IMD International


The importance of leading responsibly

By Professor Jack Denfeld Wood - July 2010

Ask people to name great leaders and chances are that they will choose a person who “fought to improve the state of the world” in one way or another; Gandhi, perhaps, or Winston Churchill. They will also name – more provocatively but just as accurately – someone such as Adolf Hitler or Osama bin Laden. This means that any serious examination of what it means to be a leader must include the recognition that one can be responsible for causing great harm as well as great good.

The responsible exercise of leadership is not the result of putting someone in a particular job, investing him or her with formal authority, and giving them a book of ethical rules to follow. It doesn’t work that way—witness the origins of the current world financial disarray.

Neither is selecting those for leadership positions the result of an assessment of a range of specific traits, competences, or presumed abilities, no matter how much some recruiters would like to believe this. Nor do those installed in leadership positions rationally assess the situation that they are facing and then choose a particular leadership style and course of action, as many theorists suggest.

The heart of leadership is not rational - it is deeply psychological and emotional. In fact, I do not believe that it is possible to “teach” leadership in the way that other subjects are taught—through lecture, videos, and written examinations. You are just as likely to improve your capacity to exercise leadership from reading books and watching podcasts by management gurus as you are to likely to improve your physical condition by watching fitness videos and Olympic competitions.

But if leadership cannot be taught, it can be learnt. Given the right conditions, virtually anyone can develop their capacity to lead more effectively. But leadership takes work. Anyone who wants to run a marathon in under three hours has to spend months practicing. Just so—executives who want to develop their capacity to lead must get their hands dirty and actually “do” leadership. Leadership has never been about simply following orders, however, and whether those who are developing their capacity to exercise leadership do so in a responsible way depends on how they understand and integrate their responsibilities as a leader.

Leadership is neither inherently good nor evil, but is a process that can be used in the pursuit of either. Indeed, the positive traits that make great leaders also contain elements with a far darker, shadow side. The implications are clear: leadership must be exercised responsibly if it is to be beneficial; and leadership development must include the development of a finer moral and ethical compass and increased self-awareness.

This is a central reason why IMD revamped its flagship high potential Building on Talent program (BOT)—to give young up-and-coming managers practice in three fundamental elements of effective management—hands-on leadership development through a deeper grasp of business fundamentals, an integrative personal project, and the opportunity to understand the broader moral context in which they live and work.

The Responsible Leadership Elective (RLE) of the BOT program requires young executives—IMD BOT Fellows—to collaborate with a non-governmental organization (NGO) in the developing world and to use their technical strategic and business knowledge and skills to “make a difference”. The Elective gets them out of the business class lounge, away from the boardroom at corporate HQ, and into situations where issues other than quarterly returns and shareholder value have to be dealt with—often life and death issues. BOT participants can choose, for example, to help Cambodian parents learn business and technical skills that will allow them to earn enough money to send their children to school, work with Vietnamese children to develop their “hospitality” skills to land jobs with hotels and restaurants, to develop a reward system that will help a Tanzanian rehabilitation facility retain its medical personnel, to work with the legal systems in the Middle East to ensure fair treatment of prisoners.

It is important that individuals exercising leadership in the future see and work with organizations with this broader sort of aim because otherwise they risk being captured by the short-term goals that dominate many profit-driven businesses. Such lack of awareness inevitably affects thousands, or even millions, of people. Without this external awareness managers can, in effect, become hostage to the limited organizational vision. With the RLE new factors are brought into the decision-making calculus leading to better, longer-term, more responsible and sustainable choices.

Profit at any price is not good enough. Companies that profit responsibly will last—and so will the societies on which that profit rests. Organizations—private or public sector—that do not behave responsibly will fail in due course. Every group or organizations needs the exercise of leadership; but only those with a long-term vision of responsible leadership will exercise it wisely. Ultimately, executives must strive to do both.

Jack Denfeld Wood is Professor of Leadership and Organizational Behavior at IMD and the director of its Building on Talent program.

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