Guiding Through Times of Uncertainty
By Beckey Bright

From The Wall Street Journal Online


Being an effective leader is challenging even when times are good, let alone during a time of corporate scandals and a rapidly transforming global economy.

Paul Taffinder, a partner in the London office of management-consulting firm Marakon Associates, and author of "The Leadership Crash Course: How to Create Personal Leadership Value," spoke recently with The Wall Street Journal Online about what it takes to be a good leader and the difficulty of leading through uncertainty. Some questions and answers were edited.

WSJ.com: How does one develop a leadership style? What leadership style is in vogue now?

Mr. Taffinder: Leadership as a practice hasn't changed in several thousand years. People react the same way to leadership and to situations in which they have to lead. But there are changes in fashions and in the context. Today, people are better educated. There are more women in the work force. And there are different perceptions about what matters.

What are some of those perceptions that have changed?

People react differently to power. There are big gender differences in leadership -- but it's more a product of who holds the power. Years ago, when women were just beginning to enter the work force in big numbers, it was more important for women to be more assertive.

That's shifting, and therefore the relationship to their followers is also changing. There is always gender stereotyping; there are expectations of how people should behave and women are expected to behave a certain way and men a certain way. In reality, women and men leaders are very similar, it's just that the expectations about them are different.

What types of leaders are best for different situations?

Some leaders are better at some organizations and at different times in the life cycle of that company. Generally, leaders fall into two types: those who are focused on making things happen, who are good at enforcing, giving a directive. And then there are those who are what we call reckless opportunists, those who are good at taking risks, and inspiring growth.

For businesses that are reasonably stable, (those that aren't suffering from regulatory changes or competitive pressures, for instance, and industries without a lot of consolidation) it is good to have leaders who are deal makers, and challenging things. These leaders make and take risks. Then there are managers who are trained throughout their career to control and manage and to some extent avoid risk. Of course you need both. Unfortunately, most organizations don't spend a lot of money training folks how to take risk. It's left for individuals to develop themselves.

What happens if your personal leadership style, or that of an employee, clashes with the company's overall philosophy?

You can be put in a tough situation if you're not evolving as a leader along with your company. It's very hard to profoundly change your leadership style. It's easy in small ways. But if your fundamental mindset is different from that of the company or from what circumstances require, it's hard to fake that. One solution is you have to find other people to do that for you. If for example you're not a risk taker, find someone who is good at that. But it's still difficult.

What advice can you give on leading a company when its future is uncertain?

There are two ways to lead through uncertainty, and you have to make a choice. The first is to declare a state of crisis and the other is to elevate ambition. I don't think you can pretend everything is okay. With elevating ambition, you are trying to convey, "We can be the best." But you have to be careful. It's easier to declare a state of crisis. One of the most important characteristics of leadership is conviction. You can't be a leader unless you have it, and it must be very obvious.

How do you convey conviction?

Examine your own beliefs and know that they are truth. It is very hard to convey beliefs that you don't believe. You have to practice being confident. If you show uncertainty it is very quickly picked up. If you look at the great political leaders, it's because they practiced, practiced, practiced. That part about conviction has been lost in the last 15 years or so. A good leader is good at generating energy. Conviction creates energy and commitment and not compliance.

So, are some people simply born leaders?

I wouldn't say anyone is born a leader. There have been some studies that indicate people who have been exposed to psychologically traumatic experiences are better leaders. They've had to overcome trials and tribulations. So they're more inclined to be challenging and look deep within themselves for what they believe in. Leaders like that learn to be clear about the story they're telling about where they have come from and where they're going.

How can you teach leadership?

Teaching people to control risk is much easier than teaching people to create it. And it's essential for companies to draw the distinction between leadership and management. It's just wrong to use them interchangeably. Managers tend to react. Leaders tend to seek out opportunities. Managers follow the rules. Leaders change the rules. Managers seek and follow direction. Leaders inspire achievement. These are profound differences. Of course you need both. But organizations fail to recognize the difference.

Organizations start to fail when they start to produce too many managers and not enough leaders. Or too many leaders of a certain type. The lesson in the corporate world, how can you simulate that [traumatic experience] in the corporate world without destroying people. How can you learn from it without becoming a casualty.

What are the characteristics of today's work environment that pose the biggest challenges to leadership?

One of the problems today is that so much emphasis is placed on shareholders and shareholder returns. There's a very rational, economic point of view. But you should be trying to unite people over a common purpose, a shared identity. There's a way of thinking about leadership that is more than just the bottom line. Companies need to determine their organizational purpose: Why it matters.

The Web is driving organizations to redefine their role in the world, reevaluate their purpose. Some organizations are making efforts to channel energy into something meaningful. In some organizations it's genuine and in others its just window dressing.

Enron had its purpose corrupted gradually into making sure its share price was inflated. There were small, incremental steps that steered the organization in completely the wrong direction. It's important [for leaders] to figure out how that happens and how you correct it.

-- Dow Jones, publisher of CareerJournal.com, has hired Marakon Associates to provide consulting services.

Email your comments to cjeditor@dowjones.com.