CIARAN RYAN: There’s an interesting debate in management and academia about whether humane or tough leadership delivers the best results. Can South African executives afford to prioritise people in a low-growth economy?
Anyone who’s looked at the biographies of leaders like Steve Jobs at Apple or Elon Musk at Tesla may come away with the impression that hard, even brutal leadership is what seems to drive performance among staff. But is this always the case?
Joining us to explore this is Dr Buyani Zwane, senior lecturer at the Gordon Institute of Business Science [Gibs]. Hi Buyani, thanks very much for your time.
This is an important debate, is it not: to manage with toughness or with a softer approach? And is there a cost to taking the hard leadership approach in terms of staff attrition? Following on from that, are there hidden balance-sheet costs in all of this?
BUYANI ZWANE: Thank you very much for the opportunity. Essentially, when you look into what we are seeking to achieve in a business, one [aim] is to sustain it. Another is to grow it. You’re not really in business [merely] for the sake of being in business; you’re in [it] in order to grow.
To do that, you need to be able to have the leadership capacity and capability that makes people want to come in and do business with you.
[At the same time], the people who are working inside an organisation [should] want to give the best of themselves.
This is often referred to as employee engagement. When employees are engaged, they become more creative, and you want to be able to have more and more truly creative people working in your organisation so that they [can] find solutions to areas that probably, as a leader, you may have overlooked – by virtue of dealing with urgent things, dealing with future things, and many competing priorities.
Therefore, it is important that we [strike] a balance [between] tough leadership but with a humane perspective, particularly in the South African context. We always talk about being humane. We call it ubuntu.
That is something that says: I care about you, I am going to grow my business and if there are instances where things aren’t working, I’m going to count on you coming to the fore and sharing with me what needs attention, and in turn, as your line manager, I will [communicate] about how things are going in the organisation.
Obviously, trust is crucial. If we are trusted as leaders, even when we are tough, the toughness is [likely to be] received favourably. But if we are not trusted, there is always suspicion that we are being decapitated because of some other ulterior motives, and you wouldn’t want that to be a story that is connected to you as a leader or your organisation.
CIARAN RYAN: This issue of trust; let’s explore that a little bit. Is there evidence that taking a humane approach translates into measurable business outcomes?
BUYANI ZWANE: Absolutely. In fact, there are conversations that are coming through from various entities.
If we look at Brand Pretorius right here in South Africa, one of the styles that we were really grateful for when we engaged with him as a leader was his humane approach when leading the Toyota organisation and [McCarthy Motor Holdings].
You found somebody in him who cared about the employees, even in the toughest of times, and that helped a great deal.
Right now, we’ve seen the shift that is taking place within Eskom. Part of it has to do with what’s happening at board level, with chair Mteto Nyati, who is so much of a humane person.
He actually visits power stations alongside [Eskom Group CEO] Dan Marokane, has conversations with the people – and without having brought in new leaders; he works with existing leaders.
They have helped turn the organisation around because one of the things that they are emphasising is: you matter, we matter, and together we make this organisation.
CIARAN RYAN: It’s an interesting case study there at Eskom. There are some business leaders who argue that, while layoffs can deliver short-term margin improvements and boost stock prices, they frequently destroy institutional knowledge, which is built up over decades and generations. They can also increase future hiring and training costs and, I guess, damage brand reputation. What’s your view on that?
BUYANI ZWANE: I would concur with that, because institutional knowledge actually works with people.
When people really feel like they are cared for, you often find that even after they’ve left the organisation, they keep sharing key information about the organisation with new hires.
Many a time, when restructuring takes place, we often have the ‘last in, first out’ approach being applied, which translates into more experienced people being let go.
In the process of doing that, you’re bringing in new people, of course, they may be coming in with [fresh], innovative ideas, but if it is at the expense of what built the organisation to the level that it is now, you may actually be short-changing yourself. So there is value in looking after the employees with longer tenure, as long as there has been proper performance management.
