The skills leaders need

LEADERSHIP IS A quality that is hard to define, but as a Supreme Court justice said of obscenity, you know it when you see it. Everyone can think of inspiring leaders from history but managers who think they can base their style on Nelson Mandela or Elizabeth I are suffering from delusions of grandeur.

The biggest mistake is to equate leadership entirely with charisma. Billy McFarland was just 25 when he set up the Fyre festival which promised attendees a luxury experience on a deserted island in the Bahamas. As shown by the Netflix documentary, “Fyre: The Greatest Party That Never Happened”, Mr McFarland was a preternatural salesman. He convinced investors that he was a visionary entrepreneur and persuaded talented young people to work for him.

But he lacked the skills to put his vision into practice. Festival guests arrived to find their food consisted of cheese sandwiches, rather than gourmet cuisine. They were housed not in luxury villas, but in tents left over from a hurricane-relief scheme. The saga ended with Mr McFarland being sentenced to six years in prison.

His example could have been a case study for the book by Tomas Chamorro-Premuzic—“Why Do So Many Incompetent Men Become Leaders? (and how to fix it)”. As an organisational psychologist, he points out that people tend to assume that confident individuals are competent, when there is no actual relationship between the two qualities. Those confident people are then promoted. Overconfidence afflicts both sexes, but men more so; one study found that they overestimated their abilities by 30% and women by 15% on average.

A related trait is narcissism. Research suggests that the rate of clinical narcissism is 40% higher in men than in women. Around 5% of chief executives (a male-dominated profession) are deemed to be narcissistic, compared with just 1% of the general population. If the Fyre documentary is a guide, Mr McFarland belongs to that group, and then some.

Neither narcissism nor charisma is purely a male phenomenon. Elizabeth Holmes, the founder of Theranos, the failed blood-testing group, convinced shrewd investors and powerful men like Henry Kissinger with her messianic vision of supplying affordable health care. But the Theranos technology did not work. Charisma plus egomania minus competence is a dangerous formula.

None of which is to say that charisma does not matter at all. Theresa May, the British prime minister, got the job on the basis of her perceived competence. She has had a difficult task in pushing through Brexit. But her lack of persuasive skills has mattered at crucial moments, and she now looks set to resign. She has demonstrably failed to unite the country, paying little attention to the views of opposition parties, or to those of business or the trade unions. In an address to the nation on March 20th she managed to alienate the very MPs she needed to vote for her plan. “A leader who claims to invite views but then ignores them is no leader,” warns Stefan Stern in his new book, “How to Be a Better Leader”.

Competence is more important than charisma. Managers need enough presence to persuade their teams to follow the business plan, but they should think in terms of coaching rather than inspiration. Gallup surveys have found that employees are more likely to be engaged with their work if they get frequent feedback from their bosses, and if they are involved in setting their own goals.

Team leadership requires having sufficient empathy to understand the concerns of others. When things go wrong, as they inevitably will, a good leader also needs the flexibility to adjust their strategy. Stubborn introverts like Mrs May lack the required flexibility; narcissists like Mr McFarland lack the necessary empathy.

Finally, Mr Stern argues that a large part of leadership success stems from the ability to set a good example. Subordinates notice what behaviour gets rewarded and which standards are set by the person at the top. Mr McFarland showed a great enthusiasm for partying, and a blithe indifference to logistics. Subordinates who doubted his vision, or questioned the detail, were told to get with the programme or get out.

Similarly, Mrs May appointed men to the top Brexit posts on the basis of their ideological positions instead of expertise. In both cases, their leadership styles got the results they deserved.