The following report is aimed at identifying the leadership skill gaps at Wells Fargo & Co following the succession of John Stumpf by Tim Sloan in 2016. Behavioural and Trait theories were used to determine Tim’s areas of improvements, while John Adair’s Action-Centred Leadership Theory was used to establish the responsibilities of the new leader of Wells Fargo & Co. Qualitative analysis revealed- low openness to experience, extraversion, and agreeableness as Tim’s areas of improvements. A suitable Leadership Development Programme has been suggested for Tim, in view of his other commitments, and budget. Finally, the Board is advised to show patience with Tim as he settles into his new role as ‘within-cycle’ rotation and ‘ritual-scapegoating’ of leaders were deemed as ‘counter-productive’.
Known to be the largest and most liquid financial market in the world, the US finance and insurance sector contributed 7.3% to the nation’s GDP in 2016 (SelectUSA, no date). Interestingly, 39% of customer deposits are held by only four banks- the so-called ‘Big Four’. As of the 2017 release by the Federal Reserve (Fed), the top four commercial banks in the US are (in ascending order of ranking)- JP Morgan Chase & Co., Wells Fargo & Co., Bank of America Corp, and CitiGroup (Federal Reserve, 2017).
Wells Fargo & Co. (popularly known as Wells Fargo) is the second largest commercial bank in the US with $1.9 trillion in assets (Wells Fargo, 2017). Being a commercial bank, Wells Fargo provides all the financial services such as ‘banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,600 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 42 countries and territories’ (Wells Fargo, 2017). The firm servers a third of the United States’ households (Wells Fargo, 2017).
Until recently, Wells Fargo had enjoyed an enviable and respectable position in the US banking industry. When all others tumbled during the 2008 Great Recession, Wells Fargo remained unperturbed despite recovering the crippling bank, Wachovia (The Economist, 2016). At the time analysts understood that this was due to their unique cross-selling strategy. Cross-Selling is the act of selling multiple products to an existing customer. Number of products owned by a customer has long been seen as a Key Performance Indicator (KPI) of success in the finance industry.
Between 2003 and early 2010, Wells witnessed the number of cross-sells rise steadily from 4.35 per Wells household to 6.02 (Smith, 2011). After witnessing unprecedented success for over a decade, fortunes seemed to give up on Wells Fargo. Following a number of serious allegations against sales malpractices between 2011 and 2016, in 2016, Wells Fargo was fined $185 million when an inquest revealed that the firm had created ‘2m deposit and credit accounts in customers’ names but without their consent’ (McGee, 2016). The same inquest led by Massachusetts’s senator, Elizabeth Warren, concluded that the scam was an outcome of a leadership failure; in her words- “gutless leadership” (Kasperkevic, 2016). The ex-CEO of Wells Fargo, John Stumpf, has since retired amidst criticisms, paving way for the then ex-CFO, Tim Sloan (McGee, 2016). Table 1 shows the profits earned by Wells Fargo in the last seven years.
Table 1: Wells Fargo’s Annual Profits: At a Glance
Source: (Wells Fargo, 2017); (Wells Fargo, 2016); (Wells Fargo, 2014); (Wells Fargo, 2013), (Wells Fargo, 2012); (Wells Fargo, 2011)
As it can be inferred from Table 1, Wells Fargo’s profits soared until 2011, following which rate of increase in profits started declining with the bank running into losses since 2015. Davidson (2016) succinctly summarised how the revelations from the scam unfolded for Wells Fargo- the effect of which is evident on the financial figures shown above.
‘The core of the case against Wells Fargo has been well-known since a remarkable investigative report by the Los Angeles Times in 2013, and hints of the troubles were already apparent in a Wall Street Journal article in 2011.’ (Davidson, 2016)
The following section assesses the leadership style of Tim Sloan, ex-CFO of Wells Fargo and successor of John Stumpf as the CEO; his predecessor was the CEO of Wells Fargo during the period over which the scam was revealed.
