LEADERSHIP: Am I a leader?

In this post I will share my personal vision of leadership and my leadership experience

Modern business world is highly competitive and dynamic, where such intangible assets as intellectual capital, corporate culture, talent, skills and leadership come to play a key role in sustaining competitive advantage (Mouritsen 1998). Leadership ability is now becoming one of the most called-for features in employees.

Who is a leader?

I believe a true leader is one, who creates the world others would want to belong to. Speaking in academic terms, a leader has vision. This view was also developed in the book by Robert Dilts “Visionary leadership skills” (1996), and this is what I feel is making the essence of being a leader. Leading in life as well as in business is about the ability to influence people, inspire and get them involved.

Born or bred?

Drucker argues “leadership cannot be taught or learned” (1954:194) – it is a matter of talent and charisma. However, more recent research has shown the contrary. In fact, it was discovered, that about 70% of leadership skills are acquired and not predetermined by the genes (Arvey et al. 2006).

In my opinion, leadership ability is a combination of inborn features and learned skills, of charisma and passion with practice and education.

My vision of leadership

My vision of leadership was influenced by two people. The first person who has strongly impressed me is the professor of International Public Relations and European Studies at Moscow State University – Dr. Jumber Asatiani.

The second person who has made me reflect on leadership is Genevieve Boast – the founder of the Beyond Human Stories, the company coaching individuals and organizations to bigger achievement and creating their own story of success.

These people are great leaders themselves, and their life stories made me think of what I can do to change mine. To me, this is real transformational leadership. They transformed my understanding of leader: I used to believe that only a few people can be leaders; now I know – everyone can be. You can become a leader by telling a story of your own life lessons that would resonate with people and motivate them.

How to be a good leader

• Vision – you can only attract followers if you know what you want and where to go. If there is nothing to share with the world – no one will be interested. There is no right and wrong idea, but you must have one.
• Communication – a leader needs to be able to deliver ideas clearly. Communication is the cornerstone of effective leadership, because all leader’s roles involve communication: giving advice, support and feedback, establishing interpersonal relationships, discussing the vision, motivating – everything goes through communication.
• Influencing – vision is essential, but not enough. It is also necessary to be able to interest people, to grasp their attention so that they want to follow. Interestingly, it was found that financial incentives do not always work as good motivation, because they often have a negative impact on performance, and better incentives are autonomy, mastery and purpose (Pink 2010).

My leadership style and experience

Every leader is different, and therefore, there are different leadership styles recognized.

According to Mullins, (2013) 3 general leadership styles can be defined: autocratic, democratic and laissez-faire divided on the principle of power distribution; Hersey and Branchard (1993) distinguish situational leadership style, based on the readiness of followers to participate; Kreitner developed the concept of inspirational or visionary leader, emphasising the role of personal charisma in leading people; Kouzes and Posner (2011) have come up with the concept of exemplary leadership, which can be easily learned through a set of practices.

The most widespread classification, though, is elaborated by Burns (1978), who identifies 2 major leadership styles: transactional and transformational, with the difference between them being in focus either on action/task or on people/team.

The idea that a truly effective leader should use a combination of leadership styles in certain proportion. suggested by Bass and Avolio (1994), is summarized in “The Full Range Leadership Model” which is built on the comparison of transactional and transformational leadership.

My leadership style is closer to transactional, according to the peer feedback received from my team mates. As a group leader I am described as responsible, effective communicator, supportive, showing direction, focused on the task and having structure. At the same time, many people recognize I always have a clear vision and that is why I am frequently chosen to lead teams I work with.

However, I need to develop the ability to motivate people, because it is an essential leadership skill, as above-mentioned. Since teamwork is now inevitable in nearly any organization, I am determined to develop myself to become a more effective leader.

Conclusions

The overall blog covers different aspects of leadership, explores leadership models and examples of powerful world-renowned leaders.

