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BPP Legal Awareness Society ‘Commercial January’ Thursday 10 January 2013 : 6.15 p.m. – 7.15 p.m. Workshop 1: Leadership This workshop will consider what a ‘leader’ is. Firstly, the context of the leader in a professional legal services firm will be considered, including what characteristics might be desirable in such a leader. Then the workshop will consider how emotional intelligence (EI) is pivotal for establishing leadership, and consider Daniel Goleman’s five components of EI. Different examples of types of leadership will be explored, such as charismatic, crisis, narcissistic, toxic and situational styles. Finally, the importance of leadership for complex change management will be considered. Outside the scope of this workshop is a discussion of leader-follower dynamics, and attribution theories of blame. 1. Law firm leadership “The changing nature of leadership in law firms” by Roland B Smith and Paul Bennett Marlow (NYSBA Journal, September 2008) “As a result of such changes, there is growing recognition that the practice of law is not only a noble profession, but also a competitive business. That means leaders must be skilled in clarifying strategic direction and in influencing and aligning various constituencies to achieve commitment to the firm’s objectives.” Apparently, today’s law firm leader is still (usually) a white male in his early to mid-50s. In one study in the US (“Of Counsel”, April 2011), 72% of law firm leaders are not operating with a clear job description. 9% claim that their management/leadership rôles are full-time. The same paper suggests that a number of skills are probably most important in law leaders: including financial and business acumen, a capacity to build consensus, emotional intelligence, other skills (such as courage, patience, sense-of-humour), and a dedication to the success of others.

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Building strategic leadership skills is part of the discussion by Smith and Bennett (2008), and the following components are identified.

• Leading in times of change. • Developing a clearer understanding of what being a leader means. • Finding guidance about how to be a managing partner. • Developing the tools that will help me meet my challenges in making effective change

in my office. • Improving teamwork and collaboration in client service and business development are

challenges for our firm. • Becoming an excellent communicator is a challenge. • Developing the courage to take unpopular positions. • Understanding the firm’s long-term vision. Ability to bring groups of people together

with different views, foster a healthy respect for different views and manage in a way that people feel included.

• Working more effectively and efficiently – ability to prioritise and manage time and to delegate effectively at all levels.

Prof. Stephen Mayson, an expert in the management of professional legal services firms, has developed the following acronym to help manage the levers of profitability (RULES) Rates and realisation : one of the most important factors affecting the profitability of a matter or project is the price that is charged to the client – and then actually received as cash by the firm. Utilisation : this is a measure of the time spent in a working week that can be billed to the client Leverage : (defined differently in the ‘Business law and practice’ core practice area for the Legal Practice Course) : the ratio of profit-takers in a professional services firm to fee-earners Expenses : the management of costs and expenses Speed : if your clients pay promptly, you benefit from improved cash balances. Difference between management and leadership In his 1989 book “On Becoming a Leader,” Warren Bennis composed a list of the differences:

– The manager administers; the leader innovates. – The manager is a copy; the leader is an original. – The manager maintains; the leader develops. – The manager focuses on systems and structure; the leader focuses on people. – The manager relies on control; the leader inspires trust. – The manager has a short-range view; the leader has a long-range perspective. – The manager asks how and when; the leader asks what and why. – The manager has his or her eye always on the bottom line; the leader’s eye is on the

horizon. – The manager imitates; the leader originates. – The manager accepts the status quo; the leader challenges it. – The manager is the classic good soldier; the leader is his or her own person. – The manager does things right; the leader does the right thing.

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In an article by Phil Phillips in “Business Corner”, the author suggests a number of questions to have in mind when selecting a new leader:

• Is he/she smart? • Is he/she making a worthwhile contribution? • Is he/she worth listening to? • Is he/she worth following? • Is he/she fair in your dealings? • Can I have confidence in him/her? • Does he/she have a hidden agenda? • Do I trust him/her?

Leadership is doing the right things. Management is about doing things right. Peter F Drucker 2. Emotional intelligence: Daniel Goleman The earliest roots of emotional intelligence can be traced to Charles Darwin's work on the importance of emotional expression for survival and, second, adaptation. In the 1900s, even though traditional definitions of intelligence emphasised cognitive aspects such as memory and problem-solving, several influential researchers in the intelligence field of study had begun to recognise the importance of the non-cognitive aspects. For instance, as early as 1920, E.L. Thorndike used the term social intelligence to describe the skill of understanding and managing other people. The first use of the term "emotional intelligence" is usually attributed to Wayne Payne's doctoral thesis, A Study of Emotion: Developing Emotional Intelligence from 1985. However, prior to this, the term "emotional intelligence" had appeared in Leuner (1966). Stanley Greenspan (1989) also put forward an EI model, followed by Salovey and Mayer (1990), and Daniel Goleman (1995). The distinction between trait emotional intelligence and ability emotional intelligence was introduced in 2000. Salovey and Mayer's conception of EI strives to define EI within the confines of the standard criteria for a new intelligence. Following their continuing research, their initial definition of EI was revised to "The ability to perceive emotion, integrate emotion to facilitate thought, understand emotions and to regulate emotions to promote personal growth."

