Choose your leaders wisely – A preamble

When I first started writing a blog in 2006, it was the beginning of a journey in discovering how my internal and natural thought processes were evolving, by seeing which areas I was going to naturally spend more time writing on. I did not consciously decide on writing on any one area more than others, and in fact risked irking some readers by choosing my topics and timeliness erratically.

I also started a blog with a view to practice writing again. This may come as a surprise to some people who know that I lead a banking research company, where writing is at the core of what we do. Unfortunately, running a commercial business left me with little time to practice my own writing groove. Writing proposals and business analysis, and guiding staff in their own business writing, was not the same as building your own writing skills.

My blog is now four years old and it has a little of different things I am interested in. It also does not have a lot of things that I am interested in, but have not had the time to write about. I take so much time in developing what I want to write on that I am always impressed by people who can twitter, blog and Facebook constantly as part of their social networking lifestyle.

I did not write very much on the financial services industry, much to the disappointment of some people who started following me thinking that I would give insights into the industry I cover. Well, the business of banking is from the commercial side of my life, and my thoughts and ideas in this industry are packaged for commercial use by clients, sponsors, subscribers and members of our different The Asian Banker websites.

But the one thing I did do was comment a lot on leaders in the banking industry, and theme of leadership in general. I have been vociferous about my opinions on specific personalities in the industry, especially in Singapore, which is where I live (most of the time).

Reading through all that I have written in my blogs, I realize that I have been stumbling on something that even I was not aware of in the process of writing. I was stumbling on the fact that more and more people today realize that they can influence who their leaders are, what their leaders give them and how they would like to be led. I also realized that I was of that bent already – that I can and should influence who my leaders are from my writings.

By writing about leaders, I was actually writing to them. I was saying to them that this is what the industry expects from you and these are the criteria you have to meet and this is what we think about you.

I was even prepared to be judgmental but only to discuss the legitimacy of leadership. Leaders of financial institutions are responsible for thousands and even tens of thousands of human lives, and their decisions can make and break life long careers.

When policy makers, government officials and bankers choose leaders who can take an institution off course that can take another 5 or 10 years to bring them back, I think it is better for someone like to me to call a spade a spade rather than be a by-stander with a pen.

Contrary to some opinion, I did not see it my job to comment on all leaders, not even the weak ones. There is a band within which all human beings try to do their best. Some will fail and others will succeed. To be judgmental of people who operate within the band of social norms of fulfilling a job or doing what is possible, is to be arrogant and god-like, without knowing the limits of my own ability to assess. Put me in the same shoe and I may actually be the same as the person I am commenting on.

I only commented on institutions and personalities that were patently going off on a wrong foot after having stated a given charter, and I was only judging them on their own terms. But the collection of the things I have been struggling with in my writings on leaders and leadership, did present back to me an insight into how the notion of leadership itself has been changing profoundly in recent times.

I only needed to look out my window into the world and see. We now enter the summer of 2011, where a whole range of momentous developments have thrown the social understanding of leadership completely up in the air.

In the Arab world, several seemingly invincible leaders have been overthrown, and several others are fighting for their lives. The Arab Spring, as it was called six months ago, has not only become the Arab Summer, but has become more than just Arab, as the electronic revolution it represents spread to China and to the Western world itself.

In the United States, the person that a popular revolt against the previous leadership put in place is himself under siege. So many pretenders have come to center stage, contributed profoundly to the mess that the US economy is in today and left, that it is clear that Americans desire even clearer leadership, if at all there is such a thing.

So, the whole world is thinking about leaders and leadership. But more profoundly, the whole world today is thinking about leadership as if they are able to influence it, shape it and direct it. This is how we are changing.

The power of the internet, the ability of so many more people to share opinions and imagine that they have collective power to change things in a way that they did not once have, has completely affected the rules on leadership. We can almost throw away many of the existing text books on the topic and new ones have to be written.

Much of the literature that exists was written for leaders, people who aspire to or people who have been thrust into positions of leadership. There are thousands of books on the strategic, emotional and social qualities of leadership, books on problem solving techniques for leaders, rule-books on corporate governance, and books on the future – every one of them written for the people in leadership positions. But hardly any written for or from the perspective of the people they lead. This is where the great void exists today.

It was until now, not necessary. Leadership was always a top-down thing. The theme of leadership looks very different when viewed from the perspective of the people who put them there, whether by choice, inadvertently or through ignorance. It looks even more different when viewed from the perspective of people who now think they can influence it.