There have been many definitions of leadership. Below is a particularly interesting one:
‘Leadership is the process of influencing people by providing purpose, direction, and motivation while operating to accomplish the mission and improving the organization.’ (US Army, 2006, pp.1-2)
The different levels of leadership have been discussed in details in the Evidence Review section. Tim Sloan is the CEO of Wells Fargo; this makes him the strategic leader. According to Trait Theory (discussed later), leaders in such positions possess excellent foresight and strategic thinking. One of the most popular tools that evolved from the Trait theory was the Big Five Personality assessment. The following paragraph aims to assess Tim Sloan’s personality using the Big Five Personality assessment. It must be noted that such assessments are usually self-attested. Evidently, this is not possible for this work. So, the assessment is based on the literature review of statements made by Tim during interrogations by Consumer Financial Protection Bureau and Massachusetts’s senator, Elizabeth Warren.
The Big Five personality traits are- Openness to experience, Conscientiousness, Extraversion, Agreeableness, and Neuroticism (Goldenberg, 1993).
Openness to experience:
Tim Sloan has been criticised for following his predecessor’s foot-steps (Calvey, 2018). Allegedly, Richard Kovacevich, the former CEO of Wells Fargo, is notorious for introducing cross-selling in Wells Fargo (Davidson, 2016). This malpractice was proudly continued by John Stumpf, and now the criticism is that Tim Sloan has not done enough to oppose it, if not supporting it.
This makes Tim Sloan a ‘cautious’ personality, as opposed to being ‘inventive’.
Even after the public revelation of the fraud Wells Fargo committed, Sloan was adamant to accept that he was unaware of any such issues (Campo and Nova, 2017). This might mean he has high conscientiousness. On the contrary, if he was actually unware of the fraud in Wells being the CFO, he would be considered careless.
Regardless, he never intervened; this could arguably mean low conscientiousness (i.e. careless).
It is difficult to comment of Sloan’s personal level of extraversion. However, a subjective review of Sloan’s conversation with Warren revealed that he is quite balanced on this front- neither too outgoing, nor too reserved.
Although Sloan’s agreeableness with Wells Fargo’s Board has been criticised, his challenging nature towards the senator has not gone unnoticed (Campo and Nova, 2017; Calvey, 2018). Yet again it is difficult to assert on this trait with the limited information available.
Sloan has good emotional stability. It was evident from the interrogations with Warren. He sportingly accepted criticism on the points he agreed he had fallen short but rebuked when he disagreed (Campo and Nova, 2017).
GAP ANALYSIS OF LEADERSHIP SKILLS
To establish the skill gaps in a leader, it is paramount to assess the requirements. Many methodologies are available to establish the key responsibilities of a leader. One of the most popular ones is John Adair’s Action-Centred Leadership Theory. This has been discussed in extensive detail in the Evidence Review section. According to John Adair’s Action-Centred Leadership Theory, leaders must Achieve the task, Build and maintain the team, and Develop the individual (CMI, no date).
Task: The biggest issue facing Wells Fargo is the reputational damage. The two key stakeholders affected are customers and shareholders. The bank paid out $110 million to settle customer disputes (Lam, 2017). Additionally, it lost a number of other important contracts, such as being the book-runner for California State. At this point, it is important to have a leader who is charismatic and willing to try new things.
If this were to relate to the Big Five personalities, the company needs a leader with a high openness to experience and medium conscientiousness.
Team: Under John Stumpf, Wells Fargo’s employees were traumatised by the extensive management pressure to pursue unethical cross-selling, and also by the large number of redundancies made in the last five years (Arnold, 2016). The new leader must change this. According to Power and Influence theory, a leader’s power can be divided in to two types: positional (legitimate, reward, and coercive) and personal (expert knowledge and referent/charisma) (French and Raven, 1959). Given the situation, the new leader ought to take an extra mile, and exercise both his personal and positional power, as essential, to win the respect of his followers.
This would imply that Wells Fargo would need a leader with relatively high extraversion and agreeableness, but balanced neuroticism. A high emotional stability is extremely important as extensive feedback is expected from the team.
Develop the individual: The individuals’ needs can be both physical (salary, compensation, benefits, etc.) and psychological (recognition, ethics, culture, etc.) (CMI, no date). If individual needs are not met, it causes disruptions to the group; this in turn affects the task.
This implies that Wells Fargo would need a leader with high extraversion and agreeableness.
