ecoMarkets Advisory Services\' Presentation On Leadership 010810

$: ecoMarkets Advisory Services\' Presentation On Leadership 010810$
Wednesday, January 06, 2010 1 ecoMarkets Advisory Services www.ecomarketsAdvisory.com

THE CHANGING NATURE OFTHE CHANGING NATURE OFLEADERSHIPLEADERSHIP

Jeffrey A. Malakoff


SESSION OVERVIEWSESSION OVERVIEWThis session is about leadership education and the changing nature of leadership in the current and foreseeable economic environment.

It does not pretend to “teach” students to become Leaders. Only the students can teach themselves to become Leaders through self-assessment, personal development, continuous learning, practice and experience.

Rather, this session, is intended to provide a foundation for that career-long effort by students relative to “what” Leadership is and “what” it requires from the Leader, “why” it is important and “when” it is useful and how they can develop themselves into Leaders in these uncertain and challenging economic times.


DISCUSSION TOPICSDISCUSSION TOPICS

• The need for Leaders and Leadership

• The importance of Leadership and its value to the organization

• Types of Leadership styles

• Change and change leadership

• Theories of Leadership

• Factors affecting Leadership style

• Leadership Development

• The differences and relationship between Leadership and management

• The Moral Aspects of Leadership

• Leadership Trends


LEADERSHIPLEADERSHIP

To lead people, walk beside them . . .As for the best leaders, the people do not notice their existence.The next best, the people honor and praise.The next, the people fear;and the next, the people hate . . .When the best leader's work is done the people say, "We did it ourselves!“

Lao-tze, Chinese philosopher


LEADERSHIPLEADERSHIP

Leadership is the energetic process of getting other people fully and willingly committed to a new course of action, to meet commonly agreed objectives whilst having commonly held values


THE NEED FOR LEADERS AND LEADERSHIPTHE NEED FOR LEADERS AND LEADERSHIP

“One of the most universal cravings of our time is a hunger for compelling and creative leadership.” James MacGregor Burns, historian and presidential scholar, in his book “Leadership”

“We need leaders in every field, in every institution, in all kinds of situations. We need to be educating our young people to be leaders. And unfortunately, that has fallen out of fashion.” David McCullough, Historian


DICTIONARY DEFINTION OF LEADERSHIP”DICTIONARY DEFINTION OF LEADERSHIP”

Noun1. The activity of leading; "his leadership inspired the team"2. The body of people who lead a group; "the national leadership

adopted his plan"3. The status of a leader; "they challenged his leadership of the

union"4. The ability to lead: "he believed that leadership can be taught"

Economics: A term. . . generally applied to qualities and forces existing within an organization (usually centered in the top executives) which motivate, guide and direct individuals. . Source: European Union.


WHAT IS LEADERSHIP AND WHO IS A LEADER?WHAT IS LEADERSHIP AND WHO IS A LEADER?

Understanding that there is no one single definition of “leadership” is the first step toward becoming an effective leader. Some common definitions or beliefs about leadership include: • A leader is the appointed head of a group, team, or organization.• A leader is a charismatic person who is able to make good decisions and inspire others to reach a common goal.• Leadership is the power to communicate assertively and inspire others.• Leadership is the ability to influence others.Not one of the preceding definitions is more correct than any of the others. All of the definitions, however, agree on one common fact: Leadership involves more than one person.

You cannot be a leader without a group of people following your direction and putting their trust in you. As a leader you have a responsibility to that group to lead fairly and ethically. The title "Boss" or "Manager" does not

automatically make you a leader


THE IMPORTANCE OF LEADERSHIPTHE IMPORTANCE OF LEADERSHIP

FEW THINGS ARE MORE IMPORTANT TO HUMAN ACTIVITY THAN LEADERSHIP.

•Effective leadership makes a business organization successful. It enables a not-for-profit organization to fulfill its mission.

•The absence of leadership is equally dramatic in its effects - Without leadership, organizations move too slowly, stagnate, and lose their way.

