Ian Davis has advised some of the world's most successful CEOs. As a retired senior partner of McKinsey & Co., Davis says his experience has shown that successful leaders share five traits, regardless of their rank within an organization.
"Organizations tend to assume that the more senior you are, the better leader you are, which is not true," said Davis, who also served as worldwide managing director at the management consulting firm. "There are many CEOs I worked with [who], in my view, are not particularly good leaders, while many people who are never officially recognized as leaders are very good leaders. I think leadership needs to be viewed from the bottom, from the middle, and from the top."
While people think leadership best describes people directing companies or military regiments, Davis said the role is "a multifaceted concept" illustrating the influence wielded by "ring leaders, gang leaders, thought leaders, and faction leaders." In Davis' world, even "technology geeks" can be effective leaders.
It's all about context, he told the MBA audience: "You cannot look at leadership in the isolation of the context you're in. If you are trying to lead Stanford GSB or a medical faculty or a regiment, your leadership task is completely different. Leading a high-tech company whose heritage is in Korea or Taiwan is completely different from leading a high-tech company whose heritage is in Silicon Valley or Munich, even though they make exactly the same products."
So, he said, leadership is best explained by what successful leaders actually do — "not what they are, not what they say, but what they actually do."
Effective leaders do five things, Davis said — most importantly, setting a direction, whether it be developing a corporate vision or developing a distinct business culture. "People may not like it, they may not approve of it, or they may disagree with it. But … if you ask most people in the company, they will be able to tell you what that direction is, what the beliefs of the company are."
Secondly, rather than simply maintain the status quo, strong leaders initiate action. "A lot of ineffective leaders have talked about initiating things," said Davis. "Real leaders initiate stuff. That's a characteristic."
Great leaders also follow through with the initiatives they've developed, even if their persistence to achieving those goals comes off as "tenacity, determination, bullheadedness, or obstinacy," he said. "Always, things are going to go wrong. Sticking with things, through good times or bad times, I think, is a really, really important part of leadership."
Another major quality in good leaders is an ability to motivate workers to carry out goals, using techniques that can range from giving encouragement to awarding financial bonuses to manipulation, he said.
Since workers pay keen attention to what the boss does, leading by example is another crucial trait, Davis said. "Whenever (leaders) say something or do something, people notice. It means whatever you say or do becomes an act of leadership by example."
Now a senior advisor at private equity firm Apax Partners Worldwide, following his retirement from McKinsey last year, Davis shared insights about what makes leaders great during the Dec. 5 ""View From The Top"" speaker address at Stanford GSB.
His observations were gleaned from decades spent at McKinsey, as well as his service as a non-executive director of oil and gas giant BP and membership on the boards of The Conference Board business research group and Teach For All, an international education nonprofit. He's also an advisory director of the King Abdullah Petroleum Studies and Research Centre and a member of the President's Council at the University of Tokyo.
Davis warned the MBA audience that they'd likely end up being frustrated in their first jobs out of college, but not to take it personally. Often dissatisfaction results from a lack of understanding of their company and its leadership expectations. Instead, he urged, "Spend time understanding the context, and often that means spending time understanding the history of the founders or the organization itself." He urged them to learn from difficult workplace experiences, but also not to be "seduced" if they get off to "a rocket start" on a first job, since "that could be the breaking of you as well."
While some leadership skills can be taught, Davis believes other traits come only through doing. For example, communication and team building can be honed in the classroom, while other abilities — such as judgment, diplomacy, and sensitivity — must be acquired through experience, he said. Diplomacy in particular will be an increasingly important skill for corporate leaders as business becomes more global, Davis said, and developing the international savvy and diplomacy needed to succeed in that realm "takes time."
Davis said people don't need to work in the nonprofit sector to have immense social impact. "Don't get trapped by the thought that to do good you've got to be in the social sector," he said. "If you are running a big company or running a successful private equity firm, you build companies, you have a lot of money, you pay a lot of taxes, and you spend time mentoring the leadership. You're doing good."