Leadership in Difficult Times
Thursday, 04 April 2019
Medico-Chirurgical Hall
Sir Douglas Flint, Past Finance Director and recently retired Chairman of HSBC.
Leadership in Difficult Times: An Opportunity to Demonstrate Underlying Character and Values or Confirm Weakness
Notes
The President welcomed everyone to the meeting and apologies were noted (see separate sheet).
The President highlighted forthcoming events, a WW1 commemoration on 8th May (“Winning the Peace”) and also Famous for Five Minutes on 11th May. Booking for the Heritage Symposium is via Eventbrite. Helpers are also required for the event and should contact Dr Marion White.
He reminded members of requests for nominations for the President’s Medal, the next President-Elect and new Council members.
The President then introduced the speaker for the evening, Sir Douglas Flint, past Finance Director and recently retired Chairman of HSBC. He was born and brought up in Glasgow and studied Accountancy at Glasgow University, later spending much of his working life in London. His talk, entitled “Leadership in Difficult Times: An Opportunity to Demonstrate Underlying Character and Values or Confirm Weakness”, was based around his opinion that leadership in crisis provides an opportunity to show and develop skills, to be willing to meet confrontation and to deal with challenge.
He gave several examples of current global challenges requiring effective leadership; environmental degradation, global warming, terrorism, populism, nationalism, technological supremacy, economic challenges and the demographics of ageing populations. Confidence in the future is required for future economic investment and development. Decisions made by leaders can be controversial e.g. in the austerity programme, there is little support for cuts, but effectively balancing the budget will help to control debt for future generations. Similarly, in negotiations for leaving the EU, the UK wants to leave, but also wants to keep as many of the benefits of EU membership as possible. Sir Douglas noted that it can be easy to make decisions based on past experience and current public mood rather than tackling difficult or unpopular issues; leadership needs courage to break taboos.
He gave an example of poor decision making within the globally respected NHS, having been involved in raising money for a new MRI scanner for a hospital serving a relatively poor community. The scanner was very old and did require to be replaced. A new scanner cost £1million. The local NHS felt this was unaffordable and hired a scanner for £500,000 per year instead. Despite the relatively poor community, money was raised to replace the scanner, but the leadership regarding the decision to hire one was perhaps below the standard expected for a large, respected organisation. A historical example of unpopular leadership was given: in the 1800s, Edwin Burke was the elected MP for Bristol. He voted against the popular opinion of his constituents on an Irish trade deal because he felt it would be better for them.
Leaders usually represent multiple opinions and communities. They have the power to get things done, mobilise resources, promote a shared vision/purpose and form an identity and pride in the community they lead/represent. Leadership and power are changing. The once hierarchical structure is now much flatter. It is also influenced by changing regulation and the proliferation of digital data. News of scandals spreads rapidly e.g. banks, large businesses with extremely highly paid leaders, politicians’ expenses, health services, church sex abuse. Digital data can also be corrupted to become fake news e.g. anti-vaccine lobby. It has made it easier to counter expert opinion, often in a vitriolic manner, via an anonymous commentator. Stories increase in credibility as they spread as viral news. There are no editorial standards in comparison with traditional media sources. Modern media sources often use emotional impact to gain momentum e.g. the media storm surrounding Charlie Gard, despite unrealistic expectations. In such instances, people in leadership roles may “play safe”, resulting in diminished leadership and less societal respect and support for their leadership role.
The way in which leadership is delivered depends upon economics, available options, popular opinion and the staff who work for them within the organisation. Leaders may be “unexpected”, such as is the case with some of the current leaders in politics, and in other instances apparently successful leaders end up leaving large organisations due to their past behaviours.
A classical leadership model started with a vision, followed by planning, setting of milestones/goals, monitoring progress and rewarding achievement. Targets were often financial. However, leadership models constantly change.
In the global financial crisis, there were numerous instances of improper conduct and financial scandals. Public anger was further fueled by politicians and sensational media stories escalating the crisis and awaiting the response of leaders in the organisations. In such instances, it requires careful consideration of how and when to respond; a rapid response may miss facts, yet a response which is too slow may be viewed as complacent. Whilst there is usually recognition of loss of customer trust, the impact on employees is often less well recognized by the media and public. Most employees are ashamed to be part of an organisation exhibiting unethical behaviour and feel let down by their employers. Very few of the workforce will have had any part in the unethical behaviour. As leaders recognize issues and identify propagators, they need to ensure that that they take of their staff, whilst shaping effective and proportionate reform. In the U.S., people are becoming more aware of financial crime compliance e.g. with drug cartels and terrorists. It takes some time for a store of value and trust in affected organisations to build up again. The lengthy legal process following the BP Deepwater Horizon drilling rig explosion took too long to allow trust in the organisation to be adequately rebuilt. Following the two recent Boeing aircraft crashes with significant loss of life customers, the general public and politicians are all looking for answers. However, employees of the company are likely to be experiencing an unpleasant time as a result of people they encounter identifying them with the company.
Whilst tighter, centralised control may give the impression of strong leadership action, it can exacerbate distrust, with people thinking that leaders do not trust the workforce.
The Millennium Generation are no longer just looking for a job, but for values too. They look at how their leaders act and react, and are more likely to “call out” bad leadership. They recognize their responsibility to shape an organisation and to build their own self-esteem. Whistleblower legislation and equality and diversity regulations have made people more aware of their organisations, and organisations often have employee networks and social media interactions and ratings. Leadership involves embedding of a shared vision and values in the workforce community. A performance management system should reward ideal behaviours and identify training needs. In order to build organisations to be bigger, evidence is required about the attitudes and behaviours of employers. Leaders should communicate clearly the required employee behaviours, and ethical values statements must be evidenced in order to keep public trust.
Organisations need to be asking for applicants with the correct values and therefore require a suitable recruitment model. Staff surveys and appraisals need to reward good behaviours and ensure that bad behaviours are rooted out/reported. Future leaders will have increased responsibility for embedding the correct culture in their organisations e.g. how targets are being achieved. Organisations will continue to change and leadership of these organisations will need to show how they are dealing with the future. Large organisations are often affected by the political and fiscal regulations of several countries and have to account for multinational and multicultural employees.
The speaker concluded with two quotes:
Charles Darwin:
It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.
Lao Tzu (Chinese Philosopher):
a leader is best when people barely know he exists. Of a good leader who talks little, when his work is done, his aim is fulfilled. They will say “We did this ourselves”.
The evening concluded with Sir Douglas answering questions and receiving thanks from the President.