•Leadership is crucial in implementing decisions successfully. Problems of implementation are really issues about how leaders influence behavior, change the course of events, and overcome resistance.

•Investors recognize the importance of business leadership when they say that a good leader can make a success of a weak business plan, but that a poor leader can ruin even the best


WHAT IS EFFECTIVE LEADERSHIP?WHAT IS EFFECTIVE LEADERSHIP?

• Effective leadership is a process by which a person influences others to accomplish an objective and directs the organization in a way that makes it more cohesive and coherent.

• Leaders carry out this process by applying their leadership attributes, such as beliefs, values, ethics, character, knowledge and skills.

• Power does not make you a leader, it simply makes you the boss. • Leadership differs in that it makes the followers want to achieve

high goals, rather than simply bossing people around.


TYPES OF LEADERSHIP STYLESTYPES OF LEADERSHIP STYLES



AUTOCRATIC:• Leader makes decisions without reference to anyone else• High degree of dependency on the leader• Can create de-motivation and alienation

of staff• May be valuable in some types of business where decisions

need to be made quickly and decisively

Martha StewartMartha StewartMartha Stewart built her empire with personal attention to each and every detail. Martha Stewart built her empire with personal attention to each and every detail.

Whether you like her or not, she was meticulous and demanding. She was also very Whether you like her or not, she was meticulous and demanding. She was also very successful in her endeavors and in using her autocratic management style.successful in her endeavors and in using her autocratic management style.

Many industry analysts might argue that it was Martha's autocratically demanding Many industry analysts might argue that it was Martha's autocratically demanding style that allowed her to flourish in such a competitive environment as the style that allowed her to flourish in such a competitive environment as the

entertainment industry. Others might argue that even more success might have entertainment industry. Others might argue that even more success might have awaited Martha Stewart if she had not relied so heavily on the autocratic styleawaited Martha Stewart if she had not relied so heavily on the autocratic style



DEMOCRATIC:• Encourages decision making

from different perspectives – leadership may be emphasised throughout the organisation

– Consultative: process of consultation before decisions are taken– Persuasive: Leader takes decision and seeks to persuade others that the

decision is correct

• May help motivation and involvement• Workers feel ownership of the firm and its ideas• Improves the sharing of ideas

and experiences within the business• Can delay decision making

Dwight D. EisenhowerDwight D. Eisenhower

As a military leader Eisenhower was faced with the difficult task of getting the Alliance forces As a military leader Eisenhower was faced with the difficult task of getting the Alliance forces to agree on a common strategy. Eisenhower worked hard to make sure everyone worked to agree on a common strategy. Eisenhower worked hard to make sure everyone worked

together to come to a common understanding. This was one of his greatest achievements. It together to come to a common understanding. This was one of his greatest achievements. It was here that the democratic leadership style and collaborative efforts of Eisenhower shone was here that the democratic leadership style and collaborative efforts of Eisenhower shone

through and with a victory of the Alliance forces to help back up the correctness of the through and with a victory of the Alliance forces to help back up the correctness of the approach. approach.



LAISSEZ-FAIRE:• ‘Let it be’ – the leadership responsibilities are shared by all• Can be very useful in businesses where creative ideas are

important• Can be highly motivational, as people have control over their

working life• Can make coordination and decision making time-consuming

and lacking in overall direction• Relies on good team work• Relies on good interpersonal relations



PATERNALISTIC:• Leader acts as a ‘father figure’• Paternalistic leader makes decision but may consult• Believes in the need to support staff


CHANGE LEADERSHIPCHANGE LEADERSHIP


CHANGECHANGE

• One of the most misunderstood and feared actions in business.

• No one knows how to deal with it well. • When things go well, you don't need change. • When things are going badly, change can't

happen fast enough. • Fear relating to change is simply the fear of the

unknown.



