CEOs have tremendous authority to lead as handed over by the rules of corporate governance. Yet this authority can only take you so far as your team listens to those in authority because they are required to do so. This is very much like follow-the-rules that will never motivate anyone to go beyond the call of duty.
At the same time, when the CEO exhibits his competence through his intelligence, composure and performance it helps his followers recognise his capabilities and his appropriateness for the CEO role. If the performance falters, even temporarily, his credibility may be questioned thereby diluting the people’s willingness to follow his directions.
A legitimate leader, on the other hand, creates goodwill, a feeling of goodwill among his team members and a license to lead through good and bad times. They can inspire confidence as well as loyalty and ensure that the team members give their best to the work they take up. Legitimacy creates trust and this increases people’s willingness to make the best effort as they feel confident that everyone will do the same, their efforts will be recognised and they will get fair treatment. They will be more willing to make long-term investments feeling confident that they will not be taken unfair advantage of.
These three words – authority, competence, and legitimacy are frequently used in the context of CEOs and their influence on their team members. Let us examine how CEOs can gain legitimacy and sustain it.
Communication.
CEOs should be compelling storytellers as it draws the attention of the listeners and helps them understand where the business is coming from and where it is heading. It would even be better if leaders could explain how to manage the forthcoming uncertainties and each employee’s role in it.
Fairness.
CEOs must be seen to act fairly. They have tremendous authority and their actions should be perceived to be free of any bias. He should also be seen as just and caring. Any hint of bias, unfairness or favouritism can dilute his legitimacy and his followers would withdraw and engage in self-protective behaviour.
Integrity.
Integrity is the consistency between what the CEO says and what he does. People watch the CEO constantly and judge if he walks the talk and this greatly influences his legitimacy.
His legitimacy is strengthened when he makes hard decisions in line with his values irrespective of the cost involved. On the other hand, CEO who forsakes their values during difficult times are likely to diminish their legitimacy CEOs should have the courage to stand by their values even while making difficult decisions.
Authenticity.
Authentic CEOs are open about their failures as well as their successes. They actively seek feedback and fresh input from others. This openness makes them more down-to-earth and relatable as well as approachable as they can connect with people easily and inspire others to follow them.
Company first.
Becoming a CEO is an honour for the many years of service to the organisation and they need to demonstrate that they put the company’s interest above their own. They should use every opportunity to acknowledge that it is a privilege to lead the company, be generous in giving credit to others and take responsibility for their failures. they should be willing to sacrifice themselves first before they expect or ask others to do so.
Stay grounded.
CEOs need to remain humble, human and approachable. The authority vested in a CEO is huge and so also the perquisites and this should not lead the CEO to believe in his self-importance and superiority to others. this can lead to arrogance which is a sure-shot way to damaging the legitimacy of the CEO.
Purpose.
CEOS should provide their followers with a sense of purpose and meaning. CEOs whose work is perceived as being in service of a larger goal enjoy greater legitimacy.
To summarise, authority-based leadership is based on formal power, competence-based leadership is based on performance and legitimacy-based leadership is based on behaviours and actions that inspire others. Legitimacy-based leadership is more sustainable and effective in the long run.
How New CEOs Establish Legitimacy
by Nitin Nohria
HBR 2023/06
R2G 