The Risk of Leadership

A plea for a new search for ‘responsible-in-the-end’ leadership: stewardship

Jack Kruf | 10 March 2017

Of course, we have our democratic system, a great set of principles and values that serve as equipment for good public governance. Public leadership, concerning both public organisations and the public domain of society, is embedded in this system, at least it should be. You may expect excellent results because the democratic system traces back to the Greek δημοκρατία in 508 BC and has been tested and challenged over and over again. Over the millennia, it has developed to this point.

Considering the present state of society and of natural ecosystems, you may be surprised by the results of this period of 2525 years of development. The Global Risks Reports, published by the World Economic Forum since 2005, tell the story of how critical the state of the Earth is. Reading these reports, I had a flashback to 1972, when the Club of Rome presented facts, findings, and figures in its report, The Limits to Growth. For at least five decades (i.e., half a century!), we know what is going on and where many generations of leadership have brought us.

Not thát good

Within this democratic system, the results of our public leadership over the years are not that good. Autocratic systems do not perform better. More than ever, public risks – being deviations, harms, and losses related to the public values we so highly pamper – seem to emerge at a faster pace, such as there are disruptions caused by climate change and cybercrime, large-scale pollution and poverty, fundamental lack of social cohesion, water shortage, and migration issues. Well, what can we say about risk leadership while leadership itself seems to be the risk? We elaborate on this.

Redefinition

Public leadership must be reconsidered against the background of the structural decline in citizens’ trust in politics as a whole and in public organisations. In society, you increasingly sense and hear, “Houston, we have a problem.” The general feeling is that public leaders do not listen to citizens and companies, are perceived as the ‘elite’, and do not act in line with their election promises. What makes things worse is the disappearance of public leaders after a governing period of 4 – 6 years, when their term has come to an end, and make way for a new wave of politicians, all with new promises.

It seems that risk leadership itself has become a risk

There seems to be a lot of governance from the boardroom and behind the desk. The living world of society seems to be separated from the ruling system world, where the leaders actually live. There is this hugely felt need among citizens, clients, companies, and if they could talk to us by natural ecosystems such as forests and coral reefs, for leaders who listen to the wants and needs, and from there truly generate values such as safety, balance, cohesion, continuity, predictability, protection, and security. There are gaps and risks (as forms of harm and loss of values) all over the place.

From this perspective, it is obvious that managing and governing the public risks that emerge in society, well defined as risk leadership, needs to be redefined. It seems that leadership itself has become a risk factor. The so-called risk leaders who cause risks instead of leading us in the prevention, approach, mitigation, and management. That is worrying, because the right course of public governance, anchored in the basics of democracy, depends on this. This aspect of leadership weakness should at least lead to a continuing process of self-reflection, improved self-awareness, and self-correction.

St. Thomas University: “The Risk Leadership Initiative is focused on several aspects of modern risk management, but one of our key issues of concern is the challenge of getting organisational leaders to integrate risk management thinking into their overall decision-making frameworks. Since PRIMO has, from the beginning in 2005, focused on top-level leaders, we would be interested in hearing your views on the problems, opportunities, and challenges of integrating risk management into executive, political, and director-level policymaking and policy implementation. Examples of successes would be particularly interesting to us. Jack Kruf: “It is clear that leaders of public and private organisations should play a coordinating and connecting role in a more holistic approach to the risks we are facing. This well-written and illustrated report impressively highlights the challenges we face on our path toward a more balanced society. Sharing knowledge, open dialogue, building trust, good governance, stewardship, and leadership.”

Political risk

In the present, think tanks have been brought forward by different stakeholders, amid the impression that society itself is drifting and that the democratic set of tools seems to be running out of its ability to control. In the outcomes of many elections and referenda, it becomes increasingly evident that the drift in societal risks in the public sphere finds its roots in political leadership and its related components. Reflecting on risk leadership automatically leads us from the academic and management domains toward politics.

According Niccolò Machiavelli politics is the world of mainly that of power and influence. Is politics then one of the key drivers of public risk itself? Is the quest for risk leadership in fact all about the risk of politics or political risk? It is possible. Zooming in a bit more here. What is political risk? Matthee (2011) defines it as follows:

‘Political risk is a type of risk faced by investors, corporations, and governments that political decisions, events, or conditions will significantly affect the profitability of a business actor or the expected value of a given economic action.’ 

