Today, modern corporate organizations face compound pressures driven by competition, talent finding and retention, globalization, financial expectations, technology innovation, energy trends, diverse workforces, environmental sustainability, corporate responsibility, the proliferation of the Internet, etc. The bottom line is that maintaining the status-quo or doing marginally better is not a formula for success. Change management and adaptation is ever more necessary to be able to set direction, to identify priorities, to manage complexity, and to deliver exceptional results.
John Kotter, Konosuke Matshushita Professor of Leadership at Harvard maintains that “Most US corporations are over managed and under led.” In essence, today’s managerial jobs require management and leadership skills with varying degrees of focus. The higher we go on the corporate ladder, the greater the demand for leadership ability. Thus, the increasingly fast changing environment we face requires more leadership from more people. To cope with these forces good mastery of leadership and management skills is essential in order to marshal and manage any organization effectively. Hence, the great need to institutionalize leadership development. “Institutionalizing a leadership centered culture–where the business rewards people who successfully develop leaders–is the ultimate act of leadership.” (Kotter 51-65, 1999).
Leadership Differs from Management
Webster’s Third New International Dictionary defines leader as “a person who by force of example or qualities of leadership plays a directing role, wields commanding influence, or has a following in any sphere of activity.” The strength of leadership comes from the enrolment of minds to a common cause or vision, and the release of intrinsic motivation to achieve extraordinary results. This means that anyone in an organization can be a leader, whether or not that individual is formally identified as such. Indeed, informal leaders are extremely important to the effectiveness of most organizations.
Allen Scherr and Michael Jensen (2-4) offered in their recent Barbados Group Working Paper that “a leader is an ordinary human being with both a commitment to deliver a result–whose realization would be remarkable and visionary given the current circumstances–and the integrity to execute on this commitment to accomplish the desired results.” One key idea of this definition is that “integrity” in the sense of leadership includes honoring your word–and that means either keeping your word or acknowledging that one will not be keeping it, and cleaning up any mess that causes for those who were counting on that word being kept.” (Erhard et al. 36).
Kotter defines management as being about coping with complexity, planning and budgeting, organizing and staffing, controlling and problem solving. To this end, he asserted that management involves setting targets and goals, establishing detailed plans for reaching goals, allocating resources, establishing organizational structure, delegating authority and responsibility, monitoring results vs. plan, identifying deviations from plan, and planning and organizing solutions (51-65, 1999). Consequently, what great managers have in common is an appreciation of their strengths as well as an understanding of their limitations. Being aware that performance hinges on how well they figure out the pressures and priorities of their particular job, they find a course that works for them. According to Sternberg “finding this individual path to success is the hallmark of managerial intelligence.” (314-315).
Management is fundamentally about minimizing risk and maximizing adherence to plan and predictability. In comparison, leadership copes with the unknown, the dreams, and the vision that generates breakthrough performance. Accordingly, what one person views as possible may be a pipe dream to another. The subject of leadership is one where the results to be produced are accompanied by greater risk and uncertainty than what is normally considered to be acceptable in the realm of management. A scholarly gem of the Renaissance was Machiavelli’s The Prince (1513/1962). Machiavelli’s thesis is as good today as it was in 1513. It declared that “there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.”
Obviously, both leadership and management are vital for a well-functioning organization. It is critical to emphasize and understand Kotter’s incisive conclusion about the tensions between leadership and management: “. . . even more fundamentally, leadership and management differ in terms of their primary function. The first can produce useful change, the second can create orderly results which keep something working efficiently. This does not mean that management is never associated with change; in tandem with effective leadership, it can help produce a more orderly change process. Nor does this mean that leadership is never associated with order; to the contrary, in tandem with effective management, an effective leadership process can help produce the changes necessary to bring a chaotic situation under control.” (Kotter 7, 1990). This conflict can be useful; however, it is not a trivial exercise. Proper balance is essential for both short-term and long-term success of any business.
