The importance of effective leadership

Tuesday, August 12, 2008

MANAGING FOR SOCIETY, THE MANILA TIMES By Evelio G. Echavez The importance of effective leadership

We have seen how our neighboring countries have overtaken us in terms of economic development in the last few decades. We have heard many times over that in the 1960s, our economy was next only to Japan in Asia but nowadays, while some of the Asian countries have become developed, we have been left sadly behind among the still struggling and developing countries of Asia. Even some countries that were relatively less developed than us in the 1970s and 1980s have posted significant growth with their per capita income now bigger than ours. And the reason for their progress was the quality of leadership that they enjoyed. Both Singapore and Malaysia, for example attributed their progress to the effective leadership of their former prime ministers, Lee Kuan Yew and Mahathir bin Mohamad, respectively. Both leaders were credited for engineering the rapid growth and modernization of their respective countries. They had great visions for their respective countries. They focused their attention and energies in leading their government and people to realize their visions. In the business world, Jack Welch, the former chairman and CEO of General Electric and who is considered as the one of the greatest business leaders of modern times comes to mind. Welch, who was at the helm of GE for 20 years, was mainly attributed towards increasing the market value of GE by 40 times. When he took over the reins of GE, he told the executives of the 350 businesses under GE that if they were not number 1 or 2 in the industry, then they should sell or close the business. He also made the Work-out Program popular. This is a practice where the workers are cloistered together for a couple of days in order for them to think of problems in their workplaces and their suggestions/solutions for the purpose of systematically harnessing the creativity, knowledge and cooperation of the workforce. Lee Iacocca, the former CEO of Chrysler Corporation, is another successful business leader who was credited in saving Chrysler from going under. In order to put the company in the black, he sacrificed a lot even to the extent of reducing his salary to $1 a year. When he was the CEO of Ford, Iacocca was very vocal in his opposition to government’s involvement in business. But at the time he was in Chrysler, which was then facing bankruptcy, he decided to go to government to seek for help. There are basic differences between what a manager/executive and a leader does. Managers are focused on making sure that the systems and procedures, budgets and schedules, structures and controls, and the basic management functions are followed. Management produces predictability, consistency, and control. It focuses on restraining, maintaining, or conforming activities. Leadership, on the other hand, involves creating a compelling vision that brings the people and the organization to a higher level of performance and development. This entails inspiring and empowering the people to do greater things and questioning the status quo for the purpose of further improving performance. Nowadays it is important for managers/executives to not just be doing management functions well but to become effective leaders as well. It is a challenge for institutions of higher learning to help business and organization leaders improve their leadership abilities. Beyond gaining knowledge and competencies in the traditional functional areas of management, effective leadership, mentoring, coaching and counseling, visioning and execution, character and ethics are some critical areas of competencies that leaders should possess.