JP Morgan reported that the failing companies with whom he worked shared a characteristic: they all overpaid their top people. He came from the perspective of financial acumen. (The overpaying / star-struck
habit illustrates a poor grip on identifying value creation).

A more contemporary perspective might also point out that such a habit illustrates a laughably out of date sense of what ‘leadership’ might mean.

Enough work and research into groups, identity, and behaviour change has been undertaken over the last few decades to cast the idea that a good leader is a superior or special person with all the answers as worryingly old fashioned.

Max Weber wrote about ‘charismatic leadership’ over a century ago, and it’s that romantic notion that just doesn’t seem to want to lie down or go away.

We are relational beings. Companies and organisations are groups, and groups of groups. And groups operate in fascinating ways as they develop, define, protect, and activate their social identity.

A successful leader is less someone special and apart and more someone involved and connected, someone who can represent of codify or strengthen that group identity.

A moment’s thought will suggest the sorts of skills that might be needed here.

A sense of ‘we’ rather than ‘me’. Together rather than apart.
A keen ear to listen, to understand what concerns and defines the group.
An ability to shift and project a range of personality traits, to reinforce the group’s feeling of distinctiveness.
An ability to help members of the group see their own interests coincide with the group’s interests.

The changing political landscape is giving us all a master class in leaders who understand social identity – and those who don’t.

Yet businesses cling fondly to a hero myth, a leader with charisma set apart by a series of separating and status-building signals. Such as pay.

What comes around goes around.
When the bank JPM founded was hit by a loss scandal a few years ago, it was
blamed on the CEO having become too imperial.

Too much charisma.

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