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The ability-based model views emotions as useful sources of information that help one to make sense of and navigate the social environment. The model proposes that individuals vary in their ability to process information of an emotional nature and in their ability to relate emotional processing to a wider cognition. This ability is seen to manifest itself in certain adaptive behaviors. The model claims that EI includes four types of abilities:

1. Perceiving emotions – the ability to detect and decipher emotions in faces, pictures, voices, and cultural artifacts—including the ability to identify one's own emotions. Perceiving emotions represents a basic aspect of emotional intelligence, as it makes all other processing of emotional information possible.

2. Using emotions – the ability to harness emotions to facilitate various cognitive activities, such as thinking and problem solving. The emotionally intelligent person can capitalise fully upon his or her changing moods in order to best fit the task at hand.

3. Understanding emotions – the ability to comprehend emotion language and to appreciate complicated relationships among emotions. For example, understanding emotions encompasses the ability to be sensitive to slight variations between emotions, and the ability to recognise and describe how emotions evolve over time.

4. Managing emotions – the ability to regulate emotions in both ourselves and in others. Therefore, the emotionally intelligent person can harness emotions, even negative ones, and manage them to achieve intended goals.

In cognitive neuroscience, it is likely that a distributed neuronal network including the ventromedial prefrontal cortex and amygdala are somehow involved in emotional processing, with the dorsolateral prefrontal cortex involved in a much-slower cognitive-based system (see for example Mark Baxter 2002 http://lnpsych.nimh.nih.gov/murray/nat.rev.neurosci.pdf)

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Emotional intelligence in the workplace Daniel Goleman in his seminal ‘What makes a leader?” from Harvard Business Review in 1998 provides useful definitions and hallmarks of the five components of emotional intelligence at work. Component Definition Hallmarks Self-awareness The ability to recognise and understand

your moods, emotions, and drives, as well as their effects on others.

Self-confidence; realistic self-assessment; self-deprecating sense of humor (sic)

Self-regulation The ability to control or redirect disruptive impulses and moods; the propensity to suspend judgment – to think before acting.

Trustworthiness and integrity; comfort with ambiguity; openness to change

Motivation A passion to work for reasons that go beyond money or status; a propensity to pursue goals with energy and persistence

Strong drive to achieve; optimism, even in the face of failure; organisational commitment

Empathy The ability to understand the emotional makeup of other people; skill in treating people according to their emotional reactions

Expertise in building and retaining talent; cross-cultural sensitivity; service to clients and customers

Social skill Proficiency in managing relationships and building networks; an ability to find common ground and build rapport

Effectiveness in leading change; persuasiveness; expertise in building and leading teams

"If we liken the mind to a high-performance engine, then emotional intelligence would be the oil that enables us to maintain and manage ourselves to perform to our full potential," according to educational psychologists JCA in its report, "A Decade of Emotional Intelligence". This report's findings seem to confirm some commonly held presumptions. While there is no significant difference between men and women in overall scores, men have a more critical mindset with higher self-regard and lower regard for others. In contrast, women tend to have a more submissive mindset with lower self-regard and with higher regard for others. According to this report, emotional intelligence improves with age, as we develop a more balanced outlook and become less dependent on, but more trusting of, others. However, measuring emotional intelligence can also be used to identify areas of development for employees in specific positions. An awareness of where you sit on each scale can help determine whether you need extra training to progress, or will excel in a particular industry or sector.

