Irrationality as Strength: Hewitt’s Four Disciplines of Leadership

When former Federal Reserve Chairman Alan Greenspan coined the phrase “irrational exuberance” in the mid 1990s, he was referring to the seemingly irrational behavior that the markets were exhibiting with regards to general consumption. The S&P Index had been climbing to record levels even as the economic environment suggested that a more conservative consumer response would have been more prudent.

In the 1990s, this exuberance ended in the infamous dot-com bust at the turn of the millennium. However, acting irrationally can sometimes produce beneficial results where self improvement, career growth, and overall public good can be positively impacted. In the2009 Hewitt Top Companies for Leaders study, irrational behavior for growth is actually what maintains an organization’s robustness, at least in the area of leadership. For engineers, re-applying these behaviors to one’s own working environment can produce results that are resilient even in the most disastrous of times.

The Hewitt Top Companies for Leaders
Conducted in collaboration with Fortune Magazine and the RBL Group, the Hewitt study assessed over 500 of the world’s top companies for leadership development. Despite the surrounding economic decline, the top companies for leaders were found to invest equal if not more energy into leadership growth rather than dissipating that energy to focus on other areas of the business. The top companies in the 2009 study included:

1. IBM
2. Procter & Gamble
3. General Mills
4. McKinsey & Co.
5. ICICI Bank
6. McDonald's
7. General Electric
8. Titan Cement Co.
9. China Mobile
10. Hindustan Unilever

This internal focus on development may appear to be an irrational act in the face of external challenges. In times of financial and market stress, wouldn’t companies be instead searching for cost reductions? Re-evaluating existing products and services? Re-allocating budgets? Such business factors are without a doubt included on the agendas of many an executive board; however, rather than exclusively focusing on the external factors, the most robust companies have also learned to look inward at the mechanism of how business is steered by its leadership.

The Hewitt study summarized these observations into Four Disciplines of Leadership:

1. Leaders Lead the Way:Top leaders, given their visibility and influence within their companies, lead by example and allow themselves be held transparently accountable. Part of leading is creating an environment of expectation so that new leaders being forged are aligned with company purpose, mission, and values.

2. Practical and Aligned Programs & Practices:Best practices and policies are engrained into the company’s internal culture, including succession plans and ground-up leadership development. A culture of serving the consumer and, in the case of engineering, the public well-being, when seeded into employees at all levels during the present, emerge as strong, customer-focused leaders in the future.

3. Unrelenting Focus on Talent:Talent is never underrated and neglected. Possession of talent is not enough—when talents become honed through practice, then leadership becomes embedded into one’s daily behavior. Talent, when executed as common practice, leads to adeptness and flexibility in the face of change. It is up to leaders to back talent not as a “nice to have” skill but as a true financial asset. In engineering, this could range from the highly technical to bigger picture service to the public good.

4. When Leadership Becomes a Way of Life:When role models, procedures, and talent development intersect and become commonplace for doing business, leaders become trained to respond consistently, regardless of circumstance. Crises are handled in a disciplined manner rather than as a reactive scrambling for solutions. Leadership development initiatives of the top companies also include regimented mentoring programs that focus on coaching and the controlled, but accelerated, growth for high potential performers.Mentoringbecomes an expectation rather than a surprise benefit. Within NSPE, groups such as theMentoring Task Forceare out to accomplish exactly that—expanding the availability of mentors to foster such leadership skills.

Strength in the Irrational
Regardless of an engineer’s environment, whether one is in industry or in private practice, in higher education or in government, these Four Disciplines can be used to buttress career stability and long-term growth even in challenging circumstances. The machinery for leadership growth may be of larger scale for a Fortune 50 company, but even for small engineering firms, the engine to fuel that growth is proportional to the individuals driving it.

This is Greenspan’s irrational exuberance re-deployed with a positive outcome. Ultimately, it is not great companies that build successful leaders, but great leaders that build successful companies. By focusing on leadership, this outcome can be designed to remain consistent, regardless of economic climate.

Published March 19, 2010 by Austin Lin

Filed under: mentoring, Leadership,

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