Globalization and competition are new business realities, and organizations no longer need simply managers, they are now looking for leaders – leaders, who are able to manage diversity in teams and benefit from it, who are capable of leading organizational change confidently and effectively, who are ethical and will embed ethics into the corporate culture.    

As I have learned from life experience and this MBA course – the ideal formula of successful leadership does not exist. Each person is individual and needs individual treatment; each leader is a unique personality with its strengths and weaknesses; each team needs a different leadership style, and different circumstances require situational approaches.

I am going to continue developing my leadership skills and shape my personal leadership style.

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References:

Arvey, R.D., Rotundo M., Johnson, W., Zhang, Z. and McGue, M. (2006) “The determinants of leadership role occupancy: Genetic and personality factors” Leadership Quarterly 17 (1) 1 – 20

Bass, B. M., and Avolio, B. J. (1994). Improving organizational effectiveness through transformational leadership. Thousand Oaks: Sage Publications.

Burns, J.M. (1978) Leadership. New York: Harper & Row

Dilts R.B. (1996) Visionary leadership skills: Creating a world to which people want to belong. Capitola: Meta Publications

Drucker, P.F. (1954) The Practice of Management. New York: Harper & Brothers

Hersey, P. and Blanchard, K.H. (1993) Management of organizational behaviour: utilizing human resources. 6^th edition. Harlow: Prentice Hall

Kouzes, J.M. and Posner,B.Z. (2011) The five practices of exemplary leadership. San Francisco: The Leadership Challenge

Kreitner, R., Kinicki, A. and Buelens, M. (1999) Organizational behaviour. New York: McGraw Hill

MLQ (2007) The full range leadership model [online] available from <http://www.mlq.com.au/flash_frlm.asp&gt; [3 April 2014]

Mouritsen, J. (1998) Intellectual capital: the logic of an “economy of creativity”. Working paper. Copenhagen: Copenhagen Business School

Mullins, L.J. (2013) Management and Organisational Behaviour, 10th Edition. Harlow: Pearson Higher Education

Pink, D.H. (2010) Drive: the surprising truth about what motivates us. Edinburgh: Cannongate Books

 

 

ETHICAL LEADERSHIP: Is it profitable in business world?

This aim of this post is to define the concept of business ethics, to discuss the positive and negative implications of ethical practices and the role of leadership in it.

 “Today, you can live everything down but a good reputation”

Oscar Wilde

Ethics is a system of moral principles based on the perception of right and wrong that shapes human behaviour. Ethics in business is a moral foundation for external relations and internal processes of the organization (Brech 1975). Ethical external relations are concerned with fair trade standards, mindful exploitation of natural resources, trustworthy relations with suppliers and customers, reliable partnership; ethical internal processes include organization’s transparency, equal employment opportunities, non-discrimination at work and fair remuneration system.

Ethical management, therefore, is a method of corporate management, which not only complies with legal norms and market rules in pursuit of economic goals, but also meets ethical expectations of the society.  Ethical management implies conformity with standards, “which may extend beyond what is required by law or which are commercially profitable” (Minkes 1999: 327).

(Source: SK E&C 2012)

For and against business ethics

There are two opinions on whether ethical behaviour is beneficial for business. The advocates of ethical management claim that “ethical behaviour can have important positive effects on both individual and organizational effectiveness” (Rubin, Dierdoff and Brown 2010: 216-217); while those who object the integration of ethical standards into business argue that ethics is irrelevant in business (Hooker 2004).

The arguments in favour of ethical behaviour and counterarguments:

Traditional profit-centred companies seek to maximize profits and tend to ignore the benefits of ethical conduct in business and the social effects of their business activities. The organizations-proponents of the ethical approach to business are concerned with minimising or avoiding negative social impact by engaging into Corporate Social Responsibility programmes.

