Responding to failure – the true test of leadership?

With leadership – especially the lack of effective leadership – in the headlines recently, head of employer branding and insight Neil Harrison argues against a blanket response to perceived failure.  “For the sake of employee engagement,” he says, “don’t apply the same solution to differing failures of leadership.

“It’s hard to move for the current focus on leadership right now,” he continues.  “Dave and Nick are working hard to shore up the coalition by refocusing their leadership.  Yahoo appointed Marissa Mayer employee, no less this week as their new leader.  She is, however, their third in the last year and fifth in a little over that, so Yahoo employees, investors and users will be scrutinising her tenure with some interest.

“However, it is two UK-based leaders – or in one case, an erstwhile leader – that have been hard to avoid of late.  Bob Diamond recently stepped down as CEO of Barclays, apparently at the behest of senior Bank of England figures, following the Libor scandal and the bank being fined £290m by US and UK regulators.  Diamond appeared hugely reluctant to resign as the story initially broke, displaying his famous ‘Bobtimism’ in an attempt to deflect early negative press.

“Diamond’s story, however, has been swept to one side – to the potential relief of some based in Canary Wharf– by the emergence of another CEO twisting in the wind.  On the face of it, Nick Buckles of G4S appears to be facing a very similar fate to that of Mr Diamond.  His firm recently made public the news that it will not, in fact, be able to supply the Olympics with some 2,500 security professionals that it was contracted to deliver.  It’s hard to imagine a more public, more high-profile corporate catastrophe.

“With the most prestigious global sporting event in the calendar due to commence in London within a fortnight, security is clearly of paramount importance.  And, at the last moment, we have to scramble troops and police to fill the gaps left by G4S’ incompetence.  G4S will certainly lose a minimum of £50m on the Olympics contract, its share value has plummeted, it’s pulling out of bids for similar contracts for the next two Olympics, and its reputation is unlikely to have benefitted hugely.  Nor is its employer brand.

“And the general response to both leaders?  Calls for a hasty departure.  But does the punishment fit the crime in both cases?

“Diamond has already walked off into a lucrative sunset.  But should the same fate await Mr Buckles?  Let’s compare the two.  Diamond has been responsible for the growth of one of banking’s clear success stories over the last decade in Barclays Capital.  But he was also seen as a huge influence behind the organisation’s highly confident culture.  At the same time, his insistence late last year that the time for contrition amongst bankers should be viewed as past – “There was a period for remorse of banks, but I think this period is over” – did not play well when the Libor story broke.

“But what of Buckles?  He has been nothing but apologetic, open and remorseful.  He has freely and apparently genuinely admitted the mistake, and stated his desire to improve matters.  Much like Diamond, under his watch the company has grown significantly and delivered handsomely to both shareholders and employees.  Where the two also share common ground is in their cultural influence.  Whereas Diamond’s chutzpah and confidence appear to have translated into hubris and corporate arrogance, Buckles has appeared honest, crestfallen and embarrassed.  He may well in time have to leave G4S – it seems received wisdom that corporate disasters such as this must equate to a vacancy at the top.

“But why?  Surely this is exactly the time when an organisation needs stability, leadership and continuity. Buckles doubtless has his faults, but he appears to be focusing on having made an honest mistake rather than on ‘cultural poisoning’.  G4S’ people will be feeling pretty bruised right now.  Engagement levels will not be stellar.  As TMP’s own research into what employees look for in a new organisation suggests, strong leadership is a major priority.  A leadership vacuum at an incredibly sensitive moment could tip G4S into a dangerous spiral.  This is cock-up, not conspiracy, and Buckles should have the opportunity to display the kind of strong, ethical and decisive leadership which can turn G4S around and turn employee disheartenment and embarrassment into renewed engagement and pride.  That will be the truest test of his leadership capabilities.”

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