Because many a time, what we find is that we’ve got people who stay in organisations for long periods, but they’re not really adding value.
In fact, you have some people in the C-suite making reference to this as ‘deadwood’ – but they’ve kept that deadwood.
How could that be the case?
Obviously, when there is a restructure, that so-called deadwood would be the people who are let go. But having held them in the organisation for long periods has an impact on morale among employees. Because when you’re not doing what’s necessary to manage poor performance, you are inadvertently impacting on high performers, who begin to ask themselves: why do I need to exert myself so much when this organisation can afford to carry passengers?
CIARAN RYAN: Agreed. Managers across the country, though, will look at this and say they are under pressure to deliver top-line performance. What would you say to them? How can they achieve this in a constrained economy without eroding the business culture and the employer brand?
BUYANI ZWANE: First thing is to actually go back to employees and get them to come with their ideas.
What you really are after is, even at the time when you are required to make the hard decision of letting some people go, you need to do it in such a way that those who are leaving say there was fairness, there was equity in the process.
The top line [performance], obviously, is driven by the people who are inside the organisation.
If you are going to be chasing after it without looking into experience, without looking at the mix of talent, there is a risk of losing the very people needed to sustain that growth.
Somewhere, you might also be asking whether we diversifying enough in terms of our business?
As John Gardner [author of On Leadership (1990)] once observed many years ago, most unsuccessful organisations develop a kind of functional blindness to their own defects. They are not suffering because they cannot solve their problems, but because they cannot see them.
Sometimes, we are not holding up the mirror to ourselves – examining what’s working for us and what has been standing in the way of our own success.
That is something I would be saying to leadership: as you are pursuing top-line growth, think about the talent you have inside the organisation. There are some who have been very good soldiers, for a long time, who can help the organisation go forward.
CIARAN RYAN: Final question, Buyani. Another factor at play here is that investors and boards are expected to uphold higher and higher standards of ethical leadership. You’ve got ESG [environmental, social and governance] standards, and sustainability is very much the buzzword these days. So how does this factor into leadership pressures?
BUYANI ZWANE: Virtually every organisation I have had the opportunity to interact with – both at the business school and even in my private consulting – has a value of integrity. Every one of them have a value that speaks to honesty. Therefore, one would expect ethical conduct amongst them.
The pressure is [increasing], particularly in our country, with the many commissions that have come through and demonstrated that there are instances of leadership – even within organisations with high, positive reputations – engaging in underhanded practices.
We know for a fact what transpired with KPMG some years ago.
They became a body that you’d be saying: but you are auditors, you are the ones who are supposed to be able to see when things are going bad. How could you be the ones falling [down on this]?
And of course we ended up with Professor Wiseman Lumkile Nkuhlu taking on the role of chair, and the organisation began the process of rebuilding trust and confidence among its clients.
So it’s absolutely crucial that we behave in an ethical manner because investors want to put their money into people they can trust to take care of the investment to higher levels.
They don’t want to be associated with scandals. No investor wants to be in a business that is fraught with scandals, so ethical behaviour is a must in today’s environment.
In particular, in our country we’ve had many exposés, often with the help of whistleblowers, that have demonstrated that key organisations have [engaged in wrongdoing], including collusion and lapses in key areas, particularly within supply chain systems.
Therefore, there is a necessity for us to be able to ensure we’ve got ethical people in, among others, finance departments and the supply chain system.
When we’ve got those tightened, investors may be assured that they can put their money and expect a return without it being stolen.
CIARAN RYAN: Terrific stuff. We’re going to leave it there. Thank you very much for that. That was Dr Buyani Zwane, who is senior lecturer at the Gordon Institute of Business Science. Thank you, Buyani.
BUYANI ZWANE: Thank you for the opportunity. Truly appreciate it.
Brought to you by the Gordon Institute of Business Science (Gibs).
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