The Nine Types of Leader

How the Leaders of Tomorrow Can Learn from The Leaders of Today

James Ashton

• Publisher: Kogan Page
• Year: 2021
• ISBN:
  9781789666977
• Edition: 1
• Topic: Business
• Subtopic: Mentoring & Coaching
• Index: Business

SHORTLISTED: Business Book Awards 2022 - Leadership Find out what makes great leaders tick, learn what it takes to be credible and read about the things that they'd do differently if they had to do it all again. The Nine Types of Leader introduces some obvious and some not so obvious types of leader through stories, anecdotes and insight garnered from hundreds of encounters with world-class leaders. Featuring interviews with industry titans including Jean-Francois Decaux of JC Decaux, Michael Rapino of Live Nation, Zhang Ruimin of Haier, Gavin Patterson of Salesforce and Isabelle Kocher of Engie, it explores how the leaders of tomorrow will improve their game by borrowing from the very best of the nine types of leader that exist today.Renowned journalist, James Ashton assesses the strengths and weaknesses of each leadership type, highlighting where and when they are best deployed, whilst helping you identify who you are and how you can improve performance. As the world seeks to recover from drastic disruption and uncertainty and the most acute test of leadership in living memory, it projects how future leaders can learn from what has gone before.

CHAPTER ONE

Alphas

Empire builders

As the curtain rose to reveal a blood-red stage, an expectant hush spread across the 2,000-strong audience settling into their seats in Salzburg’s Grosses Festspielhaus. The Austrians take their opera seriously and the performance on this sticky August Saturday night in 2015 promised to be extra special.

About to commence was the highlight of that year’s six-week Salzburg Festival: a new interpretation of Il Trovatore – The Troubadour – Verdi’s masterpiece with choruses so epic that ardent operagoers forgive the over-complicated plot of witchcraft and vengeance.

Crowds had thronged outside Grosses Festspielhaus beforehand, eager to catch a glimpse of dignitaries promenading down the avenue in their black-tie finery to the venue that had been built more than 50 years earlier on the site of the former court stables of the Prince Archbishops of Salzburg. With barely a moment to cool off, the guests processed up the stairs and into the auditorium to admire the 100m-wide stage, one of the largest in the world. There, sat in excellent stalls seats with a large retinue around him, was Peter Brabeck-Letmathe, the beaming chairman of Nestlé, the world’s largest food company.

He had visited Salzburg many times before. The city lies a two-hour drive north of his home town of Villach. This event had also become something of a gathering point for the top brass of the company whose brands included KitKat chocolate bars, Cheerios breakfast cereal, Perrier mineral water and Stouffer’s frozen food. Nestlé began its sponsorship of the festival in 1991 and from 2010 onwards it has given an award for the best young conductor. The contest gives pause for breath for executives because it falls conveniently just after half-year results are posted, usually at the end of July.

Brabeck-Letmathe, a towering figure in the company with piercing blue eyes and an earnest mien, made no secret of the fact that the Salzburg Festival was one of the highlights of his year. Several of his lieutenants were therefore encouraged to fly in and linger for a day or so. Customers and the media were invited along too, to sample some culture and hear about Nestlé’s latest achievements at lunches and dinners that always ended with glossy Nespresso coffee menus being passed around. Brabeck-Letmathe was a keen piano player of modest ability – he said – playing ‘only when I am alone’. But that night, as the Vienna Philharmonic struck up a gorgeous melody, it was clear that he was the conductor of his own orchestra.

Alpha leaders are easy to spot. It takes a big character to lead a big, multinational company – at least according to decades of business theory. They are talismen (which should of course be talismans) – rarely women – who expect to be the most important person in any room they walk into. They are inspiring to follow, a little scary even. Their workforce hang on their every word and members of their court fret at how new developments will be received by them. They are tough and top-down traditional, doing things the way they have always been done, a fixed point around which strategy and direction can gather. No other leadership type could have muscled its way into this book’s first chapter.

