• Nick

Hester had to go. He can’t dance like a loon.

Have been thinking a lot this week about the right kind of leadership – what’s right for the right time. And what’s wrong.

Along with a fair number of other UK businesses RBS has needed a gigantic, energy sapping effort to dig it out of the crap chasm. Now it’s in better shape someone, somewhere has decided that Stephen Hester isn’t the man to lead RBS through privatisation and into growth beyond.

Feeling sorry for Stephen Hester isn’t something I am used to. But I do. He didn’t look like a man who had chosen to leave RBS. He looked a bit shocked. And upset. And he sounded not very convincing when saying how lovely he thought George was.

Despite how pissed off he must feel at being defenestrated just when he’s done all the really grim, really lonely, hard stuff – making tens of thousands of people redundant, culling whole businesses, being bashed about by the media – maybe he really isn’t the right man for the next stage. Maybe.

Not a happy chappy

Leadership in a crisis, leadership for growth

So here’s my hypothesis. The type of leadership required to dig an organisation out of the crap is wholly and completely different from the leadership needed for growth.

And there’s no way the same person can do both.

People who are brilliant at making really hard calls on cost cutting, shrinking, control in a crisis really can’t suddenly become expansive, risk taking and entrepreneurial.

And the kind of people who are the entrepreneurial “bet the farm” growth fanatics are the last people you want digging you out of a crisis.

Paralysed organisations need people like Hester

RBS just after the crisis felt like an organisation suffering from a kind of trauma – and as a result had been paralysed. The behaviours that had been lauded beforehand were suddenly shameful. The “big is best” “make it happen” “jfdi” culture that had permeated the bank was something nobody wanted to emulate. It was reckless. It had caused the crash.

Everybody was scared, nobody wanted to take a risk. Sorting out the mess required special, determined leadership. An obsession with doing what’s right – no matter how hard it was. Courage to take the really brave surgical decisions. The thickest of skins to deal with the politics. Energy and patience in coping with the scrutiny. A kind of emotionless resolution. It must have been so very lonely.

What an amazing job he has done.

And then they don’t

But here’s the rub. When an organisation tips out of crisis mode into the very beginnings of growth mode it needs a different kind of leadership – expansive, open to ideas and willing to take risks. Above all one that is founded in a strong sense of purpose.

All too often the qualities that were so important in dealing with the crisis are the polar opposite of what’s required for growth.

So the troops start behaving like a resistance movement. They no longer tell the leader everything – in fact they form alternative groups/alliances who decide just how to manage information to the leader. And they start to reallocate resources for themselves to fuel growth experiments.

And the leadership has no idea. This seems to apply in all types of organisation – big, small, private, public, industrial, creative, NGO etc.

Sebastien Brion calls it the “illusion of alliance” – leaders over estimate the strength of their bonds with subordinates, often fatally. Brion shows that those leaders obtain fewer resources, are excluded from alliances, and almost always ended up losing their power.

And most astonishingly of all – they lose their ability to distinguish between a genuine and a fake smile.

Look at what’s happening in Turkey – Erdogan’s self belief has turned into something much more like absolute intolerance. With bloody consequences.

What happens if you disagree with Erdogan

So what kind of leadership does growth need?

My hunch is that for a bank to grow, really grow now it has to become much more like a movement. Driven by purpose – incredibly clear on its role in the world, what it seeks to do, and staffed by an enthusiastic and slightly fanatical set of people who share that aim.

And that purpose needs to be firmly rooted in what the world needs from us, not what we need from the world. So not “return to pre-crisis levels of profitability” but “we exist to help all of Britain’s entrepreneurs succeed in creating new and thriving businesses” and/or “we’re going to eradicate student debt”. A purpose is more like a cause – and the leader should use it to create a movement.

And creating a movement is a whole different ball game to the kind of resurrection job Hester’s been leading.

If you’ve never seen it check out this video of Derek Sievers at TED. It’s about 3 minutes and really well worth it. This is how movements are created. What do we learn?

First up – leadership is overrated, the first followers matter. And beyond that copyable behaviours and peer to peer infection is how it works – not top down. (See Leandro Herrero for how this works). And a movement needs a ‘nutter’ to kick it off – someone brave enough or stupid enough to get up and start behaving very differently. Someone who can dance like a loon.

I don’t know for sure – but Stephen Hester doesn’t look like he’s a dancer.

Still human

Hester might be sad – and I’m sure a lot of good people will follow him out of the door. But it’s probably right that he goes. More concerning are the motives of the person who pulled the trigger.

Unable to deal with crisis as well as growth. Boundless self belief leading to rank intolerance. Getting rid of people who disagree.

In the end I’m glad for Hester. I reckon he got out with some humanity intact. He probably can distinguish between a fake and a genuine smile.

Genuine smile?

#movements #StephenHester #RBS #nickkeppelpalmer #DerekSievers #LeandroHerrero

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