• The most challenging aspect of business is leading and managing change

• The business environment is subject to fast-paced economic and social change

• Modern business must adapt and be flexible to survive

• Problems in leading change stem mainly from human resource management



• Leaders need to be aware of how change impacts on workers:

• Series of self-esteem states identified by Adams et al and cited by Garrett

– Adams, J. Hayes, J. and Hopson, B.(eds) (1976) Transition: understanding and managing change personal change London, Martin Robertson

– Garrett, V. (1997) Managing Change in School leadership for the 21st century Brett Davies and Linda Ellison, London, Routledge



Self-esteem

Time

Time



Self-esteem

1

1. Immobilisation – as rumours of the change circulate, the individual feels some sense of shock and possible disbelief – so much so that they deem it worthy of doing nothing.

Time



Self-esteem

1

2. Minimisation: As the change becomes clearer, people try to fit in the change with their own personal position and may try to believe that it will not affect them.

2

Time



Self-esteem 1. Immobilisation –

as rumours of the change circulate, the individual feels some sense of shock and possible disbelief – so much so that they deem it worthy of doing nothing.

1

2. Minimisation: As the change becomes clearer, people try to fit in the change with their own personal position and may try to believe that it will not affect them.

2

3. Depression: as reality begins to dawn staff may feel alienated and angry, feelings of a lack of control of events overtake people and they feel depressed as they try to reconcile what is happening with their own personal situation.

3

7

Time



Self-esteem

1

2

3

4

4. Acceptance/letting go: The lowest point in self-esteem finally sees people starting to accept the inevitable. Fear of the future is a feature of this stage.

Time



Self-esteem

1

2

3

4

5

5. Testing out: Individuals begin to interact with the change, they start to ask questions to see how they might work with the change.

Time



Self-esteem

1

2

3

4

5

6

6. Search for meaning: Individuals begin to work with the change and see how they might be able to make the change work for them – self esteem begins to rise.

Time



Self-esteem

1

2

3

4

5

6

7

7. Internalisation: the change is understood and adopted within the individual’s own understanding – they now know how to work with it and feel a renewed sense of confidence and self esteem.Time


Summary: CHANGE LEADERSHIPSummary: CHANGE LEADERSHIP

• Become as comfortable as possible with uncertainty. The way a Leader handles it will reflect in how a Leader leads, and therefore reflect itself in the group or team as a whole.

• Information is power. Empower team members by providing them information.

• .Become a truly interested listener with the intention of improving the life of team members.

• Find out what you can about why this change is happening, make that reason as clear and meaningful as can be and then communicate it in your change leadership.

• Arrange so that your team members know where to find support and training to be able to handle the change in a good way.

• Admit mistakes when you make them. Daring to make mistakes without being ashamed is key, especially when it comes to organizational change.


THEORIES OF LEADERSHIPTHEORIES OF LEADERSHIP

“Effective leaders are made, not born. They learn from trial and error, and from experience. When something fails, a true leader learns from the experience and puts it behind him”Colin Powell, former U.S. secretary of state

When asked “Are leaders born or made.”, A.G. Lafley, the CEO of Proctor and Gamble said: “Clearly made. You choose to lead. You choose to want to make a difference, to make the world better in some meaningful way. Until the choice is made, you don’t have a leader. You have a lump of clay.”



• Is the capacity for Leadership innate in some people, born in them or nurtured by the circumstances of early childhood? Are there “natural born” Leaders?

• Or, can Leaders be developed by training and mentoring? • Or, are Leaders “self-made”, with the capacity for

Leadership developed by the people themselves? Can Leadership be learned? How learned?

• This is one of the “Perennial Debates in Leadership Theory”.

The answer to the question: “How are Leaders created?” seems to be: “All of the above.”



Montgomery Van Wart, author of Dynamics of Leadership in Public Service: Theory and Practice, “Types of Leadership Development”. believes that “…leadership is a largely learned phenomenon…improved through experience, self-analysis, and training….” But, he does not discount the role of “…innate abilities or hereditary advantage….”

In conclusion, Van Wart says, To what degree can leaders be “made” and “how”. The developmental portion actually has two major components….While part of leadership is the result of formal training, this may actually be the smaller component. Experience is more likely the more important teacher….


