What makes an effective board leader? The answers might have repercussions for gender equality, cultural nuances and ageism in the workplace, according to results from the latest study by Professor of Governance & Leadership, Andrew Kakabadse. As Programme Director of The Board Directors’ Programme at Henley Business School and Chairman of the Henley Directors’ Forum, Professor Kakabadse has undertaken global studies spanning over 20,000 organisations (in the private, public and third sector) and 41 countries. His studies into performance and leadership have led to surprising conclusions about what makes an effective board leader. In this interview, Professor Kakabadse shares with CEO Insight eight lessons board leaders could take away from his research.
Leaders who can effect positive change are confident in their decisions. Throughout his work in psychiatry and leadership research, Professor Kakabadse has noticed that whether someone is on the poverty line or in a management position, they’ll have similar crises of confidence preventing them from solving problems.
“At the senior level … I found that they were rich in their experiences and abilities but lacked confidence.”
“You would have thought when you’re dealing with people who’ve got lower incomes and are disadvantaged, they can’t quite enable themselves. What I found was the opposite. Yes, they were lower income. Yes, they were disadvantaged. Yes, there were terrible problems—but they knew the nature of their problems. And then, when I was asked by government to look at the reorganisation of social services in Scotland, I noticed the same thing. But this time at the senior level. I found that they were rich in their experiences and abilities but lacked confidence.”
Board leaders may know the nature of their problems. They may even know how to solve them. But if they lack the confidence to make changes, they’ll likely remain ineffective.
2: Culture isn’t a blockage in business, but it is a political tool
Many board leaders believe that cross-border business is fraught with difficulties; that cultural difficulties add to roadblocks in dealmaking. However, Professor Kakabadse found this is often a scapegoat for economic pressures.
“Cultural difference is used as a blockage.”
“What’s driving the issues of the boardroom and senior leaders is the economics of the market. So, it doesn’t matter if you’re, for example, French, Spanish or German; they all feel the same economic pressures. Cultural difference is used as a blockage. So if I’m a subsidiary of an American company, and I’m in Spain, I could say that you’ve insulted us Spaniards, so we’re not going to do what you, the corporate centre, want.”
In this way, cultural heritage is an effective political tool not to do something. Hence, boardroom leaders should learn cultural nuances when doing international business. It helps them form closer relationships and wield soft power to get results.
3: Equality for political correctness’ sake can destroy performance
Recently, a UK Health Region rated 48 of their 50 chair appointments as “terrible”. Why? Because people were appointed based on gender rather than their capabilities.
Gender equality within boardrooms exists as two separate issues. Firstly, the political issue of ‘should women have a right to serve as board members?’, to which ‘of course’ is the natural answer. Not only is it morally correct for women to be on the board, but there are more women in society than men, and their voices must be heard. However, in modern business, the above emotionally-charged political issue has overtaken the analytical performance issue of ‘does gender make a difference?’ And Professor Kakabadse has found the answer is no. “Now there’s a situation where boards need the right number of women to hit targets, look good and be sustainable, but it all means nothing in terms of performance.”
“There’s a situation where boards need the right number of women to hit targets … but it all means nothing in terms of performance.”
This means boards may underperform, and the makeup of their leadership means businesses may well have backed themselves into a corner. Professor Kakabadse states, “So we have a very embarrassing problem of how we now reverse this? Not the gender diversity issue we should reverse, but how do we reverse appointing poor people when we didn’t include the right performance criteria in their assessment.”
Equality and diversity are essential to a business—they often lead to innovation. However, if board members are elected for equality and diversity considerations over performance, then a lack of efficiency may not be far behind.
4: High IQ makes for better credibility than high EQ
In crises, senior managers who act on the most compelling business cases retain more credibility than those who lead with warmth and sensitivity. Professor Kakabadse found that “especially in a time of difficulty, such as a merger, takeover crisis or pandemic, the outstanding leaders were the ones who made the compelling case. The ones who outlined the logic for entering a new market and going with this acquisition”.
“What are we doing having this nice guy leading us?”
“Managers who were EQ oriented, and in truth only valued that – lovely, charming, sensitive, warm and vulnerable — in the argument they put forward, made the matter worse.” Having a sensitive person leading a board poses the question, “what are we doing having this nice guy leading us?” This leads to an erosion of authority, creating ineffective leadership.
5: The extremes of COVID help highlight the effectiveness of leaders who react to compelling cases
COVID was a moment of extreme panic, uncertainty, and isolation. Yet the most effective leaders throughout these extremes have been those who realise balance to make the most compelling business case. “In the early days, there was such harassment of individuals. You had to be sitting at your desk at home, people could see when you were leaving, and they wanted to know what you were doing. It was inefficient, and it was destroying people.”
“The idea that ‘working from home is not a very efficient way of doing things’ is beginning to change.”
However, as leaders grow comfortable that their staff are efficient from home, they’ve come to more mature conclusions about what works well online and face-to-face. “The balance is beginning to work. The idea that ‘working from home is not a very efficient way of doing things’ is beginning to change. I am increasingly seeing much better practice from middle-level and senior managers regarding the balance between zoom and face-to-face.”
