Leadership

Lean Leadership

A Model for the New Millennium 

Today, leaders are under pressure to create “mega-enterprises” with the ability to react intuitively where creativity, learning and collaboration are the cornerstones for enhancing the staying power of growth organizations. If today’s leaders are required to be strong, inspiring, and effective, then the dilemma corporations are faced with is, how are tomorrow’s leaders groomed? Even more basic are; who are leaders? What are leaders? How do we identify potential leaders? Do we even need leaders and what do Leaders really do? 

These and other similar questions have plagued businesses over the last 150 years. Now, with today’s emphasis on globalization and “world class” status, answers to these questions provide the basis for successful business achievement. Experts, “gurus”, and academics alike have written volumes of articles, books and theses on the subject from many different perspectives. 

The numbers are staggering and content is dizzying. Nonetheless, this article will explore a contemporary approach to leadership by first demonstrating the need for a new paradigm then differentiating between leadership and management, and finally, setting forth a model for the new millennium. 

Webster’s defines leadership, “as the principal member of the group in an organization endowed by cooperative ideology with a heroic to mystical character and one who governs with a minimum of formal organizational restraints and one who claims to be above the group interests.”

Prior to the 19th Century, most organizations were owner-run and owner-managed, and as the 19th century unfolded, organizations emerged as local powerhouses or complex entities where the single owner/manager concept paved the way for the creation of middle management as a liaison to the owner. This organizational innovation exploded in the 20 Century where firms built enormous hierarchical structures to manage the increasingly cumbersome, capital intensive and geographically distributed companies.

Leadership Deficit… Myth or Fact?

The early 1920’s to the 1960’s was a time when business learned to “routinize” processes (as developed and driven by Frederick Taylor and his Taylorism methodologies), and where the only true competition came from within one’s own geographic area. Therefore, the need for leadership dwindled and many new versions of management philosophies blossomed. 

However, the 1970’s witnessed a world growing ever unstable and competition increasing from outside one’s geographic territory. It is this fundamental shift in the competitive landscape which has led the business community to the need for a re-emergence and re-dedication to the “art of leadership.”  However, this managerial paradigm of the last 200 years could not be undone overnight or even in a decade or two.   

The struggle continues, especially in firms that have achieved some level of success, the ability to articulate the need for a change gets lost in the celebrating. Long-term success is generally facilitated by “out of the box” thinking which is in turn facilitated by leaders who are innovative, creative and collaborative Phillip Kotter developed a Leadership/Management Chart which can be used to determine the relative fit of people into the Leadership / Management Dilemma Model, and therefore provide an organization with a clearer picture of their leadership talent pool. In review of quadrant 2 (Strong Leaders but Weak Managers) and quadrant 3 (Strong Managers but Weak Leaders) studies show that organizations contain far too many people with quadrant 3 traits. This is evident as bureaucracy and over-specialization has overrun most organizational processes. 

In these organizations, ‘more’ is the order of the day, more policies and procedures, while numerous controls stifle innovation. Conversely, those surveyed also stated that they had too few people who fell into quadrant 2. Unfortunately, quadrant 2 people tend to find that their vision is detached from reality and often times is out of alignment with the organization, while their strategies lack the support of formal planning or budgeting.

Far less noteworthy, quadrant 1 (Weak Manager and Weak Leaders) inhabitants were found to be in excess but rarely in position to damage growth. Respondents stated that quadrant 4 (Strong Manager and Strong Leader) were a rare breed, in short supply, and considered to be the “true” leader types. Add to these findings the fact that companies spend millions of dollars on identification models and training programs, and the overall message is that the corporate world has a deficit of good leaders and lacks the systems to develop leadership and provide the right culture for the exhibition of sound leadership skills. 

The good news is that the message does not state that organizations lack potential talent but are most likely deploying the wrong methods for detecting and enhancing the requisite skill sets. Furthermore, leadership “guru” Adam Selznick states “the deficit is due to leader’s who fail to set clear, definable, attainable goals,” and Peter Drucker concurs, he also adds, “…that the leader should see leadership as a responsibility rather than as rank and privilege.” A continuing consensus further postulates that it is more basic, the entire issue has been overlooked or ignored especially in times of growth since managing the day to day operations takes on more importance (maintaining) whereas in times of high growth, firms tend to get caught up in the hype and hysteria (i.e. the “Dot-Com” boom) and miss the boat all together. 

​More evidence is found from Michael Porter who believes that the deficit occurs as a result of corporate constraints and a fear of reprisal. The result is that most organizations are devoid of leadership because they have not institutionalized the process, they do not provide a positive culture to nurture and develop leaders, and finally, many organizational decision-makers are just not aware of the vast talent pool they have to choose from.  