Alphas exert power over an organization from their force of personality channelled down clear lines of command. Many deny it happens, but how Alphas operate belies the idea that leadership is somehow a group activity. These extensive responsibilities are not taken lightly. Blessed with fierce self-belief, Alphas are immaculately turned out and drive themselves as hard as the organizations they lead. They also amass baubles of power: the biggest office or the shiniest yacht.

Corporate scale and longevity are two measures of Alpha status and Brabeck-Letmathe had both in spades. By the time he took his seat for the concert that evening he had spent 47 years at the company, on his way to completing five decades of service. Nestlé feeds and waters the world and counted 339,000 staff and annual sales of £60 billion on his watch. Such reach afforded great power and drew him into the worlds of politics, agriculture and wider society, battling with shareholders, rival food companies and policymakers to run his company the way he saw fit.

Brabeck-Letmathe was not afraid to embrace controversy. Nestlé was scarred for many years by the scandal over breast milk substitute (BMS). The issue can be traced back to 1977 when the Nestlé boycott was launched in the United States by INFACT (Infant Formula Action Coalition) to protest against unethical marketing. The company was accused of inhibiting the development of millions of babies in the developing world by aggressively targeting new mothers with formula milk when breast milk was a healthier and cheaper option.

More recently, the chairman stirred debate by insisting that access to water was not a human right. That was quite something from the head of the firm that sells millions of bottles of Nestlé Pure Life and Buxton every year, but his point was that water is a human right for the 25 to 50 litres needed per day for hydration and minimum hygiene. That makes up 1.5 per cent of the water that is being withdrawn from the system. Everything else, from filling swimming pools and watering golf courses, should not be covered by that right.

Scaling the heights

The scale and breadth of Nestlé lent Brabeck-Letmathe the power to engage with world leaders and others at the highest level. But it was not the only reason he was keen to defend it. ‘I think at the back of everybody’s mind we always have this idea that small is beautiful and big is a little bit ugly,’¹ he said when talking about how consumers were turning their backs on mass-produced groceries in favour of small-batch, organic, locally sourced and gluten-free options. Brabeck-Letmathe argued that too much focus would damage Nestlé’s long-term growth because it tended to starve investment in new markets and products. Slow-growing divisions such as dried pasta could be hived off but to grow at the rate that shareholders were demanding meant it was better to have a broad portfolio, he believed.

The numbers tended to bear that theory out. Until 2008, after serving as chief executive for 11 years, Brabeck-Letmathe delivered top-line growth of at least 5 per cent and improving profit margins. Nestlé was replete with long-term projects that had been anything but an overnight success. They included the Nespresso coffee capsule system, popularized by an advertising campaign starring George Clooney, but which took 25 years to properly develop.

Brabeck-Letmathe also championed a drive beyond food into nutrition and healthcare with Nestlé Health Science, which was trying to discover treatments for gastrointestinal conditions and to combat the effects of chemotherapy. Another venture, Nestlé Skin Health, a developer of creams and acne treatments, was the product of a 30-year joint venture with beauty firm L’Oréal. Here was a strong and steady company, able to place long-term bets and see them through to fruition.

The choreography of Brabeck-Letmathe’s leadership was interesting. When he stood aside as chief executive in 2008 – hanging on to the role of chairman – he claimed to have done so early so that his close colleague Paul Bulcke could have a longer run at the role. The pair had worked together in Latin America earlier in their careers and knew each other so well they spoke Spanish to each other even though one was Belgian, the other Austrian.

But in standing down, Brabeck-Letmathe actually preserved his own power base, remaining chairman for almost a decade until 2017. He is still chairman emeritus. ‘I have always said a chief executive is successful when his successor is as successful as he was,’² he said.

In the ensuing years, life has become harder for all packaged goods companies but Nestlé has continued to outperform. In 2017 Mark Schneider became the first outsider chief executive appointed to lead the company in almost a century. He sped up new product innovation and traded assets, most notably striking a £5.2 billion deal with Starbucks in 2018 to develop its coffee range that is sold in supermarkets around the world. The group’s breadth gave him options when drawing up his strategy that has involved tightening the portfolio around faster-growing sectors. The skin health division, including brands Cetaphil and Proactiv, which might not have been nurtured without an Alpha’s touch, became a useful asset to offload in 2019 for $10 billion.

