The Dark Side of Transformational Leadership

A Critical Perspective

Dennis Tourish

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781136766756
• Edition: 1
• Topic: Psychologie
• Subtopic: Geschichte & Theorie in der Psychologie

Most research into leadership has presented leaders as heroic, charismatic and transformational 'visionaries'. The leader, whether in business, politics or any other field, is the most important factor in determining whether organizations succeed or fail. Indeed, despite the fundamental mistakes which have, arguably, directly led to global economic recession, it is often still taken for granted that transformational leadership is a good thing, and that leaders should have much more power than followers to decide what needs to be done.

The Dark Side of Transformational Leadership confronts this orthodoxy by illustrating how such approaches can encourage narcissism, megalomania and poor decision-making on the part of leaders, at great expense to those organizations they are there to serve. Written in a lively and engaging style, the book uses a number of case studies to illustrate the perils of transformational leadership, from the Jonestown tragedy in 1978 when over 900 people were either murdered or committed suicide at the urging of their leader, to an analysis of how banking executives tried to explain away their role in the 2008 financial crisis

This provocative and hugely important book offers a rare critical perspective in the field of leadership studies. Concluding with a new approach that offers an alternative to the dominant transformational model, The Dark Side of Transformational Leadership will be an invaluable text for academics interested in leadership, students on leadership courses requiring a more critical perspective, and anyone concerned with how people lead people, and the lessons we can learn.

Part I

Leadership Agency Unravelled

1 Why the Dark Side? Why now?

Introduction

Elmer Gantry is a 1960s film about a dedicated female evangelist, Sharon Falconer, played by Jean Simmons, and the title character, played by Burt Lancaster, who is a fast-talking travelling salesman.¹ Attending one of Falconer’s events, he is attracted to her and even more to the realisation that money can be made from what he sees as little more than a racket. A riveting performer, Gantry buries his shady past to become the star of the show, wowing audiences throughout America, until exposure, disaster and – perhaps – some kind of moral reawakening takes place. Whatever his genuine beliefs, the fame and success that he enjoys in his role of travelling preacher man takes precedence over his purported message and the good of whatever followers his proselytising manages to attract. Never has charisma been so seductive – or so tawdry.

If there is any redemption for Gantry, it is only partial. For at least one follower, Sharon Falconer, it is too late. Devoted to the beliefs that she at least articulated with complete sincerity, she perishes in a fire, unable to face the truth of Gantry’s betrayal. Nothing is as it seems. In this film, sincerity may be real but it is attached to dubious beliefs; inspiring rhetoric camouflages malign intent; love is a tool of manipulation; high ideals are a ploy to win people’s hearts, all the better to purloin their wallets. The more charismatic and impressive a speaker may be, the wider is the chasm between him or her and the authentic interests of their followers.

The contrast with the way in which would-be leaders are depicted elsewhere could not be more striking. In more recent Hollywood movies, US presidents are played by such stalwarts as Danny Glover, in the movie 2012, courageously deciding to perish with his people rather than escape disaster in a specially prepared ship, or Harrison Ford in Air Force One, single-handedly taking on – and whipping – terrorists who have seized the presidential jet. This twin-step approach by Hollywood says much about how most people these days approach the subject of leadership. In one version, leaders are duplicitous and not to be trusted. In another, we are encouraged to believe that leadership is necessary and to invest many hopes in those who hold leadership positions. The corollary is that our own ability to act is diminished. As Banks (2008: 11) puts it: ‘Conventionally, leaders show the way, are positioned in the vanguard, guide and direct, innovate, and have a vision for change and make it come to actuality. Followers on the other hand conventionally track the leader from behind, obey and report, implement innovations and accept leaders’ vision for change’. Most leadership scholarship thus tends to assume that visionary leadership is powerful, exciting and necessary, with leaders acting as a force for good whose efforts almost invariably produce positive outcomes (Collinson 2012). Followers, meanwhile, have walk-on parts in the drama of their own lives.