IT industry evidence in support of business ethics

The evidence proves that ethical behaviour is bringing significant benefits to business. For example, in 2014 the IT giant Microsoft has been named one of the world’s most ethical companies for the fourth consecutive year (Ethisphere 2014). Microsoft Corporation is committed to fulfilling its public responsibilities globally through its “Corporate Citizenship” programme (Microsoft 2014), within which Microsoft addresses several areas of community needs according to its Citizenship Report (2013).

So, how did Microsoft benefit from investing into corporate social responsibility?

Through its ethical initiatives Microsoft managed to create excellent reputation among consumers: for the second year in a row consumers named Microsoft the company with the best CSR reputation, according to a new study by corporate reputation management consultancy Reputation Institute (2013). The study also shows that 73% of customers are willing to recommend companies perceived to be delivering on their CSR. Moreover, reputation is reflected in the company’s revenues – total revenue from sales has increased by 33% since 2009 (Microsoft Corporation 2013), and stock market price – Microsoft enjoys a steady growing trend for more than a 5-year period (Bloomberg 2014).

This evidence proves well-managed CSR does not only have positive effects on the company’s image, but is also profitable.

(Source: Bloomberg 2014)

There is also evidence demonstrating that unethical behaviour or a lack of corporate social responsibility, in contrast, might damage company’s reputation and financial performance. Specifically, ethical conduct in IT industry is closely connected with security issues, such as intellectual property, corporate espionage, personal data disclosure or leaking corporate secrets. Any of these cases cause negative publicity and badly damage company’s reputation.

For instance, in 2006 Hewlett-Packard was involved into a spying scandal. In an attempt to identify the source of a corporate information leak to press the company authorized the usage of certain spying techniques. As soon as the fact was revealed in media shares of the company dropped by amazing 6% in one day (The Washington Post 2006).

Ethical leadership

“Conformity to ethical requirements is a responsibility of and depends on the leadership in the organization” (Minkes 1999: 327). A leader, therefore, is to introduce, promote and integrate ethical standards into the corporate culture. Ethical leadership should become a means of transmitting moral principles to decision-making.

The leader’s role is to create a “healthy work environment where people don’t have to cheat to win” (Peale and Blanchard 1988).

Conclusion:

Managers are constantly faced with ethical dilemmas and have to make choice between principles and consequences. The crucial role of leader is to incorporate ethical standards into management process so that it becomes a regular practice and an unalienable element of corporate culture.

 For IT industry ethical leadership and management is particularly important, as seen from Microsoft and HP cases, which prove the validity of financial and non-financial gains from ethical management.

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References:

Atlas, J. (2013) “Take a Cost-Benefit approach to ETHICS”. Strategic Finance 95 (5) 51 – 53

Bloomberg (2014) Markets: Microsoft Corporation. MSFT: US [online] available from <http://www.bloomberg.com/quote/MSFT:US/chart&gt; [28 March 2014]

Brech, E.F.L. (1975) The principles and practice of management, 3^rd edition. Harlow: Longman

Ethisphere (2014) 2014 World’s Most Ethical Companies [online] available from <http://ethisphere.com/worlds-most-ethical/wme-honorees/&gt; [28 March 2014]

Friedman, M. (1970) “The social responsibility of business is to increase its profits”. New York Times Magazine [online] 13 September <http://umich.edu/~thecore/doc/Friedman.pdf > [27 March 2014]

Hooker, J. (2004) “The case against business ethics education: a study in bad arguments”. Journal of business ethics education 1 (1) 75 – 88

Lourenco, I., Callen, J., Branco, M. and Curto, J.D. (2014) “The Value Relevance of Reputation for Sustainability Leadership”. Journal of Business Ethics 119 (1) 17 – 28

Microsoft (2013) Citizenship report executive summary 2013 [online] available from <file:///C:/Users/%D0%90%D0%BB%D0%B5%D0%BD%D0%B0/Downloads/FY13_Exe_%20Summary_FINAL.pdf> [28 March 2014]

