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Why are authentic leaders so attractive? It’s a question that has been widely debated in the business world over the past few years. As a regular reader of business-related books, I understand the topic. Employees are more likely to trust and follow people who are honest, vulnerable, and true to themselves.
While I value leading with integrity, my experience as a CEO has led me to believe that it’s not enough. In an ever-changing marketplace, is being authentic a guarantee of success?
Let’s use the following example: A leader in the mobile phone industry is very passionate about a particular product, but finds it difficult to change course when customer needs and market trends change. The rise of smartphones and resistance to this revolution results in loss of market share. The leader’s stubbornness, often disguised as adherence to the original vision (authenticity), limits the company’s ability to innovate. In a sector characterized by rapid change, where leaders must constantly adapt and make tough decisions, authenticity alone cannot get the job done.
There have been moments in my entrepreneurial journey when transparency and vulnerability worked for me, and there have been moments when it didn’t.
While developing our payments platform, we faced a dilemma regarding our business model and profitability. There was pressure to introduce hidden fees to ensure the sustainability of our business model, which went against my ideals of transparency. Hidden fees felt dishonest, but a platform that wastes money doesn’t help anyone in the long run. So, I worked with my team to come up with a tiered pricing model with different features and fee structures. This solution proved to be very effective in practice.
Related: Authentic Leadership: What is it and why does it matter?
The trap of authenticity
Despite its popularity as a management term, some people view authentic leadership as outdated and fad leadership. Positive Leadership TheoryThis is an overly simplistic view of corporate life that ignores the complexities of effective leadership – for example, your communication style and leadership approach need to be adapted depending on the audience. Glorifying authentic leaders as role models for everyone ignores the real challenges of navigating high-pressure environments. This can manifest in many ways, including:
- Lack of flexibilityIn a fast-changing environment, clinging to personal values can prevent necessary adaptation. Leaders’ unwillingness to change perspectives, meet stakeholder expectations, and adhere to the company’s unspoken rules for reasons of credibility can pose serious threats to their leadership journey.
- Charisma vs. AbilityThere’s a risk of mistaking charisma for ability: just because someone is charming and conscientious doesn’t necessarily mean they have the skills and experience to lead effectively.
- Misunderstandings and manipulations: Transparency is a key tenet of authentic leadership, but it can be misused. Leaders who overshare or fail to be tactful can unintentionally create anxiety and confusion within their teams. Additionally, some skilled manipulators will appear authentic in order to gain trust and achieve their own ends.
Navigating the corporate environment
Corporate orthodoxy, characterized by a power-based leadership style and a focus on control, is gradually being replaced by more flexible management approaches. The current environment values authenticity, but leaders must be prepared to face situations where personal authenticity is at odds with organizational adaptability.
Investor expectations and market pressures can stifle even the most progressive-minded companies when it comes to leadership and people management. In those situations, pure authenticity alone won’t get you anywhere. As leaders, you need to infuse your leadership philosophy with strategic effectiveness to drive progress. This balance is “effective authenticity.” Effective leaders stand by their convictions even in difficult situations, while also demonstrating strategic thinking and a results-oriented attitude.
Related: How to lead with integrity and build a thriving workplace
Principles of Effective Authenticity
- Strategic NavigatorEffective reliability is Ability to adapt. Leaders need to stay current with industry trends and ask questions like, “What are the biggest changes happening right now and how can I prepare my organization for disruption?” For example: Satya NadellaAs Microsoft CEO, Nadella foresaw an industry shift toward cloud-based solutions and mobile technology and charted a new direction for the company. This strategic caution has helped Microsoft navigate change while staying true to the company’s traditions and core values.
- Evolving beliefs and ideasEffective authenticity means acknowledging that core values may change depending on the situation. Leaders should regularly reflect on their philosophy and company mission and consider how it aligns with the changing world around them. Indra NooyiThe former CEO of PepsiCo prioritized both profitability and social responsibility by introducing a healthier product line, a decision that demonstrates the ability to reevaluate ideals in order to stay current with the times and achieve goals – a key aspect of effective authenticity.
- Responsible InnovationChallenging the status quo is essential and leveraging technology for progress is the norm. Effective credibility lies in driving disruptive innovation while adhering to regulations and ethical practices. Conducting proper research into the social and environmental impacts of new products and services is one solution to achieve this balance. A good example is Tim Cook, CEO of Apple, who advocates for technological innovation but also prioritizes society and the environment. Environmental Sustainability and User PrivacyApple’s use of recycled materials in its products is a step in the right direction and demonstrates its commitment to responsible innovation.
- Self as an organization: While integrity is generally desirable, effective integrity also understands that there are times when a leader must put the well-being of the organization above personal feelings. When Starbucks was facing an economic downturn, then-CEO Howard Schultz They value stability through decisive action and strategic pivots, balancing transparency with the need for tough decisions. Similarly, having a structured decision-making framework empowers leaders to make tough choices when they need to.
Related: Are you a leader who is lost? Get back on track with these 4 tips for leading with power and conviction
Effective reliability is also not a magic bullet. The hardest part for leaders is dealing with the uncertainty of where many industries are headed. But finding the right balance between reliability and delivering results can prepare you for the future.