That new kind of leadership (6-min read)

We come across leaders in our everyday life. Donald Trump is a leader? Sure. Hillary Clinton? Of Course! Richard Branson? Without a doubt. Nonetheless, they are all fundamentally different people, and even more, different leaders. This is clearly recognizable if you take a closer look at their public declarations, appearance and people management style. They influence an enormous amount of people, and this in different ways, shaping entire societies.

Fitting this logic to the business world, which is currently struggling with ethics scandals year after year, what is thus needed to make sure that business organizations can evolve to become ethical over the long term? Businesses are in essence groups of individuals working together towards solving a societal problem in a profitable way, and leaders impact greatly towards what kind of organization a business is leaning. Thus, the question we need to ask ourselves is, which leader has what it takes to reach this ambitious mission?

I cross the notion of leadership in a majority of conversations with professionals about the problematic of ethics and it appears as the go-to response to humanity’s aches and pains. However, how do you define leadership? Even today the so often highlighted, clear-cut line between managers and leaders in business theory becomes blurry in practice. Everyone seems to have a different vision of a “leader”, even business literature makes the difference between various kinds of leadership and leadership styles.

That being said, how do we find the perfect leader for us? And which leaders will keep our organizations on a sustainable and ethical path to success? Let’s start by breaking down some leadership styles our mindful self comes across every day.

• First off, the Transactional Leader. Conversations between this leader and his employees tend to be very one-sided and directive, based on command and use of the leader’s hierarchal power. There’s usually no cooperation with the employee towards a common goal, stimulation is mainly centred on a reward and penalty system and extrinsic motivation while the employee fails to see shared benefits and is indirectly driven to do so. You may compare this style to the Autocratic Leader, one who tends to make decisions without asking for potentially useful input by his employees.
• Second, the Transformational Leader. Contrary to the previous type, altruism and emotional intelligence dominate this leader’s decisions. The employee-leader relationship will be two-sided and cooperative, ending up in employee personal or career growth, as well as a positive transformation. Here I might add Lewin’s Democratic Leader, who includes as a matter of principle employees in the decision process, as well as the Laissez-faire Leader who mostly provides support but gives their employees plenty of room to autonomously work out how to do their work in the best possible way.
• Next, one of my favourites: the Charismatic Leader. Basically, many parallels can be recognized with the transformational leader, with some significant differences. The charismatic leader’s focus is on leading by example. They actually perform the change they want to see in their employees and act as role models employees can look up to. Nonetheless, this bears some risks potentially leading to tragic pitfalls. Let’s imagine charismatic leaders acting unethically? Phaenomena such as Blind Following or Groupthink could lead to this behaviour being normalized among followers and bigger social groups. It wouldn’t be the first time one of these mistakes would have led to corporate scandals, which is why we have to watch out to always be critical and have the courage to discuss doubtful matters, especially with leaders.
• Fourth, the Authentic Leader. Contrary to prior styles, he is not just altruistic, but he’s naturally aware of other people’s morals as well as his own. This notion of morals is decisive, as it reflects this leader’s ability to base his decisions on ethical standards instead of his personal convictions, which may be the main difference with the Charismatic Leader. Furthermore, Authentic Leaders are known to inspire and promote Organizational Citizenship Behaviour among their followers!

Ultimately, what is the perfect leader? Even Autocratic  and Transactional Leaders, which seem at first glance like people to avoid, can be of prime importance mainly if the organization is surrounded by a stable and foreseeable environment where decisions are made quickly using leader routine. It’s clear however that none of these popular leadership styles seem up to the task of keeping our organizations on an ethical path to success, at least not in isolation.

This brings us to the very recent notion of Ethical Leadership, which combines an innovative leadership style with existing elements. Could it be up to the challenge? Let’s take a look!

As for Transformational leadership, emotional intelligence and altruism is central to the ethical leader. Furthermore, the focus lies on transforming employees, namely by embodying the ethical values and attitudes of your organization to strengthen the ethical culture, a methodology shared with the Charismatic Leader. A Reward and Penalty System is also elementary to lead by example – a system the ethical leader shares with the Transactional leader.

Next, the ethical leader must create open discussions about ethics in the organization, as discussability, behaviour reinforcement and openness go hand in hand. Moreover, such a leader has to keep in mind that his main mission is to give employees what they need to do the right thing, instead of restricting their ability to do the wrong thing, as only this method can create a genuinely ethical culture.

Finally, it’s decisive that the ethical leader connects the organization’s basic purpose with the value it creates. Business, in this case, is not only about making money, but encompasses this dimension simply by raising the bar, living to do good for everyone. Ethical Leaders, which are in essence normal people or groups trying to make their organization and thus, the world, a better place, should aim at creating value for their stakeholders with all the principles ethics represents, and may hopefully be able to convince lots of people to go along with them.

Will ethical leaders alone be the solution for the void created between financial and real markets, as well as stakeholders and shareholders? For me, the answer is no! As we’ve seen, there are many leadership styles present on the market, having an influence on how business is taken care of. And as everybody should know, value lies in diversity and empowerment!

This means, while ethical leaders will have their part to play, the presence of different types of leaders is as important for the sustainable success of a business. The main revolution lies in the way this leadership is carried out, with ethical leaders in harmony with other present leadership styles, redeveloping in essence how organization’s work. 

What kind of leaders do you know, and which leader are you or would you like to be?

Please share your thoughts!

Make sure to check out the first article of the series, what place for ethics in today’s organizations? as well as No°2: Which ROI for CSR & ethics?