Microsoft (2014) Corporate Citizenship: creating a real impact for a better tomorrow [online] available from <http://www.microsoft.com/About/CorporateCitizenship/en-us/&gt; [28 March 2014]

Microsoft Corporation (2013) Annual report 2013. Financial Highlights [online] available from <http://www.microsoft.com/investor/reports/ar13/financial-highlights/index.html&gt; [28 March 2014]

Minkes, A.L., Small, M.W. and Chatterjee, S.R. (1999) “Leadership and business ethics: Does it matter? Implications for management”. Journal of Business Ethics 20 (4) 327 – 335

Pinto, L. (2003) “Business ethics. Like nailing jell-O to the wall”. Teaching Business Ethics [online] available from <http://lpinto.net/BusinessEthicsWS.doc&gt; [27 March 2014]

Reputation Institute (2013) 2013 CSR RepTrak 100 Study [online] available from <http://www.reputationinstitute.com/thought-leadership/csr-reptrak-100&gt; [28 March 2014]

Rose, J. (2007) “Corporate Directors and Social Responsibility: Ethics versus Shareholder Value”. Journal of Business Ethics 73 (3) 319–331

Rubin, R. Dierdorff, E. and Brown, M. (2010) “Do ethical leaders get ahead? Exploring ethical leadership and promotability”. Business Ethics Quarterly 20 (2) 215 – 236

SK E&C (2012) Management policy: Ethical management [online] available from <http://www.skec.com/company/moral_01.asp&gt; [27 March 2014]

Su, H.Y. (2014) “Business ethics and the development of intellectual capital”. Journal of Business Ethics 119 (1) 87 – 98

Svensson, G. and Wood, G. (2003) “The dynamics of business ethics: a function of time and culture – cases and models”. Management Decision 41 (4) 350 – 361

The Washington Post (2006) HP stock falters in spying scandal [online] 22 September, available from <http://www.washingtonpost.com/wp-dyn/content/article/2006/09/21/AR2006092101709.html&gt; [25 March 2014]

 

LEADING CHANGE: What can be done to cope with the challenge of change?

This post is devoted to the debate whether change and resistance to change are manageable, and what is the role of leader in dealing with challenges held by changes and in overcoming resistance to it. This post also investigates two models of change management.

“Nothing endures but change”

Heraclitus

Change is natural. Multiple changes are happening every day and everywhere; change, in fact, is life, it is a driver of progress. In business as well as in daily life changes are necessary for development. The need for change is now widely recognized by the majority of organizations as their profitability depends on constant alterations in customer’s tastes, emerging new markets and capricious economic climate.

Globalization, technological innovation, ever-increasing competition and various other trends force modern companies to think of change as an integral part of the corporate strategy.

Response to change

Change is risk. Change requires courage to go for it. Some people actively welcome changes and take advantage of them, while others prefer the comfort of the status quo and strongly resist any change. It is a matter of personality that conditions the way different people react to changes.

The Colin Carnall’s (2013) Coping cycle model describes the 5 major stages of human response to change, and although the model primarily shows regularity, it can as well be used for the explanation of individual differences in people’s reaction. Hence, some people quickly move from the denial to the internalization stage without difficulty; others will take much time to go through the initial stages and reach the adaptation phase; and some people will even never get over it and will reject the need for change at all.

Resistance to change exists at two levels: individual and organizational. Resistance to change at work may arise from multiple reasons from the straightforward fear of the unknown to more specific and implicit forces, such as complex interpersonal relations, insufficient competence or technical support, economic implications and even former negative experience. Moreover, quite often resistance to change has real grounds, particularly when change bears negative implication for employment (Cunningham 2005).