Through the centuries, we have been fed this fallacy that our leaders are ordained by God or gods, that they were untouchable and have a right over us. All leaders, from emperors to priests to landowners, have had only to invoke this divine right to rule to validate their positions with society.

In the extreme, the emperors of old legitimized their power by creating elaborate religious rituals that gave the illusion that God had put them there, even if they were mostly only usurpers of the previous order.

Once we start to ponder on the fact that our leaders are there perhaps because we put them there, a whole new set of responsibilities falls on everyone – on society, on the people who influence leadership, on the leaders themselves and on the people who influence leaders.

It is an idea that takes a little bit of thinking to sink in because, notwithstanding all the wars and street protests taking place in our times, we are not all going to delegitimize the processes of selecting leaders as we know it to be from ancient days.

If anything, despite the momentous ability of the Arab people in Egypt and Tunisia to topple well-entrenched leaders with considerable financial and military resources, the leaders they put in their place will only operate within the same social framework as before.

Even the ruled don’t realize that they too are caught in this old wineskin. On the one hand, the mobs are asking their leaders to align themselves more closely to the realities that they face in today’s world.

On the other hand, they wish that they can re-establish a pre-existing time when they perceived everything worked well. Maybe the age of Nasser in Egypt or the benevolence of a United Kingdom that is essentially mono-cultural. But the age of secrecy, decorum and order is not going to return. The internet and media is making sure of that.

There is also a disconnect between our perception of the world, and that of our leaders because they seek a legitimacy from the ancient regime, whereas businesses, social organizations, organized religions and countries are all grasping very new realities.

There is already much destroying the structures of leadership. From the days when the Egyptian pharaohs holed themselves up in rooms called the “holy-of-holies” to legitimize their rule by pretending to be closer to the gods, leaders today find themselves tweeting and blogging to account for their every thought.

It was at one point, not too difficult to manage this dichotomy. Yet today, whenever there is a rumour or a discussion on a leader, everyone pours over a large amount of information over the internet and finds comfort in the number of their peers who believe the same things as they do, regardless of whether they are right or wrong.

On the one hand, the people who are led hang on to every tweet with a wish to be that much closer to those who lead. On the other hand, they are not asking for any great degree of familiarity with their leaders. The mystic of leadership is still important to most people.

People in leadership position themselves, no matter how decent or well-meaning, become dysfunctional and cannot carry out their roles because they now preside over a much more fractious and fickle population than they ever did before.

All the books that exist today that advise leaders to be more humble, to communicate better, to emphasize, to lead by example appear to be irrelevant in an age where the masses themselves have no clue what all this access to influence power should mean to them.

Quite clearly, we would be saying something quite different if we were to articulate leadership from the perspective of the people being led. The main reason movie stars and singers have a greater fan club than people in positions of power is because there is much less disagreement about who they are and what they stand for in the eyes of large groups of diverse people, even if as individuals, these movie stars are not nice people and would not make good leaders.

A number of fundamental changes have taken place in human society today that makes it important to treat this subject of leadership differently.

Firstly, there is an increase in the need to deal with diversity even within a small organization or a small country. In the past, if there were say 100 potentially different views or special interests within an organization, only about five would come close to being at the core, influencing strategy and the DNA of an organization that required the attention of the leadership. A good 85 of the special interests would be inconsequential and only 10 would require special attention because they are deviant or dangerous to the core.

With the advent of social media, it is possible for a good 20-30 special interest groups to fester their union through constant communication with each other in a manner that the leadership has increasingly have to take notice of, because of their potential to affect everyone in the organization. These can be something as inert as a sports club for boxers to a specialized technical group that can potentially be spun off as a separate company. It could even be an otherwise inconsequential shadow leadership team.

At the level of the state, until recently, the world moved in generally two different directions. In the one direction, the potentially diverse large countries like the US and China have been able to contain a considerable degree of divergent views by over-simplification in the core.

The national agenda could be stated with a few catch phrases, like the environment, or the economy or represented by the Republicans, Democrats or the Communist Party and so on. This over-simplification at the core arose because the huge diversities that these countries had within their peripheries existed very much at a local level and never found themselves becoming national, because there was only so much communication bandwidth for them to capture the attention of people who were not local.

In such countries, leadership at the national level was simplified to the lowest common denominator that the great diversity of people in these countries represent can relate to. In such countries, the leaders take on a larger than life profile, because their personalities were projected as an over-simplification that everyone could understand.