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3. Charismatic leaders Max Weber defines charismatic leadership as “resting on devotion to the exceptional sanctity, heroism or exemplary character of an individual person, and of the normative patterns or order revealed or ordained by him” (1947). Many different definitions of charisma (Halpert, 1990) Weber envisaged religious leaders like Jesus as charismatic leaders. Later researches considered various social-political leaders like Mahatma Gandhi as charismatic leaders. Dictators like Hitler also had some charismatic traits. These were the leaders with exceptional qualities, which made them almost “god-like” for their followers. The charm of such people made their followers go behind these leaders without questioning them. General definitions include: intelligent, innovative, persuasive, magnetic leaders who emerge in situations where people are economically, socially or politically oppressed (Sandberg and Moreman, 2011 International Journal of Business and Social Science Vol 2(9) May 2011 issue.) NB Not necessarily moral, though religious leaders = consistent strand in the literature. Step 1: Identification This step takes place from the composite mixture of the three factors mentioned above. It is a stage where the aspiring leader is on the social horizon; the followers are in distress and are looking forward to someone who will identify himself with their problems. The social situation is increasingly getting worsened in this stage. Step 2: Activity Arousal In this step, the leader arouses the follower to become the part of the change. Followers who were passive admirers of the leader till the earlier phase become active supporters of the leader and the cause for which he is identifying himself. Step 3: Commitment Commitment stage in the charismatic leadership is without any doubt the most interesting step in the process. This step takes the charismatic leadership at the peak and at the same time this is the phase when the charismatic leader starts losing his charisma. This step starts by demonstrating the extreme commitment of the leader towards the goal and same commitment from the followers towards the leader. Step 4: Disenchantment Many times social structure brings the disenchantment stage. Sometimes, because the leaders themselves know that they are not immortal, they try to bring the “routinisation” in the leadership. This routinisation brings the feel of loss of goal to some followers Step 5: Depersonalisation This step is a logical follower of the earlier step of disenchantment. Disenchantment starts because of routinisation and it leads to the depersonalisation and formalisation of the leadership. The leadership style becomes more and more like bureaucratic leadership.

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Step 6: Alienation This is a process of disintegration of the three factors mentioned in the beginning which had come together in phase one. In this step, due to the formalisation and ‘bureaucratisation’ of the leadership, charismatic leadership becomes increasingly redundant. 4. Crisis leadership Crises have no borders or boundaries. They can happen anytime, anywhere, and to any organisation — profit, not-for-profit, public, or private. The interconnectedness of the global economy and its political realities, arguably, can magnify the ripple effect of any single crisis, making it a common feature of corporate life. A useful article, published in the Harvard Business Review, is, “How a good leader reacts to a crisis” by John Baldoni (2011) http://blogs.hbr.org/cs/2011/01/how_a_good_leader_reacts_to_a.html Erika Hayes James, an organisational psychologist at the University of Virginia’s Darden Graduate School of Business, identifies two primary types of organisational crisis. James defines organisational crisis as “any emotionally charged situation that, once it becomes public, invites negative stakeholder reaction and thereby has the potential to threaten the financial well-being, reputation, or survival of the firm or some portion thereof.” Sudden crises are circumstances that occur without warning and beyond an institution’s control. Consequently, sudden crises are most often situations for which the institution and its leadership are not blamed. “Smouldering crises” differ from sudden crises in that they begin as minor internal issues that, due to manager’s negligence, develop to crisis status. These are situations when leaders are blamed for the crisis and its subsequent effect on the institution in question. Crisis leadership competences Initial reactions to a crisis may be dysfunctional. Arjen Boin article about Hurricane Katrina (2010) cites initial stonewalling, and deflection of responsibility. James categorises five phases of crisis that require specific crisis leadership competencies. Each phase contains an obstacle that a leader must overcome to improve the structure and operations of an organisation. James’s case study on crisis in the financial services sector, for example, explores why crisis events erode public trust in leadership. James's research demonstrates how leadership competencies of integrity, positive intent, capability, mutual respect, and transparency impact upon the trust-building process.

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Mayor Mike Bloomberg, who recently won a third term, and is widely regarded as an adept city leader, has come under fire for inefficient snow removal in New York City. Most of the complaints came from residents in the so-called outer boroughs — e.g., the four that are not Manhattan. However, Newark Mayor Cory Booker has received acclaim for his response to the nor'easter snowfall, despite accepting criticism on a host of other matters. Baldoni (2011) views that important lessons can be derived from this.

• Take a moment to figure out what's going on. • Act promptly, not hurriedly. A leader must provide direction and respond to the

situation in a timely fashion, but acting hurriedly only makes people nervous. • Manage expectations. When trouble strikes, people want it to be over right now —

but seldom is this kind of quick resolution possible. It falls to the leader in charge to address the size and scope of the crisis. You don't want to alarm people, yet do not be afraid to speak to the magnitude of the situation. Winston Churchill was a master at summing up challenges but offering a response at the same time. As he famously stated in 1940, when assuming office, he said,"You ask, what is our aim? I can answer in one word. It is victory; victory at all costs; victory in spite of all terror; victory, however long and hard the road may be, for without victory there is no survival."

