Monday, November 24, 2008

Leadership training – cause of credit crunch?

Leadership – the egos have landed
When I asked the Head of ‘news-presenter training’ at the BBC to give me a pithy statement describing what it was like training TV presenters, she said just four words, ‘The ego has landed’. What she meant was that taking a journalist and turning them into a TV star puffs them up so much, they become almost unbearable, assuming God-like qualities and knowledge on subjects they know nothing about.

Has the cult of ‘leadership’ contributed to megalomaniac behaviour that ultimately led to the financial crisis? All of this leadership lark is quite recent. For years we got by with management training, good old sensible stuff about being nice, clear and organised. Then, around the Millennium, the training world went all evangelical about ‘Leadership’.
Now the last thing you want to do with a bloated ego is feed it a diet of hubris. These guys (and it’s mostly guys) lap it up – it turns them into Ken Low-like monsters. When you over-inflate a balloon it floats away and is no longer grounded. They think they’re omniscient and omnipotent.

Leadership training
Leadership training may be partly to blame. With no solid core of theory it’s a potpourri of ideas. The cult of leadership, a relatively recent phenomenon, was grabbed with glee by the training community. A mishmash of management theory, culled from a few airport management books, they put their slides together and became leadership zealots, simply padding out the word ‘Leadership’ into a course, a miscellany of mumb-jumbo. No end of half-baked leadership consultants, who couldn’t lead a dog up a garden path, came on strong. Suddenly, it made trainers feel that they were at the leading edge of the organisation, training the leaders of tomorrow. In fact, they were goading their leaders to act even more irresponsibly.

First there was massive confusion in the field, with theories covering almost every logical possibility. We have Charismatic, great man theories (born not made), Trait theories (key qualities), Contingency theories (look at the environment), Situational theories (choose differently for every situation), Behavioural theories (one can simple learn how to lead), Participative theories (collaborative and inclusive), Managerial theories (organise and reward), Transformational theories (leaders inspire followers). You pay your money and take your choice.
Complex behaviours and skills are reduced to simple geometric diagrams, a pyramid here, an interlocking circle here, a four quadrant typology there. Leadership training became a byword for contradictory theories and over-simplification. A few choice quotes are thrown in, preferably from historically famous leaders, some interactive exercises, straight out of traditional management courses and you’re off.

Leadership and risk
An insidious feature of some gurus and courses was that leaders were encouraged to be uber-risk-takers. Risk taking (sometimes under the guise of innovation) became a badge of honour. The slightest hint of weakness was frowned upon. This led to Leadership programmes that weren’t big on managing risk; that was left to Boards and governance bodies, packed with their chosen friends. Non-executives are largely the personal friends of executives in the UK, and the risk register seen as rather old-fashioned and quaint management method, given cursory treatment at board level. Actually the main risks sometimes don’t appear at all. In practice, leaders in banks couldn’t manage risk, because they couldn’t work out what risks they were running.

Leadership gurus: a culture of narcissism
Tom Peters, Marshall Goldsmith, Stephen Covey, Tony Robbins.... they are certainly part of the problem. (Funny how you don’t get women leadership gurus, a credit to their gender and good sense.) I‘d call these false prophets, as they are basically song and dance men, all performance and no substance. It’s good old fashioned preaching with stories, parables, miracle cures, and live performance.

Tony Robbins, a narcissistic Neanderthal, is typical. A tax cheating (convicted), plagiarising (convicted) fraud. His ideas on health are stupid, but harmless. What’s harmful is his use of bogus studies – he quotes a ‘Yale study’ that shows that the 3% of Yale students who wrote down financial goals became richer than the other 97% put together (actually an urban myth). His leadership nonsense is based on training’s shameful cult – NLP, and James Randi has famously exposed some of his techniques as snakeoil scams. This is what passes as high quality corporate motivational and leadership training.

Tom Peters is not far behind with his little parables and maxims. He’s an all too common type in this field - a man devoid of theory. His first book In Search of Excellence with its 7 ‘S’s and 43 excellent companies turned out to be complete rot. Over a third of these companies were in serious financial trouble within five years of the book being written. There was even a book called In Search of Stupidity that satired his approach. Peters had simply picked large behemoths that were dominant in their stable markets, as soon as these markets changed they were too big and stupid to change. He also confessed to having faked the data in the book.

