Professor Chris Styles

Former British Prime Minister Margaret Thatcher has died at the age of 87.  Famously the daughter of a grocer she was in the top job for 11 years.  She was also a highly divisive figure who was to some the saviour of the British economy, but to others responsible for decimating industries and communities.  Irrespective of which side of the fence you sit, it’s hard not to recognise her as a strong and highly effective leader.

What kind of leader was she?  In modern parlance she might be described as a values-based leader.  Whether you ascribe to her values or not, her model of leadership was about articulating her core values, and making decisions consistent with them, even in the face of strong opposition.

How do today’s leaders stack up to the Margaret Thatcher model?  Sheena Lyengar, a Professor at Columbia Business School, told an audience of over 1000 senior business school academics gathered in Chicago this week that we are facing a ‘leadership crisis’ that applies to business as much as politics.  Whether we are indeed in a crisis is debatable, but there are legitimate concerns over short termism, popularism (whether its politicians reacting to the voter polls or CEOs pleasing market analysts), and revolving door leaders. To better understand Thatcher’s approach to leadership, consider her three biggest achievements. First, with Ronald Regan, she was credited with ending the Cold War.   Their approach was to negotiate from a position of strength, which controversially included deploying nuclear missiles across Western Europe (including in Britain).  While Mikhail Gorbachev was a man she said she could ‘do business with’, she had a deep distrust of communism and saw its end as a moral imperative.

Second, she fought and won a war in the Falkland Islands that no one seriously thought she would enter into. Although a group of Islands where sheep outnumbered people, she said that it was a matter of principle that she not sit by and see British citizens invaded by ruling military junta in Argentina.

Finally, she transformed the British economy.   When Margaret Thatcher came to power in 1979 inflation was rife and the economy in poor shape.  She tackled inflation head on, cut spending and took on unions to move the economy towards the more flexible, market driven system that essentially operates today.  She was hated by many for the hardship her measures caused, but was resolute in reshaping an economy that in her mind would reward the efforts of local grocers like her father.

All three of these achievements are defined by a strong set of core values that were translated into strategies and action.  For example, her commitment to free and flexible markets led to strategies that reduced union power and privatised state industries which ultimately led to actions such as the miners’ dispute.  And once she went down a path, she did not waiver a position made famous by her remarks, “the lady is not for turning”.   Many of her decisions led to short term pain, including job losses, and indeed 255 British servicemen and three Falkland Islanders, as well as 649 Argentineans, lost their lives as a result of the Falklands conflict. She saw leadership as actions reflecting principles rather than basing decisions on popular sentiment.  She also displayed what many now see as a critical leadership quality, resilience.

When selecting leaders, whether on election day or for senior positions in business, we would do well to focus on a person’s core values and beliefs, and assess their record of delivering against them, particularly when the going gets tough.   If values are well articulate and we buy into them, then decisions and actions are better understood, respected and followed, even if not always liked.  Values-based leadership has much going for it and Margaret Thatcher was a great exponent.

Professor Chris Styles is Deputy Dean and Director Australian Graduate School of Management (AGSM).