19

Sep

2016

The Myth of Pragmatic Business Leadership

Written by: Bert A. Spector

 
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In a just-published research piece, a group of scholars from Harvard and University College of London posed a significant challenge to the supposed benefits of “fact-based” reasoning.[1]  The way people respond to factual arguments – in this case, the researchers used scientifically-based findings concerning climate change – is predetermined by their previous beliefs.  Exposure to facts can actually increase polarization of opinions rather than encourage agreement.

So, how does this finding relate to our understanding of leadership, particularly as it is practiced within a business organization?

Two recent streams of leadership research have emerged extolling the virtues of pragmatic, fact-based leadership.  In the world of public corporations, pragmatic leadership is virtually de rigueur.  Business, these researchers suggest, is all about solving real-world problems, meeting challenges, and achieving results.  The metrics used to delineate effective and ineffective performance, success and failure, are clear, objective, and indisputable.  The best leaders – that is, the most effective – take a hard, unblinkered look at the factual evidence and respond appropriately.  They work in a world brimming with scorecards and public accountings, and respond accordingly.  To be sure, bad actors surface with alarming regularity.  Still, even they are being pragmatic, although in a purely self-serving way.

Allow me to explain why pragmatic leadership is a myth.

You may recall Al Dunlap, the “turnaround” champion of the 1990s who “saved’ a number of companies – Scott Paper and Sunbeam among them – by essentially shuttering them down and selling their brand names and facilities to competitors.  His defense, that his action were intended entirely to benefit shareholders in these companies who were rewarded when they sold their stock to competitors, was a deeply ideological one.  The “facts,” as Dunlap saw them, were that his actions help shareholders, which was, he insisted, the sole purpose of the corporate CEO.

Now consider Steven Spinner, the current CEO of United Natural Foods.   The goal of his company, he insists, is to meet and exceed “the needs and expectations of all our stakeholders: our customers, associates, natural and specialty product consumers, suppliers, shareholders, communities, the environment, and the planet.” This was a statement of corporate ideology, no less than Dunlap’s premise.

In these cases, “facts” become the evidence used to support what I refer to in Discourse on Leadership as corporate ideology. Corporate leaders select between two competing ideologies. The first, Dunlap’s raison d’être, is that the sole purpose of the corporate is to provide a return to shareholders. The second, made explicit by Spinner, is that corporations are obliged to meet the needs of multiple stakeholders: investors, to be sure, but also employees, suppliers, customers, the host community, and, indeed, the planet.

The issue here is not competing facts; it is competing ideologies.  Ideology is a belief system called upon to justify a particular order, an arrangement of power and authority, rights and privileges, sanctioned and unsanctioned behavior, rewards and punishment.   Ideologies are used to validate the favoring of some groups over others; perhaps those in power, perhaps those seeking power.  Ideology supports leader assertion of legitimacy, both for themselves and their goals.  All businesses are steeped in ideology, and claims of legitimacy made by business leaders – Dunlap, Springer, and everyone else – spring from that ideological foundation.

The notion that leadership can be based entirely on a pragmatic rendering of fact-based evidence is simply a myth.  All business is ideological, and therefore, all business leadership is ideological.

Discourse on Leadership: A Critical Appraisal by Bert A. Spector 

 

[1] Cass R. Sunstein, Sebastian Bobadilla-Suarzez, Stephanie C. Lazzaro and Tali Sharot, “How People Update Beliefs about Climate Change: Good News and Bad,” Social Science Research Network, released 9/2/16.

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About the Author: Bert A. Spector

Bert A. Spector (PhD, American History) is Associate Professor of International Business and Management at Northeastern University's D'Amore-McKim School of Business. His research interests include organizational change, leadership, business model innovation and management history. His articles have appeared in Leadership, Management and Organizati...

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