The Financial Technology Consultant and Adjunct Lecturer at the Ghana Institute of Management and Public Administration has urged businesses to create a new set of leaders that have fresh ideas and skill-set capable of managing today’s complex businesses, especially during this turbulent time that the banking sector is going through.
Speaking to 150 Agripreneurship students in Mampong in the Ashanti Region on the theme ‘Agripreneurship and Financial Literacy’, Prof. Samuel Lartey said this has become necessary considering that many businesses are suffering from leadership crisis – which has eventually led to the collapse of some.
“Contemporary leadership development practices reveal that companies must no longer assume that you either have it or you don’t when it comes to leadership potential. It is believed that managers should be trained and retrained for a leadership role.
“It is indeed in times of adversity that real leaders are found. However, maybe just like how most businesses have had to find out the hard way, it is high time for a new generation of business leaders who are much better equipped to thrive in these very different times,” he said.
He added that leadership is no longer based on rank and experience, but competence and ability to persuade workers to perform tasks that they would otherwise not perform.
“It can no longer be purely about rank and experience. There are so many brilliant leaders who are not at the top of their organisations, but stand out because they are able to establish an emotional engagement with people. They have the inherent ability to persuade and influence others to actively support the direction they set,” he said.
Prof. Lartey’s full speech can be found below.
There comes a time when we all ‘Need Something Positive to Believe in’. The only thing worse than no leadership is poor leadership. There are some moments in recent history that will stick with us forever; some memorable for all the right reasons, and others that divide a nation and drive an unhelpful atmosphere of Fear, Uncertainty and Doubt (FUD).
In about 400 BC the Greek poet Euripides wrote that: “Ten good soldiers wisely led will defeat one hundred without a head.” This verse may be interpreted to mean that the fall of an institution has little or nothing to do with local possession or foreign ownership. As this verse suggests, the notion that success depends on the quality of leadership is hardly noble; that is why most contemporary organisations spend millions to develop their leadership.
Money alone is not the answer. Many banks died with huge assets. Three of which are:
- Lehman Brothers Holdings Inc.
Lehman Brothers Holdings Inc. was a global financial services firm which, until declaring bankruptcy in 2008, participated in the business of investment banking, equity and fixed-income sales, research and trading, investment management, private equity, and private banking. It was a primary dealer in the U.S. Treasury securities market.
Bankruptcy Date: 09/15/2008
- Washington Mutual, Inc.
On September 26, 2008, Washington Mutual, Inc. and its remaining subsidiary, WMI Investment Corp., filed for Chapter 11 bankruptcy. Washington Mutual, Inc. was promptly delisted from trading on the New York Stock Exchange, and commenced trading via Pink Sheets. All assets and most liabilities (including deposits, covered bonds, and other secured debt) of Washington Mutual Bank’s liabilities were assumed by JPMorgan Chase.
- Bankruptcy Date: 09/26/2008
- Assets: US$327.9billion
- CIT Group, Inc.
CIT Group, Inc. is a large American commercial and consumer finance company, founded in 1908. The company filed for Chapter 11 bankruptcy in 2009. The company is included in the Fortune 500 and is a leading participant in vendor financing, factoring, equipment and transportation financing, Small Business Administration loans, and asset-based lending.
- Bankruptcy Date: 11/01/2009
- Assets: US$71billion
Many companies, especially the banks, pay more attention to their liquidity and leave the human side of the organisation to take its own course. However, companies always need better leadership. To enjoy the competitive advantage of great leadership throughout every level of your organization, you need to engage in an aggressive programme to develop your own leaders.
Readers will recall that after all the fabulous work the then-36 universal banks in Ghana and their workforce, stakeholders and client network had delivered over the years, they were rocked by mistakes and errors of judgement which have killed the very existence of most of them – 13 out of the 36 banks are dead or have been consolidated, wiping their names off the register of banks in Ghana.
Perhaps the banks’ focus was heavily on profitability, leading to the introduction of complex systems, complacency, false information and leadership arrogance, while little was on leadership integrity, ethics and corporate governance. Simplicity was hanged on the line. Mistakes can usually be forgiven, but once trust is lost it is extremely hard to recover.
There is no gainsaying that, as part of the measures in sanitising the banking sector, the BoG increased the minimum capital requirement of banks to GH¢400million to ensure that the sector was adequately capitalised. The Bank of Ghana (BoG) is confident that reforms in the banking sector will help position the country as the sub-region’s safest investment destination.