• Demonstrate control. When things are happening quickly, no one may have control, but a leader can assume control. That is, you do not control the disaster — be it man-made or natural — but you can control the response.

• Keep calm. A hallmark of a crisis is its ability to change quickly; your first response may not be your final response. In these situations, a leader cannot be wedded to a single strategy. She must continue to take in new information, listen carefully and consult with the frontline experts who know what's happening.

Crisis leadership: Hurricane Katrina Some failures can be useful if leaders learn from them, according to Robert Mittelstaedt, Dean of Arizona State University's business school. The three biggest causes of failures he sees are not believing data, disregarding new phenomena, and not taking responsibility for problems.

Hurricane Katrina holds plenty of those lessons, according to Mittelstaedt. He points out that for years a wealth of information was available that New Orleans could not withstand a major storm, but officials didn't act on the data. Officials then ignored information about the scope of suffering by those stranded in the city. He blamed President Bush and others for not taking responsibility and instead arguing about whose job it was to rescue people. "When you see people on rooftops, you don't sit around worrying about whose responsibility it is," says Mittelstaedt. “Crisis teams” Ken Brumfield article (CPE Learning Module, October 2012). The reasoning: teams can pro-actively seek leadership from ‘crisis leaders’, to defuse crises before they actually happen. A culture of crisis management has to be conveyed to middle-managers. Leadership here is a ‘process of influence’.

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5. Narcissistic leaders “Narcissistic Leaders: The Incredible Pros, the Inevitable Cons” Michael Maccoby, January – February 2000 http://www.maccoby.com/Articles/NarLeaders.shtml “Leaders such as Jack Welch or George Soros are examples of productive narcissists. They are gifted and creative strategists who see the big picture and find meaning in the risky proposition of changing the world and leaving behind a legacy. Indeed, one reason we look to productive narcissists in times of great transition is that they have the audacity to push through the massive transformations that society periodically undertakes. Productive narcissists are not only risk takers willing to get the job done but also charmers who can convert the masses with their rhetoric.

The danger is that narcissism can turn unproductive when, lacking self-knowledge and restraining anchors, narcissists become unrealistic dreamers. They nurture grand schemes and harbor (sic) the illusion that only circumstances or enemies block their success. This tendency toward grandiosity and distrust is the Achilles’ heel of narcissism. Because of it, even brilliant narcissists can come under suspicion for self–involvement, unpredictability and—in extreme cases—paranoia.”

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6. Toxic leaders It is currently considered that “toxic leaders” ‘prey’ on primitive human characteristics: including a need for authority, a need for security, the need to feel special, the need to belong, and a fear of exclusion or ostracism in a complex social hierarchy. (Maslow’s hierarchy of needs relevant here.) Crises, rapid change and turbulence can create an appropriate environment for ‘toxic leaders’ to thrive. The basic traits of a toxic leader are generally considered to be either/or insular, intemperate, glib, operationally rigid, callous, inept, discriminatory, corrupt or aggressive by scholars such as Barbara Kellerman. They boast that they are supposidly clever, always criticise other staff members and avoids and/or hate to be asked awkward questions about their leadership style. These may occur as either:

• Oppositional behaviour • Plays corporate power politics • An overcompetitive attitude to other employees • Perfectionistic attitudes • Abuse of the disciplinary system (such as to remove a workplace rival) • A condescending/glib attitude • They are shallow and lack self confidence. Toxic leaders are not confident with

themselves and become agressive to cope • Poor self-control and or restraint • Physical and/or psychological bullying • Procedural inflexibility • Causes workplace division instead of harmony • Use "divide and rule" tactics on their employees • Arrogant • Irritable

However, they can also display grandiose ideation, seeking an ‘idyllic world’. 7. Toxic leadership: ENRON The Enron scandal had far-reaching political and financial implications. Legal and ethical issues. Ethical issues – toxic leadership, fundamental culture of mistrust (Fukiyama argues that trust is fundamental to financial prosperity.) Legal issues – breach of statutory and fiduciary duties to stakeholders Hugely significant – as led to the enactment of Sarbanes-Oxley Act (2002), partly : http://en.wikipedia.org/wiki/Sarbanes–Oxley_Act