Table 2 describes assigns a level to each of the Big Five Personalities for the ideal leader for Wells Fargo and Tim Sloan to determine the skill gaps.
|Personality Trait||The Ideal Leader for Wells||Tim Sloan|
|Openness to experience||High||Low|
Table 2: Gap Analysis of Leadership Skills
LEADERSHIP DEVELOPMENT AND RECOMMENDATIONS
Many modern theorists, such as Hyacinth (2014), argue that leaders can be made. Such ideologies have called for Leadership Development Programmes (LDPs). LDPs equip leaders with necessary skills such as demonstrating integrity, managing complexity, inspiring engagement, and acting strategically (Harvard Business Publishing, 2016). On the contrary, critics argue that most LDPs are useless. Gurdjian, Halbeisen, and Lane (2014) criticised LDPs for the four shortcomings, as discussed below:
The argument is that leadership is context-oriented. An excellent leader of one situation may not do as well in other situations. Most LDPs suffer from the ‘one size fits all’ anomaly, argues Gurdjian, Halbeisen, and Lane (2014).
Decoupling reflection from real work:
Although Gurdjian, Halbeisen, and Lane (2014) recognises value in off-site training (as it gives the individual an opportunity to escape the monotony of day-to-day work), it debates most individuals would struggle to transfer their off-site learning to their daily tasks.
Alike athletes, it is essential to stretch the individuals during the training sessions to get the best out of the session. However, it is often awkward to discuss these ‘below the surface’ feelings during these LDPs (Gurdjian, Halbeisen, and Lane, 2014).
Failing to measure results
Gurdjian, Halbeisen, and Lane (2014) explains that there is no ‘fool-proof’ way of measuring the impact of the training programmes. Feedback is the most popular means of measuring the value of the LDPs, but Gurdjian, Halbeisen, and Lane (2014) is concerned that trainers cover a more appeasing syllabus (rather than challenging the individuals) to improve feedback.
It is unclear whether LDPs are meaningful as the opinions seem to be divided, but the problem with filling leadership positions is imminent. 2008 IBM Global Human Capital Study found that ‘more than 75 percent of the survey respondents identified building leadership talent as their current and most significant capabilities challenge’ (Oracle, 2012, p.3). Across separate studies, it was also revealed that 36% of the companies are not prepared to fill their leadership vacancies, and ‘19 percent of managers and 29 percent of executives are eligible for retirement by 2015’ (Oracle, 2012, pp.2-4). So, robust or not, there is a need for LDPs to meet the leadership needs of the future.
Oracle Leadership Development Programme
Oracle Leadership Development Programme is a contemporary development programme that combines the ‘goodness’ of many theories and tools- such a Functional Leadership and Situational theories. The approach seems simple, yet robust. Oracle have extended the popular business analysis technique, namely ‘Gap Analysis’, to formulate this contemporary LDP. Although relevant for developing future leaders for Wells Fargo, steps 4-6 are not applicable to Tim Sloan, but have been included here for the sake of completeness.
Oracle Leadership Development Programme has the following steps:
1. Determine the Best Leadership Style for Your Organization
Oracle (2012, p.7) understands that primary cause of failure of most executives is the fact that they are not compatible with the company culture, not because they are poor leaders, per se.
Using the Trait theory, it was established in Table 2 that Wells Fargo would require a leader with high openness to experience, extraversion, and agreeableness. However, he should be well-balanced on conscientiousness and neuroticism.
It further is recommended that the Leadership and Development (L&D) professionals in Wells Fargo consult with the Board and vendors to validate this and establish the required attributes of the leader of the firm.
2. Identify Current and Potential Leaders Within the Company
Oracle (2012, p.7) suggests that Situational Leadership Theory be used in conjunction with Trait Theory to assess the psychological and behavioural aspects of the potential candidates. Potential leaderships competencies may constitute ‘creating and conceptualizing, analyzing and interpreting, leading and deciding, interacting and presenting, adapting and coping, supporting and cooperating enterprising and performing, and organizing and executing’ Oracle (2012, p.8).
Figure 1: Oracle’s Potential/Performance Matrix Source: Oracle (2012, p.9)
Figure 3 above is the Potential/Performance matrix that depicts the essential management steps involved in developing and promoting the internal individuals. It requires that only high performing individuals with high potential be promoted, while others are nurtured.
