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I’ve been betrayedDuring a major transformation program in an engineering business last year, a key project was brought to a standstill when the CEO accused two key executives of betrayal. The executives had gone outside the agreed plan by contacting a potential supplier with a view to outsourcing an important part of the project. The CEO was intent on keeping the entire project “in-house”, while the two executives in question believed that the entire transformation program would be jeopardised by the organisation trying to undertake such a key activity itself.

During the subsequent upheaval, one of the executives was relieved of her responsibilities in the transformation program, and the other resigned shortly afterwards. As a consequence, the program lost momentum and the positive feeling surrounding the change was eroded.

While everyone agreed that the whole affair was regrettable, I began to question whether the “betrayal” by the two executives had been correctly interpreted by the CEO - and indeed, whether we needed to reexamine the real meaning of their actions.

Happily, we were able to turn the whole incident into a learning experience that was subsequently built into the transformation program. The CEO was prepared to “re-interpret” his executives’ behaviour and the transformation program was reinvigorated after some time. My relationship with the CEO - although placed under some strain during the incident - remained strong and we were able to explore the issues of loyalty and betrayal in a new light. One that produced some interesting insights into how both loyalty and betrayal can drive better performance.

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Maverick or Rebel?

Dr Norman Chorn | norman.chorn@centstrat.com | www.normanchorn.com | www.centstrat.com

Leading with loyalty and betrayal

Leading with both loyalty and betrayal can improve the performance of your organisation

What’s wrong with betrayal?Many leaders consider loyalty from their people to be an important ingredient for their success. Where their people are perceived to be disloyal, they feel betrayed and let down. Some, as in the case I described above, feel as if they have failed in their attempt to be a good leader. All in all, the degree of loyalty from followers is often used as a metric to assess how effective you are as a leader.

But what if loyalty was not always important for good leadership? What if betrayal could be highly productive? And what if the mavericks, who “go against you” in their acts of betrayal, are actually important ingredients in the leadership of a high performance organisation?

I learned three important lessons in my experience with the engineering business:

1. Leadership is about the mobilisation of people rather than simply aligning them behind a plan

2. Both loyalty and betrayal are needed for high performance3. Leaders need to distinguish between mavericks and rebels - and treat them quite

differently.

Leadership is about mobilising your peopleConditions of uncertainty and change mean that effective organisations are continuously aware of their environment and focus on adaptation. Their people are participants in the ongoing process of setting and executing strategy and the renewal of the organisation’s capabilities. To encourage participation, leaders have to do more than simply get their people aligned. They have to mobilise them and get them them fully engaged in the business of the organisation.

When people are mobilised behind an organisation’s purpose, they bring their full array of skills and opinions to bear on the issues and challenges faced by the organisation. And because these skills and opinions are diverse, the organisation benefits from a rich array of options and possibilities.

The leadership challenge is to achieve a good balance between the diversity of opinion and conformity to organisational purpose. Mobilising your people is about providing the clarity of purpose as well as the structure that gives people the flexibility to work out the best way forward. The key key elements of mobilising you people are:

a) focus relentlessly on the purpose of the organisation (note: this is not profitability)b) encourage people to take responsibility for solving problems in which they have a

stake - the people are both the problems and the solutionsc) facilitate learning and experimentation within predetermined limitsd) shape a culture that is both conservative (keep that which is worthy) and

progressive (adopt new and better ways of doing things)e) provide air-cover for your people - and accept that some failure is inevitable.

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Loyalty and betrayal are needed for high performanceThere are two related points to note here. The first is that loyalty produces a virtuous circle that drives high performance in organisation. This is a relatively well know fact and it relates to the benefits of loyal staff and loyal customers.

The second point relates to the value of betrayal in certain aspects of leadership. This is a more complex issue.

1. The virtuous circle of loyalty

Having loyal customers and staff produce real benefits for the organisation by creating the virtuous circle depicted above1. Four key elements describe this system:

• effective leadership produces loyal staff• loyal staff deliver value-adding products and services• value-adding creates loyal customers• appropriate metrics measure customer loyalty so as to reward staff.

People display loyalty to leaders once trust is established between the two parties. This trust is based on three key elements2:

• does the leader acknowledge our capabilities and contribution? (Competence Trust)

• does the leader keep agreements and display consistency in dealing with us? (Contractual Trust)

• does the leader communicate openly and honestly? (Communication Trust)

The contribution to performance by high levels of loyalty is well explained by this virtuous circle.