However, resistance can bring value to the change process. According to current research the concept of resistance to change is undergoing a perception shift from the traditional paradigm of being “the enemy of change” to a new understanding as “a resource” (Barel 2013). For instance, Ford and Ford (2009) maintain that resistance is a perfect source of quality information, because it gives feedback from people who are directly involved in the process of change. This information can be used to make adjustments to introduced changes. At the same time resistance is a form of participation, so it creates engagement of staff into the process of change. A further argument on the utility of resistance is that it serves as a balancing factor contributing to consistency and organizational stability (Albanese 1973; Hultman 1979; Waddell and Sohal 1998; Azad et al. 2013).

How can managers deal with the resistance to change?

The above-mentioned arguments revealing the advantages of resistance to change indicate that it can be used as a constructive tool of change management, which disapproves the claim proposed by Mullins that “there is little management can do about resistance to change” (2010: 753).

The evidence suggests that resistance can be effectively dealt with through communication. For example, in 2011 GSA – the U.S. federal services agency – decided to launch a change programme and move all its 17000 employees to cloud-based email system. To introduce the change GSA collaborated with Google and Unisys for the change management programme. The major concern was whether employees will totally resist or eventually reach the adaptation stage. So what did they do to ensure the change was accepted? They implemented communication plan to educate their mature workforce about new technological opportunities that can be used at work to facilitate routine paperwork (Israel 2012).

GSA CIO Casey Coleman with Peter Gallagher (Unisys) and Alex Diacre (Google) talking about their collaboration on the issue:   

The role of managers in overcoming resistance to change

GSA’s change management experience proves good communication and education to be a good solution for change management, thought not the only. Other approaches to change management include technical support, training, building a clear structure, leadership capabilities application, encouragement and motivation.

McKinsey Global Survey report (2010) conveys that leadership capacity is particularly significant for success rate of organizational transformations; besides, according to IBM Global Making Change Study (2008),lack of change leadership is found to be one of the critical causes for project failure. The crucial role of manager, therefore, is to undertake change leadership.

Conclusion:

The pace of change is accelerating, and organizations need to reflect and address this dynamics of the environment. Consequently, it is essential to manage change and resistance to it. The best way to do it is to combine management techniques with leadership skills to encourage employees to undergo change. So, the answer of this blog to the question if change is manageable is positive.  

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References:

Albanese, R. (1973) “Overcoming resistance to stability”. Changing Organisational Behaviour. Englewood Cliffs: Prentice Hall

Azad, M.H.B., Qadri, N., Ansari, B. , Azad, A.P. and Tabussum, S. (2013) “Resistance to Change: A Blessing or a Curse?” Interdisciplinary Journal of Contemporary Research in Business 4 (12) 345 – 353

Bareil, C. (2013) “Two paradigms about resistance to change”. Organization Development Journal 31 (3) 59 – 71

Carnall, C.A. (2003) Managing Change in Organizations. 4th edition. Harlow: Financial Times Prentice Hall.

Cunningham, I. (2005) “Influencing people’s attitudes to change”. Professional manager 14 (3) 37

Ford, J.D. and Ford, L.W. (2009) “Decoding resistance to change”. Harvard Business Review 87 (4) 99 – 103

Hultman, K. (1979) The Path of Least Resistance. Denton: Learning Concepts

IBM (2008) Global Making Change Work (MCW) Study [online] available from <http://www-935.ibm.com/services/us/gbs/bus/html/gbs-making-change-work.html&gt; [21 March 2014]

Israel, D. (2012) “GSA moves to the cloud – a change management case study”. GovLoop [online] available from <http://www.govloop.com/group/googleforgov/forum/topics/gsa-moves-to-the-cloud-a-change-management-case-study&gt; [23 March 2014]

McKinsey & Company (2010) Global Survey Results: Creating Organizational Transformations [online] Available from <http://www.mckinsey.com/insights/organization/what_successful_transformations_ share_mckinsey_global_survey_results> [24 March 2014]

Mullins, L.J. (2010) Management and Organisational Behaviour, 9th Edition. Harlow: Pearson Higher Education

Waddell, D. and Sohal, A.S. (1998) “Resistance: a constructive tool for change management”. Management Decision 36 (8)  543 – 548

 

MANAGEMENT & LEADERSHIP: Which style should managers adopt to ensure success?

