Inclusive leadership as dynamic managerial capability

Applicability to the ISBE conference theme – Inclusive leadership, which is associated with valuing uniqueness and strengthening the sense of belonging, has gained momentum within the leadership domain. Funding bodies too recognise the importance of inclusive leadership as a means to achieve a more equitable society, but rarely from a strategic management viewpoint. For inclusive leadership to find widespread acceptance in the long term, a strategic mindset that seeks the development of dynamic capabilities is required. Practitioners frequently see inclusive leadership as a progressive step forward, but with small and medium-sized enterprises (SMEs) being disadvantaged in many ways, it is crucial for their leaders to understand how inclusive leadership practices translate to dynamic capabilities and hence tangible outcomes. For policy makers working on support schemes for SMEs, it is important to design business support programmes that focus on capability development and treat equitable opportunities as a strategic asset.

Aim – While the adoption of inclusive leadership practices is essential for inclusive and sustainable economic growth, few studies have explored inclusive leadership from the dynamic managerial capability perspective. With knowledge and experience, relationships and networks, and cognition representing the underlying dimensions of the dynamic managerial capability view, the adoption of inclusive leadership practices is argued to affect each dimension and consequently influences the strategic resource allocation. Yet leadership styles vary and so does followers’ perception thereof. The purpose of this study is to evaluate why some leaders adopt good inclusive leadership practices more than others, how inclusive leadership practices are perceived by their followers, and to what extent such practices inspire entrepreneurial behaviours, such as pro-activeness and innovativeness.

Methodology – The case study company is a mid-sized company with an international distribution network and headquartered in the West Midlands, UK. We conducted 17 semi-structured interviews with male and female middle managers and their followers to understand the motivation for adopting inclusive leadership practices and the role knowledge and experience play. We further enquired about implications of inclusive leadership practices on managerial cognition, relationships and networks, and entrepreneurial behaviours. All interviews were transcribed and a thematic analysis was carried out. First order concepts, second order themes and aggregate dimensions were identified, and feed into a conceptual model that addresses the research questions.

Contribution – This study contributes to the understanding of inclusive leadership as a dynamic managerial capability by differentiating authentic from non-authentic inclusive leadership. Authentic leaders are inclusive because they have a goal in mind and seek repetition, which results in consistency and credibility. For non-authentic leaders it is harder to maintain consistent behaviours and, as a result, their leadership style is more mechanistic and reduces the ability of teams to work as a unit and develop entrepreneurial behaviours. Irrespective of the leadership style, few leaders are explicit about their efforts in creating inclusive teams, which erodes their well-intended approach. Our conceptual framework captures the crucial distinction in leadership approach as well as intra-organisational tensions. We also elaborate under which conditions inclusive leadership encourages entrepreneurial behaviours.

Implications for policy – For inclusive leadership to find widespread acceptance, leaders and followers require organisational support. That is, the business as a whole must be inclusive and consistent in its approach. Most coaching and training programmes, however, are designed as a one-off intervention, which limits leaders’ ability to develop consistent behaviours and organisations in developing distinctive managerial capabilities. In the absence of an external pressure that incentivises businesses to be more inclusive and equitable, training programmes are ineffective and do not generate tangible benefits. The strategic benefits of inclusivity have indeed received little attention and for business support programmes to be effective, more visibility of tangible benefits is desirable. Our research bridges the link between inclusive leadership and capability development from a strategic viewpoint and thereby informs policy design.

Implications for practice – Inclusive leadership rewards leaders with followers’ commitment to team and organisation, and an acceptance of accountability. Yet inclusive leaders find themselves in a complex situation where supportiveness is constrained by operational targets. Also, being inclusive means that leaders are honest about their situation, which some followers perceive as diminishing leadership autonomy. To enable followers to understand the rationale behind inclusive leadership practices, leaders are advised to be more explicit about the approach they take to create inclusive teams and the expectations attached to it. Successful teams demonstrate unity, but unity implies inter-group conflict and for organisations to consider themselves as inclusive, leaders are advised to practice constructive discourse to stimulate entrepreneurial behaviours, which sets the foundation for inclusive leadership as a dynamic managerial capability.