In a broader sense, citizens and communities should also find refuge in this definition. Anyway, politics is an obvious dimension that brings harm. An important aspect to build into Professor Peter Young’s new program. It leads in my view to the conclusion that risk leadership at least needs to embrace itself and for its practical applicability and use has to be upgraded, maybe even reconsidered, redefined, re-invented, or re-engineered. In the public domain of day-to-day business and government, it means that this attitude of self-reflection needs to be applied to every elected and governing council, the place where politics actually emerge.

It has become clear from the European UDITE and PRIMO network that many city managers express the general feeling – from extensive experience with society, citizens, clients, investors, businesses, NGO’s, and media – that this unpredictable working of politics has become a critical factor and express that the system of democracy itself is under pressure.

The unpredictable working of politics has become a critical factor

What is leadership if “democracy is the worst form of government, except for all the others” (Churchill)? What is in perspective of the emerging public risks, in fact, the ability of democracy? Gore (2009) reflected as follows:

”It is now apparent that the climate crisis is posing an unprecedented threat… to our assumptions about the ability of democracy and capitalism to recognize this threat for what it is and respond…”.

These doubts and the lack of trust in the governing system, where leaders live, form the background for further reflection on leadership, especially when it concerns risks to citizens, society, and nature.

Stewardship

Discussing the major public risks within the European network of public leaders, the main concept for leadership that addresses and mitigates is felt in the form of stewardship, not only in a religious way, but as a form that has a true, holistic approach. We remember here the great Alexander von Humboldt and his holistic approach that spanned the borders of the sciences in the early 19th century. He essentially connected sciences and approaches, and, with that, crossed the lines of segmentation of opinions and views into a true ecological approach to areas and topics. Could his approach be a starting point for a more successful public leadership approach, connecting vertical detail with the headline, strategy with implementation, and, horizontally, all relevant stakeholders? This way of perception could be beneficial and a great asset for modern leaders.

Alexander von Humboldt connected sciences… and with that crossed the lines of segmentation

Elaborate a little bit more on Von Humboldt. To see things as one and interconnected is the capacity of true ‘reflection’ needed, i.e., the capacity to zoom out and see the larger picture by connecting the dots. Like Alexander von Humboldt did in his 1858 masterwork (Cosmos part I). He, for the first time in history, connected the different sciences of the living and non-living world. He concluded: “Physical geography…, elevated to a higher point of view, … embraces the sphere of organic life…”. That was a great discovery and a major lesson to be able to connect the dots.

On governing cities and regions, this reflection can be of great advantage in diagnosing the problem and defining actions. Reflection is needed to get the bigger picture of things, people, and happenings, and to develop a clear and sabbatical view of how to lead. It helps leaders get the bigger picture, see more sharply the connection of elements within the public domain, and thereby contribute to better decision-making and putting things in perspective.

Change

From the PRIMO network comes the experience that most public risks stem from leaders’ lack of reflective capacity, and, as a result, insufficient diagnoses lead to ineffective decisions. Only 12% of policies lead to implementation, and of those, only 25% are effective. Secondly, a lack of good working interfaces between stakeholders caused by a lack of binding leadership, and thirdly, by what can be defined as responsible-in-the-end leadership, i.e., stewardship. The last being an ethic that embodies the responsible planning and management of resources.

The concept of Risk Leadership can be possibly enriched with key leader capacities of reflection, connection and stewardship. In my view these can contribute to the reduction of risks, caused by leaders themselves and improve the quality of public and private governance and management in general. The initiative of Risk Leadership by the St. Thomas University could not have been timed better in this timeframe of changing paradigms, drifting societies and on a large scale emerging public risks. It is time for change.

Bibliography

Gore, A. (2009) Our Choice: Changing the way we think. Emmaus, US: Rodale Books.

Matthee, H. (2011) ‘Political risk analysis’ in Badie, B., Berg-Schlosser, D., & Morlino, L. (eds.), International encyclopedia of political science (pp. 2011-2014). Thousand Oaks, CA: SAGE Publications Inc. doi:10.4135/9781412959636.n457

This article was originally published to contribute to the Risk Leadership Initiative of the Opus College of Business of the University of St. Thomas, led by Professor Peter Young. As published here, the article has been amended from its original in formulation and positioning. Hyperlinks and biography are added. The publishing date has been kept on its original: 10 March 2017.