The purpose of this post is to compare and contrast the concepts of leadership and management and to discuss best management and leadership styles.

 What is the difference between management and leadership? There are multiple definitions of both terms elaborated by scholars in an attempt to differentiate the two.

The godfather of modern management Peter Drucker suggested “management is about human beings. Its task is to make people capable of joint performance, to make their strengths effective and their weaknesses irrelevant” (2006: 194). But this definition seems to be equally suitable for both management and leadership. So, where hides the difference?

Management concept

A number of interpretations from classical management theories to revolutionary ideas have been expressed on management, but the common feature of all approaches is its functional character.   Thus, Fayol (1949: 5) defines management through its 5 key functional components; similarly, Drucker (1977: 28) identifies 5 operations of management; and Brech (1975:19) sees 4 management elements.  Furthermore, all approaches clearly share common elements.

Henry Fayol’s model:

Peter Drucker’s model:

 Edward Brech’s model:

A concise summarising definition of management is formulated by Mullins claiming that management is “getting work done through the efforts of other people” (2013: 421).

Leadership concept

According to Yukl leadership is a “process of influencing others” and “facilitating individual and collective efforts to accomplish shared objectives” (2010: 26). The key idea of the notion is the ability to impress, inspire and influence people so that they want to contribute their efforts to common achievement.

Leadership is unimaginable without followers – “there is no leader without at least one follower” (Kellerman 2007: 84). But why should people follow? The only reason is because they get satisfaction through achieving personal goals. A successful leader attracts followers by integrating 3 areas of needs: group, task and individual needs (Adair 1979: 10).

The relationship between leadership and management

The two concepts are “radically different” argues Kotler (2013), but both are crucially important for organizations. The full range of differences is summarized in the table:

In general, it appears that leadership and management exist in different dimensions. Leadership is a personality feature, either an inborn trait or a developed skill. Management is only about job role, it is entirely formal; it is more about the characteristic of one’s hierarchical position at work. Management is not a personality attribute. “There is a clear implication that leadership is not a part of the job but a quality that can be brought to the job” (Belbin 1997: 98).

You might be a natural leader, but not occupy a manager’s position in the company where you work; you can be a good manager but do not have leadership skills; or you can have both leadership ability and formal management authority and use your leadership skills to manage your subordinates. In one person leadership and management might overlap, coincide or even be detached.

Consider examples of each case:

1. Elvis Presley – the legendary king of Rock-and-Roll – is a perfect example of a true leader, but not a manager. What makes him leader? Followers. Elvis had and his legacy still has millions of followers all over the world. What else? Mission. A real leader is to inspire people. And Presley’s music and lyrics are inspiring and motivating. His songs were and continue to be the driving force of human imagination. Yet, he never had subordinates to manage and was not manager.
2. A great management success without leadership can be illustrated by the example of Michelle Miller – the Walgreen’s store manager in California. Michelle achieved exceptional results in personnel management by using purely management technique – she recognized individual strengths of her employees and found the way to rearrange job roles in a highly effective and beneficial way.  But she was not leading her subordinates; she only created a formal framework, i.e. purely managed them by setting responsibilities, shifts, schedules, promotions, etc. (Buckingham 2005)
3. Probably, one of the most commonly referred to examples of the combination of leadership and management (particularly interesting in the context of the IT industry explored throughout the entire blog) is the example of Steve Jobs, who was not only a CEO of Apple, but a powerful, charismatic and creative leader inspiring his staff as well as unrelated to IT production people (Sharma and Grant 2011).  What made him such an influential leader? He had vision. So, he was an inspirational or visionary leader – a variation under the transformational leadership model (Burns 1978).

What is the most effective approach to managing the work of subordinates?

