CEOs & Leadership Culture

 We seem to encounter this concept of leadership quite regularly in the business community, but we still struggle to clearly define it and understand the role it plays within organizations.  When we think about leadership in business, we often think of the CEO of the organization.  Thus, not surprisingly we have focused much of our discussion on the impact and power of the CEO. 

I came across an interesting article in Forbes magazine, which is relevant to the subject http://www.forbes.com. The author makes the argument that leadership and strong business performance is not all about the CEO, but that “long term business performance comes from leadership culture and careful and continuous development of leadership at all levels.” Now this is not exactly a revolutionary idea, and you might be wondering, as I was, what does leadership culture actually mean?

Well apparently, research shows that certain best practices in leadership development have a greater impact on long-term business performance than almost any other factor.  Certain high performing companies such as IBM, General Mills, and Procter & Gamble actually invest a significantly larger portion of money than their counterparts in developing their own leadership development programs.  This does not mean sending managers away to leadership seminars, but more so supporting and training employees to better achieve the goals and vision of the organization in their everyday work, whether that is global citizenship, collaboration, or innovation, for example.

I thought it was interesting how the author’s view of leadership strategy had an internal rather than external focus.  I agree that in order to lead the organization CEOs need to align the business strategy with the human side of the organization.  Thus, they must first understand the mission and goals of their organization and then clearly communicate it to their managers and teams to drive motivation towards this common purpose.  It’s about building leaders within all levels of the organization so that a legacy of leadership remains even as CEOs come and go.

But then I considered, who is responsible for developing the leadership culture in the first place, was it not the CEO?  And what about changing environments, does the CEO not then have to change the organization’s mission and values, thereby changing its leadership values?  I would say that today’s rapidly changing business environment calls for transformational leadership; a process in which I believe the CEO is quite instrumental.   This type of leadership calls for a charismatic leader who is able to transform the organization; this requires the ability to articulate a vision, coach individuals, and set high performance standards.  But would the leadership culture disappear under the direction of a CEO lacking in these qualities? Does it not require both a CEO capable of transformational leadership as well as an established leadership culture within the organization in order to achieve long-term success?

- Rebecca Hebb