The most effective managers get the balance right by asking colleagues the right questions, such as ‘what’s your workload?’, ‘Who are your clients?’ and ‘What do you have to do?’ and altering expectations accordingly. They lead by having the confidence to look at the data, see where the efficiencies are, and come to the balanced, most business-compelling conclusion that “so long as the work is done professionally and appropriately, then that’s fine.”
6: How people are taught to manage differs from the reality of management
There’s a vast difference between how management is taught especially at Business Schools and how it works in practice. Companies that rely solely on a rational approach to leadership are the least effective. Whereas the most effective leaders remain rational while building the nuance of context into their managerial style.
“I’m seeing a massive divide between the people thinking about management and the actual living of it.”
Professor Kakabadse has found that traditional leadership teachings have a fixed approach, “if you read the academic literature on management, you will find there’s a rationale for going from A to B to C to D.” Yet this fixed approach doesn’t reflect reality, “what I see in practice is that there’s such variation in context, situation by situation. So, I’m seeing a massive divide between the people thinking about management and the actual living of it.”
But what is the alternative to a ‘by-the-book’ approach to leadership? Professor Kakabadse argues for a new approach to obtaining and adapting to feedback through contextualism. With contextualism, Professor Kakabadse looks at how leaders work in their predominant context and uses these findings to see how it shapes them in other situations. For example, how a leader works in the workplace (their predominant context) also shapes how they work at home and elsewhere. This way of analysing a leader crucially gives them insights from multiple perspectives to help them understand why they do what they do.
However, while Professor Kakabadse admits having a high IQ is a critical aspect of a leader, the most effective ones must be able to tap into their emotions and be self-reflective to grow. “I face an emotional engagement with a leader where I want to explore because they want to improve themselves. So, I did not try to link into their mind; I tried to link into their soul by how they feel, which is a very different approach.” To highlight just how vital his approach is, Professor Kakabadse can now predict business bankruptcies 65 months into the future. Therefore, getting the balance right between leaders with a high IQ and the ability to self-reflect is vital for the long-term survival of a business.
7: An ageing workforce is a wise workforce
Boards are increasingly replacing the older workforce with younger people, but they do this at the expense of wisdom. Wisdom that makes for board leaders who have the experience to navigate challenging political situations.
“By the time people reach 70, they’re only just becoming good”.
The point of a board is to be mature enough to stand back and oversee the business. However, Professor Kakabadse’s research reveals younger people tend to misinterpret the board’s remit. “So rather than oversee the management, they want to be part of the management—pushing them to reach goals—which creates resentment.” Hence, knowing what not to do is just as important as knowing what to do. In this way, age becomes a political issue. And in politically charged circumstances, your contribution is worth more than how young you are. In many cases, “by the time people reach 70, they’re only just becoming good”. Therefore, keeping wisdom around can make for the most effective board.
8: Generational differences don’t matter as much as societal ones
One of the biggest questions put to boards is whether the Millennials replacing Baby Boomers in management positions have the steel to navigate the current socio-economic landscape. However, Professor Kakabadse’s research suggests differences between generations are not that insignificant, and one is just as likely to cope as the other. “You’re now having to balance costs, disciplines, and how we make an organisation efficient with adaptability and agility—it’s all about having the confidence to do something new. I found that, whether you are a Millennial or a Baby Boomer, you will be brought into that situation, and there’s no choice.”
“Whether you are a Millennial or a Baby Boomer, you will be brought into [the socioeconomic] situation.”
Rather than generational differences, it comes down to the makeup of an individual. The ones who will succeed in leadership roles will have a high IQ, adapt to self-reflection and be good at balancing socioeconomic pressures.
Political intelligence may be the key to effective leadership
The most influential leaders need a high enough IQ to make rational decisions with enough EQ to be self-reflective enough to grow. But what does someone with that quotient makeup look like? Someone who is politically intelligent.
“Leadership is somehow caught between coming up with a clever argument, the negotiation process, which is political, and the resilience to withstand that.”
Professor Kakabadse explains, “Politics has a negative connotation. But in reality, all it is is negotiation. How can I negotiate so that this impossible situation becomes more possible?” In the same way, business leadership is a constant political negotiation. Whether that be balancing equality in the workforce, fighting to hold onto wisdom on the board, or even navigating the socio-economic landscape. “So the leadership is somehow caught between coming up with a clever argument, the negotiation process, which is political, and the resilience to withstand that.”
But why does political intelligence seem to make the difference? Again, it comes back to confidence. Those who have high PQ have confidence in the decisions they make. Professor Kakabadse continues, “When you have to have discipline about why are we structured this way? Why are we going that way? Why are we investing in this market as opposed to that market? With that comes individualism, which is if you don’t quite have trust, in your own opinion, why should anybody else have trust in you?”
Ultimately, what makes an effective board leader is confidence. A leader can have a high IQ to make the business case, the emotional intelligence to grow, and even a political mind for successful negotiations. Still, if they lack confidence in their convictions, they’ll be lost to inefficiency.
This article contains quotes from an interview with Professor Andrew Kakabadse, Programme Director of the Henley Board Director Programme. The programme is taught over six weeks and helps leaders discover what it takes to be a successful board member and expand their leadership skills.
You can learn more about The Board Directors Programme here: https://www.henley.ac.uk/study/executive-education/the-board-directors-programme
Or for more information on Henley Business School, visit: www.henley.ac.uk