This is one of the most extensively discussed questions over the last century.  The CMI report (2013) points that the general consensus has moved away from “command-and-control” towards more “facilitate-and-empower” approach (Mintzberg 2009:121), and the best approach may vary according to circumstances and individual characteristics. This seems to indicate the preference for leadership over management. Analogical view is shared by P.Drucker (1993), who sees the future of management in incorporating leadership skills into management functions.

In conclusion

It is a more than century-long debate on the differences between management and leadership. Although they are not the same, they are necessarily linked, and complementary. Moreover, “Leadership and management must go hand in hand” (The Wall Street Journal 2014).The most effective approach to management is, I believe, through the application of leadership skills.

It is also essential to remember that due to a complex human nature alongside the exposure of management to external circumstances, the management of the XXI century needs to be flexible, situational and have personal style.

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References:

Belbin, R.M. (1997) Changing the way we work. Oxford: Butterworth-Heinemann

Brech, E.F.L. (1975) Principles and practice of management. 3^rd edition. Harlow: Longman.

Buckingham, M. (2005) “What great managers do?” Harvard Business Review 83 (3) 70 – 79

Burns, J.M. (1978) Leadership. New York: Harper & Row

CMI (2013) Understanding Management Styles. Checklist 236. London: Chartered Management Institute

Drucker, P.F. (1977) People and performance. Oxford: Butterworth-Heinemann

Drucker, P.F. (1993) Managing for the Future: the 1990s and beyond. New York: Truman Talley Books/Plume

Drucker, P.F. (2006) Classic Drucker. Boston: Harward Business Press

Fayol, H. (1949) General and industrial management. London: Pitman Publishing

Kellerman, B. (2007) “What every leader needs to know about followers?” Harward Business Review 85 (12) 84 – 91

Kotler, J.P. (2013) “Management is (still) not leadership”. Harward Business Review Blog [online] 9 January, available from <http://blogs.hbr.org/2013/01/management-is-still-not-leadership/&gt; [16 March 2014]

Mintzberg, H. (2009) Managing. Harlow: Financial Times prentice Hall

Mullins, L.J. (2013) Management and Organisational Behaviour, 10th Edition. Harlow: Pearson Higher Education

Sharma, A. and Grant, D. (2011) “Narrative, drama and charismatic leadership: The case of Apple’s Steve Jobs”. Leadership 7 (1) 3 – 26

The Wall Street Journal (2014) What is the difference between management and leadership? [online] available from <http://guides.wsj.com/management/developing-a-leadership-style/what-is-the-difference-between-management-and-leadership/&gt; [14 March 2014]

Yukl, G. (2010) Leadership in Organizations: Global Edition, 7th Edition. Harlow: Pearson Higher Education

MANAGING DIVERSE TEAMS. Is diversity a driver of success or a source of conflict?

This post is devoted to the debate on the advantages and challenges of diverse teams in business and explores how a manager can benefit from the diversity to improve the performance of the team, and whether the ability to manage diverse teams is key to success in IT industry. 

Imagine yourself being listening to music. Can you remember your favourite composition or song? How many notes can you hear? How many musical instruments were used to create this composition? Can you imagine a piece of music consisting of just one note extracted from just one musical instrument? No. It would not sound pleasant, interesting and impressive, would it? It is the diversity of notes, instruments and their combinations that creates the harmony of sound. In the same way the diversity of people in a team gives birth to creativity and harmonious performance.

The nature of diverse team can be different. It might be either cultural diversity resulting from the emergence of global workforce due to globalization and increasing migration (UN DESA 2013) or psychological diversity originating from differences in personalities and individual behavioural attributes (Afolabi and Osayawe 2005).

Diversity might have a controversial effect

Diversity holds both advantages and challenges for teams and their managers. Multiple researches and case studies have been conducted to explore the impact of diversity on team performance (Senichev 2013; Woehr, Arciniega and Poling 2013; Nielsen and Nielsen 2013; Boone and Hendriks 2009; Jackson, Joshi and Erhardt 2003).

