Asik Khan Assignment 1 Leadership Styles Best Practice
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Jan 9, 2024
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Asik Khan
Professor Susan P. Mekrami
COM 3102
30 October 2023
Best Practices for Leadership Communication Styles
Effective leadership communication is the cornerstone of organizational success, shaping corporate culture and steering firms towards their goals. Through positive workplace culture stakeholders can share a common objective and be aligned in their thinking to improve the firm. As Steve Jobs once remarked, "Innovation distinguishes between a leader and a follower," (Hobson 1) hinting at the pivotal role of leadership in fostering a culture of progress and achievement. Notably, my recent conversation with AIG CEO Peter Zaffino shed light on the indispensable role of communication in leading AIG's remarkable resurgence from the brink of the 2008 financial crisis to its present eminence. Leadership, defined as the art of influencing a group to achieve a common objective, underscores the significance of executive presence in molding a firm's ethos. It's imperative to recognize that an organization's culture lies at the heart of its triumphs or failures, with market alignment and competitive edge playing pivotal roles. Understanding the nuances of various leadership communication styles—be it transformational, transactional, or laissez-faire—becomes paramount in determining which approach best serves the firm's unique requirements. The following best practices highlight the critical need for a leadership style that seamlessly integrates with the organization's goals, thus necessitating the implementation of tailored communication strategies for optimal effectiveness.
To ensure the most effective alignment of leadership style, conducting a comprehensive market-based analysis of the firm to determine the appropriate leadership approach for employees (whether transformational, transactional, or laissez-faire) is imperative. This involves
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entrusting the firm’s internal business analysts or external consultants with evaluating the company's current financial status and market competitiveness. Subsequently, establishing specific goals based on this report aids in identifying the necessary work culture required for their achievement. Additionally, assessing the current executive presence with the aim of implementing changes to expedite the realization of predefined objectives is crucial. Moreover, conducting an anonymous survey to understand the employees' perspectives and strategizing ways to propel them forward helps determine the most suitable leadership communication style. Embracing this approach allows effective leaders to leverage a wide range of leadership behaviors, ensuring adaptability to changing market conditions. By implementing this practice, companies can attain their specific objectives, tailored to their unique industry and life cycle stage, rather than adhering to generalized industry standards. This best practice is exemplified in the leadership trajectory of AIG’s Peter Zaffino. Zaffino rescued AIG from the 2008 financial crisis, bringing in his own management team to inspire and motivate the reeling company towards transformation. Peter emphasized the importance of shifting culture at AIG from growth to efficiency as being the most important part of the firm’s recovery. His focus on optimization, margins, and efficiency led to multiple successful corporate carve-outs and spin-offs, alongside orchestrating the restructuring and servicing of the US government bailout. However, towards the end of 2013, as AIG had solidified its resurgence and market conditions were in its favor, Zaffino transitioned towards a more transactional leadership style, adapting his approach to the company's changing needs and circumstances.
A remarkable transformational leader, through personal exemplification, establishes themselves as a paradigm for the firm's middle managers, imbuing their own values onto their
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subordinates. This approach entails the training, promotion, or hiring of middle managers who share the same principles as the leader, ensuring the smooth transmission of motivation and inspiration down the chain of command. The benefits of this best practice are multifaceted, as directives are less likely to be questioned, and there is an inherent drive to surpass expectations when values are aligned. This approach can facilitate a comprehensive overhaul of the firm's work culture and internal processes with minimal resistance, leading to optimized labor and reduced process lag time. Additionally, fostering a work environment where top-down and bottom-up feedback is encouraged enhances the likelihood of a more productive work atmosphere. An exemplary instance of this best practice is illustrated in the case of Booking.com & Priceline’s CEO, Glenn Fogel, who found new growth in the fiercely competitive travel reservations after discovering two small European startups with a business model that contrasted with Priceline's approach. Given Glenns extensive investment banking (mergers & acquisitions) background, he successfully inspired the firms’ managers to actively find and adapt to new, more
profitable, business models (Scott and Schwartz 2). Conversely, an anti-example is represented by the leadership of Jefferies Group CEO Rich Handler, known for fostering a toxic work culture
and facing allegations of sexual harassment, emphasizing the perils of a misaligned leadership style (Barrabi 1).