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In just 15 years, Enron grew from nowhere to be America's seventh largest company, employing 21,000 staff in more than 40 countries. However, the firm's success turned out to have involved an elaborate scam. Enron lied about its profits and stands accused of a range of shady dealings, including concealing debts so they didn't show up in the company's accounts. As the depth of the deception unfolded, investors and creditors retreated, forcing the firm into Chapter 11 bankruptcy in December. Jeff Skilling’s person reaction to it is remarkable, http://money.cnn.com/2010/06/14/news/newsmakers/jeffrey_skilling_prison_interview.fortune/index.htm An account of the chronology of collapse of ENRON from TIME: http://www.time.com/time/specials/packages/article/0,28804,2021097_2023262,00.html 8. Situational leadership The Hersey-Blanchard Situational Leadership Theory was created by Dr Paul Hersey, a professor and author of "The Situational Leader," and Ken Blanchard, author of the best selling "The One-Minute Manager," among others. The theory states that instead of using just one style, successful leaders should change their leadership styles based on the maturity of the people they're leading and the details of the task. Using this theory, leaders should be able to place more or less emphasis on the task, and more or less emphasis on the relationships with the people they're leading, depending on what's needed to get the job done successfully. According to Hersey and Blanchard, there are four main leadership styles:

• Telling (S1) – Leaders tell their people exactly what to do, and how to do it. • Selling (S2) – Leaders still provide information and direction, but there's more

communication with followers. Leaders "sell" their message to get the team on board. • Participating (S3) – Leaders focus more on the relationship and less on direction. The

leader works with the team, and shares decision-making responsibilities. • Delegating (S4) – Leaders pass most of the responsibility onto the follower or group.

The leaders still monitor progress, but they're less involved in decisions.

As you can see, styles S1 and S2 are focused on getting the task done. Styles S3 and S4 are more concerned with developing team members' abilities to work independently.    

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9. Leadership and change Different experiences of change: e.g. fire, snow, mask and movie (Harvard Business Review, Fuda and Badham, November 2011) http://hbr.org/2005/10/the-hard-side-of-change-management/ar/1 In a seminal article entitled, “The hard side of change management” in Harvard Business Review (2005), Sirkin, Keenan and Jackson described their study of change initiatives at 225 companies, and found a consistent correlation between the outcomes of change programs (success versus failure) and four hard factors, which they called DICE: project duration, particularly the time between project reviews; integrity of performance, or the capabilities of project teams; the level of commitment of senior executives and staff; and the additional effort required of employees directly affected by the change. The DICE framework is a simple formula for calculating how well a company is implementing, or will be able to implement, its change initiatives. The framework comprises a set of simple questions that help executives score their projects on each of the four factors; the lower the score, the more likely the project will succeed. Schein’s model of change management (2004) Schein's model of organisational culture originated in the 1980s. Schein (2004) identifies three distinct levels in organisational cultures:

• artifacts and behaviours • espoused values • assumptions

The three levels refer to the degree to which the different cultural phenomena are visible to the observer.

• Artifacts include any tangible, overt or verbally identifiable elements in an organisation. Architecture, furniture, dress code, office jokes, all exemplify organisational artifacts. Artifacts are the visible elements in a culture and they can be recognised by people not part of the culture.

• Espoused values (“shared values”) are the organisation's stated values and rules of behavior. It is how the members represent the organisation both to themselves and to others. This is often expressed in official philosophies and public statements of identity. It can sometimes often be a projection for the future, of what the members hope to become.

• Shared Basic Assumptions are the deeply embedded, taken-for-granted behaviours which is usually unconscious, but constitute the essence of culture. These assumptions are typically so well integrated in the office dynamic that they are hard to recognise from within.

Importance of Schein's Model

One can easily understand the paradoxical organisational behaviours and have an in-depth knowledge of the culture. Interpersonal skills also help in understanding culture. Helps to know the culture at different levels. The assumptions can be identified. Organisational culture is the most difficult to change, this model brought to light understanding of the organisational culture and can be applied to lead change.

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Peter Drucker on “change leaders” (http://www.inc.com/magazine/19990601/804.html): “We do not hear much anymore about overcoming resistance to change, which 10 or 15 years ago was one of the most popular topics of management books and management seminars. Everybody has accepted by now that change is unavoidable. But that still implies that change is like death and taxes--it should be postponed as long as possible, and no change would be vastly preferable.

But in a period of upheaval, such as the one we are living in, change is the norm. To be sure, it is painful and risky, and above all, it requires a great deal of very hard work. But unless an organization (sic) sees that its task is to lead change, that organization (sic) --whether a business, a university, or a hospital – will not survive. In a period of rapid structural change the only organizations (sic) that survive are the "change leaders." It is therefore a central 21st-century challenge for management that its organization (sic) become a change leader.”