According to the BoG, having fewer resilient, strong and safe banks will send a signal to investors that their funds will be safer when they choose this country as their investment destination. The BoG posited that it intends to have fewer stronger and safer banks than have many banks with some that are not very strong.
Finally, on Friday 4th January 2019, the BoG announced that we should feel happy that with the final 23 banks that are left in the system, whenever investors bring in their funds they will be safe. But my concern still remains: is it liquidity or leadership?
In the global context, the whole Brexit referendum process was one such startling and totally unexpected example that will not be easily forgotten. When the stunning results electrified the media headlines the morning after, those living in London felt weird and rather empty. This was not possible, was it? But in actual fact it was the result of a clever and brilliantly executed strategy of exploiting the prevailing FUD factor. There were many untruths and half-truths, which some of the media eagerly gave much publicity and support to.
There now appears to be some new unwritten rules of leadership. The usual, polite and knowledgeable leaders are looking ancient and hugely ‘out of touch’. It’s a bare-knuckle fight that favours those with nothing to lose and all to gain. Many of the new leaders have never held leadership office before, and will throw mud, rocks and anything else they can get their hands on at their ‘establishment’ opponents. The brashness and superfluous, extravagant life clearly (and sadly) work. They are the new challenger brands.
Leaders are now pejoratively labelled the ‘out of touch elite’. ‘Globalisation’ was suddenly, the enemy. This seemed to defy logic, but it was our horrific reality. The brutal truth is it was never going to be about logic. A huge mistake the leaders made was thinking they could use historical data and intellect to propel them to success. They never come close to understanding or accepting that old axiom, “hardly anyone remembers exactly what you said, but everyone remembers how you made them feel”.
They stuck to their tried and tested, neat and docile management approach; a well-thought out strategy based on historical corporate data, supporting plans and activities derived from this intelligence – clever, yes…but totally underwhelming.
The lesson that needs to be learnt very quickly is that nearly all businesses are screaming out for something new, different and much more like them. They definitely don’t want the same old guard (that led them to crisis), with the same old polices and the same old out-of-touch hand-shaker!
When facing up to the challenge of a disaffected and low-morale organisation:
- Let them know that you do know what it is like to ‘walk in their shoes’
- Speak their language – use their words, not words they don’t connect with
- Humble thyself – get down off your platform and be at ease among them
- Use real stories, not strategies or policies
- Give them something to belong to
- Give them someone to believe in
- Let them know you are in it for them, NOT only you
- Make tough promises and keep them
- Remind them of the promises you have kept
It is indeed in times of adversity that real leaders are found. However, maybe just like how most businesses have had to find out the hard way, it is high time for a new generation of business leaders who are much better-equipped to thrive in these very different times.
It can no longer be purely about rank and experience. There are so many brilliant leaders who are not at the top of their organisations, but stand out because they are able to establish an emotional engagement with people. They have the inherent ability to persuade and influence others to actively support the direction they set.
Can you influence and persuade others without using authority? If so, you might just be onto something. The science of Management has not changed much since its inception over a century ago. It was invented and designed to get more productivity out of the organisation’s workforce. It is necessarily fixated on efficiency, and when boiled down to its core essence it is based on ensuring that employees do exactly what they have been told to do.
If Management is all about IQ, then Leadership is all about EQ. We call Management the ‘hardware’, as it has become commoditised and everybody practices it now. We call Leadership the ‘software’, as it has seriously become the biggest differentiator between the winners and the losers. And when we say Leadership, we mean Vision, People, Teams and Culture. And when we say Management, we mean Strategy, Tasks, Plans and Measurement.
Getting to the close, let me say that “Leadership is the art of accomplishing more than the science of management says is possible”. Everyone can be a Leader if they choose to be, and the best organisations have Leaders everywhere. One of the huge misconceptions playing itself out across the banking sector is that Leaders are only at the top of the organisation. In the most progressive companies in the world, Leaders are everywhere; pump-attendants, cashiers, till-operators – all in the vital frontline – could all be Leaders. Those companies with the most Leaders will achieve so much more, and win.
The attendees left as inspired Leaders, and their mission was to go where many businesses had not gone before – in search of more Leaders. And I can guarantee you they will find them – as Leaders are not born or made – they are found. After all, good leaders create followers; and great leaders create Leaders.
“A candle loses nothing by lighting another candle.”