Leadership is about being comfortable with change, and understanding that the status quo works against progress in most cases. Every quarter and every month, there is change–things are in constant motion. While others may not be aware of this, leaders assume it. In knowing that change is inevitable, the true leader seeks positive change for a purpose and for the better. Kotter defines leadership as consisting of the following three elements: 1) establishing direction, 2) aligning people, and 3) motivating and inspiring them. This is a great definition but the paper of Allan Scherr and Michael Jensen, adds further insight into the domain of leadership by agreeing with Kotter’s work but adding two more elements: “Communicating breakdowns, and managing breakdowns.” (Scherr, Jensen 4).
Legendary leader, Jack Welch remarked in a WSJ editorial (2004) that after 30 years of leading he knows what leaders look like and act like. His process assesses four essential traits (each one starting with an E, a nice coincidence): 1) great positive Energy, 2) ability to Energize others, 3) Edge or the courage to make tough yes-or-no decisions, and 4) Execution follow through to get the job done. He concluded his assessment with an observation about integrity and general intelligence as necessary attributes to complete the profile of a strong leader type.
As we gather, there is no shortage of leadership definitions. The many dimensions into which leadership has been cast can make the subject ambiguous. Nevertheless, there is adequate similarity among definitions to find common ground. Leadership has been conceived as the exercise of influence, as a function of personality, as a mode of persuasion, as particular behaviors, as a means to achieve future visions, as an approach to induce commitment, as a creative mind set, as an achievement instrument, and as a mixture of such conceptions.
Situational Theories of Leadership
The inability of researchers to recognize conclusively all the dimensions of leadership resulted in the development of four popular situational theories of leadership. These theories propose that the most effective leadership style depends upon situational variables, especially the characteristics of the group and the nature of the task.
Hersey and Blanchard developed a “Situational Leadership” model that harmonized different combinations of task behavior and relationship behavior with the maturity of the followers. Depending on the readiness of the subordinates, the appropriate leadership style is first telling; then selling; then participating; and finally, for highly mature followers, delegating (Vecchio 334-350).
The most extensively researched situational leadership theory is Fred Fiedler’s “Contingency Theory” of leadership. Fiedler used the LPC scale to measure the leader’s orientation toward either the task or the person. The most appropriate leadership style was then determined by assessing three situational variables: whether the relationships between the leader and the members were good or poor, whether the task was structured or unstructured, and whether the power position of the leader was strong or weak. When these three situational variables created an extremely favorable or extremely unfavorable situation, the most effective leadership style was a task-oriented (low LPC) leader. However, a leader with a high concern for interpersonal relationships (high LPC) was more effective in situations where there were intermediate levels of favorableness (Ayman et al. 351-377).
The “Path Goal” model is another situational leadership theory. This theory is derived from expectancy theory and suggests that effective leaders must clarify the goal paths and increase the goal attractiveness for followers. Four distinct leadership styles are proposed in the model: directive, supportive achievement-oriented and participative leadership styles. The most appropriate style depends upon two types of situational factors: the characteristics of the follower and the characteristics of the environment. Three of the most important follower characteristics include the locus of control, authoritarianism, and personal abilities. The three environmental factors include the nature of the task, the formal authority system within the organization, and the group norms and dynamics (House et al. 259-273).
Vroom and Yetton’s “Normative Decision-Making” model is also a situational leadership theory since it identifies the appropriate styles leaders should use in making decisions. The three leadership styles include autocratic decision making, consultative decision making, and group decision making. The decision titles determining which style is most appropriate include such questions as whether the leader has adequate information to make the decision alone, whether the subordinates will accept the goals of the organization, whether subordinates will accept the decision if they do not participate in making it, and whether the decision will produce a controversial solution (Vroom 278).
Although most of the literature on leadership emphasizes the influence of the leader on the group, the influence of the group upon the leader should not be overlooked. The relationship between the leader and the group implies a reciprocal influence. Groups have the capacity to influence the behavior of their leaders by responding selectively to specific leader behaviors. The influence of a leader can also be constrained by several external factors, such as organizational policies, group norms, and individual skills and abilities. Other variables have been found to neutralize or substitute for the influence of a leader, such as the skills and abilities of followers and the nature of the task itself.