Transformational Leadership: It’s Not What You Think

The idea of transformational leadership sounds good when taken at face value. A transformational leader is someone who instills pride, respect and trust in its followers. They inspire and motivate people beyond expectations, sparking innovation and change. And, if you look up “transformation” in the dictionary, you will see it defined as “a thorough or dramatic change in form or appearance.” So, what organization wouldn’t want to introduce some form of transformational leadership to respond to the disruption caused by the current digital revolution?

Although transformational leadership seems like a good idea in theory, it is nothing more than charismatic leadership with a different and more appealing name. A recent study published by the Journal of Personality and Social Psychology shows that there is plenty to dislike about charismatic leadership. In fact, there is little evidence to show that there is a strong correlation between charisma and effective leadership. So, because charismatic leadership and transformational leadership are essentially the same thing, it’s important to understand how this style of leadership has been so widely adopted across the globe.

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CEO Assessment and the Performance of Portfolio Companies

In the final analysis, business is about money and people. By definition, successful private equity firms understand finance, but on average they tend to be less sophisticated about people issues. This makes sense: deal partners and analysts are trained in finance and are good at spotting undervalued assets. But savvy private equity players also understand that reviving an underperforming business depends to a large degree on people issues—in particular, it depends on the leadership of the portfolio company and its working relationship with new ownership.

Considerable evidence suggests that PE firms could do a better job evaluating the ability of the leadership team in their acquired companies. A recent survey by Alix Partners found that nearly three-quarters of portfolio company CEOs are removed during the investment life cycle. Over half are replaced in the first two years; but only 15% are replaced at the outset. These data suggest that, for 4 out of the 5 replaced CEOs, the decision takes too long, thereby delaying strategic milestones and prolonging the hold time.

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Super Bowl LIII: A Lesson in Potential and Effective Leadership

In January of 2017, Les Snead, the general manager of the Los Angeles Rams, had a tough choice to make. Hired in 2013, his team had not had a winning record since 2003 and had moved from St. Louis to Los Angeles just a year earlier. Expectations in LA were high, and it was time for Snead to find a new head coach. The safe and easy choice would be a seasoned, veteran head coach who was no stranger to the biggest stage in American sports. Jon Gruden, who won a Super Bowl in 2003 (2002 season), seemed to be an obvious candidate. Or, you take a look at successful college coaches, such as Nick Saban, who has won six NCAA championships as head coach at the University of Alabama and Louisiana State University. Both of these coaches had proven records as head coaches and were realistic candidates to fill the Rams’ coaching vacancy.

Instead, Snead hired Washington Redskins Offensive Coordinator Sean McVay, who also was a former assistant wide receivers coach under Gruden in 2008. At 30 years old, McVay was the youngest coach in NFL history. The results have been tremendous. In two seasons McVay has lead the Rams to a 26-9 record (including playoff games). On February 3, just nine days after his 33rd birthday, McVay will coach his team against the New England Patriots in Super Bowl LIII.

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Humility: The Cure for a Know-It-All

No one likes a know-it-all.

They’ve annoyed us all by talking down to us about anything and everything, even when it’s obvious they know far less than they believe. But know-it-alls don’t just ruin watercooler gatherings and dinner parties. When they rise to positions of power, they can wear away at productivity and trigger costly mistakes.

Joann S. Lublin wrote an entertaining article on the subject in the Wall Street Journal. She interviewed a number of self-professed former know-it-alls that caused major problems for themselves and their companies, such as losing over $2 million on a home purchase, hiring an unsuitable job candidate, and not asking subordinates for their input.

The know-it-all causes all kinds of professional headaches. They don’t try to learn about an issue or ask for help, which leads to poor decisions. They ignore some people or are condescending to others, which leads to a toxic work environment. They project a false aura of power and knowledgeability, which gets them promoted into jobs they might not actually be able to perform.

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Emergence versus Effectiveness

There is an old adage that cream always rises to the top. In talent management, that means people who are fit to lead an organization will rise to the corner office on their own. Although many organizations operate this way, the truth is that the best leaders rarely end up in the corner office, which is probably why half of new leaders fail. Failed leaders can cause big problems. Leaders should drive employee engagement, yet only 30% of employees are engaged, costing the U.S. economy $550 billion a year in productivity loss. Moreover, a large global survey of employee attitudes toward management suggests that a whopping 82% of people don’t trust their boss, and over 50% of employees quit their job because of their managers. Read More »