In the other directions, there were the countries that have had to tolerate the diversity within the core all the time, in a federated manner, such that all of the diverse groups had to be aware of each other, and deal with differences on a daily basis.

In such countries, their specific leaders were relatively inconsequential. France and Italy would be the European countries that demonstrate this model the best, and also countries like India and Indonesia in Asia.

The impact of the Internet on human interactions has been to make it necessary for the countries that have benefitted from over-simplification to now deal with the wide range of their citizens’ interests coming to the core. The trade-offs that take place in the US Congress and House of Representative today are just that more complicated (and sometimes even appear ludicrous) because there are many more nuances represented at the core, that it is nearly impossible for even those doing the trade-offs to square their positions clearly on any issue.

In countries where the impact of communication is coupled by an increase in the population, like Egypt where the population ballooned from about 20 million in the 1960s to 80 million today, the need to manage diversity has become explosive.

This diversity coming to the core is replicated in business as much as it is in society. The reasons are somewhat different and yet similar. It has to do with the amount of data that is now available to be sliced and diced in a way that attracts businesses to provide more products and services for more customers than they are socially designed to do.

Business has become more complicated only because technology has made it possible to be complicated. What I am also saying here is that it does not need to be, if that is what a business leader envisions it to be.

In banking, the universal banking model, and all that we are able to know about the customer through the data we have has complicated the institution in a way that it is impossible for any one man or woman to run it without consensus, and even then still impossible to get consensus and render the leadership broken.

A bank serves very specific types of different clients –retail, small businesses and corporations. It provides capital markets and other financial intermediary services, requires internal skills that range from treasury to retail marketing. It is no longer possible to point to the one person in the organization whose career track is best suited to lead such a complex organization.

In fact, within any one bank there is this constant bickering between the people from the different business lines as to who is more important to the core business and profitability of the institution. Hardly any CEO has skills covering the full range of the business lines so as to be competent enough in each of them.

Human society responds to such blatant complexity by constantly looking for opportunities to simplify and simply, even in draconian ways.

We see today that the generalist is more desired as a leader than the specialist. In the extreme, in society, the artists, singers and actors generate more appeal and following than the career politicians of a country, even usurping them in some cases.

In an organization, the marketing man has greater appeal as a leader than the technically competent man whose skill may be more core to the balance sheet of the business.

The reason that these people generate greater appeal as potential leaders or pseudo leaders is because they represent the lowest common denominator who can pull together the diversity represented. In fact, in times of crisis, such personalities have made great leaders, able to focus the entire organization or country in solving a problem.

But in other times, when a country needs a technically competent person to put in place the nuts and bolts so that it can function and realize its full collective potential, a populist leader can be disastrous.

The more boring and technocratic leaders appear to be at the losing end today. These are the unsung heroes, the leaders whose names we may never even remember, who are prepared to serve their time and disappear. The more stable countries, like Switzerland and Norway, have some of them. The more stable companies have them as well. These are leaders too, except that they exist in societies and companies that are in a better position to “choose their leaders” to represent a clear direction that they already subscribe to. So, personality is not as important.

In the next few weeks, I will be writing the rest of my thoughts on this topic. If it becomes a book, I want to call it “Choose your leaders wisely.” Actually, that was the title of an important article I wrote on leadership of CEOs in the banking industry that I wrote in 2007, and that became the basis of an annual award that we give to the industry every year. But these writings now take on a broader scope. I want to talk about leadership in general.

The title alludes to the perception that we live in a world where we can and do choose our leaders, and that they don’t choose us. It is that perception that has to be defined correctly, because it can be both true and yet not true.

This global phenomenon of large masses of people craving for leaders who bring out the best in them has is leading to greater chaos today. The truth is, many people, equipped with greater access to information and communities, feel empowered to do what, they are not sure themselves.

But in the longer term, even this generation will be looking for a new plateau that both leaders and the people being led can function normally. The sooner we defined that next plateau, the sooner we can get there.

In the next few weeks, I will be adding the following chapters to this blog, that hopefully can be turned into a book:
1. We are at another cross-roads in the evolution of leadership
2. Leadership by any other name is still leadership
3. Where are our future leaders likely to come from
4. What’s the “right personality” for a today’s leader?
5. Why the Capacity to deal with Diversity is more important today than it ever was
6. The Morality of a Leader
7. Are you a leader?

I will also be writing and re-writing chapters as I grow them. So, please bear with me.