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Lucky Leaders

December 30, 2022 by

Political leaders and CEOs have to navigate their societies and organizations through challenging times with Covid, inflation, war, and other crises. Dutch leadership professors Janka Stoker and Harry Garretsen have written an instructive book with lessons for leaders in this era of uncertainty.

They draw three lessons from the Covid crisis. The first is that leaders have become more directive during Covid as a consequence of the threat-rigidity reflex: they show more rigid behavior reacting on an external threat. That is functional in the short-term and less effective in the long run. So the lesson is that leaders should give up their directive behavior.

The second lesson is that hybrid working, which has become commonplace, only works well if it is coordinated. Individual flexibility will need to be curtailed.

The third lesson is that just-in-time management needs to become just-in-case management. Organizations need more resilience in their ability to absorb shocks. They need to move from efficient to robust.

Stoker and Garretsen also write about political leadership. In their view the political fragmentation and polarization in Europe and the US can only be countered by leaders providing a meaningful story that addresses feelings of economic and social uncertainty and shows citizens what they can expect and why. They are very critical about Dutch Prime Minister Mark Rutte and his lack of vision.

The authors are convinced that autocratic leaders will fail in the end. They have a negative impact on economic growth, don’t understand their people, assemble yes-men around them and see threats too late. The demise of Russian leader Poetin is inevitable in their view, hopefully without him taking half the world with him.

The authors think that the gap between salaries of CEOs and average employees has negative consequences for organizations and society. In the US this relation has increased from 20:1 in 1965 to 112:1 in 1995 and 312:1 in 2017. They state that the market for CEOs doesn’t work. Rewards for CEOs are insufficiently related to organizational performance, but depend mostly on how non-executives perceive their value.

One of their other suggestions is that leaders should reflect more to learn lessons from the past. They change direction too often and abruptly, embracing the next management fad, thus becoming unpredictable and unreliable. The problem is that reflection takes time, isn’t visible and might necessitate to take action. Changing structures is easier and seems more satisfying.

The main message of the book is that effective leadership is highly contextual and depends more on luck and coindence than on the unique qualities of the individual leader. Exceptional performance is by definition temporary because of the statistical regression to the mean.

Janka Stoker and Harry Garretsen. Goede leiders in onzekere tijden. Lessen voor organisaties en de politiek. Business Bibliotheek, 2022