In an organizational context, much of this attributional process is vested in the persona of the chief executive officer (CEO). Their charisma, reputation and symbolic power are assumed to impact positively on corporate reputation (Cravens et al. 2003) and firm performance (Rajagopalan and Datta 1996; Pollach and Kerbler 2011). Within the public sector also, there has been a growth of rhetoric around what has been described as ‘leaderism’ (O’Reilly and Reed 2011), in which it is assumed that some form of leadership – drawing heavily on private sector models – is vital for improved effectiveness (Martin and Learmonth 2012).

In line with this, influential practitioner journals such as the Harvard Business Review regularly devote space to the need for ‘better’ leadership. They provide forums in which influential CEOs proclaim their business ‘secrets’ and methods of doing management as models that should be more universally applied (see article by CEO of Heinz [Johnson 2011] for a typical example). Macho imagery is rife. One edition of the Harvard Business Review in January 2007 devoted to ‘the tests of the leader’ adorned its cover with an image of a male business executive performing push-ups on a boardroom table. The job of such leaders is then to cajole, convince or bully followers into embracing the leader’s vision. If the global economic crisis is any indication, the results of this approach have not been inspiring. In a slightly less crude form, this is more or less what transformational leadership theories seek to legitimate. I argue in Chapter 2 that such a stress on how leaders transform others inevitably changes the relationship between leaders and followers from a two-way exchange into a one-way process of domination that has an inherently autocratic potential.

More studies are appearing, however, that explore ‘toxic’ leader behaviour (Pelletier 2010), ‘bad’ leadership (Kellerman 2004), ‘narcissistic’ leadership (Kets de Vries 2006), the prevalence of ‘destructive leadership behaviour’ (Aasland et al. 2010) and ‘leadership derailment’ (Furnham 2010). ‘Negative’ leadership has been variously conceived as behaviour that is insincere, despotic, exploitative, restrictive, failed, laissez-faire and involving the active and passive avoidance of leadership responsibilities (Schilling 2009). But within the field of leadership studies, every study pointing to the dark side is met by a chorus of voices that present leaders as saints, commanders, architects (redesigning society), pedagogues (teaching appropriate behaviours) and physicians (healing stricken organizations). Such metaphors are widely employed by leaders themselves, determined to present themselves as indispensable for human prosperity (Amernic et al. 2007).

A Fascination with Leadership?

In good times or bad, it appears that most of us remain fascinated by leadership and enthralled by leaders. Indeed, as many have suggested (see, for example, Lipman-Bluemen 2008), it may even be that difficulty and uncertainty heighten our tendency to hope for the appearance of a Messiah figure and in the process render us more susceptible to the persuasive charms of snake-oil salesmen, whatever the toxicity of the brew they are peddling. By definition, such hopes are combined with contempt for actual leaders practising leadership in the world that we see before us. From this perspective, the first decades of the 21st century have been a boom time for peddlers of illusions, vain hopes and bombastic promises, seeking to capitalise on the uncertainty, economic chaos and disillusionment that has engulfed society. There are plentiful business ‘gurus’ who claim to have identified a few simple steps capable of producing lasting success, possibly with nothing more complex than the adoption of seven habits deemed to be ‘highly effective’ (Jackson 2001). Sun Myung Moon, who died in 2012, claimed to have found the one true path to God and mobilised unknown thousands to that end within the Unification Church, better known as the Moonies. They have many rivals offering similar promises, potions and prescriptions. For those of a more secular disposition, there are numerous psychotherapies that promise to free the human psyche from distress. Some seek to accomplish this by regressing people to traumatic memories of past lives or fast forwarding them to ones they have not yet experienced (Singer and Lalich 1996). All that one needs to do is to suspend one’s own critical judgement and defer to the wisdom of someone else.

Ultimately, this book challenges our enduring preoccupation with leader agency, while the rest of us are expected do little more than admire or critique their efforts. It is a warning against trusting too much in the judgement of others and not enough in our own. If power corrupts, then the same might be said of powerlessness. It corrodes our ability to act purposively, take responsibility for our actions and manage our own destiny but it enhances our tendency to ridicule the imperfect efforts of others, to little positive effect. Passivity also provides the unscrupulous with opportunities to manipulate others against their own real best interests. This book explores these dysfunctional processes in detail, in the hope that more balanced attitudes towards leadership can be developed and that we can find better ways to practise leadership than are mostly in evidence at present. Given the economic calamities that have befallen the world since 2008, the need for better leadership has rarely been so clear.

