Business lessons for political leaders

Can political leaders learn lessons from challenges faced by their counterparts in business?


In the UK, the Labour party will soon have a new leader. As the main party of opposition, whichever candidate takes the spot will have a crucial responsibility in terms of holding the majority Conservative party to account and scrutinising its actions, while negotiating their own party’s causes. 

Meanwhile, in the US, two campaign marathons are playing out as the presidential candidates for the Republican and Democrat parties set out to gather support ahead of 2016’s presidential nominations.   

Political leaders face different challenges than their counterparts in business. They occupy a different role and are judged by different stakeholders. But are there common lessons that both political and business leaders can share? Nigel Nicholson, leadership expert and Professor of Organisational Behaviour, London Business School, says yes. He gives his three business tips which political leaders would do well to follow. 


1. Read the situation with clarity

“Define the challenge in a way that’s credible,” says Professor Nicholson. “Don’t just listen to advisors or a small coterie of people around you who have their own interests. You have to look beyond and take in the ideas and opinions of people who aren’t necessarily your supporters.”

The temptation to surround yourself with a small circle of closely trusted advisers can appeal to both politicians and business leaders, but narrow opinions may result in a devastating misreading of a situation.
Former Labour leader Ed Miliband was criticised for his tight inner circle, with commentators pinning a large portion of the blame for his party’s catastrophic failure in the 2015 UK elections on the fact that they provided him with a skewed view of reality. By appointing a close group of individuals with a shared viewpoint, he missed out on the valuable opportunity to understand broader visions, values and arguments, as well as truly grasp the concerns held by many about his leadership campaign. 

“It’s true of business and politics,” says Professor Nicholson. “Both business leaders and politicians can get distracted by their magic circle.”


2. You need your own authentic narrative

“The story you tell about yourself is key in terms of whether people buy into your authenticity and believe in you as a political leader,” says Professor Nicholson. “You need to write your own story, but make sure it’s a credible one based on your experience,” he explains. “Your narrative has to have a ring of truth about it.”

Professor Nicholson, who is also author of The I of Leadership, says that people are seeking more authenticity from politicians than they did previously, and that it’s more important than ever for politicians to stand by their principles and present a cohesive identity based on their beliefs. 

It may explain why left-wing Labour candidate Jeremy Corbyn has gained such a devoted following, to the surprise of politicians and media commentators alike. Criticism and dire warnings are hard to make stick when an individual’s sense of authenticity is so strong. 

Professor Nicholson says that while business stakeholders are less concerned about authenticity and more concerned about delivery from leaders, when it comes to corporate management within a firm, it’s just as crucial that people see you as an authentic individual. 

“I do think people want to know that their leaders care about the business and that they are people who have a genuine care for what the business does,” he says. 


3. Build a culture around yourself

"Develop teams with an inclusive culture,” says Professor Nicholson. “Empower people and show that you have created others and allowed them opportunities.”

It can be tempting in a position of power to promote your own interests over those of others. But Professor Nicholson says that by fostering others’ ambitions and allowing them to flourish, you strengthen your own position. 

“A business leader once said to me that ‘leadership is a lousy way to run a company’. It can’t be about the leader doing everything. You have to empower and facilitate, making everyone else as good as they can be.”

Professor Nicholson cites family businesses as often having a strong ethic of building a culture. He explains: “The field in which I’ve done the most work is family business, and employees are very aware that their leaders are real people. They have a strong identity through the company and they spend a lot of time building the business’s culture, which is one of the most important things a leader has to do.” 


About Nigel Nicholson

Nigel Nicholson is a Professor of Organisational Behaviour.

He teaches on the following programmes: