The Fundamental Purpose of Leadership

It’s time to question the traditional assumption of leadership’s fundamental purpose. The textbook account focuses on the leader’s role in maximizing employee performance. All the decades of writing about leadership style beginning over 50 years ago focuses on how different styles affect the motivation and productivity of employees. When we question the conventional purpose of leadership and offer a different foundation, we get a very different conception of leadership. Until we recognize the need for a radical shift in perspective, our vision of leadership will remain stuck in the past.

Having an internal focus on employee performance was acceptable for leadership prior to the 1970’s. But since the success of the Japanese commercial invasion, business has increasingly operated in an era of hyper-competition where rapid innovation changes whole markets overnight. In the old days of leadership theory, business was not so competitive. Then, business’s only task was to execute as cost effectively and profitably as possible. Today, there is also the need for businesses to be constantly re-inventing themselves, to be continuously creating new futures. For leaders to be successful now, they must have an external focus.

The new purpose of leaders is to ensure that new futures are created as rapidly as their external markets evolve. All organizations now have two equally important tasks: to deliver today’s results and to create the future. The principle of division of labor suggests that we need two separate functions for these very different tasks. Management needs to be upgraded from a narrowly controlling, mechanistic function to take care of today’s business, leaving leadership to champion changes to enhance competitive advantage.

So, what are the implications of this shift in emphasis? Well, if your sole reason for being is to maximize employee productivity, you need to be in charge of the people whose performance you want to improve. You need a formal position of authority over them. You need the authority to promote, move, develop, train and pay in accordance with merit. People can be motivated by informal leaders but none of the other productivity-enhancing decisions can be made without formal authority.

Not so with the new leadership. Promoting new products, services or better processes can be done by anyone, regardless of their formal roles. Even a consumer group criticizing an existing product line could show leadership from the outside to the organization. This new conception of leadership is the only way to make sense of bottom-up leadership. If leadership is merely the successful promotion of new products, then front-line employees can do it. The Sony employee who invented PlayStation is a good example. He showed bottom-up leadership to the senior executives at Sony whose initial reaction to the idea of PlayStation was to protest that Sony doesn’t do toys.

The role of senior executives is now more multifaceted. They need to both lead and manage. But leadership, as conceived here, has nothing to do with motivating employees to perform better, contrary to the textbook account. So-called transformational leadership became popular because it was felt that employees needed to be really inspired to give of their best. But now, we need to shift everything to do with motivating employees to management, leaving leadership free to promote enhancements to competitive advantage. Why? Because we need a definition of leadership that makes sense of how leadership can be shown bottom-up which has nothing to do with motivating employees to work harder. The sole purpose of leadership, therefore, is to promote new directions. It is management’s job to execute them.

Leaders must have an external focus to be effective; managers can focus internally. Both leadership and management are equally essential organizational functions, but only management is a formal role. Leadership is an informal, occasional act, like creativity, not a role. Senior executives are managers by virtue of their roles, not leaders. If their businesses are operating successfully and don’t need innovation or process improvements to succeed, then these organizations don’t need any leadership. This is a second radical implication of the new vision of leadership, the first one being that leadership has nothing to do with managing people or getting things done through them.

Keep in mind that, if leadership equates to the successful promotion of new products, services or process improvements, and if anyone can do it regardless of position, then employees with no one reporting to them can show leadership. This is a liberating conclusion, but one that has revolutionary implications for our understanding of leadership.

See for more information on this and related topics. Mitch McCrimmon’s latest book, Burn! 7 Leadership Myths in Ashes was published in 2006.

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