcomes do not necessarily mean that the managers made brilliant decisions.

Et alors?

Superstar leader status appears to be born with the halo effect. The starting point can often be what is heard said in big corporations, namely: “she’s really intelligent – she’ll do well!” The myth of intelligence is often that firstly, it is nice at the top to think that the people who will replace you are those who are seen as being intelligent; secondly, either from the top or elsewhere, it can be an easy diagnostic of failure – evidently she was not clever enough: if she was really intelligent she would have worked it out. Finally, throughout the organisation, it there is a conceit amongst those who “know” that the business is complicated and challenging and can only therefore be “mastered” by “genius”, then the myth of intelligence can easily become self-perpetuating.

In most corporations, intelligence is required to enter the “leadership tournament”, but is neither a guarantee of success nor any guarantee of extra value-added to the company since everyone in the “tournament” is already of a certain higher-than-average intelligence. It should not matter but with intelligence as the starting point, the halo effect is that the superstar is then more likely to be described positively in other categories. If this is actually combined with good performance then you go from beyond halo effect to “can-do-no-wrong” and so the superstar snowball is set in motion.

How many leaders will actually admit that a positive outcome was in full or in part due to chance? If however the outcome is negative, then it goes without saying that it was bad luck! For the fledgling superstar, once status is confirmed, chance can work in their favour since if it does not happen to go the right way then not only will everyone understand that it was bad luck but people will start to appreciate this leader as a “risk taker”…

Once a superstar is not only born but is being carried along by chance, then despite the stretch targets and special projects, performance has to be seen to be good. This too will not be a problem since, with the benefit of the halo effect, the superstar will by now exemplify the corporate culture. Whatever the values of the company are, the superstar will be seen to have them and good performance will be assured when measured against the “values” of that corporate culture.

To be a leader, it helps to be slightly more intelligent than average. To be a superstar leader, you have to perfectly “fit in” to the corporate culture. If that corporate culture is one which perpetuates the myth of intelligence and the leader is not only intelligent, but is seen to be intelligent (and preferably has the very best diploma to certify it), then with some help from the halo effect, a superstar is born! My point is not whether superstar leadership is good or bad, but that from the perspective of developing leadership in a particular corporate culture, the “superstar” status should be treated with at least some scepticism...