The following article is written by Cross Accountancy Services - Accountants Sydney. The author is Sargon Odisho.
A powerful call for extraordinary leaders is ascending from corporations across the globe as a result of striking contemporary challenges. Now more than ever is the need for a more effective leadership. These challenges are affecting the way business is conducted. Some of these challenges rose sudden and unexpected such as terrorist attack or it crept up slowly. A noticeable example of a slow change is the growth of globalisation. Affecting the financial performance of many organisations and forcing a global change to their operation. There are growing evidences that by applying a particular leadership style to deal with certain challenge will result in a better outcome. A compelling example to deal with a terrorist attack is September 11 and Al-Qaida attack on New York City. Judging from the events of Rudy Giuliani’s capabilities and leadership style to deal with the situation. During sudden crises a situational leadership style was the most effective. The situation was perfect for Rudi it fit his capabilities and style. Another fascinating example to deal with a globalisation challenges was demonstrated by Steve Job and the turnaround of Apple. A charismatic leadership style was the most effective style to deal with globalisation challenges. In this essay the two challenges of terrorism and globalisation will be discussed in details and how each challenge was dealt with.
Terrorism is another important contemporary challenge that changed the way business is conducted effecting security, travel and lifestyle worldwide. The largest terrorist attack that the business community witnessed was carry out by Al-Qaida on early morning of September 11, 2001. Four passenger airliners were hijacked by 19 al-Qaeda terrorists so they could be flown into World Trade Centre in suicide attacks (September 11 attacks).
The human life lost were more than 3000 including 227 civilians and 19 hijackers aboard the four planes. Also the loss in stock market wealth as the market's own estimate arising from expectations of lower corporate profits and higher discount rates for economic volatility, the price tag approaches $2 trillion. The world has witnessed an instant collapse of many companies. The destruction of major buildings in the World Trade Centre with a replacement cost of $4.5 billion. The loss of four civilian aircraft valued at $385 million and the loss of air traffic revenue $10 billion. Losses to the city of New York lost jobs, lost taxes, damage to infrastructure, cleaning were $95 billion (How much did the September 11 terrorist attack cost America?).
The threat of terrorism is real placing enormous risk on business conduction and life style in general.
The world is crying out for a more effective leadership to deal with terrorism. September 11 terrorist attack was a particular situation were New York Mayor Rudy Giuliani demonstrated a very effective leadership. Rudy Giuliani had come to office with a very strong term as Mayor for New York City. Emphasising on economical growth, crime rate reduction and operational cost reduction allowing for the 2nd term win. However the performance had declined as Rudy experienced many challenges including personal issues which affected his reputation, a racist incident when an African immigrant shot outside his house and then came the 911 terrorist attacks. Rudy Giuliani was highly prepared for such an attack especially after 1993 when world trade centre was bombed by terrorists becoming a good example to learn from. Rudy created the office of emergency management. Gaining experience by personally supervising many realistic military exercises including counter terrorism.
Rudy Giuliani was visible everywhere in the street of New York almost on an hourly basis. Showing signs of a calmness in the face of crises. Hiding his personal fear and uncertainty while offering transparency and sharing information extensively all that time. Appearing everywhere on television, provide support and guidance. Becoming open about the possibility of a second attack. Doing anything possible to help the survivors and offering condolence to victims’ families. Showing compassion for those who suffered in the attack. Connecting with people of New York and their values. Calming people down who were angry about the lost by preaching tolerance in the face of hatred to avoid turning into Muslim community of New York. Educating the people of New York that this attack was conducted by extremist group and averting Americans to turn on their neighbours.
Rudy Giuliani was so effective in this situation that made many people asking questions how could this struggling leader suddenly become so effective in this situation? Did Rudi change his leadership style overnight? How is it that Rudi came about to be a great leader? These questions can be answered by Rudy’s crises management capability as he practiced in a preparation for a similar situation. This situation was perfect for Rudi because it fit his capabilities and style. Having the capability to demonstrated calmness and having the people rally in the face of crises. It is clear Rudy’s skills and capabilities matched the situation very well. Hence the situational leadership was applied in this situation. The notion that fit or alignment must exist between leader style and contractual demands and pressures that they face. Rudi’s examples displayed the fit alignment. Hence the institute must seek a leader that is well suited for a particular challenge.
Globalisation is another contemporary challenge having an intense impact on many businesses today. The outcome of operating in a globalised environment will result in working under an intense competition. Making it harder for smaller businesses to establish given that smaller players are more vulnerable. Also it widens the gap between rich and poor, both among and within countries. Furthermore the exploitation of workers in the outsourced country by paying the workers a fraction of what they should be paid. Moreover the risk of having an economic depression in one country can trigger adverse reaction across the globe. It is not a doubt that globalisation is in a growth mode making it more challenging for a leader to perform well. However some leader managed to conquer these challenges and performing extremely well including Steve Jobs who founded Apple in 1970s. Nevertheless Steve left Apple during 1980s accumulation additional concerns including the drop in market share to 3% and the loss of $1.6 billion in a short time. Apple shares fell by more than 60% from 1993 to 1997 (Transformational leadership). Apple was not just in financial crises but it lost its status. Thus it was no longer the king for user experience. After leaving Apple Steve becomes the CEO of Pixar that produced many great animated movies, including Finding Nemo and Toy Story. Steve returned to Apple in mid 1990s offering a compelling new vision. Steve argued that computers are not about technological devices but a fashion oriented products. Hence the design user experience is about emotionally connecting with customers. Steve offered a vision of becoming a global mobile technology leader offering product such as ipod, ipad and iphone. Using emotional appeal sponsored by phrases such as “it’s the coolest”, “isn’t that incredible” and “we change the way”. Steve was emotionally connected to the customers and becoming a personal face of Apple. Hence the customers were more than just customers; they were fan of the company.
It is very clear that Steve Jobs was a charismatic leader who had a bold vision that is different than a market status yet seems feasible. Articulating unconventional manner by having unusual way to realise the vision. Employing emotion to attract followers rather than using authority to tell them what to do. Showing a great enthusiasm and self confidence for promoted products. Steve returned to Apple by taking the CEO position for $1 annual salary confirming self sacrificed characteristics and taking a personal risk. Steve Jobs used personal identification in order for the followers to please and imitate the leader while the followers were seeking charismatic leader’s approval. The followers believed in certain values that Steve possessed. Hence Steve increased his responsibilities with Apple and reduced responsibilities with Pixar. Having the CEO role of two successful companies. Steve Jobs is an example of a charismatic leader who saved the organisation in the time of crises. Steve Jobs products dominated the world market in all the four corners of the planet. Making Apple the most successful global company in the world. Expanding the operation offering jobs beyond USA to China and Philippines. In 2006 ipod employee were about 13,920 earning $750 million in the United State and 27,250 earning $320 million abroad (CHRYSTIA 2011)
In conclusion the challenges can be dealt with using specific leadership style for each challenge. It is very clear that sudden change such as terrorist attack requires a capable leader who is experience and ready for such a challenge. As for globalisation challenge it is recommended to search for charismatic leader who has a bold vision. A distinct example was explored in details to prove that a situation theory was the answer to deal with terrorism. Having Rudy Giuliani’s leadership style a perfect match to the situation. The second example was clearly demonstrated by Steve Jobs and his turnaround of Apple by applying a charismatic leadership style. Hence leaders may fit their approach to fit the situation. Therefore the leaders must have a style or the organisation must search for the leader with certain styles to fit for a particular challenge.
By Sargon Odisho - Marketing and IT Manager 20/7/2013