Authentic Leadership is a term that has become more popular in its usage than in its understanding. Some leaders are intrinsically authentic, but many are not and need to develop this. Nevertheless, it is a leadership style that is very effective in many first-world situations and business owners and entrepreneurs would do well to understand its principles and practices.
Starting and sustaining a successful business requires not only vision and capital but the ability to engage others to assist. The ultimate success of a business is more likely to be related to the effectiveness of a team of people than it is to the business’s products or services. Today it is widely recognized that the role of an organisation’s leaders is pivotal to the success of any entrepreneurial venture.
Old school leadership paid scant attention to the role of leadership behaviour on business outcomes, particularly in smaller emerging firms. In fact, business results were viewed primarily as a management function rather than an exercise in leadership. Today, we recognise the importance of leadership, but to many, the practice of leadership is somewhat vague and not easy to perform.
What is Authentic Leadership?
The concept of authentic leadership is an output of positive psychology. Positive psychology focuses on looking at what is right within people and emphasizing and moulding strengths, rather than trying to fix weaknesses. And so we can define an authentic leader as confident, hopeful, optimistic, resilient, transparent, moral, ethical, future-oriented and giving priority to developing employees to be leaders. (Luthans and Avolio, 2003)
Authentic leadership creates an environment of trust that helps people to build on their strengths and be more positive, broaden their thinking and gets them to focus on adding value. This then contributes to the performance of their organisation over time and produces the outcomes sought by its leaders.
In today’s environment of intense and global competition, a motivated workforce is an essential component for survival and growth. A greater focus on human assets could well enhance the likelihood of entrepreneurial success.
An authentic leader would be one who holds the belief that not only does every individual within the organisation have something positive to contribute, but also that they should be helped and encouraged to build upon those. At a personal level, authentic leaders build their power through their knowledge, their ethical stance, their ability to communicate effectively and the rapport they build with individuals.
Practical Elements of Authentic Leadership
Quite apart from the theoretical concept and the interpersonal dynamics of Authentic Leadership, in order to lay the foundations for effective Authentic Leadership, several tangible artefacts are required.
The appreciation and value of an organization’s leadership style and indeed its moral and ethical stance begins long before employment. Many of today’s employees are concerned with the social and moral issues of our time. They gravitate to businesses that display a positively perceived and mutually agreeable stance on matters of popular concern. Moreover, many would-be employees place a high priority on how employment with a given employer may look on their resume and on their social media profiles and may reject possible employment on this basis alone.
Thus any business must therefore take pains to develop an appealing leadership profile in order to attract quality employees. Such a task is not trivial.
Not only that, but as mentioned elsewhere, leadership is closely linked to business outcomes. This is not just a case of meeting operational and financial objectives. From a business value standpoint, the state of the business’s culture could be a factor in determining the valuation multiple when it comes to selling the business. Obviously such a result is the product of sustained effort over a long period of time that argues in favour of early and sustained leadership action.
Authentic leadership is viewed by many as behavioural and in fact behaviour is an important element. But to approach this from a purely behavioural standpoint places too much emphasis on an individual. For much better results, a systematic approach is required, some elements of which are explained below.
The core propositions that underpin how a business operates are one of the key elements of an authentically led business.
- Business purpose, vision and mission
- Core Values
- Value Proposition and Customer Promise
These must obviously align and congruently lay the foundation for the development of a positive and productive culture.
These propositions need to serve as a constant reminder and reference point for strategic decisions that will be made by the business’s leaders, tactical decisions that will be made by management, and operational decisions that will be made by team members.
Quite apart from their mere existence, these propositions need to be ever present in the psyche of all employees and the subject of regular training.
A lot of emphasis is placed on organisational culture nowadays. This culture should reflect the principles and philosophies of the leaders. Unless strongly asserted otherwise, the culture will reflect the aggregate attitudes of the business’s employees. And so to develop the right positive culture in an organisation, it needs to be defined within the context of the leadership’s long term vision in the form of a culture statement.
Such a statement can be extremely useful.
- It can serve serve as a recruitment tool, helping to disqualify potential misfits
- As a training tool
- As a reference element for behavioral standards.
Without such a component, an organisation’s culture can conceivably be subverted with possible dire consequences.
By the same token, an organisation’s culture can be developed and improved over time. Without a defining structure, such development is less likely and long forgotten mistakes could be repeated.
Authentic leaders lead from the front, serving to model the behavior that inspires their employees, and recognize that task accomplishment and associated development are closely related.
It would be true to say that there are many examples of business founders who fail to scale because of too narrow a task focus. With a myriad of support resources available today, this should be far less of an issue today than in the past. It does however require some leadership self awareness in order for corrective action to be undertaken and/or the correct modality of help and support found.
Leadership behavior is the most important factor that determines employee behaviour within an organisation. A leader who “walks the talk” has been shown to be much more effective in influencing others than by coercing or persuasion. (Quinn et al., 2000).
Today’s challenging business environment demands not only continual innovation but improvements in all aspects of stakeholder satisfaction and so effective leadership is more critical than ever. The degree of employee operational and entrepreneurial independence acts as a multiplier effect that increases the leader’s ability to lead and add value.
An effective authentic leader not only develops the personal attributes required, but implements practises in their business to make it authentically leadership a practical reality.
- Luthans, F., and Avolio, B. J. (2003) ‘Authentic Leadership: A Positive Developmental Approach’. in K. S. Cameron, J. E. Dutton, and R. E. Quinn (Eds.) Positive Organizational Scholarship 241-261. San Francisco7 Barrett-Koehler
- Quinn, R.E., Spreitzer, G. and Brown, M. (2000), “Changing others through changing ourselves:the transformation of human systems”, Journal of Management Inquiry, Vol. 9 No. 2