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Be a visionary, go the distance

The Sears boss was, but couldn't. The man from BP who did has been shown a new horizon. By Bruce Tofield
Strong Major Simon Blair. Not a beefy army officer but leaders in the news. Their various recent fortunes encapsulate quite fundamental principles about organisation, leadership and management, whether in business or in politics. Notice the recent similarities between business and politics. Mr Strong leaves Sears after failing to effect an acceptable turnaround. The nation's shareholders have likewise given a profound thumbs-down to John Major and brought in a new leader, Tony Blair, with a turn-around agenda. Mr Blair has persuaded Sir David Simon, chairman of BP, to become Minister for Trade and Competitiveness in Europe. Sir David has presided over a spectacularly successful turnaround of the oil giant over the past five years.

But is not politics quite a different business from business? Obviously so on the surface; there are more personalities and there is less coherence and less control. The overall aims are different. But both business and politics are in a more competitive world, with increasing pressure on resources and increasing expectations from shareholders and the electorate. They will increasingly be seen to have many similarities. That is not some sell-out by politics. The similarities will reflect the underlying mechanisms of turning vision into reality, something both business and political leaders have to do. Successful politics must be inclusive; the inclusive organisation is a metaphor for the successful company of tomorrow.

There are three fundamental principles that seem to guide the success of enterprises that have long-term objectives. All are obscured by focus on personalities, on the short-term drama of politics, or the short-term financial indicators of business. All seem to be over-looked as much as they are followed. Yet, if they are ignored, the consequences, whether in business or politics, are poor decisions, undesired outcomes, under- performance and decline in quality of service. Everyone suffers.

The first principle is that the purpose, values and vision must reflect the real complexity of the task. Running a great company these days is complex and challenging; governing a country is even more so.

If the vision and values expressed by the leadership are short-term and do not reflect that complexity, then, whether in business or politics, the ability to cope with this complexity will be compromised and performance will suffer. New Labour, both before and after the election, seems to be articulating such a vision. So do companies such as Virgin and Body Shop. BP gave New Labour the idea of the 10-point performance contract.

The second principle is that the leadership must have the capability to work at the level of complexity and uncertainty that the distant future inevitably entails. With hindsight, good decisions may seem obvious; when they have to be made, they are often anything but clear.

It is the ability to make good judgements and decisions in the face of such uncertainty that is a key quality of good leadership; to create coherence where others can follow. Tony Blair could see that the Labour Party he inherited needed to change its philosophy quite radically if it were to become electable. Now, the change seems obvious; when he made it, it was controversial and dramatic.

If the required ability is not there, then problems will occur that should have been dealt with (such as BSE), poor decisions will be made (for example the ill-fated attempts to sell Sears' shoe shops), short-term argument or fire-fighting will become the norm (Euro-sceptics), and the day-to- day operations that are the bed-rock of success will be ignored and standards will decline (Tory constituency organisation, sleaze, service in Sears' shops). That is what happens when leadership cannot cope with the complexity of the task.

Sadly, the Peter principle seems very much alive. The underlying qualities that define whether people can cope with the complexity and doubts of leadership seem so often over-looked or not even understood. A good managing director does not necessarily make a good chief executive and a good minister does not necessarily make a good prime minister. Appointing people to a level above their ability to cope is unfairly stressful for them and bad for the organisation as a whole.

The third principle, the really hard one in practice, describes how the vision, which, although exciting, is diffuse and long-term, is coupled to the focused, short-term, day-to-day activities. It describes the means by which the vision is realised. That can be achieved only via well-considered strategy. A vision of an efficient and responsive health service is one thing. Getting there, from today's situation, in the face of antiquated practices, vested interests and lack of resources, is something else. Creating and implementing the strategic direction that oversees all aspects of the service, that creates good systems and information, and encourages best practice and innovation at all levels is absolutely fundamental to success.

For governments responsible for public policy and public service, and for businesses alike, effective strategic direction is the essential middle level of complexity of activity that couples long-term vision to short- term operations. This linkage is the process by which the future informs the present. It is so often compromised by short-term fire-fighting, inappropriate de-layering, unnecessary over-control, or by over-promoting people who cannot cope with the demands of what is complex and difficult work. Whatever the cause, when strategic direction is compromised, either by inadequate leadership or inadequate organisation, things go wrong, in business as they have, for example, in the prison service.

Whether in business, or in the world of politics and the public sector, if those three principles are followed, the underlying similarities between business and politics will become ever more evident. Businesses will be successful through becoming adaptive, learning organisations where people can realise their potential. The political process and the public sector will create a community where people are enabled, not excluded and an environment where all the organs of society can perform to their potential, where excess or vested interest is curbed, and where information flows freely.