Leadership and ‘The Great Recession’

A contemporary focus on the dark side of leadership is indebted to bankers – a rare sensation, it must be said, for a taxpayer. They have come to symbolise much that is wrong with leadership and the paradoxes of our attitudes to it. Two cartoons in the UK newspaper, The Daily Telegraph, during July 2012 sum this up. In one, a secretary is reading out a list of messages to a worried-looking banker. She concludes: ‘And your mother called to say she thinks you should be in jail’. In another, a woman is saying to her banker date: ‘I told my mother you were a Scientologist, but I didn’t dare tell her you were also a banker’. Bankers themselves have been slow to recognise their fall from grace. They have been reluctant to apologise and have developed accounts of the 2008 crisis which persistently fail to draw meaningful lessons about what needs to change in their behaviour (see Chapter 10).

Evidence seems to emerge on an almost daily basis that demonstrates lax ethics and a culture of self-enrichment at odds with any model of leadership that purports to serve the common good. Barclays is one of the world’s biggest banks. Its leaders spent much of the summer of 2012 dealing with accusations that they had manipulated interest rates – particularly the London Interbank Rate (LIBOR) and the Eurobank Offered Rate (EURIBOR) in ways that may yet attract criminal charges. The Financial Services Authority (2012) issued a damning report and it was ultimately fined £290 million by US and UK regulatory authorities. Its chairman, chief operating officer and CEO had to resign, the latter facing a lengthy grilling from Members of Parliament (MPs). By then, such shenanigans and attendant grim publicity had become almost routine.

But what began as a banking crisis in 2008 has also sent economic shockwaves around the globe, threatened the Eurozone and the wider European project, brought whole populations in countries such as Greece to levels of destitution unheard of since the 1930s and stimulated a mass ‘Occupy’ movement throughout the world. Many now question the validity of capitalism as the best system for generating long-term prosperity. Thus, bankers may be the most pilloried exemplars of business leadership gone awry but they do not stand in the dock alone. The UK, in 2012, witnessed the previously unthinkable, as the once mighty Rupert Murdoch, owner of News International, faced a wave of scandals, particularly concerning illegal phone hacking by his newspapers’ journalists. He had to close one of his most profitable and long established papers, The News of the World, and endure intense questioning from a select committee of MPs. His son and heir apparent was forced to resign from a senior role in the company, while several other top executives now face criminal charges.

Critical attention has also been directed at pay levels for those who hold top leadership positions. The New York Times reported in April 2012 that the median pay for CEOs in the USA had reached US$14.4 million, compared with an average salary for employees of US$45,230 (Singer 2012). The newspaper bluntly asked whether they were worth it. A report by Incomes Data Services (2011) on directors’ pay, prepared for the UK’s High Pay Commission, noted that in the previous ten years the average annual bonus for FTSE 300 directors had increased by 187 per cent but the average year-end share price had gone down by 71 per cent over the same period. As their report noted: ‘Pay for performance has added to the staggering complexity of executive packages and yet there is no clear evidence that it works’ (p.5). Challenges to the legitimacy of business leadership thus reach way beyond the banking sector. Kellerman (2012) cites a 2011 Gallup survey in the USA, where, by a ratio of six to one, respondents said that corporate leaders had done more to hurt than help the economy. The same survey found that only 13 per cent of Republicans wanted major corporations to have more influence in the future than they have had in the past. These findings are now typical. Established institutions, political parties and business leaders are held in lower regard than any time in living memory.