BASS’S THEORY OF LEADERSHIP BASS’S THEORY OF LEADERSHIP

Bernard M. Bass' theory of leadership states that there are three basic ways to explain how people become leaders.

These theories are:

•Some personality traits may lead people naturally into leadership roles. This is the Trait Theory. •A crisis or important event may cause a person to rise to the occasion, which brings out extraordinary leadership qualities in an ordinary person. This is the Great Events Theory. •People can choose to become leaders. People can learn leadership skills. This is the Transformational Leadership Theory. It is the most widely accepted theory today



TRAIT THEORIES:• Is there a set of characteristics that determine a good

leader?– Personality?– Dominance and personal presence?– Charisma?– Self confidence?– Achievement?– Ability to formulate a clear vision?



TRAIT THEORIES:• Are such characteristics inherently gender biased?• Do such characteristics produce good leaders?• Is leadership more than just bringing about change?• Does this imply that leaders are born not bred?



BEHAVIOURAL:• Imply that leaders can be trained – focus on the way of

doing things– Structure based behavioural theories – focus on the leader instituting structures

and is Task orientated– Relationship based behavioural theories – focus on the development and

maintenance of relationships – process orientated

• Concentrates on what leaders actually do rather than on their qualities. Different patterns of behavior are observed and categorized as 'styles of leadership'. This area has probably attracted most attention from practicing managers



CONTINGENCY THEORIES:• Focuses on identifying the situational variables

which best predict the most appropriate or effective leadership style to fit the particular circumstances

• Leadership as being more flexible – different leadership styles used at different times depending on the circumstance.

• Suggests leadership is not a fixed series of characteristics but rather leadership can be transposed into different contexts



TRANSFORMATIONAL:• Widespread changes to a business or organisation• Requires:

– Long term strategic planning– Clear objectives– Clear vision– Leading by example – walk the walk– Efficiency of systems and processes

• A person with this leadership style is a true leader who inspires his or her team with a shared vision of the future. Transformational leaders are highly visible, and spend a lot of time communicating. They don’t necessarily lead from the front, as they tend to delegate responsibility amongst their teams. While their enthusiasm is often infectious, they can need to be supported by “detail people”.



INVITATIONAL LEADERSHIP:• Improving the atmosphere and message sent out by the

organisation• Focus on reducing negative messages sent out through the

everyday actions of the business both externally and, crucially, internally

• Review internal processes to reduce these• Build relationships and sense of belonging and identity

with the organisation – that gets communicated to customers, etc.



TRANSACTIONAL THEORIES:• Focus on the management of the organisation• Focus on procedures and efficiency• Focus on working to rules and contracts• Managing current issues and problems


FACTORS AFFECTING LEADERSHIP STYLEFACTORS AFFECTING LEADERSHIP STYLE



Leadership style may depend on:• Type of staff• History of the business• Culture of the business• Quality of the relationships• Nature of the changes needed• Accepted norms within the institution


FACTORS AFFECTING LEADERSHIP STYLEFACTORS AFFECTING LEADERSHIP STYLE

Leadership style may be dependent on various factors:• Risk - decision making and change initiatives based on degree of risk involved• Type of business – creative business or supply driven?• How important change is – change for change’s sake?• Organisational culture – may be long embedded and difficult to change• Nature of the task – needing cooperation? Direction? Structure?


DEVELOPING LEADERSHIP TALENTDEVELOPING LEADERSHIP TALENT

“Leadership and learning are indispensable to each other.”John F. Kennedy

“Leadership has an extraordinary power. It can make the difference between success and failure in anything you do or yourself or any group you belong

to.” William Cohen

Therefore continually developing Leadership talent is criticalTherefore continually developing Leadership talent is critical


LEADERSHIP DEVELOPMENTLEADERSHIP DEVELOPMENT

Whether and how a person becomes a Leader is up to each individual.

