What leader for what organization?

Alfredo Behrens

editor@newsleader.com.br

 

Winston Churchill, one of the warring World’s most renowned leaders, was thrown out of office once the war was over. In peacetime Britons preferred a different leadership style. The same with corporations.

 

Based on the work of Gareth and Jones,[1] I highlight why a company may demand different leadership styles through its existence and suggest what extensions to this analysis may be necessary to make it even more relevant to the Latin American business environment.

 

Since most companies begin small, let us begin by a start-up. This company usually revolves around a visionary leader delivering one product. The initial team is small and chosen by the leader, allowing for little argument about the focus and the ways. There is also little disagreement on whom the competition is and on how to sell to whom and at what price.

 

These organizations show a high degree of solidarity between its members because they display an intense commonality of interests and focus. Sociability is also high; the staff freely interacts during working hours and beyond. Reciprocity in collaboration is taken for granted, for it is only seen to be in the best interest of the organization. Gareth and Jones call these organizations “communal”.

 

The leader of communal organizations tends to be loved, his vision shared and his moral authority binding, as is his standing a source of meaning for the work to be tackled. A successful leader of this type of organization is likely to guide his team to another organizational phase, when the high degree of solidarity gives way to an organization more accommodating to individuality.

 

By then the organization may have grown to over 200 or 300 members, it may have developed several products that it sells in several markets and it may be already multi-site. This organization cannot cope with the demands of the highest level of solidarity, yet it vies to keep its high level of sociability and new staff is likely to have been hired on this trait. People are no longer able to socialize all together out of office but they keep a high level of social interest in each other. Reciprocity is still assured and high networking allows for high teamwork spirit. Lower on solidarity than the earlier phase, this still high sociability organization is highly “networked”, which is the name that Gareth and Jones use for this organizational phase.

 

The early visionary leader is phased out in favour of a more professional backstage style of management. The new leader operates mostly behind the scenes and knows how to stimulate different collaborators differently. He is also more at ease with individuality.

 

This leader must also know how to help his organization keep focus on performance; for it is in the nature of large organizations high on sociability to seek to preserve social relationships, perhaps even at the expense of performance. Some leaders fall short on this issue and, while liked, they may fail to lead the timely adjustments that may avoid more painful restructuring later on.  If the leader falls short on this account, the organization may go through a long period of poor performing units led by teams of old friends; discontent may spread, market share may drop, turnover increase; eventually the leader is replaced by a more performance-oriented one.

 

By then this organization, having already lost the early high solidarity traits, has also lost much of its high sociability ones. As the organization is refocused on performance for survival there is little time for getting to know each other, mistakes are not tolerated, working hours are extended and rewards are calibrated on performance with clearly set goals. Networking is pursued in as much as it serves the performance goal. Individuality prevails. Reciprocity is not taken for granted.  This goal-oriented organization has entered a mercenary phase of organizational culture.

 

The leader of the mercenary culture is likely to be less adroit at stimulating collaboration by a complex array of incentives. He believes that people respond to fear and greed and will use threats and power rewards in pursuit of total annihilation of the competition; and will reward its staff accordingly. Fearsome as it may seem, this organization is once more a highly focused organization where a one-dimensional collaboration helps build a sense of unity, characteristic of high solidarity, despite its low sociability. However, overburdened with its focus on performance, the mercenary organization, poor in sociability, fails to learn and share information. Islands of proprietary knowledge may arise.

 

Without nurturing the binding force of solidarity the mercenary organization may recede to the lowest level of organizational culture, poor in solidarity besides sociability: the Fragmented culture. Here company units or individuals are, at best, misaligned with the organization’s overall goal; individual goals may even take precedence over collective ones. The leader of these organizations, commanding little attention, is typically tolerated and frequently ignored; until the organization succumbs.

                         

Again, this is not a blueprint for the evolution of all organizations; and there may be good reasons for some organizations to remain in any one stage, even the fragmented one. Yet, that the evolution portrayed here is a plausible one for many companies; serves my purpose: to illustrate the balancing act between organizational culture, company performance and leadership styles; suggesting that there is not one best leader for all companies; and even those long-living business leaders, that are frequently portrayed as prototype leaders by the popular press, may be doing more good to themselves than to the organizations they lead.

 

We must still work together in the Latin American scenery to “localize” this framework of analysis. For instance, we may want to fit-in issues like foreign vs local organizational culture in the case of subsidiaries.  We may also want to discuss the nature of leadership in public corporations, or during and after mergers. Perhaps even more creatively, we may reflect on the organizational impact of the culture of cynicism in Latin American societies. This cultural trait slows down the building trust and inhibits solidarity also limiting sociability to small tribes within the organizations. This environment may foster the emergence of leaders more fitting of mercenary organizations, without the benefits of the latter.