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There's been a lot of talk recently about authentic leadership. Authentic leaders, it is said, are full of integrity, have great presence, enjoy good work life balance, and a host of other desirable qualities. And who wouldn't prefer to be led by someone nice rather than an out and out greedy geezer? But all this talk about niceness misses the point of what authentic leadership is really about. Bill George, who popularised the term, defines authentic leadership somewhat differently.

According to George, the defining characteristic of authentic leaders is their ability to meet the needs of all organisational stakeholders, not just the needs of owners and investors. This focus on the needs of all stakeholders makes authentic leadership very different from traditional business leadership in two significant ways.

Firstly, authentic leaders have a genuine commitment to serving others. Imagine a continuum of leadership. At the left hand end we have the greedy geezers, leaders who are interested only in their own success, irrespective of how much they trample over the needs of others. Towards the middle of the continuum we have traditional business leaders, who see their role as meeting the needs of their shareholders and themselves. They are not afraid of taking huge bonuses while freezing the remuneration of front line staff – in fact they positively relish it. They lose no sleep over the fact that in 2008 the average Fortune 500 CEO received 369 times the average salary of a typical worker.  Moving on, to the far right hand end of the continuum we find authentic leaders - those who are genuinely committed to meeting the needs of all the organisational stakeholders. Authentic leaders aren't interested in happy employees and customers because it's a great route to profit – they are interested in happy employees and customers – and suppliers and partners – because it's the right thing to do. Authentic leaders don't see corporate social responsibility as a way of improving their company's PR – they see their company's responsibility to the local, national and global community as the right thing to do.

Why would anyone want to be this authentic when they could be making a fast buck by taking a more traditional approach? Because authentic leaders are more interested in being happy than in being rich – and they understand that happiness comes more from positive relationships and fulfilling service than it does from generating mountains of cash. That's why authentic leaders often enjoy better work life balance than traditional leaders. It's not simply that a more balanced life helps them to make better decisions at work (though it probably does) – it's that great relationships make a huge difference to your sense of well being.  Why wouldn't you want to have great personal relationships outside the workplace as well as within it?

There is a second way in which authentic leaders differ significantly from traditional leaders, and that is their orientation towards time. Greedy geezers find it hard to think more than a few minutes ahead – 'I want it and I want it now'. Traditional leaders think in terms of months (can I hit the numbers for this quarter?) and if they are lucky, years (what's the three year vision that will help me to deliver this quarter's numbers?) But authentic leaders think in terms of years, decades and lifetimes – they thing long term. Authentic leaders often see their business endeavours as fulfilling part of their life purpose.

Fun and profit

Authentic leaders are exactly the kind of leaders you would want at all levels in your organisation. The obvious point is that they're much more pleasant to be around. Given that we spend so much time at work, wouldn't we rather spend it with people who are good to be with? But paradoxically, authentic leaders can also help your organisation to be more profitable, and here's why. In many organisations, a huge amount of energy is consumed by people protecting their own personal interests or the interests of their own group rather than the interests of the organisation as a whole. We call this organisational politics. In fact, some organisations are far better at competing with other departments within the organisation than they are at competing with their true business competitors. Authentic leaders don't engage in this kind of organisational politics, because they are focused on the bigger picture.

The personal qualities we admire in authentic leaders flow from this essential orientation towards service over the long term.  Meeting the needs of all stakeholder groups is a big challenge, so authentic leaders know that they must work with other people. This in turn requires a host of interpersonal skills – including humility, self awareness and a willingness to learn. Because they take a long term view of things, authentic leaders are much more resilient in the face of short term setbacks.

Most of us would prefer to be led by authentic leaders and interact with organisations who genuinely meet the needs of all their stakeholders, rather than with organisations which do their level best to rip us off in order to enhance shareholder value. All this sounds highly desirable – but is it realistic? Can such organisations exist in the dog-eat-dog world of globally competitive businesses in the 21^st Century? Admittedly, as the collapse of the world's financial system over the past year has shown, the present model certainly has room for improvement – but is it really possible to sustain organisations that meet the needs of all stakeholders? Indeed it is, and somewhat counter intuitively, such organisations can not only survive but also deliver superior financial returns. Such authentic organisations are sometimes called firms of endearment.