Robin Sharma, lawyer turned leadership guru, with his little poems on the fridge door. The more expensive the speaker, the more fatuous the content. If you’re in any doubt as to the phoney, hokey nature of this guy, watch this.

Why are so many people suckered with this stuff? David Hume explained it all in his masterpiece essay On Miracles (1748). Firstly, we all have an overactive sense of wonder which means we are easily drawn into aspirational ideas, the more miraculous the better. Secondly, our gullibility is increased when we actually want to believe something, and the people who pay to see these guys talk, and buy their books, are believers before they start. Hume was talking about Jesus and religious superstition, but the parallel with leadership training is obvious.

Leadership gurus: a culture of celebrity
An offshoot from the culture of narcissism, leadership training became the last refuge of washed out celebrities and sports people. I can’t tell you how many dull sports stars of yesteryear I’ve heard mumbling out platitudes between their schoolboy anecdotes. Football players rarely play this game as they barely made it through high school. So we’re left with an assortment of oddball sport people. The problem here, is that many sports, such as golf, tennis, swimming, track etc. are devoid of key management skills. These are obsessive, solitary creatures, who spend much of their lives training in isolation. It’s a solipsistic world. Even in team sports, there’s a coach or manager who has to make the strategic decisions and get them organised.

Leaders: Type 1 Megalomaniacs
Fred Goodwin, ex-CEO of RBS, refused to use the word ‘learning’, insisting on ‘training’. This was the man who insisted on staff at the Clydesdale wearing the company tie, an egomaniac, proud of his ‘Fred the shred’ moniker. His bank, now 60% in public ownership, he managed on fear, with the HR department that could be best described as a casualty department. This is the leader who took out a writ against a Sunday newspaper because it had the temerity to question the wisdom of his megalomaniac monument building around the new HQ. In the end he turned out to be the leader who couldn’t calculate risk and took RBS’s share price from 442p to 50p, made £15.5 million in salary in four years, and walked away with a £8.4 million pension pot. Is he contrite and has he shown any remorse? No , Good-win is a bad loser – thankfully now shredded.

He’s only one of a whole rack of ‘bankers’ (you know what I mean) who trousered £54 million in just five years, others include; Adam Applegarth (Northern Rock), John Varley (Barclays), Stephen Green (HSBC) and Andy Hornby (HBOS).

Leaders: Type 2 Barrow boys
Is anyone seriously suggesting that Alan Sugar is anything other than an ill mannered boor? Do we really want to hang on his every bad word about making money? The Leader who said, about women, "You're not allowed to ask, so it's easy, just don't employ them”. The whole ‘Apprentice’ thing looks decidedly grubby in this climate, with Sugar playing the bully and the participants devoid of intellect, talent and even good sense. If these are the ‘Leaders’ of tomorrow, god save us. This type will do anything to make money.

Leaders: Type 3 Crooks and hucksters
What about those four automobile CEOs who immediately after stating that they’ve laid off tens of thousands of workers and demanded billions in support, refuse to give up their fleets of private jets (yes fleets). These guys have annual salaries in the tens of millions and they only travel in private jets and some have negotiated that their wives will only travel in private jets. These guys had so little management insight that they continued to produce gas guzzling SUVs while foreign car makers decimated their market share. These leaders are self-indulgent crooks.

But the King of the hucksters is Ken Low or Enron fame. These guys deliberately set out to steal from customers and shareholders. It’s all about amassing personal wealth and nothing will stop them and their well-paid advisors (Andersons – remember those crooks?) from achieving their goals. I admire the US’s approach to this type of fraud – they haul them off in cuffs. In Europe, they get away with it.

Lions led by donkeys
‘Leadership training’ plays to a culture of narcissism and celebrity that feels the need to promote egos way beyond what is reasonable. It produces Type 1/2/3 leaders. It’s a world that says, ‘We’re all losers, so let’s worship the winners’. And where did these leaders take us? They robbed us and their organisations blind, with bonuses and share options disengaged from performance.

