True leadership is knowing when to say goodbye

Business

True leadership is knowing when to say goodbye

The trick is to get the right mix of wisdom and energy

Mark Barnes

Get into power, stay in power – that’s the cardinal rule of politics. We’re seeing it applied more and more, across the world. I’ll take a small bet that Xi Jinping, head of the Communist Party and president of China, will remain in those positions for at least three terms (he’s just started his second), and probably for life. It won’t be the first time China has endured “for life” rulers – remember Mao Zedong and Deng Xiaoping.
There can be no question but that Xi’s first term in office has yielded extraordinary results in terms of dealing with corruption and driving China’s ambition (and progress) towards being a world superpower, economically and otherwise. In last year’s marathon party address he made it clear that a number of landmarks still had to be achieved to deliver the “modern China”, but that it would take until 2035 to get there – long-term planning indeed.The virtue and success (economic transformation, state capitalism, civil order) of being ruled by a benevolent dictator are perhaps most obviously argued by Singapore under the leadership of Lee Kuan Yew. I doubt, though, whether we’ll ever know whether everyone wanted this outcome at the price of personal freedom that it took to get there.
China is not alone in its appointment of “lifers” – Russia’s Vladimir Putin is probably the most standout other example in modern times. Africa has a few. Even Angela Merkel, as successful as she has surely been, found that only a compromise coalition could keep her in some sort of power for a record-breaking fourth term.
Limited terms are there for many reasons and they should be respected and kept in place. I do not subscribe to any form of life-ruling right, even perpetual election, and least of all rule by birthright. Actual life rule of monarchies has rightly been reduced, to a large extent, to ceremonial positions, however influential, but without the power to unilaterally make and impose laws on society – or should I say, subjects?
The real issue with extending the rule of leaders beyond their sell-by dates is the enduring staleness that it creates. In business, when the difference between the age of your management team and your target clients becomes too wide, there is a mindset gap which is difficult to close, particularly when it comes to finding each other on new product and service innovations. Industry disruptors that go on to become the new market share leaders typically come from breakaway, uncluttered minds not tolerated (let alone enabled) within the established institutional “way we do things around here”.Stale management in structures where hierarchy determines remuneration (a commercial substitute for power) tends to suppress competence, if for no other purpose than self-preservation. In the final result, the inner circle of “yes men” gets so tight and so uniformly defined that it strangles itself, and with it any competitive edge the organisation may have had in the first place.
The trick is to get the right mix of wisdom and energy – or experience and youth, if you will. That will limit the size of potential error, while not stifling innovative ideas and calculated risk-taking – both necessary ingredients in our adapt-or-become-irrelevant business world.
The commercial airlines have got it right. The captain (the more experienced and senior of the typically two pilots in the cockpit) is in charge of the aeroplane, but the first officer (of whatever rank, a qualified pilot) actually does the flying. If anything starts going wrong the captain has the unfettered right, if not the obligation, to take over the flying. The very presence of such respected oversight changes behaviour and keeps the young pilot within acceptable risk boundaries.
A clear example in South African business is how the founders of RMB, having achieved a “reverse takeover” of FNB, leveraging brains to acquire brawn, have morphed from hands-on FirstRand management to wise counsel to allow young and able managers to step into the hot seat and run the show. That group’s relative outperformance among its peers in the banking sector is testimony to the foresight of their strategy.
Far from simply defaulting from chief executive to non-executive chairman (or similar), it is the purposeful change of roles that has mattered. You don’t have to stay in the driver’s seat to retain appropriate influence. A key element for such success is where wise counsel executives retain significant equity in the business, ensuring that they have a vested interest in its future and not just their CV from its past.
Mark Barnes is the CEO of the Post Office.

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