‘Some are born great, some achieve greatness and some have greatness thrust upon them’, muses Malvolio, a steward in Shakespeare’s Twelfth Night and the victim of a cruel prank whereby he believes he might be elevated to his mistress’s side as consort.
The story of how individuals achieve greatness in organisations can also be a mix of development or chance, depending on the individual and the situation the organisation is in at the time. Whether they fit the ‘tried and trusted’ or the ‘outside maverick’ criteria can determine the success of the individual as leader.
According to Gautam Mukunda, Assistant Professor at Harvard Business School, the process for choosing the ‘right’ leader can be one that is rigorously controlled, but in many successful cases is more left field. In either instance there is no guarantee of success or failure, which is instead dependent on a wide range of external forces.
Mukunda’s research concentrates on two distinct types of leaders and the selection processes by which they are chosen. One is ‘filtration’, whereby a leader is groomed and nurtured by their organisation into what Mukunda has termed a ‘modal’ leader. An example of this might be General Electric, which is well known for spotting leaders and bringing them through the ranks to fit the kind of leader blueprint that suits the company.
Mukunda’s theory is that many organisations’ success depends in part on the success of their leader filtration process. However, the strategy can fall down in situations where the business faces some kind of crisis or unusual set of circumstances that causes it to seek a non-traditional leader who breaks the mould – an ‘unfiltered (or ungroomed, external) outlier’.
According to Mukunda’s research, a modal leader will generally be successful in circumstances that are normal, but there is often a desire among organisations to look for an outlier as a breath of fresh air from outside. Mukunda cautions that this is a gamble, because ‘given just how catastrophic a poor leader can be, the virtues of one who will very likely be quite good should definitely not be ignored in the pursuit of a transcendent extreme.’
Interestingly, while many excellent leaders in business, politics and the military have been modal leaders, often the best leaders are outliers. Conversely, these can also be the most resounding failures. In Mukunda’s analysis of the US presidents according to how a range of historians have evaluated their success, Abraham Lincoln is seen as the most successful and George W. Bush one of the least, although both are ‘unfiltered’ in that they did not really conform to a traditional political career trajectory (Mr Bush’s familial precedents notwithstanding).
The reasons for success or failure are as much due to circumstance as to the attributes a leader possesses. Mukunda contends that one of the problems with leadership theory is that it can be too focused on the abstract qualities of a great leader and thereby the perceived uniqueness of that individual for the job. However, analysis of circumstances and the viable alternative candidates available often suggests that the same, or similar, outcomes may have been achieved regardless of which leader was chosen. This is particularly true when modal leaders are chosen by filtration. As an example, Jack Welch, the legendary CEO of GE, was termed by Fortune magazine to be the ‘Manager of the Century’, but Mukunda’s research suggests that GE as an organisation has such a highly developed filtration process that almost any leader picked would have performed well. ‘Maybe he or she would not have been as good as Welch but that still leaves a lot of room for the alternative CEO to have been very good indeed,’ he says.
According to Mukunda, many organisations think about choosing leaders in the wrong way, focusing on absolutes. ‘Trying to pick “the best leader” is the wrong way of thinking about the problem,’ he states, counseling organisations to think about choosing a leader ‘the way you think about investing. When you are investing you can decrease your risk by diversifying.’ He acknowledges, however, that ‘you can only pick one person to lead your organisation.’ Generally, he says, leadership filtration is the most effective way to avoid unpleasant (or indeed pleasant) surprises. But, Mukunda cautions, ‘You’ll want to take the risk in two major situations. The first is when only the best possible leadership can bring your organisation success, and the second is when the purpose of your organisation is such that it prefers short-term dominance to long-term success.’ He also warns that another issue that comes with the notion of choosing ‘the best leader’ is the relative definition of what ‘best’ means. For example: ‘The best leaders might fit the particular challenges of the job they are facing but star employees often fail when they migrate from one company to another.’
‘WHILE MANY EXCELLENT LEADERS IN BUSINESS, POLITICS AND THE MILITARY HAVE BEEN MODAL LEADERS, OFTEN THE BEST LEADERS ARE OUTLIERS.’
Mukunda’s recent book Indispensable analyses the career of Jamie Dimon of JP Morgan through the lens of his theory of filtered versus unfiltered leaders. It provides a glimpse into the way modern companies often look for someone who has ‘value-defined “leadership qualities”’ while doing little to ‘assess whether candidates had skills that matched the particular requirements of the job.’ Dimon’s career has been an interesting mix of meteoric rises and setbacks. The role that paved the way for him gaining the top job at JP Morgan was that of CEO at Chicago-based Bank One Corporation, a position he only secured following more than a year in the wilderness after being fired from Citigroup.
Mukunda has applied his thinking mainly to CEOs and political leaders, but can it be applied to the general counsel, a role whose remit is becoming more and more of a leadership one? And are the criteria different for lawyers and CEOs? We asked a number of GCs for their thoughts on Mukunda’s theories.