Cool, calm analysis and intellect was replaced by mission statements and hubris. These so called leaders had to behave like religious figures, exhorting others to strive for more, pushing everyone faster and faster. Missions replaced good sense and debt became a virtue, not a vice. Believe me these banks and investment companies all had ‘values’ and training on ethics. It would seem that it never got near their so-called leaders.

If we’re looking for academic leadership, we need look no further than Drucker, who hated the idea of ‘Leadership’ and ‘Leadership’ training, or Jim Collins, who took hard empirical evidence, from thousands of companies, to see what really made good leadership (not necessarily good individual leaders). Not surprisingly, his conclusions contradicted almost all of the ‘false prophets’. God leadership turns out to be good management. Steady, analytical, smart people who know how to deal with others. The good thing about Collins is his focus not on isolating good leadership but in seeing what makes a good organisation tick.

We could do worse than scrap ‘Leadership’ courses and all the hubris, and get back to simple, sensible management training.


Raymond E. Foster said...

Damn good post. Part of the trepidation my writing partner and I had on my last book was very similar to your blog post - you can have been on in the conversation. After many long conversations we went ahead and wrote a leadership book. Oh well. People often ask - what leadership books do you read? Me - biographies:)

John Wootton UK said...

The thing about being a good leader is that you either have it or you don't in my opinion.

Many of the names you mention Donald have good traits, for example Tony Robbins .. he displays enthusiasm; a leadership trait. He jumped on the bandwagon of NLP, which itself has many great ideas ... like many things it was made into something it wasn't by 'huckster' trainers who did a 6-week course and became hypnotherapists. I watched Richard Bandler live and he said that many things portrayed as NLP were purely additions made by others.

The key thing to me is that whatever I read or whoever I see, I take what I think fits and utilise it in my job and treat everything with scepticism until it works in the field.

Many consultants and leadership trainers have never had an original idea of their own and like you say, have never led anyoe at anytime. While there's money to be made, con-men will always exist.

We just have to be clever enough to sort the wheat from the chaff and be strong enough to say no when the latest leadership theories are thrust upon us.

Anonymous said...

I noticed during my time with a division of General Electric (the American one) that we were chock full of leaders -- except when you needed something signed. Then it had to be a manager.

More seriously, a lot of leadership codswallop is the Great Man theory of history, ported over to corporations to make those in charge feel smarter. I don't imagine any great rush by all the banking and financial leaders of the past 4 or 5 years to give back the salaries, bonuses, and deferred compensation that was in theory a reward for great return.

Anonymous said...

This is so beautiful Donald. Thanks for sharing. I was wondering when I picked up Robin Sharma book, if the person was sane to write such a juvenile stuff? This is a wonderful post. I have no words. Today, as I see the state of Mumbai with terrorists tearing apart the place, I have no doubts that Indus Valley civilization or Harrapa were much safer places. This is what leaders do, sell the country and for votes shelter the Mujahideens and see the innocent people killed on roads like insects. I completely agree all this leadership talk and what they provide as services is damaging and negative. We need no leaders, we are better off without such blood-sucking monsters. Thanks again for sharing you are generous in your giving to the world. Blessings.

Leon Stander said...

Whew, you really laid it on the line! I agree with most of what you said and used it as the basis for a post in my blog, Occam's Donkey. Thank you for that.

Have you read Francis Wheen's book, How mumbo-jumbo conquered the world? His 2nd chapter, Old snake-oil, new bottles is in agreement with much of what you said and is even more topical today after the credit meltdown.

Johan said...

You may be interested in the NLP brouhaha that I got involved at

It touches on quite a few of the topics mentioned here.

Unknown said...

That 'Yale Study' does the rounds amongst motivational speakers/writers but turns out to be an urban myth, with the motivational speakers all quoting each other as the source!:

I read somewhere that when confronted with this Brian Tracy (I think) said, "Well it OUGHT to be true".

Unknown said...

Really nice post. All the types of leaders mentioned look so apt. Effective leaders are not born with the gift of knowing how to lead. Rather, they gain experience, they absorb knowledge, they see and listen to the world around them - both inside the organization and beyond.

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