Nasty or nice, leaders will still need a vision when they reach the top

My Week

Click to follow

The schizophrenia of leadership was laid bare in Oxford on Monday. Speaking at Editorial Intelligence’s Names Not Numbers conference, Insead professor Herminia Ibarra pointed out that strong leaders were in demand – until the point that they were revealed to have screwed up, when a more consensual style was hankered after.

Against the backdrop of Volkswagen’s emissions crisis and England’s rugby failings, it is true that leadership is in crisis. The forces of nature get blamed when a company loses its moral compass, but a lack of ambition and focus on short-term targets does not deliver for shareholders.

Management guru Charles Handy put it that leaders were frightened people these days, distracted by the instant feedback from Twitter and Facebook and under pressure to deliver quick returns. He praised the bravery of Jeremy Corbyn for standing up for what he believes in – even if his ideas ultimately prove to be wrong.

Can it really be that captains of industry are reluctant creatures? Ibarra thinks so, and that most get propelled upwards in a company because they have achieved technical excellence in a particular area and not because they have a great desire to become a figurehead. The serial non-executive director Denise Kingsmill put chief executives into two categories: those who least offended on the way up and therefore had fewest enemies, and the neurotics who just forced their way through.

Whichever camp they hail from, leaders still need a vision and the confidence to put that into action, as well as the ability to inspire followers. Handy is pushing his idea of the “second curve” – the radical reinvention of a company before it has fully surfed the wave of success the first time around. Not the sort of decision that can be taken by a cautious committee. 

It can’t be so bad, if leaders are getting paid an ever-larger multiple of what their average member of staff picks up. What is instructive is that the industrial empires built in the 21st century are among the most autocratic. The likes of Apple and Facebook have been dominated by individuals with a vision – and often backed by share structures that dilute external investors’ influence. No crowdsourcing strategy there, then.

Yet another line in the banking sand

Time and again, the banking industry has been too quick to draw a line under its failings when it has subsequently been revealed to be failing in a new and creative way.

Bob Diamond was busy trying to get back to business as usual at Barclays before the payment protection insurance (PPI) scandal, Libor and the rest had fully emerged. At Lloyds, dubious sales tactics where branch staff were offered “grand in your hand” bonuses carried on for a surprisingly long time into the reign of Antonio Horta-Osorio. So any suggestion that a deadline should be set, after which customers can no longer apply for PPI compensation, should rightly be treated with suspicion.

I do, however, think it would be the right thing for the Financial Conduct Authority to do. PPI has become a racket for numerous hangers-on, not least the claims management companies hunting for their cut. The subsequent publicity surrounding a deadline would give everyone who hasn’t already claimed the chance to do so. And then, finally, the industry can move on.

Channel 4 sale is not about the money

The idea of privatising Channel 4 is not a new one. It was mooted when John Major was in Downing Street and had it gone ahead was tipped to have raised £2bn for Treasury coffers. The price tag will be about half that if the Government gets on with it this time around. After fees, the proceeds will be negligible, so this is not about raising cash to pay down borrowings. If it is simply following a smaller-state ideology, the cultural impact must be factored in too.

Advertiser-funded Channel 4 is not a drag on the state like the Royal Mail had been. Its chief executive, David Abraham, argues that it contributes heavily to the economy because of numerous relationships with smaller independent producers. Much of that public service could be protected, whoever owns it. But a commercial owner would require the broadcaster to make a profit, which it can only do by retaining programming rights that largely revert to the programme makers at the moment.

Then there is the issue of who might buy it. In Major’s day, Silvio Berlusconi is said to have been keen to write out a large cheque. In the week that Jeremy Corbyn praised the Italian government for supporting its domestic steel industry while at home SSI’s Redcar plant was mothballed, could the former Italian prime minister mount a rescue of another key national asset?

A problem to stretch Experian’s boffins

Finding new leadership for the credit-checking firm Experian last year was long and convoluted because of, as the company stated, the “highly complex and unique nature of the business”. Anyone other than boffins need not apply. In the end, chief executive Don Robert was shuffled into the chairman’s role vacated by founder Sir John Peace and beancounter Brian Cassin was made chief executive. It was an unusual fix.

This week’s data hack, which may have exposed the private information of 15 million potential US customers of T-Mobile who applied for a credit check, demonstrates just how complex Experian is. Investors counting the cost of a plummeting share price can only imagine how much worse it would have been if the company had appointed people who didn’t know what they were doing.