Although future leaders could be both internal or external, Oracle (2012, pp.9-11) prefers developing internal leaders as they are believed to achieve productivity 50% faster, when compared with their external counterparts, and help employee retention.
This step can be skipped for Tim Sloan’s development but is extremely important for the firm’s future consideridations.
3. Identify leadership gaps
The purpose of this step is to perform a gap analysis between the ‘as is’ (current) and ‘to be’ (future) leadership scenarios. Oracle (2012, p.11) recommends the following steps be carried out.
In Table 2, it was identified that low openness to experience, extraversion, and agreeableness are Tim’s areas of improvement.
4. Develop succession plans for critical roles (Not Applicable)
Unlike most LDPs, Oracle Leadership Development Programme recommends successions plans for all critical roles, including direct and tactical leadership positions (not just the strategic ones).
5. Develop career planning goals for potential leaders (Not Applicable)
61% of graduates left their first jobs because their employers didn’t offer career advancement opportunities (Oracle, 2012, p.14). Capital is invested on graduate training and development. So, developing career planning goals for potential leaders would promote retention.
6. Develop a skills roadmap for future leaders (Not Applicable)
Future leaders can be nurtured through a number of activities such as ‘coaching, rotational assignments, job shadowing, mentor relationships, and project leadership’ (Oracle, 2012, p.15). By developing skills roadmap for future leaders, Coca-Cola has been recruiting its market leaders internally, thereby saving on capital investments and ensuring retention (Oracle, 2012, p.16).
7. Develop retention programs for current and future leaders
Intuitively, retention is all about rewards- both financial and non-financial. Financial rewards may include salary increments, bonuses, and paid leaves while non-financial rewards comprise of acknowledgement through public praise and flexible working.
However, critics claim that, in modern times, employees don’t just seek rewards but also seek stimulating tasks and a friendly work culture (CMI, no date). So, a good retention program should account for rewards for the employee, a team matching his/her skills and interests, and a role that keeps the employee engaged; this is kind of in-line with the suggestions made by John Adair’s Action-Centred Leadership Theory.
The Board recovered ‘$69 million from John Stumpf and $67 million from Carrie Tolstedt’ following the scam (Wells Fargo, 2017). This, in addition to the pressure from the regulators and shareholders, shall test Tim’s resilience. The Board is advised to ensure that Tim feels sufficiently backed.
Budget and Scheduling
It is a no-brainer that Tim has a very tight schedule. Tim is a banking veteran and has held strategic leadership positions for a number of years. So, it will be counter-productive to put him through a generic programme. It is recommended that the L&D professionals coordinate with the Board and Leadership Development partners, such as SHL, to customise a development programme for Tim.
A classroom based training is strongly discouraged in this case as it decouples reflection from real work. Additionally, it is unadvisable to have the most important strategic leader ‘out-of-action’ for a prolonged period, especially when the firm needs him the most. The training could be delivered over 12 months and should not require Tim to spend more than one hour every week. L&D professionals must work with the Board and partners to determine metrics on how progress could be monitored and improved.
Although a custom-made development plan is expected to incur significantly higher costs than a generic one, it is not expected to exceed $100,000 (including overheads). These expenses are not even comparable to a CEO’s compensations. So, budgeting is perhaps lesser of a concern in this case.
Tim’s succession of Stumpf was perhaps just ‘common-sense’. Rowe et al. (2005) posits that when a leader is replaced after a string of poor performances, it results in a positive shift in the firm’s ‘tempo’; this generally helps the firm do better. So, the Common-Sense theory would suggest that Tim is in a naturally favourable position. However, the Board must understand that Tim has a herculean task at hand. Undoubtedly, he has to win back the trust of the shareholders and the customers but quantitatively, his success will be measured by a positive change in the firm’s Net Income. Wells Fargo’s unrealistic profits in the last decade were due to the sales malpractices. This is no longer a viable option for Tim. So, the Board must understand that it might take time to witness previous levels of profitability.
Rowe et al. (2005) posits that new leaders need time to settle; only then can they deliver positive outcomes. Vicious-cycle theory posits that within-season succession adversely affects the team dynamics and is counter-productive (Rowe et al., 2005). So, it is recommended that the Board decide against this should Tim be unable to deliver in first couple of quarters or so.
