Analysis & Opinions - Financial Times

Good Leadership is Deciding How to Decide

| April 1, 2008

George W. Bush has famously described his leadership role as "the decider". But deciding how to decide is as important as making the final decision. What should be the composition of the group the leader turns to? What is the context of the decision? How will information be communicated and how much control does the leader maintain over the decision? A leader who gets any of these factors wrong may be decisive, but also decisively wrong.

The US president described his leadership style as having three core components: outline a vision, build a strong team and delegate much of the process to them. His decision-making on Iraq, however, has been criticised for the grandiosity of his vision, failure to manage the divisions in his team and failure to monitor the delegation of decisions. Without contextual intelligence, being a "decider" is not enough.

Understanding context is crucial to effective leadership. Some situations call for autocratic decisions and some require the opposite. There is an infinite variety of contexts in which leaders have to operate, but it is particularly important for leaders to understand culture, the distribution of power, followers' needs and demands, time urgency and information flows.

Ronald Heifetz, the leadership theorist, argues that the first thing a leader needs to diagnose is whether the situation calls for technical and routine solutions or requires adaptive change. In the former case, the leader may want to clarify roles and norms, restore order and quickly provide a solution. In the latter case, the leader may want to let conflict emerge, challenge unproductive norms and roles and let the group feel external pressures so that it learns to master the adaptive challenge. This may require delaying decisions. Leaders are often tempted to decide quickly to reduce followers' anxieties rather than to use these anxieties as a learning experience. This is a very different image of leadership from simply being "the decider".

General Electric prides itself on producing leaders, but half of its highflyers who went on to become chief executives of other Fortune 500 companies had disappointing records. Why do some leaders succeed in one context and fail in another? A common answer is "horses for courses": some run better on a dry track and some in mud. Many a good CEO turns out to be a disappointment when appointed as a cabinet secretary.

Contextual intelligence is an intuitive skill that helps a leader align tactics with objectives to create smart strategies in new situations. It implies a capability to discern trends in the face of complexity as well as adaptability in trying to shape events. Bismarck once referred to this as the ability to intuit God's movements in history and seize the hem of his garment as he sweeps by. More prosaically, like surfers, leaders with contextual intelligence have the judgment to adjust to new waves and ride them to success.

Contextual intelligence allows leaders to adjust their style to the situation and their followers' needs. It enables them to create flows of information that "educate their hunches". It involves the broad political skill not only of sizing up group politics, but also of understanding the positions and strengths of various stakeholders so as to decide when and how to use transactional and inspirational skills. It is the self-made part of luck.

In unstructured situations, it is often more difficult to ask the right questions than to get the right answer. Leaders with contextual intelligence are skilled at providing meaning by defining the problem that a group confronts. They understand the tension between the different values involved in an issue and how to balance the desirable with what is feasible.

Psychologists generally agree that multiple forms of intelligence exist. What we today measure as IQ was originally developed a century ago in the context of the French school system. Thus it focuses on linguistic, mathematical and spatial skills that tend to predict success in school, but not necessarily in life. Contextual intelligence consists partly of analytic capabilities and partly of tacit knowledge built up from experience, which tends to be expressed in rules of thumb. In some situations, such "street smarts" are much more important to success than "school smarts". But as Hillary Clinton and Barack Obama, the two Democratic presidential rivals, have recently debated, in novel situations judgment is more important than experience.

Contextual intelligence also requires emotional intelligence. Without sensitivity to the needs of others, pure cognitive analysis and long experience may prove insufficient for effective leadership. Ronald Reagan was often faulted on his cognitive skills, but he generally had good contextual intelligence. Jimmy Carter had good cognitive skills, but was often faulted on his contextual intelligence. As one wag put it, he was better at counting the trees than seeing the forest.

The best leaders are able to transfer their skills across contexts. Dwight Eisenhower, for example, was successful both as a military leader and as a president. Many leaders have a fixed repertoire of skills, which limit and condition their responses to new situations. To use an information age metaphor, they need to develop broader bandwidth and tune carefully for different situations. That set of skills is contextual intelligence. Leaders need to learn it and, especially this year, voters need to judge it.

The writer is a professor at Harvard and author most recently of 'The Powers to Lead' (Oxford University Press)

For more information on this publication: Please contact the Belfer Communications Office
For Academic Citation: Nye, Joseph.“Good Leadership is Deciding How to Decide.” Financial Times, April 1, 2008.