Attaining Alpha status is as much to do with how a leader’s presence is felt across a company as it is with standing in a room. Brabeck-Letmathe’s personal strength is worth noting. In his later years as chairman, he was treated for a ‘curable illness’ that caused him to lose his hair. Rather than slowing down, he appeared to speed up. His doctor banned him from flying long distances, a tough demand for any jet-setting Alpha to accede to. But Brabeck-Letmathe put the spare time to excellent use, qualifying as a helicopter pilot. Everyone in Nestlé knew he was not to be messed with – and not to be stopped in the way that mere mortals might be by age or medical complaint.

This personal strength is a constant theme among this type of leader. You would think an Alpha had enough on his or her plate running their company but there is quite often evidence that they feel they must excel in their private life too. That competitive streak extends to compiling an impressive hinterland – as this next leader demonstrates.

António Horta-Osório took on one of the biggest challenges in Corporate Britain in 2011 when he attempted to revive Lloyds Banking Group after the financial crisis and lead it out of state ownership. The Black Horse bank was once one of the largest in the world but latterly concentrated on building a rock-solid domestic franchise. Lloyds was brought low after agreeing to a government-brokered rescue of ailing lender HBOS in 2008 that meant it was forced to accept its own £20 billion rescue by the taxpayer soon after.

This was more than just a banking job. When it was working properly, Lloyds supported whole swathes of the economy. When it wasn’t, small businesses and mortgage customers stood to suffer. On appointment in November 2010, Horta-Osório made clear he understood ‘the vitally important role the Group plays in the UK’s social and economic fabric’.³

There is much you should understand about the Portuguese Horta-Osório, and that insight starts a long way from the boardroom. His love of tennis comes from his father, who was a table tennis champion. Doctors told the young banker he would never play again after breaking his right wrist at the age of 30. He promptly taught himself to play left-handed, reverting to right-handed two years later. Talk about gritty. And he speaks six languages. At risk of veering off into caricature, he is known to enjoy scuba diving with sharks. Oh, and his favourite book is The Art of War, by Sun Tzu, the ancient Chinese military text that became a leadership must-read, offering lessons about discipline and humility.

This personal determination extends to his business life. Horta-Osório was poached by Lloyds from the Spanish bank Santander’s UK offshoot, where the challenge that faced him was of a different order. He was driving himself so hard when he took over that within the first year he was diagnosed with sleep deprivation and given several weeks off – an extremely rare incident among blue-chip bosses who typically battle with relentless pressure but don’t buckle under it.

What marks out Horta-Osório is that from this early wobble he came back even stronger. Later on, he made a convincing defence for strong, solo leadership – the Alpha method in a nutshell – regardless of the obvious strain it can breed. Those intense turnarounds, he said, required ‘a more centralized approach to management because you are under pressure. Like we used to say in Portugal, in times of war, you don’t clean weapons.’⁴

Horta-Osório might have been a Fixer (see Chapter 2) if it wasn’t for the fact he has endured for so long at the helm of Lloyds, disclosing plans in mid-2020 that he intended to stand down in 2021. With 65,000 staff, 30 million customers, the biggest private shareholder base in the country and originator of one in four mortgages for first-time buyers, there are a lot of people relying on him to get it right. It is a challenge he clearly relishes. He even looks like an Alpha leader, straight from central casting: tanned and strong, with slicked-back leonine hair, sharp suit, and a handshake almost as firm as his eye contact. It is clear who is in charge when he joins a meeting.

His skill has been in grinding out results. Lloyds returned to the dividend list in 2015 and the UK government sold its final stake in the bank in 2017. It was an easier fix than Royal Bank of Scotland, its fellow state-backed lender, but that is not to underplay Horta-Osório’s achievements. He also understood early on that making Lloyds perform better was not just about sorting out the financials. It had to be a good corporate citizen too. In getting his ...