In a worse scenario, where Tim fails to deliver in the entire year, it is still recommended that the Board continue to show patience. Rowe et al. (2005) posits that between-season succession (also known as ritual-scapegoating) has no impact on team’s performance.
Leadership has been widely researched over centuries but systematic approach to organise theories began in the 1840s with what is known to mankind as the Great Man Theory. Depicted in the 1840s, Great Man Theory postulated that leadership traits are intrinsic and great leaders are born, not made (Caryle, 1841; Galton, 1869). Many critics, such as Hyacinth (2014) have opposed this idea in the recent times. Cowley (1931) compared the personality traits of great leaders and suggested that it is the mental, physical, and social characteristics that set the good leaders apart. Kenny and Zaccaro (1983) built upon Cowley’s (1931) ideas and formulated some well-known tools and concepts for personality assessment. The most famous ones include 16 Personality Factors, Big Five Personality Traits, NEO Personality Inventory and the HEXACO model. Barrick and Mount (1991) posited that Big five personality is a robust framework based on which personalities on individuals can be evaluated. The Big Five personality traits are- ‘Openness to experience’, ‘Conscientiousness’, ‘Extraversion’, ‘Agreeableness’, and ‘Neuroticism’ (Goldenberg, 1993).
However, critics argue that a leader’s behaviour is more important than his/her traits, giving rise to Behavioural theories (Blake and Mouton, 1964). Here, the key point of interest was to assess the specific behaviours leaders display. On the other hand, Derue et al. (2011) posited that ‘Leader behaviors tend to explain more variance in leadership effectiveness than leader traits, but results indicate that an integrative model where leader behaviors mediate the relationship between leader traits and effectiveness is warranted’ (Derue et al., 2011, p.7). Many modern critics of Trait theories support Behavioural theories but do suggest that best results are seen when there is a good balance between both (Derue et al., 2011).
Other theorists were more interested in analysing the importance of power in a leader’s behaviour. French and Raven (1959) proposed Power and Influence theory. According to Power and Influence theory, a leader’s power can be divided in to two types: positional (legitimate, reward, and coercive) and personal (expert knowledge and referent/charisma) (French and Raven, 1959). French and Raven (1959) assert that a leader must be good at both in order to exert influence.
In Situational Leadership Theory (originally known as Lifecycle Theory of Leadership), Hersey and Blanchard (1969) suggested that leadership behaviour be tailored to the skills and commitments of the followers. Table 3 summarises Hersey and Blanchard’s (1969) recommendations.
Table 3: Recommended Leadership Styles for varying skills and commitments of followers
Other theories, such as Functional Leadership Theory, aimed at drawing parallels between a leader’s behaviours and organisational unit effectiveness. In the Action-Centred Leadership model, CMI (no date) posited that the key responsibilities of a leader focus around tasks, team, and individuals. This has been elaborated upon later.
Fayol (1916) and Gulick and Urwick (1937) also did some work on formulating classic statements on organisation theory, while Hackman and Walton (1985) used the principles of functional leadership to suggest ways to build effective task performing groups in organisations.
Finally, contemporary authors, such as House et al. (2003) have suggested means to adapt leadership styles based on cultural differences.
Both qualitative and quantitative approaches were used in this work. Quantitative methods were used for financial analysis. Document Analysis was performed on data obtained from ‘Secondary’ sources, i.e. Wells Fargo’s Annual Statements, to assess the financial performance of the bank under different leaders.
Qualitative approach was used to perform the gap analysis on Tim Sloan’s leadership skills. Excerpts from Tim Sloan’s interview with senator Warren and regulators, and an in-depth literature review of the commentary on Tim’s leadership skills were used for this purpose.
Levels of Leadership
Leadership can be either ‘direct’ or ‘indirect’. Musumeci (2015)differentiates the two levels of leadership based on the position/power the role entails. While ‘direct’ leaders are generally seen to have more power over smaller groups, ‘indirect’ leaders generally tend to influence larger groups (Musumeci, 2015). Seelhofer (2011) added another dimension to this analogy-duration. According to Seelhofer (2011), direct leaderships positions tend to be shorter than the indirect ones. However, critics argue this stance by citing Pope, the leader of the Catholic Church, as an example (Musumeci, 2015).
