Great leaders must be courageous

The difference between excellent managers and great leaders consists in the ability of the latter to take risks that, on the face of it, may seem counter-intuitive. But without courageous leaders prepared to accept challenges and embrace the risk factor, businesses will sooner or later founder.

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Courage is not related to intelligence, nor is it something one can learn through tuition; on the contrary, it needs to be acquired over time via experience with personal risk taking. But as an article at hbswk.hbs.edu points out, an obsession with numbers and fear of failure will prevent many managers from taking any such chances and thereby moving to the next level.

He who is afraid should not do business

Several examples of successful risk takers may serve as models to follow. Alan Mulally, for instance, rejuvenated the fortunes of Ford, which had just lost 18 billion USD, by borrowing 23.5 billion to revamp the organisation and he succeeded in restoring it to profitability. Paul Polman transformed Unilever, more than doubling revenues in his first eight years as the CEO and subsequently seeing off an aggressive takeover bid.

After becoming CEO of PepsiCo in 2006, Indra Nooyi showed great foresight in adding healthy foods and drinks to the company’s traditional offer of soft drinks and snacks. In contrast, PepsiCo’s main competitor, Coca Cola, continued to focus primarily on soft drinks. Results show a 70% increase in PepsiCo’s stock in the past six years; Coca Cola’s is up only 15% during the same period.

Other great leaders, whose courage has helped make their companies global names, include Jeff Bezos at Amazon, Jack Ma at Alibaba or Howard Schultz at Starbucks. These and others like them have the courage of their convictions, which enables them to guide their organisations through hard times to a more prosperous future.

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Article source HBS Working Knowledge - new management trends from Harvard Business School
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