“Because leadership development is ultimately self-development, in the end, the leadership challenge is a personal challenge.”James M. Kouzes and Barry Z. Posner

According to Montgomery Van Wart:

“Three fundamental types of leadership development are possible: self-study, structured experience, and formal training and education.”

Attitude is Paramount: To become a successful LeaderAttitude is Paramount: To become a successful Leader you must Think and Live Leadership every day!you must Think and Live Leadership every day!


A LEADERSHIP STORY:A LEADERSHIP STORY:

• A group of workers and their leaders are set a task of clearing a road through a dense jungle on a remote island to get to the coast where an estuary provides a perfect site for a port.

• The leaders organise the labour into efficient units and monitor the distribution and use of capital assets – progress is excellent. The leaders continue to monitor and evaluate progress, making adjustments along the way to ensure the progress is maintained and efficiency increased wherever possible.

• Then, one day amidst all the hustle and bustle and activity, one person climbs up a nearby tree. The person surveys the scene from the top of the tree.

• And shouts down to the assembled group below…

• “Wrong Way!”(Story adapted from Stephen Covey (2004) “The Seven Habits of Highly Effective People” Simon & Schuster).

““Management is doing things right, leadership is doing the Management is doing things right, leadership is doing the right things”right things”

(Warren Bennis and Peter Drucker)


DIFFERENTIATING DIFFERENTIATING LEADERSHIP AND MANAGEMENT LEADERSHIP AND MANAGEMENT

“You manage things, you lead people.” RADM Grace Hopper USN

“The manager focuses on systems and structure, the leader focuses on people.” Warren Gamaliel Bennis, American scholar, organizational consultant and author, widely regarded as a pioneer of the contemporary field of Leadership Studies


LEADERS VS. MANAGERSLEADERS VS. MANAGERS

• Leadership and management are terms that are often used interchangeably in the business world to depict someone who manages a team of people.

• In reality leadership vs. management have very different meanings.

• To be a great manager you must understand what it takes to also be a great leader.


CHARACTERISTICS OF A MANAGERCHARACTERISTICS OF A MANAGER

MANAGERS-• Given their authority by the nature of their role. • Ensure work gets done, focus on day to day tasks,

and manage the activities of others. • Focus on tactical activities and often times have a

more directive and controlling approach.


CHARACTERISTICS OF A LEADERCHARACTERISTICS OF A LEADER

LEADERS-• Model the Way • Inspire a Shared Vision• Challenge the Process • Enable Others to Act • Encourage the Heart


Summary: LEADERS VS. MANAGERSSummary: LEADERS VS. MANAGERS

“Producing change is about 80 percent leadership...and about 20 percent management....”John Paul Kotter professor at Harvard business School and an authority on leadership and change


ETHICS AND LEADERSHIP ETHICS AND LEADERSHIP

"In these times more than other times, first and foremost is demonstrating personal integrity and maintaining your personal credibility. They are so important in tough times, yet many leaders lose their integrity and destroy their credibility by giving into the temptation to cut corners when they have to do unpleasant tasks like downsizing.“Ram Charan, Leadership in the Era of Economic Uncertainty


THE MORAL ASPECT OF GOOD LEADERSHIPTHE MORAL ASPECT OF GOOD LEADERSHIP

•There are no black-and-white ethical decisions; ethics is a realm of grayness, of complexity, and of questions that are difficult to answer.

•Ethics involve social decisions about what is "right" and what is "wrong." Ultimately, however, these decisions become personal, even though they are influenced by professional colleagues and the broader culture.

•Herman Chapman observed, "It is obvious that a code of ethics represents a consensus of professional opinion rather than individual preference"


LEADERSHIP IN UNCERTAIN ECONOMIC LEADERSHIP IN UNCERTAIN ECONOMIC TIMESTIMES


LEADERSHIP IN UNCERTAIN ECONOMIC LEADERSHIP IN UNCERTAIN ECONOMIC TIMESTIMES

When Times Become Difficult Is The Exact Moment To Innovate. Successful Leaders:

• Take a calculated risk now and again.• Are Innovators • Do not avoid or fear trouble: they embrace it.


