Do you remember the old American Western movies where the sheriff with the big white hat rode onto the scene to bring law and order to the frontier town? Having grown up with these movies, the image of the heroic leader with the big hat still sticks in my mind. But today we don't see many big hats around anymore -- and it's not just because 21st Century leaders dress differently.
In many ways, the current financial crisis has been caused, or at least exacerbated, by a lack of leaders with big hats. Instead of thinking about what's best in the long-term, most politicians have been focusing on how to advance their own parochial agendas. Thus European leaders have been protecting their own currencies, deferring austerity measures, and avoiding some of the deeper structural changes that may ultimately be needed. Similarly, Democrats and Republicans in the U.S. (including the President) have been digging in their heels on their "non-negotiable" positions and seem to spend more time blaming each other for problems than actually offering solutions. Everyone seems to be wearing a small hat, not willing to exchange it for a larger one that encompasses a broader perspective.
Wearing a small hat, of course, is perfectly natural. Political leaders are elected, appointed, or promoted on the basis of positions that resonate with their constituencies. And often, to be re-elected, politicians feel that they need to stay faithful to those positions. But what many leaders don't understand is that they also have a responsibility to do what's best for people who did not elect or support them, but whom they represent anyway. Coming to grips with that tension and reconciling conflicting principles for the overall good is the essence of what I'm calling "big hat leadership."
Big hat leadership is not just an issue for governments and politicians. It's also a recurring challenge for managers in all organizations. What's best for a particular function, geographic unit, or product division will often not be the same -- and even may be contrary to what's needed for the organization as a whole. Getting to the optimum solution, however, requires that all of these managers wear big hats and partially subsume their individual agendas.
Take, for example, one consumer products company that was struggling to increase margins: The leadership team jointly decided to sell off or discontinue a number of low-volume brands, and outsource some of the support functions. Following this decision, if the managers of those affected brands and functions had not put on their big hats (and accepted the individual consequences to themselves and their constituencies) (which they did), these shifts would have been very difficult, potentially to the detriment of the entire company.
Not everyone has the capability or willingness to be a big hat leader. In many ways, it's far easier to advocate for the people who support you or agree with your positions than to alienate your base or be seen as weak. It's also easier to be an expert in your own area than to learn how other areas work and how the organizational (or economic) pieces fit together. Most importantly, wearing a big hat takes courage -- since it means venturing into new territory, not worrying about popularity, and possibly making decisions that are good for the enterprise but not for you personally.
So yes, it's tough to put on the big hat. But at the end of the day, our organizations (and our economy) might be better off if more of our leaders learned how to do it.
To what extent do you think leaders in your organization, and in your country, are able to wear the big hats?
Cross-Posted from Harvard Business Online