Interpersonal (Direct) Leadership
Lately, Interpersonal Leadership has been extensively researched (Lamm et al., 2012). ‘Interpersonal leadership sets up an expectation that leaders must be in dialog or at least in view of their followers’ (Griffith, 2013). Typically, interpersonal leaders tend to lead small teams- between 6-10 individuals. While proponents, such as Lamm et al. (2012), debate the usefulness of Interpersonal Leadership, critics such as Griffith (2013) argue its viability in a truly globalised world where teams are scattered across multiple countries; this makes it difficult for the interpersonal leaders to be in constant dialog with their followers.
Lamm et al. (2012) gives a very descriptive summary of the skills essential for interpersonal leadership.
‘understanding, caring and consideration for others (Bass, 2008), communication competence (Bass, 2008), fostering and maintaining good relations (Bass, 2008), managing conflict (Bass, 2008), delegating and empowering (Bass, 2008; Yukl et al., 2002), fostering happiness (Bass, 2008), promoting collective decision making (Bass, 2008), personal attributes (Bass, 2008), developing others (Fleishman et al., 1991; Yukl et al., 2002), recognizing others (Yukl et al., 2002), motivating others (Fleishman et al., 1991), encouraging innovative thinking (Yukl et al., 2002), and supporting others (Yukl et al., 2002).’ (Lamm et al., 2012, p.185)
Indirect leadership is further divided into ‘tactical’ and ‘strategic’.
Strategic Leadership relates to people at the top of the organisation (Crossan and Vera, 2004). Intuitively, the skills required to make success of this leadership position are different to that required to excel as an interpersonal leader. Seelhofer (2011) posits that analytical skills, foresight and formulating strategy are the most attributes for a strategic leader.
Tactical leaders are positioned between direct and strategic leaders, and are chiefly responsible for delivering the long-term strategy set by the strategic leadership. Typically, they are responsible for medium-sized teams.
Seelhofer (2011) pictorially summarised the different levels of leadership in Figure 1 below.
Figure 2: Seelholfer’s (2011) representation of different levels of leadership
Source: Seelhofer (2011)
Attributes and Competencies of a Leader
Although the desired attributes in Strategic leaders may not be the same as the ones essential/expected of interpersonal or tactical leaders, all ‘good’ leaders share a core set of attributes and competencies (US Army, 2006). The Army Leadership Requirements Model lists a set of key attributes and competencies required of army leaders.
According to Army Leadership Requirements Model, army leaders (across all levels) are leaders of characters, leaders with presence and intellectual capability (US Army, 2006). A leader of character should exhibit and champion the values and ethos of the firm he/she represents, while a leader with presence is expected composed, confident and fit. US Army (2006) considers a person fit to lead if he is both mentally and physically fit. Finally, all leaders should be leaders with intellectual capacity; mental agility, sound judgement, innovation, interpersonal tact, and domain knowledge are considered to be the indicators of intellectual capacity (US Army, 2006).
According to Army Leadership Requirements Model, the duties of leaders are to- ‘Lead’, ‘Develop’ and ‘Achieve Results’ (US Army, 2006). Good army leaders are expected to extend their influence beyond the chain of command by ‘leading by example’ an ‘being champion communicators’. Sullivan (2010) quoted-
‘If you are the leader, your people expect you to create their future. They look into your eyes, and they expect to see strength and vision. To be successful, you must inspire and motivate those who are following you. When they look into your eyes, they must see that you are with them.’ (Sullivan, 2010, pp.232-233)
This can be extended to outside the military regime. When a firm is in crisis, stakeholders expect their leaders to step up, ‘carry the can’, and bring success.
A leader must develop- himself, others, and the processes in the firm by creating a positive environment. And finally, the leader must achieve and be able to demonstrate success through results. Leadership is a relationship between ‘leaders’ and ‘followers’. If followers are not confident in their leaders, the fundamental concept of leadership, in such situations, is meaningless.
Responsibilities of a Leader: Action-Centred Leadership Theory
Popular for its simplicity and versatility, John Adair’s Action-Centred Leadership Theory posits that the key responsibilities of a leader focus around tasks, team, and individuals (CMI, no date). According to John Adair’s Action-Centred Leadership Theory, leaders must Achieve the task, Build and maintain the team, and Develop the individual (CMI, no date). According to John Adair’s Action-Centred Leadership Theory, the needs of the tasks, team and individuals overlap.
