Samuel Pam, Consultant, Consultant

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Subjects of Interest

  • Financial Market
  • Fiscal Policy
  • Public Sector Reform
  • Taxation

A private sector perspective on leadership 15 Nov 2019

A group photograph of officials and Senior Students of Senior Course 3, Nigeria Customs Command and
Staff College with Mr. Samuel Pam (front centre), after his lecture on leadership to the group in August 2019

Leadership is too broad a topic for a discussion. This private sector perspective on leadership will attempt to narrow the discussion, which starts with this question: Why do people choose to be leaders?
As a deliberate choice, one could aspire to leadership because of the status it confers, the pay package attached to it, the power it wields, or the authority that comes with the role, or a combination of these. But the responsibility, accountability and vision required can also motivate leadership, even as the opportunity to make a difference and make a real impact.

Leadership has been misconstrued by many, particularly in the public sector domain, as the supreme opportunity to amass wealth for oneself, family, and share a bit of it with friends, cronies and tribesmen. This selfish view of leadership supports the notion that true leaders are born and not made. Leadership that is self-centered is obnoxious and fallacious. It has been responsible for decades-long retrogressive politics, lack of development and corporate failures, as well.

A different paradigm sees leadership as a response to challenges. Leaders want to take on challenges for the benefit of others, even if the leader would be better-off for it. Leaders are visionaries. They take on tomorrow’s challenges today. But leadership is not mere ambition.

Although leadership can come from intuition, it nevertheless requires knowledge and skills. To ensure it doesn’t wreck lives and businesses, leadership requires learning, focus and humility.

There is a yawning gap even in private sector leadership today, even though the public sector is often our terms of reference when discussing leadership failure. But either in public or private sector, the leadership gap is filled by “a small coterie of nondescript individuals with neither known address nor antecedence,” said Arch. Bishop Matthew Kukah, the Bishop of the Roman Catholic Diocese of Sokoto.

It may be useful to highlight the traits of public sector leadership failure, as a framework for reality check by private sector leaders. Whenever the traits are present in his or her organisation, the reality is that the private sector leader has failed. The civil servants today are considered in many circles as underperformers, “fantastically corrupt,” and the Trojan horses through which politicians fleece our sovereign wealth. In the words of Anthony Jay, “The civil service are the opposition in residence.” Civil servants have constituted themselves into “shadow” contractors and budget-padding consultants.

The general belief these days, is that the private sector is better organized, disciplined and more visionary to deliver top leadership performance. This is not gospel truth. We have seen leadership failures of monumental scales in private sector establishments. A number of global banks, international consulting firms and big local corporates have failed on poor leadership (called corporate governance), even if the failures of such firms like Lehman Brothers, Arthur Andersen and Intercontinental Bank are episodic, usually occurring in a boom and bust business cycles.

Nevertheless, the private sector has more consistently galvanized and upheld the core ingredients of leadership: influence, inspiration, passion, motivation, conviction, and purpose. These attributes, and others, drive businesses towards maximum output and best-in-class service delivery and performance.

The private sector has leadership selection issues, just like the public sector. For instance, the private sector usually confuses leadership with functional skills and experience. So, doctors often lead private hospitals, even as engineers head engineering firms. This is much like the norm in the public sector, where the chief medical director of a teaching hospital is a doctor; and an engineer is usually the rector of a polytechnic, etc.

But leadership is not the same thing as engineering. It is beyond functional skills. Leadership is about leading people and influencing top individual and institutional performance.  

The leadership selection conundrum is not as pervasive in the private sector, though. We have seen the leadership of some key financial institutions run by people with backgrounds in the sciences and engineering. Such leadership choices have even overlooked backgrounds in the management sciences. This is rightly so, because the aforementioned requirements of leadership are amenable to different educational backgrounds.

There are many excellent and effective managers out there. But management and leadership are not essentially the same. Management is concerned with setting and achieving challenging goals. In other words, management is focused on accomplishing set tasks. Leadership, on the other hand, is more about visioning, influencing, motivating, and inspiring people to perform. However, management and leadership are complimentary systems of action. The real challenge is striking a balance to achieve effective leadership.

In many instances, the private sector has upended conventional leadership approach by focusing on performance, environment and then leadership. The conventional approach to leadership, which is the model most favoured in the public sector, starts with leadership, environment, and then performance. It is common for people to get promoted to leadership positions because of their skills or experience, hard work, result, and even physical attributes. Such leaders would naturally continue to nurture what got them to the top.

However, putting performance at the forefront of leadership selection emphasizes the future health of the organization. It is about supervising the detailed processes of defining the “what”, “why”, “who” (vision), “when” and “how” (mission) of top performance delivery. The next emphasis on the environment aims at identifying and creating suitable conditions for people to deliver top performance. A leader then ensures sustainability in top performance.

There is another important complementarity of leadership, which is strategy. In situations of life and death, strategy is the tao of survival or extinction. (Sun Tzu, 500 B.C.).

Leaders are constantly challenged to proffer solutions to the ever-demanding challenges of the modern world. Richard Rumelt viewed strategy as “a cohesive response to an important challenge.” Therefore, strategic leadership is about utilizing strategy in leading people to top performance.

It is noteworthy that successful businesses are those that constantly deliver the solution for tomorrow’s challenges today. This requires predictive ability. This strategic requirement has instigated the popularity of predictive analytics. According to Jearne Hearns and Marc McDonald, the ultimate knowledge is knowledge of the future.

Strategy is the guide for individuals in organizations to achieve their objectives. It is the means through which a certain goal is achieved. Strategy influences the allocation of resources and integration or cohesiveness of decisions and actions.

There are four factors that are central to any successful strategy. These are: consistent and long-term goal, profound understanding of competitive environment, objective appraisals of resources and effective implementation. These factors are the main ingredients of any successful strategy. Driven by effective leadership, top performance is assured.

Leadership is meant to deliver value to stakeholders over the long term. The respect a leader earns is by virtue of his or her character and performance.

A real leader knows the difference between role and personality, different from a politician that obfuscates position of service with power. In further juxtaposition, a leader inspires others while the politician uses his or her position of power to coerce the people, corruptly enrich himself or herself and prolong his or her hold on power. This toxic use of power in the public sector has negative effects on private sector leadership. It can unlevel the playing field and hinder organisational success. It can also impinge directly on a private sector leader who does not cozy up to the public sector helmsman.

In Nigeria, private sector leaders have had to be beholden to public sector leaders to ensure survival. In banking, this has seen public sector deposits take a huge importance to the detriment of private sector development, which requires lending supported by the banks. As such, many insist that if banking is about financial intermediation for private sector businesses, then our banks are not practicing banking.  

In this regard, perhaps the public sector is the stumbling block, hindering the role of the private sector in the emergent new world economic order that is ruled by innovation. The wake-up call has now been sounded, with the imminent further slip of oil into relative relevance, and ultimately outright irrelevance, as an economic commodity of value. We have to enable our private sector leaders to lead the structural transformation of the Nigerian economy.

There is no effective leadership without effective followership. According to Peter Drucker, “If you want something new, you have to stop doing something old.” This is instructive for public sector top leadership selection in Nigeria, which needs to change for the better, for stronger private sector leadership performance to gain traction in the economy.

This article was adapted from the lecture by this author on “A Lecture on Leadership: A Private Sector Perspective” which was delivered to the Senior Students of Senior Course 3, Nigeria Customs Command and Staff College, on Thursday 8th August, 2019, at the World Customs Organization, Regional Training Centre for West and Central Africa, in Gwagwalada, Abuja, Nigeria.