Most of them tend to agree that diversity has mainly positive influence. Indeed, there is a range of widely recognized benefits for organizations from the diversity of workforce:

• greater creativity – views from different perspectives help to find fresh, unusual approaches to team tasks and the diversity of ideas gives birth to innovation, which is a vital element of organization’s success in the modern highly competitive business environment;
• increased productivity – a team comprising people with different but complementary skills is likely to deliver better results and work more efficiently. The evidence suggests that diversity is positively related to team productivity (Richard et al. 2004);
• wider customer base – diverse team has better opportunity to understand needs and wants of the global and diverse target audience and, therefore, find the way to satisfy more people with their corporate product.

One of successful examples of how a company might benefit from the cultural and psychological diversity of its employees is the case of the Lenovo-IBM alliance. After Lenovo took over IBM’s PC division in 2006, the new integrated corporation emerged where eastern and western business cultures were blended. The outcome of this fusion was the launch of a new line of PC’s targeted at small and medium sized U.S. businesses – a market traditionally ignored by IBM – which finally resulted in increased sales and the stock market price immediately going up (Johnson, Whittington and Scholes 2011). However, this merger also caused several problems.

As far as the negative impact of diversity is concerned, it might become the source of conflict. What would music sound like, if ten different musical instruments simultaneously played different melodies at the same time in one place? Would it be music at all? Each being producing a beautiful sound, altogether they would cause disgusting noise. Analogically, the difference in cultural backgrounds or just personal values among team members at workplace might cause argument and misunderstanding. Stereotypes and biases are additional obstacles to effective communication. When diverse teams fail to cooperate and exchange information – diversity becomes a burden. This was exactly the case with Lenovo-IBM at the first stage of their merger.

Chinese and American colleagues faced communicational difficulty due to differences in national and business cultures (medium age of employees and managers, attitude to time, behaviour at meetings), language barer and lack of face-to-face contact between teams. At the forming stage, according to Tuckman model (1965), if applied to global corporation scale, this discrepancy significantly impeded the working process.  But at the second stage – storming – they managed to establish constructive dialogue: Chinese, who traditionally like to listen, started to be more direct in addressing problems, while Americans, who are typically talkative, learned to listen to their Asian colleagues. Finally, they created a new shared corporate culture at the norming stage and even came out with positive results on the last – performing – stage.

A team is just like a musical band

Each member has its role and each member is essential. You can hardly imagine an orchestra made up of ten pianists. Each member of the band is playing its own part on a particular instrument, and similarly each member of a business team should do its own job that reflects personal strengths, as described in the Belbin team roles theory (1993).

One of the nine Belbin’s “functional” team roles is co-ordinator, or leader in other words. Any orchestra as a diverse team has a bandmaster – its leader and co-ordinator. The task of co-ordinator is to manage diversity – to recognize it, understand individuality of team members and allocate a suitable role for each member.

Ibarra and Hansen argue that the diverse teams demonstrate better results only if they are wisely led. “The ability to bring together people from different backgrounds, disciplines, cultures, and generations and leverage all they have to offer, therefore, is a must-have for leaders” (2011: 71).

For Lenovo-IBM it turns out to be true. Each division had different competences and different market sectors coverage, but through adopting diversity as their corporate HR management strategy the alliance achieved higher competitiveness and gained larger market share. The Lenovo-IBM example proves the ability to manage diverse teams to be a crucial skill for leaders in modern IT companies.

Toni Tenicela, Global Leader at IBM, talks about how to leverage diversity to the benefit of the organization:

Conclusion

Diversity within a team might become the driving force of creativity and efficiency as well as an obstacle to understanding and cooperation. Therefore, it is a task and major challenge for a team manager to take advantage of diversity to deliver better results.    

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