It is obvious that the practice of leadership has gone badly wrong. As a result, the heroic myths of leadership that were so dominant for many years are under scrutiny and by people far beyond ‘the usual suspects’ on the left. The Harvard Business Review has published a number of critical articles (at least, by its normal somewhat sycophantic standards), including a piece by the global managing director of McKinseys, entitled ‘Capitalism for the long term’. This fundamentally challenges the shareholder value-first priorities of the previous booming decades and urges leaders to change their basic models of business or face the possibility of more stringent outside regulation being foisted on them (Barton 2011). Gary Hamel is a well-known business analyst and commentator, visiting professor at the London Business School, author of several bestselling management books and a frequent contributor to the Harvard Business Review. His latest book (Hamel 2012: 10) argues that ‘The worst economic downturn since the 1930s wasn’t a banking crisis, a credit crisis, or a mortgage crisis – it was a moral crisis, wilful negligence in extremis’. He goes on to specify these failings in terms that include deceit, hubris, myopia, greed and denial. It is a devastating charge sheet.

Questioning Leadership Theory

While present economic strains may ease at some point, wider questions about the nature of leadership have been inescapably posed. There are calls for more regulation, a greater focus on ethics, a change in culture, a rebalancing of capitalism, a change of leadership personnel in banks and, in many cases, suggestions that politicians should also be dispatched to the scrapheap. But something, it seems to me, is missing. Leadership theory also needs to change. It has done much to encourage an overemphasis on leadership and, in some cases, has legitimised the actions of megalomaniac leaders, who have become convinced that powerful, visionary leadership is helpful, healthy and wise – and, of course, that this means more power should be ceded to leaders. I challenge this view, and what I see as the complacency that goes with it. Different models of leadership are required. The concentration of power in the hands of a few has not been a successful experiment in decision making. We should not be so surprised by this. It has long been noted that out of control leaders in charge of countries invariably lead them to ruin, as in Iraq, Zimbabwe or Libya, and that centralised command economies of the kind currently found in North Korea do not work. It is difficult to see why it should be otherwise within individual organizations. Theories that seek to entrench leader power without considering the downsides of doing so need to be challenged. Business schools, therefore, also need to revisit how they approach the teaching of leadership – a point I develop further in Chapter 6. Leadership theorists have too often presented an idealised image of leadership – a magic mirror that is economical with the truth. It is time to catch up with reality.

The Dark Side and the Psychology of Power

A core argument throughout this book is that leaders wield enormous power, not always wisely. Power is generally defined in terms of our ability to influence other people and derives in part from our ability to control such things as resources, rewards and punishments. As See and colleagues (2011: 27) note, ‘A growing body of research has shown that power has strong effects on those who possess it’. These effects range from the benign to the malign. Regardless of this, many accounts of power take it as natural that it should be concentrated in the hands of leaders and regard it as a neutral resource to be used as they see fit. Pfeffer (2010) is one example. An organizational theorist of great renown and a persuasive advocate of humanistic workplace relations, his book on power nevertheless functions as a guidebook on how business leaders can acquire more power, avoid losing whatever power they have and so direct more effectively the efforts of others. In his view, the world is as it is, not as we would like it to be. Some people have power and others do not. Pfeffer admonishes his readers:

Don’t worry about how your efforts to build your path to power are affecting your employer, because your employer is probably not worrying about you. Neither are your coworkers or “partners”, if you happen to have any – they are undoubtedly thinking about your usefulness to them, and you will be gone, if they can manage it, when you are no longer of use. You need to take care of yourself and use whatever means you have to do so.

(Pfeffer 2010: 217–18)

In this dog-eat-dog world, if people want power then Pfeffer’s book provides the techniques that will lead them to their heart’s desire. It is someone else’s job to worry about the consequences.

It is obvious that I take a more critical approach in this book. The Great Recession serves as an excellent illustration of what happens when power is concentrated in the hands of a few people, who then use it to advance a self-serving agenda with minimal regard for its wider consequences. It has long been clear that models of leadership which assume that powerful leaders can be relied upon to behave wisely, ethically and for the public good are mistaken. Power adversely affects our ethics, perceptions of others, levels of testosterone and our inclination to engage in risky behaviours. Some examples illustrate the point.

Lammers et al. (2010) designed an ingenious set of experiments with 61 subjects designed to manipulate how powerful people felt. They were asked to recall a time when they felt either powerful or powerless. Levels of hypocrisy instantly increased. Those who felt more powerful were more inclined to condemn ...