Leadership Styles – What’s Yours? The role of EQ

How do you move from functional management into leadership? Course delegates – particularly those on our 3 Day MBA programmes – often ask this question. The first step is to have a career plan (see our recent white paper). It also helps to understand the different styles of leadership and most importantly, to understand your own leadership style. In this blog, we attempt to summarise some of the more well-known aspects of leadership and make some suggestions as to how managers in oil & gas might apply them to their own career development.

What is leadership? It’s the act of inspiring and influencing others to follow in a certain direction. There are many theories about business leadership, ranging from Sun Tzu’s The Art of War, from thousands of years ago, to Jim Collins’ Level 5 Leaders and Simon Sinek’s more empathetic approach in “Leaders Eat Last”.  Amidst all the current ideas about leadership styles, a few themes stand out.

Emotional Intelligence – EQ

One of these is “Emotional Intelligence” (EQ). Pioneered by Daniel Goleman, this is a leadership idea that has taken root in the past two decades.  The word ‘emotional’ in the context of management may not sit comfortably with the oil & gas industry. But “Emotional Intelligence” is now part of the armoury of leadership skills and is now widely used in many of the most successful global firms.

EQ, as it is often known, refers to the ability to understand and manage your own and other’s emotions, and starts with self-awareness. In the workplace, this means understanding how you react in different situations and how your emotions affect problem-solving, decision-making and team dynamics. And in addition to managing your own emotions, EQ means being able to identify and manage how others react and behave.

In their 2002 book “Primal Leadership” Goleman and others summarised 6 different leadership styles

·         Commanding

·         Visionary

·         Affiliative

·         Democratic

·         Pacesetting

·         Coaching

All 6 styles can be effective in the right context, but some might be disastrous in the wrong situation or with the wrong team – for example “commanding” works well in a crisis, but would be highly ineffective when trying to implement change in an experienced and successful team, while “coaching” might be less effective on a short project needing clear direction and fast results, rather than helping an employee improve over time. The mark of an effective leader is that they can apply all these different styles and know when to do so effectively. The reality is that most individuals will have just two or three dominant styles with which they feel comfortable. It’s crucial to be aware of what these are.

The culture of the organisation (and industry and location) also plays a role. Leaders shape the culture, but are often also shaped by the culture. An approach that works in one company or country may not work elsewhere until the culture has changed – which of course is another leadership task.

In the oil industry culture of the 70s and 80s, the conventional style was “Commanding”: imagine a drilling manager barking questions at a geologist or petrophyiscist, seeking fast and definitive answers. Now it’s understood that drilling operations are highly complex, involving lots of different skills and to lead such an operation needs much more than a loud voice and years of experience – but has the culture changed?

How much do leaders in the E&P business demonstrate EQ?

It’s a complex, competitive industry with a high emphasis on technical competence and safety. Risk is everywhere. Failure can be costly and even hazardous. Decisions are based on logical analysis, on thinking rather than feeling. In such a world, empathetic management may seem less appropriate.

This would be a mistake. Recent studies have shown (see our 2016 white paper, and 2017) the industry needs to change and that includes its approach to leadership. The drive for innovation, the expectations of Millennials, the new low oil price environment, the Great Crew Change – these and other factors mean oil firms have to adapt their leadership styles. Chadwick Covey, Houston-based energy specialist at head-hunters Spencer Stuart, highlighted this in a recent article, stating “the industry will need senior leaders who can help foster organizational cultures that spur innovation”.

It’s not always accepted: one HR director told us that there is now a feeling that the EQ move has gone too far, that those managers with excellent “hard skills” are being overlooked because of the emphasis on “soft skills”; this argument suggests that some businesses, eg oil exploration, need a more traditional, authoritarian approach to leadership. This may be true in highly competitive sectors, such as investment banking and oil exploration, where staff need to demonstrate constant high performance to achieve goals and mitigate risk.  There is a sense that the “touchy-feely” nature of EQ-led management is incompatible with the aggressive, dynamic culture of such firms. Is this true? If so, how can it be resolved?

