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At the top of every successful pharmaceutical company is a strong team of leaders whose efficacy is defined by their complementary skill sets
There can be few topics on which more words have been written than leadership. Yet, despite this, it is not easy to get a clear answer on what a leader is and what they actually do. All too often, authors confuse leadership with management, leaving both managers and leaders confused as to the true extent of their roles.

In an attempt to solve this conundrum, my colleagues and I at Cranfield University have spent years leafing through the mountain of academic research and practitioner books on the subject of leadership to better understand what it is and how to be successful. The results of our work are more profound than the airport books and more applicable than the academic research.

The first task in understanding leadership is to look critically at what great leaders do. This can be separated into four core activities that nestle within each other like a matryoshka, as shown in figure 1 (below).

click on image for larger viewGreat leaders create value by somehow aligning their organisation to the outside world. It all begins with a vision, around which the organisation is structured and built. By moulding the company to one central vision, the value of the company-to-market alignment can be realised. When the early leaders of Johnson & Johnson created their famous credo, it was a kind of revelatory vision. When today's industry leaders redraw the commercialisation process, they are trying to deliver the value their firms create.

However, there is a problem with this model. It is an accurate description of leadership but, in reality, it's also the agenda for some sort of deity. When we consider what these four activities demand of a leader in practice, we can see why there are so few great leaders.

Yet some companies are well led. With this in mind, our research moved on to explore not what leadership is in general, but how great leaders operate.

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Individual style
click on image for larger viewTalk to any great leader and they will make a confession. They are happiest when they are doing just one part of their role. Every leader has a style that focuses on the part of their job they like doing most; the other areas are delegated to those who have a propensity for that given element.

Although no two leaders are alike, leadership styles can be split into four stereotypes that correspond to the part of the leadership task - inspiring, enabling, directing and incentivising - they are most comfortable with, as shown in figure 2 (see right).

Each of these styles is very different, as summarised in table 1 (below). They create value in different ways, require different core skills of the leader, and have different cultural implications for the organisation. Most of all, they release the energy of the organisation in different ways. Inspiring leadership, for instance, tends to create new energy. Incentivising leadership is more about refocusing the existing energy of the firm, while enabling leadership releases energy that had previously been constrained by culture and structure.

click on image for larger view

The key lesson to draw from studying the successes of leaders is that leadership style is more than simply image or spin. The various styles are fundamentally diverse both in their execution and in the way they impact on the organisation. Background and experience, for example, have a major impact on leadership style: look at the different styles of people in leadership who come from sales, accountancy or R&D. In most cases, pharma leaders focus their efforts on one part of the leadership task - delegating the others - and their style is dictated largely by their own personal skill sets.

Looking at what leaders do reveals that there is more than one way to lead, but that all leaders focus on one part of the leadership task and not on the whole, superhuman job. This leaves two questions: who, in effectively-led companies, is responsible for carrying out the parts of the leadership role that are delegated, and which is the best leadership style?

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Teams are the true leaders
As valuable as it is to define what leadership is and how leadership styles differ from each other, what matters to leaders in the real world is what works and what does not. As ever, it is easier to catalogue the failures first.

Leadership fails to create value when it does not address four core activities; delivery, alignment, connection and vision (as described in figure 1). Since individual leaders tend to be stronger at, and prefer one of, these activities, this makes it very easy to lead badly, with an emphasis on connection, for example, but without vision, direction or incentivisation.

In simple terms, this is the most common explanation for failure in leadership. The corollary is that successful leadership comes from somehow addressing the four core activities even when the leader is not great at them all. In other words, great leadership almost always comes from companies that have assembled leadership teams, where the members complement each other's styles.

This is analogous to the famous Belbin team roles (Dr Meredith Belbin, part of Belbin Associates, defines the role of the team as: A tendancy to behave, contribute and interrelate with others in a certain way). If, for instance, a leader has an enabling style, he or she will need to be surrounded by visionaries, incentivisers and directors. Importantly, these roles do not all need to reside in the boardroom. Indeed, it's often best if they are distributed through the layers of senior management.

As an experiment, observe how the idea of complementary leadership structures is illustrated in your own company.  Often, homogeneous 'group-think' teams add less value than those whose styles differ but complement each other.

The observation that great leadership comes from collections of complementary styles has another corollary too. The stereotypical model is that of the CEO as a visionary with their vision cascading down and out from the boardroom through layers of enablers, directors and incentivisers.

Reality, however, is more complex than this. Some organisations are indeed led from the inside out as the stereotype suggests. In others, strategic direction flows in and up from the subsidiaries and functional units.

click on image for a larger viewJust look at the way best practice in marketing arises less often from the centre and more often from one country or therapy area before spreading around the company. The truth is, companies can have `outside-in' leadership, as well as `inside-out' leadership, as depicted by the arrows in figure 2 (left).

Greater leadership happens when the leadership group collectively addresses the four core activities, and this can happen in any order. The question still remains, however, what is the best way to lead?

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Contingency Leadership
Although best practice remains the mantra of middle managers and most airport books, academics and the majority of accomplished senior managers eschew the idea, those who understand leadership know that there is no one best way to do things and the best way to lead depends on the context.

The challenge lies in working out the contingency factors that should influence how firms should be led.

Just as the effectiveness of organisations depends on how well they align to their market, the effectiveness of any given approach to leadership depends on how well it suits its context. In reality, three contexts overlap to influence the effectiveness of a leadership style: the leader's skills, the follower's needs and the business context.

In short, when a leader's skills overlap with the needs of the business, they provide good strategic leadership. For example, visionary leaders work well in turbulent situations where the way ahead is not clear. Similarly, incentivisers and directors tend to be more effective in more stable situations where implementation, rather than strategy, is needed.

However, leading the business is necessary but not sufficient to be a great leader. In the same way that a company must align to its customers, leadership style must align to the needs of the people from whom leaders want and need to get buy-in.

click on image for a larger viewBusiness leaders don't just lead businesses, they must lead people. When a leader's skills overlap with the needs of the people, they provide good people leadership. For instance, visionary leaders work well when the whole organisation needs to be bought in to a change programme. When only a few key people need to be carried along, directing leaders work best. Enabling and incentivising appear only to work when buy-in is less of an issue. This match between leadership style and the organisation is shown in figure 3 (right).

Philosophy of leadership
To quote Samuel Johnson: There is nothing that requires more to be illustrated by philosophy than trade, or business as we now call it, and leadership lies at the heart of good business. The mass of leadership philosophies confuse as often as they inform, but beneath the hype and opinion there lie some basic truths.

Leadership is about alignment. Leadership requires either a superhuman or, more likely, complementary team. There is no one best way to lead, only a way which best suits the business, the leader and those who need leading. Leaders, aspiring or actual, would be wise to learn these lessons.

The author
Professor Keith Ward is a Professor of Strategic Finance at Cranfield University. This article is based on his new book, Extraordinary Performance from Ordinary People. Dr Brian Smith is a Research Fellow at Cranfield and runs PragMedic (www.pragmedic.com). They can be contacted via: brian.smith@pragmedic.com

2nd September 2008

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