One in-house lawyer at a London private investment bank feels that the accretion of knowledge and corporate culture gained by coming through the ranks can be invaluable, particularly for developing the global oversight needed for today’s general counsel role. She says: ‘You understand the risk profile and the DNA of the company. You just know that “No, we would never do that”, which saves time. Obviously there is the corporate history and I think that is very overlooked, especially in legal. In litigation, for example, it is amazing what people can forget – “Don’t you remember? That company sued us and now you want to do a joint venture with them!” You might not actually think to look it up. You might not think to check that their subsidiary sued us in Australia 15 years ago and no one in London would know or remember that. Maybe it doesn’t even matter, but it is very useful when someone is aware of that sort of thing, and they can raise a flag about the weirdness of getting into bed with them now.’
However, one of that lawyer’s most productive engagements was with an unfiltered leader, precisely because he got the team thinking in a different way. ‘At my previous bank we had three directors and an MD who had come up through the ranks, then someone from outside who was a bit of a maverick but I loved him. He seemed “radical” then because he concentrated far more on his career and networking, which is something that lawyers never do. He invigorated us all and asked us to think about our careers, suggesting “perhaps you want to be GC of this team or you might want to market yourself to these internal people” – all the things that the bank and the legal team hadn’t been thinking about,’ she recalls. In her situation, a bank that had a fairly predictable pattern of modal leaders and progressive promotion actually needed someone to come in and shake things up, particularly in thinking about talent management and personal brand for the team.
However, when it comes to talent management, the arrival of an outsider can also have a markedly negative effect, as Brian Salter, general counsel of AMP in Australia, told us. ‘Recruiting internally is a very important signal to the rest of the team that there is a career path within the organisation and that the organisation does care for the careers and the futures of its people. To recruit externally can sometimes send the wrong message.’
‘RECRUITING INTERNALLY IS A VERY IMPORTANT SIGNAL TO THE REST OF THE TEAM THAT THERE IS A CAREER PATH WITHIN THE ORGANISATION.’
Salter thinks that Mukunda’s theories are applicable to the general counsel role because it is now a key leadership position. ‘When you are looking for cultural change, you need all the organs in the organisation to be supportive and going in the right direction,’ he says. He also wonders to what extent companies that need to be refreshed can bring in techniques of change management to persuade their filtered leaders to try and bring the best of the unfiltered perspective to the business, to aim for the best of both worlds.
But Mukunda points out that the risk and reward narrative attached to unfiltered leaders is very much a case of what is needed by the organisation at the time – and not one of change being brought in merely for the sake of it. Indeed, in Mukunda’s analysis of the US presidents, some of the most successful unfiltered outliers rose to prominence or served at times of great upheaval and change for the country: the War of Independence for George Washington, the Civil War for Lincoln and the Second World War for Franklin D. Roosevelt. Salter concurs that when ‘outside of the box’ thinking is paramount, bringing in a fresh perspective may be the only answer: ‘If you are looking for a leader to be a change agent for the culture because you think, for example, the organisation is not as nimble or responsive or as attuned to the market as you would like, or is a bit complacent, then I would agree that someone from outside the culture is really necessary.’
Rosie Nicholls, general counsel at recruitment process outsourcer Cielo, firmly agrees that it is very much a case of horses for courses. ‘In terms of the GC role, if there are a lot of compliance issues, if the business hasn’t been working, there is low trust and/or a lack of collaboration, and maybe the deals haven’t been good, then it may be best to bring in someone who is external. If you have a problem with low employee engagement, and maybe the CEO needs to be handled in a certain way and clients need reassuring, then getting someone who is well regarded from the inside is very helpful because it helps stabilise things. That would steady a rocking ship,’ she explains.
Sometimes the need for an objective overview and a steady hand might mean that those recruiting for head legal roles can benefit more than most from taking Mukunda’s advice on approaching leadership as a bespoke investment decision rather than as an absolute. Nicholls points to the Independent Inquiry into Child Sexual Abuse in the UK and a similar corruption inquiry in Australia as examples of organisations that have benefitted immensely from the perspective of an outsider, precisely because they were entirely new to the environment they were looking into and did not owe any favours.
Popular public opinion on political leaders in the US and Europe seems to back up the notion that unfiltered leadership is having a revival. General counsel positions can perhaps be subject to the same criteria. But Mukunda cautions any organisation considering some form of unfiltered leader to take certain steps to safeguard itself, such as matching leaders to situations, removing them from power if the situation changes, choosing unfiltered leaders who have been successful filtered leaders in other organisations, and shaping the position to the leader you choose.
Ultimately, subscribing to the monolithic notion of ‘the best leader’ is doomed to failure, as there is no such thing. But understanding this might lead to a more optimistic view of talent management and leadership development – because perhaps, given the right circumstances and experiences, any of us can aspire to the role…