Task is a combined effort and typically, cannot be accomplished by an individual. This urges a requirement of a team. In order to maintain a team’s effectiveness and cohesiveness, it is imperative to promote and retain the key individuals (CMI, no date). The individuals’ needs can be both physical (salary, compensation, benefits, etc.) and psychological (recognition, ethics, culture, etc.) (CMI, no date). If individual needs are not met, it causes disruptions to the group; this in turn affects the task.
In order to fulfil the aforementioned aspects, Action-Centred Leadership Theory depicts the following eight functions that must be performed and developed by a leader- Defining the task, Planning, Briefing, Controlling, Evaluating, Motivating, Organising, and Setting an example (CMI, no date).
Defining the task: The requirements set by leaders should be Specific, Measurable, Achievable, Realistic, and Time Constrained (famously abbreviated as SMART).
Planning: Leaders should plan for entire lifecycle of a task; from requirements elicitation to decommissioning (where applicable). As planning also requires planning and testing for contingencies, it is best done in groups (CMI, no date). Leaders should approach such groups sessions with open-mind and be willing to take feedback and suggestions from others.
Briefing: CMI (no date) views team briefing as pivotal in the process as it sets the right atmosphere, promotes teamwork, and motivates the individuals on the task.
Controlling: In addition to being effective, leaders must also be ‘efficient’ i.e. they must encourage maximum output with minimum input. ‘To achieve this leaders need self-control, good control systems in place and effective delegation and monitoring skills’ (CMI, no date).
Evaluating: Leaders should be good at consequences assessments, performance evaluations, promoting appraisals and training of individuals, and judging individuals (CMI, no date).
Motivating: Adair (2002) asserted that ‘50% of motivation comes from within a person, and 50% from his or her environment, especially from the leadership encountered therein’ (Adair, 2002). So, leaders should be motivated themselves; select people who are highly motivated; set realistic and challenging targets; remember that progress motivates; provide fair rewards; and give recognition (Adair, 2002, cited in CMI, no date)
Organising: Sindell (2015) explains why organising is an essential function of leaders.
‘If you think about it, when you are amazing at planning and organizing, you have the opportunity to demonstrate that you can take your pie in the sky ideas (aka being a visionary) and turn them into a reality. Not only that, it is also your opportunity to demonstrate that you can then think ahead (aka being a strategic thinker) and anticipate roadblocks to create contingency plans (Sindell, 2015)’.
Setting an example:
‘If you are the leader, your people expect you to create their future. They look into your eyes, and they expect to see strength and vision. To be successful, you must inspire and motivate those who are following you. When they look into your eyes, they must see that you are with them (Sullivan, 2010, pp.232-233)’.
Leaders don’t just need to set examples to win the trust of their followers, they need to set good ones, claims CMI (no date). As bad examples are more noticeable than good ones, there is immense pressure on leaders to set good examples consistently.
Inspired by Fleishman’s work on Initiating Structure and Consideration, Blake and Mouton (1964) proposed the managerial grid (Molloy, 1998). The grid is used to predict different leadership approaches based on two attitudinal dimensions- Concern for People and Concern for Performance (Molloy, 1998). Based on this, there can be five styles of leadership- Team Management or Teamwork, Authority-Compliance or Authority-Obedience, Middle-of-the Road Management or Organization Man Management, Country Club Management, and Impoverished Management (Molloy, 1998). Figure 2 below pictorially describes Blake and Mouton’s Managerial Grid.
Figure 3: Blake and Mouton’s Managerial Grid
Some authors, such as Molloy (1998), have taken a more quantitative approach; instead of using Low-to-High for the two attitudinal dimensions, they have preferred using a 1-9 scale. Nonetheless, the gist remains the same.
The management style where a leader who exhibits low concern for both task and people is termed as Impoverished Management. Such leaders tend to do the bare minimal required to avoid replacement. They are considered to be abdicators of responsibility. Impoverished Management is also considered as Laissez faire type of leadership; critics consider this style to be detrimental for an organisation (Skogstad, 2007; Molloy, 1998).