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Some companies subscribe to one of the many schools of thought, or believe that leadership can be taught like running a press or that it cannot be taught but is an inborn trait. These disparities add to the confusion and hence the mystique of leadership.  There are many good characteristics of each of these approaches, however, adhering to one style single-focuses an organization and prevents it from reacting and altering course when their external environment dictates. The preferred direction then becomes a hybrid which provides for the employment of the best practices of all these models.

• Situational Approach
• Transformational Approach
• Transactional Model
• Contingency Model
• Inherited Concept
• Learned Theory
• Great Man-Woman Theory

Leadership is not Management

As referenced above, the Webster’s definition contributes to the confusion surrounding leadership since it subtly suggests that everyone in a leadership position actually provides true leadership. Similarly, it also suggests that leadership and management are synonymous, or at the very least, related. Clearly, to properly define leadership, we must first be able to differentiate it from management. According to John P. Kotter, management is comprised of three main tenets:

1. Planning and Budgeting
2. Organizing and Staffing
3. Controlling and Problem-Solving

Planning and Budgeting involves creating timetables to meet commitments and developing specific action steps; Organizing and Staffing requires that managers put some structure to the plan which includes staffing requirements, communications and delegation of responsibility. Controlling and Problem-Solving entails the monitoring of activities, spotting deviations from the plan and organizing solutions. These management processes create and maintain order and predictability within the organization. Further, they can help an organization be on-time and on budget. Good management controls people by pushing them in the right direction.  On the flip side, Kotter states that leadership is a function of: 

1. Direction Setting
2. Aligning Constituencies
3. Motivating and Inspiring 

Setting the direction is designed to create the vision and strategy. In the 1990 May-June edition of The Harvard Business Review, the article titled “Setting Direction: Lou Gerstner at American Express” describes how Mr. Gerstner seized the opportunity to alter the direction of AMEX through questioning “sacred cows” (long-standing beliefs or practices), implementing a more entrepreneurial culture, hiring risk-takers, and clearly communicating the overall direction. His team responded with entrances into new markets, new product offerings and services and expanded their overseas presence markedly. In Aligning Constituencies, the leader lines up all the relevant stakeholders with the vision and strategies previously created while motivating and inspiring others energizes people to achieve the vision no matter what the obstacle. 

These types of leadership processes can produce dramatic and significant change within an organization while aiding adoption to a challenging or new environment. Leadership should complement management, not replace it. Effective leadership produces useful change through fundamentally sound direction setting. A leader is first and foremost a visionary, not a magician. He/she is also a broad based strategic thinker who is willing to take risks while motivating people by satisfying their basic human needs through empowerment. Since change is a function of leadership, then being able to create highly charged behavior is essential for dealing with change and its associated barriers. The first distinction that needs to be addressed is the difference between Direction Setting (Leadership Element) and Planning (Management Element). 

Managers use planning to create order and eliminate risk, this is usually accomplished in a relatively short time frame where the final objective is to employ a deductive activity to create plans and budgets. Conversely, Direction Setting involves producing change over time which necessarily disrupts the current order and increases the probability of risk and its effects. Furthermore, this element is an activity with a longer time frame focus and is an inductive action that creates vision and strategies. Most leaders realize that their visions of the future should not be firmly fixed, but remain flexible to accommodate change. 

Similarly, Napoleon once stated, “I have conceived of many plans, but I was never free to execute one of them. For all that I held the rudder, and with a strong hand, the waves were always a good deal stronger.” Complete industries can be destroyed or completely altered by changes beyond a leader’s control thus placing tremendous importance on a solid, realizable vision in which an organization emphasizes learning as an on-going process. 

 On a cautionary note, we have seen where direction setting can lead to a lack of closure which is very unsettling to the average manager and disastrous to an inexperienced leader. In an effort to reduce exposure to this pitfall, we suggest that effective direction setters exhibit five consistent traits. (1) Constantly challenge the status quo by asking basic questions and creating the atmosphere for new alternatives. (2) Search for answers for these queries (not give them) and test them against a wide-array of information and proven systems or mechanisms. (3) Exhibit decisiveness, regardless of the endless, broad, and in depth amount of data available to them. Hence, they do not succumb to “analysis paralysis”. Leaders are willing to and even be abstinent about eliminating self-imposed constraints to solve problems. (4) Display flexibility, and not rigidity, concerning decision-making. Leaders are willing to revisit a decision, if necessary, and restructure it. (5)  Leaders who exhibit these traits in setting directions produce the desired actions of the vision and strategies. Direction setting and planning are distinct efforts yet interdependent components.

Without good planning, a vision can lose touch with reality over time. Without solid direction setting, one loses the focus essential for intelligent planning.