Procurement Intelligence Unit

My recent blogs on McKinsey and Rajat Gupta and the Japanese earthquake, and the current UN coalition push to unsettle Colonel Gaddafi in Libya have a key common thread: leadership.

There are many definitions of leadership, emanating from a range of sources, from established academics such as Professor Kotter at Harvard University to basic definitions offered by management institutes. However, what I am interested in is not where definitions come from, but rather tangible and intangible outcomes of leadership.

An outcome is what a leader does to shape employees' thinking and future behaviour and motivate them to perform. Analysis of leadership outcomes in relation to the selected recent events below makes an interesting read:

• The failure of McKinsey to put in place perpetual confidentiality arrangements with departing staff members allows for speculation on what could have been done to avoid the Securities and Exchange Commission investigation. Leadership in this case placed a lot of trust in individuals, expecting their conduct to be of an 'elite standard', which left no room for IP exploitation. However, once removed from a situation of collective endeavour, individuals can become opportunistic, illustrated by the allegations of insider trading on client information.
• The Japanese disaster has rocked the country's leadership and perhaps exposed its failure to manage the event's aftermath effectively. Leadership both at  the government level and at the nuclear power plant failed to assess correctly the potential fallout from such an event (ie, no proper assessment had been made and no plans were in place to mitigate the risks).
• The large number of Tomahawk missiles that have been launched over Libya highlights the strong leadership of the United Nations coalition necessary to rein in a failing dictator. Colonel Gaddafi has failed to show the sort of leadership necessary to bring about positive change.

Leadership can be anything from passive, short-sighted and outright opportunistic to revolutionary and positive. From a private entity perspective, leadership can be the engine driving innovations and therefore enhancing a company's bottom line. At the government level, leadership can help to increase living standards and raise people out of poverty.

Where business environments lack leadership, it is difficult to add long-term value and create sustained brand value as the management team maybe overly focussed on, for example, short-term cost savings. The dichotomy exists where managers that try to put their heads above the parapet and put long-term value creation at the heart of their operations may find themselves conflicting with short-term cost objectives. In procurement, leadership must recognise the inherent conflict between short-term and long-term objectives and their impact on organisations.

The Chartered Institute of Management blog provides the following statement: Leaders do not exist, but instead there are only more energetic managers with the vision to act beyond rationality.