Architects, Not Surgeons: Leadership In A Post-Covid World
David Price
In my new book, The Power Of Us: How We Connect, Act And Innovate Together, I suggest that capitalism is in a bad way. In fact, it’s been in a bad way for quite some time. All it might take is a global pandemic to finish it off entirely.
Let’s examine the universally agreed standard when judging the health of capitalism: profitability. At the risk of getting bogged down in the weeds of economic theory — no two economists ever seem to agree with each other — the immutable law of economics, coined by Karl Marx and known as ‘the tendency of the rate of profit to fall’ (TRPF) has been consistently demonstrated. Somewhat inconveniently, the rate of profit, in pretty much every developed economy for the past 70 years, has steadily fallen. By way of example the US rate of profit in the corporate world, in 1952, stood at around 43%. By 2013, it was just over 25%.
Productivity fares no better. In a sharply perceptive 2017 report for Deloitte, Dr Rumki Majumdar attempted to explain the ‘productivity paradox’. She highlighted the fact that, despite thirty years of phenomenal improvement in information technology, productivity has actually decreased steadily during the same period. Dr Majumdar argued that blaming the fall in productivity during the past 15 years on the global financial crisis was much too simplistic — productivity was already falling before 2007, the GFC simply accelerated the decline. World productivity growth was 3.9% in 2006. By 2016, it had fallen to 1.6%.
Perhaps part of the cause lies in stubbornly low employee engagement levels (only 13% declared themselves as engaged by their work in the Gallup Global Survey of 2016, and that figure had been like that for a decade).
Capitalism After Corona
Add to that mix, the psychological and economic after-effects of the coronavirus recovery. At the time of writing, the global ‘magic money tree’ (which hitherto most free marketeers had denied the existence of) was printing money for bail-outs and corporate protection schemes, to the tune of six trillion US dollars. Additionally, people were openly questioning the value of judging the prosperity of societies solely by the strength of their Gross Domestic Product (GDP) — shouldn’t health be a key marker? And everywhere saw a reappraisal of the economic value of the people who risked the most during Covid (key workers) whilst generally being paid the least.
In short, productivity, profitability and employee engagement had been on a steadily downward trajectory for the past seventy years. On top of this, the collateral damage of the pandemic was prompting some commentators to declare that the ‘supernova’ of capitalism was about to burn itself out.
Leading our way out of it
On the other hand, capitalism still seems to be the least worst option when considering economic systems. And the picture is always one of economic swings and roundabouts. Extractive industries may be in (hopefully terminal) decline, but the knowledge sector boomed through the early 21st century. And with that boom came new models of leadership (for one thing, they didn’t all wear trousers…)
Spending time with James Watt at BrewDog’s HQ in Ellon is a reminder that, in the words of Frederic Laloux, author of Reinventing Organizations, ‘The general rule seems to be that the level of consciousness of an organization cannot exceed the level of consciousness of its leader’. That consciousness, viewed over a forty-year span, has clearly changed. James and fellow co-founder, Martin, are creating an organisation that corresponds with how they want the world to be. So is Terry Young and the other senior people at sparks & honey. BrewDog have guarded their independence tenaciously, refusing to be taken over by monopolistic brewing giants. Their strength has been to remain true to their founding principles, even while the context, size and reach of BrewDog bears no relation to the days when they were selling beer from the trunk of their cars: make good beer for good people; look after your employees; take a stand, be a force for good; community ownership.
The reality is that even the most people-powered organisations are heavily reliant upon the attributes and skills of their leaders — although, ironically, the goal is usually to make them less reliant . The strategies may differ from those observed in more conventional leadership and the relationships almost certainly will. In the hugelkultur cultivation of mass ingenuity that we started with, the emphasis become less managerial, and more horticultural. If the basics of the right mindset and operational software are in place, the leader’s role is to be acutely aware of the changing context, and to feed the right nutrients into the growing medium, so that innovation is fed by the root system, not a top-down process of fertilisation. That growing medium is more commonly described as the culture of the organisation and it’s the leader’s role to ensure that it’s as healthy as it can possibly be.
The community builder
An analysis of leadership styles came with the publication of a study in the Harvard Business Review, in 2017, by Alex Hill, Lis Mellon, Ben Laker and Jules Goddard. Unusually, the study examined leadership styles, and their impact, in UK schools. Although the context was how leaders can turnaround failing schools, there are obvious parallels with almost any kind of organisation. Briefly, the authors placed leaders into one of five categories:
- Surgeons — incisive, high-profile, they quickly identify what isn’t working, focusing on performance. They cut resources in failing areas and redirect them to get quick wins, emphasising discipline and hard work;
- Soldiers — favour efficiency and order. They obsess over waste, cutting non-essential activities, bolster morale by telling people they’re lucky to have a job, urging them to do more with less;
- Accountants — resourceful, systematic. They believe in growing their way out of trouble, and are usually believers in financial strength and make acquisitions and finding new revenue streams a priority;
- Philosophers — eloquent, love to debate. They think of themselves as experienced practitioners, rather than leaders. Always seeking out new ideas and approaches, but mainly as an intellectual pursuit;
- Architects — quietly humble, focused on purpose. They frequently have an industrial background but gravitate toward education, to build community and seek incremental improvement.
As someone who has spent a long time in education, I could easily assign leaders I’d known into one category or another — but the taxonomy also worked for CEOs I’d known in public and private spheres. So, what impact do these diverse leadership traits make, and what legacy do they leave?
- Surgeon-leaders dramatically improve results during their tenure and get handsomely rewarded for it, (typically 50% more than the other leaders) with more of them receiving public honours (knighthoods, etc) than any of the others. Performance improvements, however, are unsustainable and fall as quickly as they rose. By this time, however, the surgeon has moved on to the next patient, leaving someone else to clear up the mess.
- Soldiers see financial improvements, but test scores stay the same. Morale plummets as staff fear for their jobs. Once soldiers move on, staff are left exhausted and unmotivated, and costs quickly rise again.
- Accountants often see financial stability achieved — even after they leave. Since test scores weren’t their prime focus, they barely change during the accountant’s tenure.
- Philosophers tend to be initially popular with staff, as their concerns are listened to, and discussed. Eventually, however, the lack of improvement — either financial or performance-related — frustrates, and someone else needs to turn the ship around.
- And what of architect-leaders? Well, the report found that this was the only leadership style that saw sustainable improvement, even after they left. There was slow progress in the first couple of years as architects engaged with the community and built the right environment. By the third year, however, metrics improved and continued to do so. Architects remain low-profile, receive the least compensation of the categories, and are ‘more concerned with the legacy they leave than how things look whilst they’re there’.
Zero CEO heroes
For too long the model of leadership has been the heroic figure, working longer hours than anyone else, wielding carrots and sticks in equal measure, and being the confident risk-taker who doesn’t know what stress is. Surgeons can’t build a culture of innovation, because they are ‘the ideas person’ who transforms the organisation. Being the heroic CEO may stroke the ego for a while, but eventually it just becomes exhausting. Running around being seen, hoping some of that innovative genius will rub off on to others, progress chasing, and micro-managing decision-making.
The challenge to leaders of organisations everywhere is this: imagine how transformational it would be if you gave people the freedom to self-organise, and to imagine their own solutions to complex problems? Aside from the impact upon the organisation, and the fulfillment of users and employees, it would make your job a hell of a lot easier.
This is an extract from ‘The Power Of Us: How We Connect, Act and Innovate Together’, published by Thread. In my next article, I’ll share a case-study of Garry Ridge, Chairman and CEO of WD-40 Company, and a true architect-leader.
