LEADING BUSINESS BEYOND PROFIT

Leadership theories have been researched for decades, and history has shown the positive and negative impact of different leadership practices. However, the negative consequences of ineffective leadership are evident everywhere: political instability, wars, poverty, fraud and corruption, manipulation of capitalism, modern slavery, environmental destruction, low employee engagement, low talent retention in organizations, poor organizational performance, and economic hardship. This is an indication that current leadership theories and practices are not effective in sustaining the world, now or in the future. These problems indicate a global leadership crisis that has never been resolved in the history of humankind.

Over the last century, companies have spent billions to develop leaders in organizations, and have used different training methods to cultivate new leaders in business and society. However, problems such as low work engagement and stress-related ill health remain evident in organizations, despite these development efforts. Some blame the ineffectiveness of the leadership development programs and suggest that the training methods should change. Others believe the world is changing too fast to equip leaders with the right competencies to lead, and that the world is therefore experiencing a leadership gap.

Maybe the problem is not the development program, learning method, or the rapidly changing world, but rather the leadership approach that is taught in the program. Many business schools focus on equipping leaders with the technical ability to run a business, but neglect to transform the heart of the leader, which is actually the most crucial part of effective leadership. As a result, there are many self-serving leaders in business and government who aim to accumulate more wealth, power, and status for themselves, to the detriment of other people, without leaving any form of positive legacy.

Leaders can have all the technical abilities, competencies, and economic know-how, but with the wrong leadership heart, these abilities will be used with the wrong intent, and will wreak destruction in the world. The devastating consequences of self-serving leadership are clearly evident in the history of humankind. The past and current problems in the world clearly indicate the desperate need for a more effective and sustainable leadership approach, namely servant leadership.

1.6 Difference between self-serving versus servant leadership

The main differentiator between self-serving and servant leadership is intent. Self-serving leaders lead from a motive or intent to achieve selfish goals to the detriment of others and society, whereas servant-leaders lead from a motive and intent to serve people, organizations, society, and the environment. Self-serving leaders have a ‘get’ mentality, while servant leaders have a ‘give’ mentality. Self-serving leaders focus on accumulation, servant-leaders focus on collective positive impact. Self-serving leaders use practices such as fear, control, greed, and pressure to get results, and often abuse their power to accomplish selfish goals. Servant-leaders, on the other hand, use practices such as purpose, talent alignment, empowerment, and support to achieve goals that benefit multiple stakeholders, and use their leadership position to create sustainable positive change in business, people, society, and the environment. Self-serving leadership is characterized by selfishness, jealousy, greed, narcissism, manipulation, Machiavellianism, personalized charisma, a need for power, and psychopathy. These characteristics are driven by a heart of pride and fear. The characteristics of a servant-leader include courage, altruism, compassion, integrity, accountability, authenticity, humility, and the ability to listen, and originate from a heart of love and purpose.

A self-serving leader produces destructive outcomes for organizations and abuses organizational resources to serve selfish needs. For example, a self-serving leader might abuse the training budget of a company to attend expensive conferences or executive training courses for personal gain, and neglect to provide training opportunities to other employees in the organization to empower and support them to achieve personal and organizational goals. A self-serving leader will also limit the performance potential of an organization. For instance, a self-serving leader will hoard critical knowledge, information, or skills to remain in power. Employees then remain dependent on the leader to perform, which hinders organizational competence and performance. A self-serving leader, furthermore, exposes the organization to unethical and unlawful practices that put the organization at risk and damage its reputation. The corrupt behavior of one selfish leader can, in a day, destroy an organization’s reputation that took decades to build.

Other destructive organizational outcomes that self-serving leaders produce are poor service delivery, poor product quality, low productivity, and unsustainable financial performance. For example, a self-serving leader might decrease the quality of a product by removing small parts in the manufacturing process, or retrench people in the after-sales department to reduce overheads. As a result, the customer receives reduced quality for the same price, and will not receive adequate support when the product fails. Customer trust in the company then decreases, which means that customers will not repurchase products from the company in the future or recommend the product to others. This will ultimately cause a decrease in sales.

Self-serving leaders not only produce negative outcomes for organizations, they also have a negative impact on people. People working under self-serving leaders experience more stress, leading to higher physical and psychological ill health. Self-serving leaders also cause higher employee turnover, increased absenteeism, and overall work- and life dissatisfaction. These destructive individual outcomes then negatively influence the employees’ ability to perform.

In contrast, servant-leaders produce positive organizational and individual outcomes. For example, servant-leaders apply good stewardship and use organizational resources wisely to produce the best return on investment, to the benefit of multiple stakeholders (the customer, employee, shareholder, supplier, society, and the environment). Servant-leaders also continuously develop and empower employees to perform better, which leads to improved overall organizational competence and performance. Servant-leaders do business ethically, as they possess high levels of integrity, and they reduce organizational risks because they are accountable and good stewards.

Servant-leaders are also service-orientated; they serve customers, employees, shareholders, suppliers, society, and the environment to the best of their ability. In return, the organization benefits from more sales (due to repeat business and customer referrals), higher retention of employee talent, more capital investment by shareholders, better supplier relationships and partnerships, a supportive society, and a sustainable environment.

Servant-leaders not only serve. They also think, plan, and deliver. They instill a higher-purpose vision in the organization, to achieve collective benefits for people, society, and the environment. They also create a serving culture in the organization and empower employees to serve the customer and society, to ultimately achieve the higher-purpose vision. In this way, servant-leaders create a more sustainable world for all.

In summary, self-serving leaders produce a destructive legacy in society, whereas a servant-leader will produce a positive and sustainable legacy, to the benefit of people, organizations, society, and the environment.