Recently in Paris, I had the chance to listen to two psychologists, one French, one Norwegian, who work as consultants for business and specialize in leadership issues. We had a fascinating conversation about "human capital" and leadership. The wonderfully surprising result of these hours together was that they both agreed that what was often overlooked, but vitally important in true leaders is valuing Human Capital, their own and that of their employees. They also agreed that true leaders are able to see failure as part of their life's narrative, and how their businesses helped them to heal their own personal or collective stories, and care about those who work for and with them. Real leaders in no way feel naturally "entitled" to use and abuse those in their private and work life. The words which I was left with at the end of this time together were "care" and "healing."
Gry Osnes is based in London and has worked in Scandinavia, and has carried out research specifically on family businesses in places as diverse as tribes Zimbabwe and the fashion industry in Europe. Matthieu Langeard is based in Paris, and has worked with some of the biggest French companies, as well as with venture capital, individuals, entrepreneurs and those who are directly involved with questions of leadership.
One distinction Langeard made early on was between "Leaders" and "Managers." The word "leader" is derived from the Old English word for "Pathfinder," whereas "Manager" comes from Latin, and refers to the place where one trains horses. A Leader creates new pathways, whereas a manager tries to keep an existing structure in place and "train" those under him or her to work within that context. Leaders find failures part of learning, whereas managers tend to have a hard time talking about failure.
Gry Osnes clarified differences between European and American ways of dealing with "Leaders" or "Managers": in the US, often a CEO is a Founder and/or is also Chairperson of the Board whereas in Europe the CEO and the head of the Board are Never the same person. The Board in Europe exists to counter-balance the CEO and to remind him or her that he or she is "mortal" and can be removed. She went on to explain that part of the problem with the lack of checks and balances in the US Financial System has to do with the fact that the heads of large banks and companies were not reminded that they were "mortal" until it was too late and they had a disaster on their hands. We have seen this type of entitlement and arrogance within the banking industry in the U.S. This brings up the subject of Narcissism.
Langeard has looked into healthy or productive Narcissism v. unhealthy Narcissism. Part of the problem with the MBA programs around the world is that they produce "stars," whereas true entrepreneurs are often the "ugly ducklings" of their families and surroundings. One important factor Langeard looks for when determining placement of venture capital is that the entrepreneur is able to tell you his or her life story, which almost always includes an important meeting. These people are the actors in their own lives. Langeard equates those who cannot recount their life stories as having "no pilot in the plane." But these are not snake oil salesmen, using the "life story" approach to "sell" themselves as Entrepreneurs. These true leaders differentiate themselves based on a very human way of being able to recount their life trajectories, without unhealthy narcissistic distortions or "stealing" of ideas.
True leaders also tend to not act as dominating "leaders" or "managers" in their own homes. Their wives do not treat them as CEOs but as equals. Their business life does not take over home life and require them to make decisions which are harmful to the family. These "leaders" take out the garbage, do not order people around nor act as princes with doting wives or husbands. Their children do not cower not feel that their CEO fathers/mothers' professional roles carry over into their family life. At work and in their personal life, leaders have true empathy and act accordingly.
An Entrepreneur is often the main asset of the company, driving it forward (think Steve Jobs). Innovation is important to these leaders/entrepreneurs. For a manager, innovation is less important than keeping the status quo intact. Healthy Narcissism in a Leader also means they appreciate the Human Capital that is derived from the employees. Unhealthy Narcissism destroys Human Capital and results from someone in "power" who has not earned the title of "Leader." These people harm not only those who work with them, but harm the company overall.
We have seen a great deal of harmful "Leadership" of those who are not true leaders and have not respected those working with them. Their disturbing Narcissism has not only lead to fraud, bankruptcy and many job losses, but to the overall Financial Crisis and general criminal financial behavior. In the future we need to rethink the importance of elitist MBA programs and support true leaders and entrepreneurs in companies that are human in scale. Quit rewarding Narcissists with bonuses and promotions. Support more humane approaches to business and those businesses which treat employees with respect, which includes profit sharing. We need real leaders, not a bunch of spoiled MBAs feeling entitled running things in the US. We are better than that!