The best transactional leaders induce a sense of internal competition within their firms by
rewarding high performers with well-established promotion pipelines or a large slice of the stock-option/bonus pool. Rewards at the lower levels of the firm's hierarchy must be protected. Upper management must make certain sacrifices to their own total compensation to ensure that high-performing early to mid-level talent does not leave the firm. Top-heavy/Management bonus pools should not be favored in the long term, as metrics for measuring performance must align
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with the firm's goals. The benefits of this practice include lower firm employee turnover and higher retention of top performers, with firm goals championed by higher performers at all levels. Despite potential sacrifices in leadership motivation, the long-term growth of the firm is ensured by the increased motivation of junior to mid-level employees. A notable example of this best practice can be seen in the leadership of Evercore CEO John S. Weinberg, who has successfully maintained a large, public investment bank with the highest bonuses for junior to mid-level employees on Wall Street, resulting in comparatively low turnover and talent retention (Dickson and Basak 2).
Leaders looking to implement a laissez-faire style of leadership should aim for guided-
freedom via a support system that gives employees a competitive advantage over followers of other firms while allowing them to be highly autonomous. Essentially, the leader is responsible for establishing and supporting the firm's competitive edge in at least one relevant department/capability that is used by all employees. Additionally, the leader must ensure that guidance and education are prioritized within the firm. With these support systems in place, employees are free to be creative in their revenue generation and productivity. The benefits of this best practice include a competitive edge supported by leadership while being expanded by employees. A perfect example of this approach is evident in the leadership of Citadel CEO and Founder Kenneth Griffin. Citadel is known for pioneering the "Pod shop" format of hedge funds where portfolio managers, or "pod" owners, act like fund managers within a fund. They take advantage of the overall fund's risk management and research capabilities while being creative with their own pod's investments (Doherty 2). The training programs and support at Citadel are so effective that many pod managers, and even more junior employees, leave to start their own funds, showcasing the success of this laissez-faire leadership approach (Doherty 1).
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In today's complex business landscape, effective leadership communication remains critical to organizational triumph, by weaving the fabric of corporate culture and steering firms towards their long-term goals. As Steve Jobs astutely pointed out, the distinction between a leader and a follower is innovation, underscoring the transformative role of leadership in fostering the correct firm-culture relative to its market position and stakeholder sentiments. Leadership, defined as the art of influencing a group to achieve a common objective, underscores
the profound significance of executive presence in molding a firm's ethos. Embracing diverse leadership communication styles, be it transformational, transactional, or laissez-faire, is imperative in addressing the unique demands of each organization. Through a meticulously tailored communication strategy aligned with the organization's objectives, market research, and internal surveys, effective leaders pave the way for sustainable growth and enduring success. As the business landscape continues to evolve, the steadfast adherence to these principles will undoubtedly fortify organizations, ensuring their resilience and adaptability.
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Works Cited
Anthony, Scott, and Evan Schwartz. “What the Best Transformational Leaders Do.” Harvard Business Review
, Harvarad University, 20 Sept. 2017, hbr.org/2017/05/what-the-best-
transformational-leaders-do. Barrabi, Thomas. “Jefferies CEO Pushes Return to Office, End to ‘Lonely Home Silos.’” New York Post
, New York Post, 1 Sept. 2022, nypost.com/2022/09/01/jefferies-ceo-pushes-
return-to-office-over-lonely-home-silos/. Colvin, Geoff. “Inside AIG’s Sweeping Plan to Transform the Once Flailing Insurance Giant.” Fortune
, Fortune, 21 July 2022, fortune.com/2022/07/21/aig-imploded-2008-recession-
financial-crisis-turnaround-plan-6000-employees-accenture/. Dickson, Steve, and Sonali Basak. “Evercore’s Schlosstein Sees ‘huge Growth Opportunities’ in Tech.” Bloomberg.Com
, Bloomberg, 27 Oct. 2021, www.bloomberg.com/news/articles/2021-10-27/evercore-s-schlosstein-to-step-down-
leaving-weinberg-sole-ceo#xj4y7vzkg. Doherty, Katherine. “Ken Griffin’s Hand-Picked Math Prodigy Peng Zhao Runs Market-Making
Empire.” Bloomberg.Com
, Bloomberg, 11 May 2023, www.bloomberg.com/news/articles/2023-05-11/ken-griffin-s-hand-picked-math-prodigy-
peng-zhao-runs-market-making-empire.
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Hobson, Nick. “Steve Jobs Said What Separates a Leader from a Follower Really Comes ...” Inc.Com
, Mansueto Ventures, LLC, 8 Apr. 2023, www.inc.com/nick-hobson/steve-jobs-
said-what-separates-a-leader-from-a-follower-really-comes-down-to-this-mindset.html.