CURRENT LEADERSHIP TRENDSCURRENT LEADERSHIP TRENDS


IMPACT OF THE ECONOMY ON IMPACT OF THE ECONOMY ON LEADERSHIPLEADERSHIP

• The turn of economic events in our country over the last 15 months has shifted the fortunes of industries, businesses, and an untold number of individuals.

• The economic downturn means that there is more pressure now than before to prepare leaders who can weather the storm and navigate their companies successfully through the turbulence.


INCREASED DEVELOPMENT OF STRATEGIC INCREASED DEVELOPMENT OF STRATEGIC THINKERS AND THOSE WHO CAN INSPIRETHINKERS AND THOSE WHO CAN INSPIRE

• Greater need for executives that can think strategically, lead change, create a vision, and rally others around that vision. These qualities call for specific areas of further development within emerging leader programs.

• The need to develop Leaders that have the capacity to stand back from operations and see where value is created, where it is lost and where it is destroyed is critical, especially in the face of complexity.

Thirty years ago Shell identified the step from operational to strategic Thirty years ago Shell identified the step from operational to strategic management is the key risk for management failure.management is the key risk for management failure.


BENCH STRENGTH IS #1BENCH STRENGTH IS #1

• “Increasing bench strength” is a key objective in executive development.

• This theme has been building for a number of years, but the eminent retirement of baby boomers has pushed this issue to the forefront.

• The recession has clearly shown that there is a decliningproportion of key seats filled with the right people”


ACCELERATING THE DEVELOPMENT OF ACCELERATING THE DEVELOPMENT OF HIGH POTENTIALSHIGH POTENTIALS

• Preparing high potentials is a major part of the bench strength equation.

• Greater need in organizations to identify and develop high potentials.


BETTER METRICS FOR MEASURING BETTER METRICS FOR MEASURING EMPLOYEESEMPLOYEES

• Donald L. Kirkpatrick’s model has become the standard for measuring participant outcome, and the majority of organizations now measure all four levels of outcome.

• This is a notable shift from just four years ago, when evaluation metrics was a much more fragmented practice.


LEADER-AS-TEACHER MODELLEADER-AS-TEACHER MODEL

•The use of leaders as teachers has become a best practice that is growing in popularity.• While fairly self-explanatory, this practice of engaging the organization’s most senior leaders in the development of those in the leadership pipeline is both effective and exciting. It gives senior leaders an opportunity to pass on their crucial experiences and organizational knowledge..


LEADERSHIP & HUMAN RELATIONSLEADERSHIP & HUMAN RELATIONS

The six most important words: "I admit I made a mistake." - Author unknown The five most important words: "You did a good job." The four most important words: "What is your opinion." The three most important words: "If you please." The two most important words: "Thank you," The one most important word: "We" The least important word: "I"


About ecoMarkets Advisory ServicesAbout ecoMarkets Advisory Services

•Part-time & Interim CFO Services•Banking & Banking Relationships •Board advisory services •Business financial modeling •Cost benefit analysis•Crisis management •Enhancing cash flow and profitability •Enhancing operations •Exit strategies

• Expense reduction• Funding• Increasing sales • Reporting and analysis• Risk management advisory &

analysis• Start-up business services• Supporting and analyzing

major transactions• Value creation & profit

optimization • Working capital management

ecoMarkets Advisory Services provides part-time Chief Financial Office (CFO) and accounting/financial advisory services to growth oriented, alternative and renewable energy businesses. For more information about a particular service contact jmalakoff@ecoMarketsAdvisory/com or call us at +1.973-879-6135


SummarySummary

LEADERS• Always accelerate change • Are interdependent with followers • Have a rock-solid value system which is congruent with their followers

LEADERSHIP IS A PROCESSLEADERSHIP IS A PROCESS

ecoMarkets Advisory Services\' Presentation On Leadership 010810

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