Leadership is a key determinate in the success of any enterprise. Leaders make crucial decisions on resource allocation and other important factors such as work design, structure, goals, culture, relationships and people development. It is argued that the design of an organisation provides the context in which managers manage. This may be true for a contingency style of leadership, but is it true for all leadership styles? Business environments rarely remain static and organisations often evolve in ways which create misalignment with the fundamental objective.
This article considers the impact that leadership style can have on organisational design, and as a consequence, performance. Furthermore, this article will explore the question whether in addition to qualifications and experience, should leadership style form part of the recruitment/promotion process, and if so, how would this intangible be measured. Given that a well qualified and experienced leader can exhibit different leadership styles based on traits, values etc, what should rate as the most important selection factor? If research indicates that leadership style is an important determinate of success, how important is the fit between leadership style, function and organisational design? Organisations are facing increasing pressure as they strive to compete at a local or global level and organisational design is important to gain competitive advantage. The decisions leaders make on organisational design have the most potential to impact on operational efficiency and work attitudes such as motivation and job satisfaction. An example from my experience is a manager whose leadership style discouraged employee input. This manager’s ability to make sound decisions was severely constrained by those same employees who ordinarily were well placed to inform and influence him.
This article focuses on medium to large enterprises. In these dynamic environments you are more likely to encounter a large range of competing structures and management styles. It is natural to think that strategy is formulated by the CEO and driven throughout all levels of the organisation. That is, strategy starts at the top and remains consistent, integrated and coordinated across the culture, systems, structure, leadership and employees of the organisation. This may have been the intent but without a clear intellectual framework to guide strategy what tends to occur is that strategies start to diffuse or emerge at various levels of the organisation. Managers with limited perspective and responding to different agendas make decisions shaped by their leadership style and frames of reference. The potential for conflict and misalignment is high, particularly where a leader’s style is, or becomes incompatible with the strategy. The movement of leaders across different business units by promotion or the introduction of new recruits may improve or exacerbate any misalignment. Consider the example of a high performing
manager leading a team of field technicians. The manager’s style was authoritarian and he relied heavily on expert power. The manager led an all male staff and worked to a centralised and mechanistic structure with strong formalisation and systems of control.
The manager seeking other opportunities with the organisation is promoted to lead a business development business unit consisting of both male and female staff. The manager is now faced with a different environment. The business development unit has an existing clan/market sub-culture and would best suit a leadership style which encourages creativity and innovation. It is not difficult to see where misalignment might occur impacting the business unit performance. From HRs perspective the manager is a good fit. It is a normal progression to move from technical expertise to sales. The manager has demonstrated that he can manage a team and has delivered on expected outcomes. Unless the manager can adapt, the missing ingredient may be the manager’s leadership style. Throughout the course of my career I have sat through a number of interviews. Rarely have I been asked about my leadership style. On the rare occasion that I have been asked the question it seemed like a throwaway line, and I wondered if it had any relevance at all. When discussing strategy and structure it is often stated that structure follows strategy and systems follow structure. Perhaps it is appropriate that a fourth element of “leadership style” be included in this generic mix? As a suggestion, strategy, leadership style, structure, systems. This approach would clearly put leadership style as a key factor in strategy formulation, design and recruitment practices.