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Right&customers&

Measures&of&loyalty&

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1 Fred Reicheld, Loyalty-Based Management, Harvard Business Review, March 1993

2 Dennis and Michelle Reina, Building Sustainable Trust, Organisation Development Network, 2007

2. The value of betrayalFrom the analysis above, we can define betrayal as the breaking of trust between the two parties. In the engineering business described above, the CEO clearly felt that the trust between him and his two executives was broken as they had not followed the plan agreed to by the team.

But what if the breaking trust is motivated by a deep desire to serve the purpose of the organisation? What if the betrayal is directed towards the agreed plan rather than the overall purpose served by the plan?

The latin origin of the word (betrayal) is interesting - it means to “give oneself over to a higher purpose”3. While the usage of the term has changed over time, we should consider the possibility that leaders and executives may well be betraying people/ breaking trust in the organisation as they pursue change initiatives. Indeed, if one of the roles of leadership is to continuously seek adaptation to a changing environment, we may well consider betrayal as one of the elements of effective leadership.

Before we cast leaders as the villain in the piece, let’s be clear that we are not referring to those forms of betrayal where the individual places self interest ahead of the interests of the organisation. If the executives in the engineering case were seeking an outside contractor because they had been bribed with a sum of money, this would be classified as corrupt and even criminal behaviour.

Instead, we are referring to cases where a previous agreement has been betrayed because the leader or executive believes this would better serve the overall purpose and values of the organisation. This “virtuous” betrayal may well be an ongoing part of effective leadership if we consider leadership’s role in introducing change and ensuring organisational adaptation. For example, agreements made and undertakings given at one point in time may not be in the best interests of the organisation at another point where conditions have changed. This was my argument in favour of the two executives who were accused of betraying the CEO in the engineering case study.

In order for this form of betrayal to be considered virtuous, the decision or action should lead to a better outcome for the organisation, and should be motivated by a desire to further the interests of the organisation.

Mavericks aren’t rebelsI believe that our engineering CEO would have found it useful to make a distinction between “mavericks” and “rebels”. While both seemingly betray the organisation, they do so in different ways and for different reasons.

43 James Krantz, Leadership, betrayal and adaptation, Human Relations, Vol 59(2), 2006

Both loyal soldiers and automatons follow the organisation’s processes and agreed plans, while the rebels and mavericks actively challenge these with their actions and decisions. However, the key difference is that mavericks are aligned to the purpose and values of the organisation, and “betray” the organisation (ie break the trust of an agreement) in order to seek a better outcome. Rebels, on the other hand, are motivated by a desire to further their own or other interests.

I suggest that the two executives in the engineering business were mavericks. They believed that the transformation agenda of the organisation would be better served if a key element of the process was outsourced to a third party contractor. And they took the initiative to test this out by discussing it with an outside contractor. In so doing, they “betrayed” the plan that had been previously agreed to by the executive. It could be argued that they should have sought permission to do so beforehand, but they formed the view that they would have a stronger case if they had the facts at hand before bringing this to the attention of the CEO (They were correct! It is unlikely that this CEO would have agreed without a time consuming evaluation process. And the delay could have compromised the timeline of the proposed transformation program).

This is often the case with mavericks. They may act on an intuitive hunch first and seek permission afterwards. It is their willingness to challenge the status quo and seek out better ways that makes them potentially so valuable to organisations in times of change. I suggest the process of adaptation and change requires more mavericks - people who are prepared to think for themselves and “betray” the agreed ways of doing things. Indeed, the very role played by leaders in introducing change is one that requires a healthy dose of betrayal.

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Not aligned with the organisation’s

purpose and values

Aligned with the organisation’s purpose and values

Adheres to organisation’s

processes

Challenges organisation’s

processes

Leading for high performanceSo what can we learn about the contribution of loyalty and betrayal to improved performance in organisations? You have no doubt formed your own views, but here are a few that really stand out for me:

1. Leaders improve performance by mobilising their people rather than simply attempting to align them

2. Leading change and adaptation is a key task of leadership in these uncertain times

2. Successful change leadership requires an appropriate balance between loyalty and betrayal

3. Loyalty produces a virtuous circle that results in improved organisational performance

4. Betrayal enables behaviour that challenges the status quo - essential during times of change and adaptation

5. Distinguishing between mavericks and rebels allows leaders to balance loyalty and betrayal appropriately.

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Norman conducts workshops instrategy and organisation design.

norman.chorn@centstrat.com

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