‘It was the best of times; it was the worst of times…’ Whilst these are the opening words in Charles Dickins’ novel, The Tale of Two Cities, these could be the words to describe two very different leaders.

Two businesses had a few months ago both promoted what they had internally identified as two talented executives to lead important divisions of their fast growing business. Expectations were high of their capabilities but after just a few months the feedback from the people within the two businesses was very different today.

One leader had created an atmosphere and environment of energy where engagement was high; sales were growing; and employee turnover low. The leader was popular: it was the best of times for both the business and its people with a future that looked bright.

The other leader had in a few months ‘sucked the energy’ out of the atmosphere with rising employee turnover, falling engagement levels, and absenteeism that had grown as sales had flattened: it was the worst of times for the business and its people with a future that looked far from bright.

Both of these leaders had been appointed because their organisations considered them to be top talent, but the dissimilarity of the outcome lies in the different understanding by the respective businesses of what is a leader and what talent is.

Taking leadership first, a quick Google search will generate millions of definitions but if we look from an evolutionary standpoint, leaders are important among all autonomous groups of social mammals from chimpanzees through to wolves. Mammals look for and expect to have a leader, for it is a vital role in their group existence.

Humans are no exception, we are as ‘hardwired’ as other mammals in looking to a leader. For instance human groups such as tribes will have a chieftain; a country, a head of state; a firm, a senior partner; and a business, a CEO. The model of a leader that is deeply embedded in our human psyche is that of ‘the person with the highest authority within the social group’.

Authority has long been linked with power, dominance, and control with many organisations and this was the successful model of business management for many years that many still and perpetrate today. A number of organisations have thought about authority and interpreted authority differently to use another of its meanings: Influence – the ability to affect ideas and actions. This definition far better suits the business needs of leaders for today and tomorrow. Why?

Influence is significantly more important than authority in the role of a leader today in four ways:

• Authority requires no ability nor a particular skill set. History can teach us much about the misuse of authority. Influence on the other hand, is challenging for it carries no authority and requires a skill in perceiving, understanding, and managing emotions and feelings of both others as well our self.

• Authority is transactional whereas influence is transformational with the latter being far more critical to the innovative needs of businesses today and in the future.

• Authority is resisted and leads to low levels of engagement with change often being obstructed. Influence on the other hand is about ideas being shared and accepted generating innovation, involvement and engagement.

• Authority relies on structure and clearly drawn top-down lines that are about roles not people. Influence has little structure relying upon people, relationships, and collaboration up, down, and across the organisation.

That the two businesses had adopted two different approaches to leadership is obvious. One is based in influencing, energising, and involving people. The second is based in authority where there is hierarchy and control. The disproportionate effect that leaders have has led to the positive outcomes of the first business, and the negative outcomes of the latter. Psychologists call this emotional contagion - the phenomenon directly triggering similar behaviours in others. Its effect is underestimated.

If we consider the question of talent it was the consulting firm, McKinsey, who put this concept top of the business agenda nearly 20 years ago with an article entitled, ‘The War for Talent’ (McKinsey Quarterly, 3, 1998, pp 44-57). The basic argument was that modern organisations would succeed or not based upon their ability to attract and retain ‘A players’.

As to what the authors of the McKinsey report meant when the used the word ‘talent’ they answered as follows: ‘In the most general sense, talent is the sum of a person’s abilities – his or her intrinsic gifts, skills, knowledge, experience, intelligence, judgement, attitude, character, and drive. It also includes his or her ability to learn and grow.’ This is a long list and has created problems for many organisations.

If we take the list, the first business sees attitude, intrinsic gifts, and the capacity to learn and grow as key for performance and innovation as their talent criteria to lead. The second business, stuck in authority, has based its talent attraction and retention around skills, knowledge, experience, and intelligence based on past success and sees its leaders in this mould.

Those businesses that want ‘the best of times’, and who wouldn’t, understand talent, leadership, and the power of emotional contagion are crucial. No business surely wants ‘the worst of times’ and the top leaders of these businesses need to change their beliefs and attitudes fast about talent and leadership as well as recognise the power of emotional contagion.