I recently read ‘The Smartest Guys in the Room, The Amazing Rise and Scandalous Fall of Enron’, written by Bethany McLean and Peter Elkind. It outlines how corporate greed and scandalous activities caused a level of cheating that was unprecedented. Enron was an energy company that collapsed in 2001, also causing the demise of Arthur Anderson, one of the Big Four at the time.
Why did it fail? It was a combination of factors that included creative market trades and dodgy accounting practices. But all of that was facilitated by bad leadership, an inside boy’s club and a terrible culture, where leaders were motivated to do wrong for high reward.
In the last couple of weeks, we have experienced leadership gaffes and corporate betrayals that we might have thought were more indicative of another era. After the disaster of the global financial crisis and the recent pandemic, you’d think or indeed hope that shameful shenanigans in boardrooms were over.
In case you think those days are over, you only have to reflect on the past few weeks to know that’s not true. While we know the Davy debacle actually took place a number of years ago, I’m sure you’ll agree that the likelihood of similar stories emerging from other companies is inevitable. Human nature is what it is.
A couple of weeks ago, I wrote a piece in this column about leaders. I shared my ‘Leader’s 6-pack’ on what it takes to be a strong leader. I was really surprised at the number of mails, texts and calls I received. It clearly exercised a lot of people. But I’m happy to say that this pandemic has certainly shone a light on those great leaders that have empathy for others and the world around them.
Larry Fink is CEO of Blackrock, the world’s largest investment management company. In his letter to the CEOs of the companies it invests in (blackrock.com/corporate/investor-relations/larry-fink-ceo-letter), he advised them to be clear about their plans for sustainability. From January to November 2020, investors in mutual funds invested $288 billion globally in sustainable assets. “I believe that this is the beginning of a long but rapidly accelerating transition” he said.
I appreciate some will read this with cynicism saying that he is motivated by return on capital when he also says “We know that climate risk is investment risk. But we also believe the climate transition presents a historic investment opportunity.” I’m okay with this, as there doesn’t have to be a contradiction between doing the right thing and making money. In this example, sustainability is the topic, but he could just as well have been talking about other global issues. It’s the portrayal of responsible leadership that inspired me.
Leaders need followers
Today I also want to spare a thought for great followers, namely middle managers. In my experience, I find that they often have the toughest job in an organisation. They are the buffer between the boardroom and the front line. They are the ones who have to execute the strategies on the ground, by rallying their troops and keeping them motivated to deliver to a standard, on time and on budget.
More often than not in large organisations, you can see a corelation between three sets of data. KPIs, customer feedback and employee feedback. For those divisions that score highest in all three, much of the recognition for that can go to the local leader.
Those followers get direction from their bosses. They make sense of they’re asked to do and they then interpret it in an appropriate way at local level. In being good leaders they are also being great followers. They take accountability for their brief and just get on with it. But sometimes, they also have to stand up and disregard poor direction.
Tips on how to be a great follower
- When you get good direction from your line manager, be a great follower by being accountable and deliver. In my role over the last thirty years, this is the one characteristic that I believe is in short supply. Whether we are leaders, managers or whatever, we all have a duty to take ownership for our part in the jigsaw puzzle and connect our pieces into the bigger picture.
- If you can’t deliver due to obstacles outside your control, then find your voice and speak up. Provided your supporting arguments are reasonable and valid, you cannot be accused of being difficult. If however it’s a case of ‘you won’t’, then consider if this role is right for you.
- If you are unsettled by being asked to do something that is inappropriate, then stop for a second and think. Measure what you have been asked to say or do against the agreed values of the organisation. This enables you to push back in an objective way rather than with your own subjective viewpoint.
- If your company does not have a set of agreed values, then rely on a common set of values that include decency, respect and honesty. Who can argue against any of those?
- I also appreciate that situations like this can be extremely stressful. If you need help, find a trusted confidante. But do it quickly rather than procrastinate.
There is a fun video on Youtube that shows a lone guy dancing at a music festival. He is left on his own for some time until he is joined by the ‘first follower’ after which the crowd forms. In a nutshell, while leaders are essential, it highlights the important role of great followers. We can’t all be leaders, but we can all show up, use good judgement and be great followers.