ANY organisation’s leadership, be it at corporate business, or national economic level, significantly affects an undertaking’s long-term wellbeing.
Essentially, an undertaking’s leadership determines its vision, mission and how the organisation will execute effective strategies to achieve that vision.
However, the underlying values espoused by an organisation’s leadership ultimately determine how effective the strategies will be in achieving the company’s operational and financial objectives.
From last week’s discourse, it’s clear that lack of value driven leadership is rife everywhere on the globe across all sectors; private and public organisations.
Once again, who is a value driven-leader?
A value –driven leader is one who leads an organisation from a deep sense of conviction and purpose.
Additionally, he or she demonstrates a clear commitment to life-affirming values, such as having respect for professionalism, justice, being fair, honest, having integrity, being hard working, having courage, having genuine humility, being trustworthy, and demonstrating care for the undertaking’s people.
How does a company’s strategy get affected by who its leader is?
Once again, a strategy is ‘a battle-course of action’ that an organization undertakes to get from point A of its positioning to point B or where it desires to get to.
For instance, for most businesses to grow their market share, they inevitably have to wrestle market share from their rivals, comply with rigorous regulatory, quality, health and other conformity requirements and so forth.
Besides all this, the business must have internal resources and capabilities including its people to achieve such desired outcomes.
Many a reader, may ask, can every Sara, Jim and Jack lead a company to achieve a desired strategic outcome?
Two years ago, I undertook a study of South African Airways (SAA) and Eskom South Africa.
I learnt that SAA’s failure to reach its strategic destination isn’t an issue of its underlying debt or exorbitant costs of operation.
It’s more than meet the eye!
Additionally, the problem isn’t even attributed to the complex nature of the aviation industry.
It’s simply been due to lack of value driven leadership which subsequently failed to lead the airline to its intended strategic destination.
Think of it, SAA has had nine permanent or acting chief executive officers over a 10-year period that were all embroiled in corruption scandals.
Up to last year, SAA’s debt was estimated to have soared to R12 billion ($782 million) between 2011 and 2019.
Imagine, just last year, SAA’s Business Rescue Practitioner (“BRP”) , Siviwe Dongwana revealed that SAA has the potential to be a sound business but would benefit from having an industry-investment partner to improve its management.
Additionally, Ms. Dongwana noted that no strategic-equity partner was willing to deal with legacy issues of SAA.
Remarkably, around 2014, the SAA board implemented the Long-Term Turnaround Strategy (LTTS) for the airline.
This strategy too, couldn’t save the airline!
It was hampered by governance and leadership issues – the absence of value driven-leadership!
SAA corporate strategy suffered one major set-back emanated from the airline’s leadership instability.
SAA has been rated as the best full service airline in Africa. There had been an optimisation of network and fleet, a cost compression culture has been embedded, and operating performance was improving.
Following on, SAA managed to achieve the cost reduction measures and the network remediation in a number of its key routes; Beijing, Mumbai and Abu Dhabi.
It’s interesting to note that everything else in SAA was improving except the airline’s board and management!
Is the SAA scenario something that corporate leaders in Zambia can relate to?
In what way does a leader affect the business strategy of an undertaking?
A corporate leader has legal authority given of agency that is given to him or her by virtue of their position.
They can decide to either use it effectively or abuse it altogether depending on their personal convictions, values and ethics that they espouse!
It is further interesting here to note that sometime around 2015, the Chairperson of the SAA Board instructed the acting chief executive officer, Thuli Mpshe, to terminate the deal between Emirates and SAA.
This was just a few hours before the deal will be signed.
Essentially, the deal was going to result in SAA raking in R1.7 billion to the revenue of SAA.
That was stranger than fiction, wasn’t it?
SAA was therefore deprived of achieving its intended strategies by its leaders.
In any case, that’s what lack of value driven leadership traits could directly do to a company’s strategy.
On the other hand, a corporate leader plays a key role in the process of strategy formation.
A corporate leader either through his authority or indirect influence inevitably affects the thinking of people within the organization.
However, it should be noted that the leader’s mindset, convictions and values may not always be positive.
In the event that the people perceive a leader’s perverse acts or message as beneficial to their personal well-being, the company’s long term strategy takes the toll.
Indeed, a leader’s ethics, convictions, values and belief systems goes a long to determine how far an organization can go to achieve its business strategies.
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The author is the Managing Consultant at G. N Grant Business Consultant, a Chartered Certified Accountant (ACCA), a Master of Business Administration (MBA) holder, with a Specialism in Strategic Planning, and a candidate for the Herriot Watt University (Scotland) Doctor of Business Administration (DBA)