George Kohlrieser, Professor of Leadership at IMD, addresses this potential conflict between a competitive and ambitious culture and empathetic leadership with his Secure Base Leader model – “Care to Dare”. This combines the need to push employees out of their comfort zone to achieve more with the support and encouragement that gives them the confidence to take risks. He lists nine Leadership characteristics, mixing ambition and direction with support and empathy: the balance is crucial, as demonstrated by the following matrix:

High Caring  Low caring
High Daring Playing to win – “Together we can achieve great things” Playing to dominate – “I don’t need others, I can do this on my own”
Low Daring Playing not to lose – “Let’s be safe” Playing to avoid – “I want to be left alone”

Get the balance wrong, and you have a leader who is either isolated or uninspiring.

Two other themes are common across the current leadership styles:

  • The need to seek different perspectives and accept challenge. This is a key element in any leadership programme to drive innovation.
  • The need for clear, simple communications around a single, high level goal. This sounds obvious, but so often, in large, complex organisations, too many people want their “message” included. The result is a multi-layered communication that few people understand and most people ignore.

Defining leadership in today’s industry, a senior E&P executive told us: “Most technical people in the business are highly focused on their particular area, so the leader needs to make sure appropriate integration of ideas and information takes place routinely.” The leader needs to ask just enough questions to make sure this is happening, but without interfering or asking irrelevant questions. But most importantly, after describing the processes and data a leader needs to apply, he ended on an “Emotional Intelligence” note: “If people feel that you are fully supporting them to deliver the best possible work product, they will follow you anywhere”.

Develop your leadership skills

What does all this mean for the O&G functional manager who wants to become an effective leader across the business? Here are a few suggestions:

  1. Understand your own leadership style: what is your dominant characteristic? Which others do you need to develop?
  2. Understand what (and who) drives behaviours in your organisation, and what the organisational culture is. Find ways you can help shape the culture.
  3. Recognise the role of emotional intelligence, and that feeling as well as thinking is part of decision-making
  4. Make sure you understand the business beyond your function, and be clear how your function contributes to the overall goal. McKinsey suggest describing what you do in these broader terms, rather than technical terms – “as a geophysicist, I am helping to add to our oil and gas reserves” rather than “I collect and interpret seismic data”
  5. Manage upwards and horizontally. Another recommendation from McKinsey: make sure your objectives are clearly aligned with the Board’s strategy and involve other departments, getting to know your counterparts in other functions.
  6. Build your own career development plan, discussing ideas with your HR partners

We have only touched the surface of this topic here and we recommend further reading (see links) for those interested in developing leadership skills. It is a topic we will return to in the coming months and we welcome comments and contributions from managers and leadership experts.

www.warrenbusinessconsulting.com

©WBC Training 2017

Comments

  1. Adam Lomas says:

    a great article, focussing importantly on the importance of EQ in industry in general, and E&P in particular.
    The essential role of coaching and particularly mentoring are symbiotic Leadership skills, which are close to my own heart as previous Head of Leadership and Development in a major E&P organisation.
    these skills sadly often suffer in times of economic stress, which the E&P organisation is currently “enjoying”.
    arguably these Leadership skills are even more important at such times.

  2. David Finlayson (Chairman WBC) says:

    This is David Finlayson, Chairman of WBC here. Here are some ‘pers comm’ thoughts I received from a former Senior Oil and Gas Exec, on reading our paper:

    • Most successful organizations are doing complex, costly things. It is impossible for the leader to be on top of everything that is going on. The most valuable thing the modern leader can do is make sure his team(s) have everything (training, capital, equipment, software, enough staff, etc.) that they need to succeed while having their backs. I agree that if people feel you are supporting them as best you can, they will follow you anywhere.
    • The leader needs to continually engage with people up and down and across his organization and listen to what they say about how things are going and how risk is being managed. The level 5 leaders typically ate lunch with the troops to learn all they could. They also maintained broad networks both inside and outside of their companies and industries.
    • The leader needs to find ways to continuously monitor how well communications are functioning across his organization and also with people outside of his organization. This can be the first indication that smokestacks are developing and reducing innovation and efficiency.
    • The leader needs to have a track record of high competence that helps legitimize his position in the company. It must be crystal clear that his superiors are supporting him 100%.
    • And lastly, my personal experience indicates that one must promote one’s self to eventually get into the senior management stream. By this I mean showing up at a performance review with a boss, or bosses, with a memorandum (better to mail it in advance of the meeting) documenting key personal and team accomplishments along with a short list of desirable next assignments. Demonstrate that you have done your homework on these positions and why you think you are qualified or will be in the near future. Do not leave it to your boss or Human Resource to get themselves accurately informed about your abilities. If they disagree with any of your assessments, insist that they tell you why.

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