Country Club Management
The management style where a leader who exhibits low concern for task, but very high concern for people is termed as Country Club Management. Such leaders tend to provide attention to a friendly working culture.
Authority-Compliance Style Management
The management style where a leader who exhibits low concern for people, but very high concern for task is termed as Authority-Compliance Style Management. Molloy (1998) describes such leaders as ‘Tough-minded no-nonsense production-prodder’ (Bass, 1990, cited in Molloy, 1998, p.5)
The management style where a leader who exhibits high concern for both task and people is termed as Team Management. Perhaps the best of the lot, such leaders are described as ‘Integrator of task accomplishment and trust and commitment from followers’ (Bass, 1990, cited in Molloy, 1998, p.5)
Middle-of-the-road Style Management
The management style where a leader balances the efficiency of tasks, whilst keeping the morale at acceptable levels is termed as Middle-of-the-road Style Management.
The managerial grid has been widely used to assess and train executives in many companies. In fact, it is so versatile that in the recent years, the use of the managerial grid has also been extended to conflict management and organisational development (Molloy, 1998).
This module has helped me understand the core principles of leadership and management. I learned about the different levels of leadership and the theories underpinning them. I also learned how to determine necessary leadership skill gaps by applying industry-recognised tools such as the Big Five Personality test and Gap Analysis. Finally, I also learned about the various arguments both in the for an against of Leadership Development Programmes (LDPs). I also applied one of the contemporary LDPs, i.e. Oracle Leadership Programme, to bridge the leadership skill gaps in Wells Fargo.
I also took this opportunity to undertake a Big Five Personality test to help me understand my behavioural traits. The results have been tabulated in Table 4 below.
|Openness to experience||58%|
Table 4: Big Five Personality Test Results Source: Truity (2018)
I learned that I am fairly creative and open to new experiences. I scored 42% on conscientiousness; this means I slightly more decisive, and less careless. I scored 40% on extraversion. Although I am certainly not an extrovert, I am not quite an introvert, per se. I like to assess the situation, and then exhibit the appropriate level of extraversion. I scored very high on agreeableness. This is not a surprise at all. With minor moral exceptions, I am perhaps one the most agreeable personalities. I scored 50% on neuroticism. This indicates good emotional stability. However, I am aware that I am slightly more neurotic than average person. I understand that it is important for leaders to be emotionally intelligent. So, this is one of the many development areas I have identified through this exercise that I hope to improve on in due course.
Truity (2018) understands that I am a people person who values creativity; they referred to this in their unique words- Emphatic Idealist and Practical Caretaker. Figure 4 summarise the findings. Truity (2018) understands a good leader must be balanced across all the four areas. The assessment below has helped me further identify two areas of improvement- analytical thinking and logical reasoning. I acknowledge that, as a leader, it is essential to base decisions based on facts, and not solely on what makes people happy. I shall continue to work on these areas of improvements through my remaining tenure at the university and beyond.
Figure 4: Personality Assessment of Shreyaas Das
Kenny and Zaccaro (1983)
(Blake and Mouton, 1964).
French and Raven (1959)
Hersey and Blanchard (1969)
House et al. (2003)
all annual reports from 2011-2016
Fayol, H. General and industrial management (C. Storrs, translator). London: Pitman & Sons, 1949. (Original work published in 1916 19. Gulick, L. & Urwick, L. Papers on the science of administration. New York: Institute of Public Administration,
Cite This Work
To export a reference to this article please select a referencing stye below:
Related ServicesView all
Related ContentAll Tags
Content relating to: "Leadership"
Leadership can be defined as an individual or group of people influencing others to work towards a common goal. A good leader will be motivational and supportive, getting the best out of others when trying to achieve their objectives.
Leadership Challenges facing The Urbanists & Leadership Approaches for Sustainable Business Growth
Contents Executive Summary Introduction Aims and objectives Literature Review Research Methodology Findings Conclusion References/Bibliography Recommendations / Actions Executive Summary The Strategic...
Leadership Skills Theory at HSBC Life Assurance Malta
Chapter 1 Introduction Leadership skills are the focus of this study and therefore the author will be, in this chapter introduce leadership and the concept of the leader versus the manager as a primar...
DMCA / Removal Request
If you are the original writer of this dissertation and no longer wish to have your work published on the UKDiss.com website then please: