The Business and Leadership Conflict

By Gary Hinkle

It’s ridiculous if you think about it – businesses invest billions of dollars per year on leadership development, yet we continue to have a shortage of true leaders in business. Not every business suffers from this shortage, but I know that within most organizations involved in technology development and manufacturing there are major leadership voids in the management ranks.

I know this from my direct experience working with thousands of managers and engineers at hundreds of well-managed, highly-regarded companies. The common behaviors that are symptoms of major leadership issues include:

  • Unrealistic expectations
  • Making unachievable commitments to customers
  • Inadequate support for project planning
  • Insufficient resources needed for project success
  • Not fully trusting employees
  • Unwillingness to hear and accept bad news
  • Not treating people with respect
  • Dishonesty and lack of transparency
  • Reorg, after reorg, after reorg…

Sound familiar?

It’s also silly that companies work hard at attracting and retaining talent, but people often quit due to what they perceive as “management issues.”

Actually, “management” is pretty good overall in business. It’s the lack of leadership that’s the problem.

What does it mean to be a true leader? The basics are to earn trust and respect by showing trust and respect, communicating well (especially listening), and by demonstrating integrity. With these basic characteristics, leaders achieve objectives through influence.

Leaders with these basic characteristics and skills will generally attract followers, because this is attractive behavior. As straightforward as this might seem, business managers with all of these qualities are rare.

Beyond the basics, there are several qualities that separate great leaders from good leaders. It’s really challenging to be a great leader in a business environment, because most of the qualities found in exceptional leaders can be viewed as significantly in conflict with the main business objective which is to maximize profit.

  • Great business leaders put people before profit (expecting that profit will follow).
  • Great leaders take risks.
  • Great leaders have a vision of excellence, and influence followers to achieve it.
  • Great leaders challenge the status quo and drive positive change.
  • Great leaders demonstrate exceptional integrity.

As someone who teaches and coaches leaders, I know that it’s a lot easier to learn about and write about great leadership – and coach leaders to strive for greatness – than it is to actually be a great leader. Conflicts between leadership and business management create very challenging obstacles, and as a business person I am affected by these obstacles like any other business person.

Obstacles and Conflicts

People vs. profit: Since the main purpose of business is to make a profit, it’s a natural priority. In a public company maximizing shareholder return is typically number one priority. The leadership challenge here is straightforward. Put people before profit, expecting that profit will follow. That can be risky from a pure business management perspective, which leads us to the next big challenge.

Risk-taking is inherent in many basic leadership attributes such as trusting others, dealing with conflict, and engaging in debate with people in positions of power. Taking significant risks is an important aspect of great leadership because it’s needed to make significant progress.

The fundamental conflict is that in business management, predictability is ideal – the opposite of risk. Good business management generally means perfecting what’s proven to work by increasing efficiency, and making incremental, low risk improvements. The results we should expect with good management are simply “good.” If we want “great,” it requires either luck or risk-taking. The latter is the better option unless we’re willing to wait a long time to maybe get lucky. Hence the need for this important risk-taking quality found in great leaders.

Vision of excellence: Achieving a vision of excellence generally involves risk-taking, so the attributes of vision and risk-taking are closely related. Actually having a vision isn’t really that difficult if you think about “What does excellence look like?” With a vision, the question then becomes, “Is the vision achievable, and are the effort and risk worthwhile?” If achievable, the risk factor is the potential problem that’s in conflict with popular management theory.

Challenging the status quo and driving positive change: The thought of positive change sounds completely great, but it often means challenging the status quo. The status quo is both good and bad. You want to preserve the good part of the status quo and improve what’s not so good.

Challenging the status quo usually comes with resistance. Many people just don’t like change. Some might not understand why the change is good. If the magnitude of the change is small, people are more likely to adapt compared to a big change, so this is the typical management approach – continuous small incremental changes.

Unfortunately that doesn’t always work in the long run. Major disruptions eventually force the need for reactive, radical change. Though no leader has a magic crystal ball for predicting the future, great leaders constantly drive positive change – attempting to stay ahead of the curve and position their organizations to handle unforeseen disruptions with minimal chaos.

Exceptional integrity: The challenge in a business environment is to overcome many fundamental business management conflicts like putting people first, trusting them, being honest, and transparent. Putting people first means that leaders must give them enough time, attention, and support. It also means truly listening and caring about people.

To be clear, good managers don’t necessarily do any of this. Good managers are focused on the bottom line, they minimize and mitigate risks, they execute someone else’s vision, they maintain the status quo to avoid risk, and they might give their people minimal time and effort, to serve the demands of their bosses in a joint effort to maximize profit. Exceptional management is needed in business, because profit matters.

Does there really need to be such a conflict between excellent business management and great leadership? The management best practice of risk avoidance is a major obstacle, because risk-taking is the common denominator across the qualities found in exceptional leaders. For each of us as individuals, it really boils down to a choice – playing it safe for job security, or striving to make a significant and meaningful difference.Those of us who want to make a meaningful difference while depending on others to achieve it must be willing to take significant risks.

Here’s how I see it – if I take risks in an attempt to significantly make my organization or my client’s organization better, and I’m reprimanded or lose my job or a client because of it (I have been, I have, and I have), the attempt to better the organization is always something to feel good about. Losing a job or a customer doesn’t usually feel good, but the source of income can be replaced. Lost opportunities to make a major impact can’t be replaced. Not the same opportunities, anyway.

What’s working today in some companies is a grass-roots leadership culture, where individual leaders do what I’m suggesting. They have a vision and go for it by building rapport and influence, and they accept the risk that comes with the responsibility of leadership. Not all of these businesses where bottom-up leadership exists have a supportive, risk-taking culture, which makes leaders in those environments admirable.

This is what I think needs to change in business to fill the many leadership voids in the management ranks. We need a more positive view of risk as management best practice, rather than risk avoidance. Leadership can thrive when risk-taking is part of the culture. Think about companies you admire and view as highly successful, and it’s likely that a risk-taking culture led to their success.

About the Author

Gary Hinkle is principal consultant at Auxilium, Inc. (http://www.auxilium-inc.com), a company that helps engineering-oriented businesses increase productivity, manage special projects, and develop talent.

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