My apologies for being offline for a while...
Soon I will finish my "Forgotten Aspects of Leadership" segment with a discussion of Kathryn Schulz's forthcoming book "Being Wrong." Before that, however, I want to write something about capitalism...
Recently, there has been talk in the United States about a newspaper bailout. The “Newspaper Revitalization Act,” sponsored by US Senator Benjamin Cardin (D-MD) proposes to allow newspapers to become nonprofit organizations. (http://cardin.senate.gov/pdfs/newspaper.pdf) By shifting to 501(c)(3), newspapers would be able gain significant tax benefits that for-profit organizations do not have access to. Senator Cardin argues that this is an issue of democracy. In his words, “We are losing our newspaper industry… The economy has caused an immediate problem, but the business model for newspapers, based on circulation and advertising revenue, is broken, and that is a real tragedy for communities across the nation and for our democracy.” He may have a point, and some important scholars on this issue have pointed in a similar direction. For example, in Fighting for Air: The Battle to Control America’s Media, NYU Professor of Sociology, Eric Klinenberg (http://www.amazon.com/reader/080508729X?_encoding=UTF8&ref_=sib%5Fdp%5Fpt#noop) argues that local news is a core feature of democracy (which I agree with) and that the conglomeration of American media has led to news being driven by corporate interests rather than as a public good. So, from this perspective, Senator Cardin might be right: maybe newspapers do have something to do with democracy.
But his bill has little to do with democracy; and little to do with laissez-faire capitalism if the impetus for this bill is coming from the corporate lobby (which it most surely is). My big issue here is in the fact that we have such a confused understanding of capitalism in this country. I would like to raise two issues with respect to this topic. First, we love the idea of free markets and capitalism more generally in this country, but we don’t have the political will for it. Second, there actually *are* examples of newspapers that are being competitive out there. It is just that many of our flagship organizations are not among them, and that is largely because of bad leadership. Propping them up with just perpetuate the horrible leadership that exists in those venues.
On the first point: The last 30 years of US economic history is littered with examples of two dissonant themes: On the one hand, we have a corporate sector advocating deregulation, singing the praises of a laissez-faire market, and criticizing government interference as fundamentally inefficient. On the other hand, we have corporations—and the population—asking for bailouts when they can’t survive the realities of the free markets they have advocated. Although many love the idea of the unfettered free market, we simply do not have the political will for a free market in the US economy. Or perhaps we simply do not understand what a free market is. One of the key aspects of a well-functioning market is the ability of the market to discipline actors who make bad economic decisions. Just as markets can reward risky behavior, they must also be allowed to discipline risky behavior when the bet turns out to be wrong. The incentive system simply cannot work if we reward risky behavior but then bail out the economic actors when they end up on the wrong side of the risky outcome. The irony of our time is that corporations want it both ways: they want a deregulated system so that they can take on increasingly risky behavior in financial markets and then want a government handout when the same risky behavior that those deregulated markets allowed leads to potential bankruptcy.
The recent crises in the financial sector are clearly tied to this push and pull over deregulation and bailouts. The risky behavior that led to the S&L crisis of the late 1980s can clearly be traced to the Garn-St. Germain Depository Institutions Act of 1982, which gave Savings and Loans institutions many of the same opportunities as commercial banks but not the same amount of federal oversight. As a result of this deregulation, S&L’s were able to make very risky loans in real estate without Congress or the Federal Home Loan Banking Board (FHLBB) stepping in to shut them down for those risky loans or insolvency. Eventually the crisis grew to a level that Congress was forced to step in and bring forth an aid package that would cost the American tax payers somewhere between $125 and $160 Billion. What message does it send to the risk-taking actors—who lobbied for deregulation in the first place—if they can take risks and then count on being bailed out by the government?
In the current crisis, the relaxation of the Glass-Steagall Act over the course of the 1990s and the eventual repealing of the Act in 1999 with the passage of the Gramm-Leach-Bliley Financial Services Modernization Act allowed commercial banks to operate in a number of areas (insurance, investment banking, securities) that Glass-Steagall had forbidden. As a result, commercial banks could begin to deal on both sides of the fence: they could lend mortgages to their commercial customers and they could turn these same loans around and securitize them in the form of mortgage-backed securities, selling and trading them on the fast-moving securities markets that were emerging during the 1990s. While everyone was making money, all seemed copacetic. However, banks were now removed from the main incentive to be vigilant about risky borrowing behavior—they now no longer held the note on the house of the individual they loaned to. As a result, there was no disincentive for them to compete for business in a riskier and riskier loan pool. What was the downside? As long as the real estate market continued to rise, everyone would come out ahead; and if it didn’t, they wouldn’t hold the note on the foreclosed home anyway, as that mortgage had long since been packaged with a larger group of mortgages, securitized, and sold off to some other institution (which likely sold it again). Some individuals working in the industry have estimated that, by the time these mortgages had reached the end of their securitization life cycle, they would have been repackaged as parts of new financial instruments as many as 20 times. All the while, the risk assessment agencies that typically assess the viability of these financial instruments had incentives to keep the market booming, and they continued to award AAA ratings without a second thought. This type of risky behavior generated a great deal of wealth; but it was risky behavior nonetheless, and just as these risks yield rewards, they should also be subject to the discipline of the market when the system unravels. By what logic should the individuals gambling at this table receive a bailout?
Many in the industry and in political realms made the case that we had to bail out the banks because (1) massive bankruptcies, like Bear Stearns (if it had been allowed to happen) and Lehman Brothers (which did), would disrupt the economy and even cause a disruption of global markets (for which the US would be blamed); and (2) foreclosures would hurt American consumers, many of whom stand to lose their homes. Which brings us to the second culprit in this crisis: politicians, who also want it both ways. In essence, the politicians want to appease the corporations—many of whom donate significantly to their campaigns—but when it comes time to deal with the results of the economic incentives they have created, they want to protect the American voter from these outcomes. The reality in both cases is that if we let the market work in a truly unfettered fashion, banks would have had the opportunity to record the record profits they have accrued over the last decade, but they would also have to be prepared to bear the consequences of the risky behavior that led to those profits. A painful S&L bankruptcy would have been a powerful lesson as to what can happen without federal oversight in the banking sector; and Bear Stearns’ bankruptcy would be a valuable lesson in the realm of corporate oversight the same way that the debacles of Enron and WorldCom have become important lessons in the realm of lax corporate oversight in other sectors. Individual consumers would certainly have a different attitude about the virtues of an unfettered market if they learned the difficult lesson that risky behavior can bring about foreclosures and even recession. Maybe they would even vote differently.
Now newspapers seem to want the same treatment. Whining over the fact that the changes in technology have put at risk many of our country’s flagship institutions, powerful and influential publicly traded corporations (for example, the New York Times Company) are surely behind Senator Cardin’s move. But this move obfuscates a simple fact that many in the industry know: Arthur Sulzberger has been a terrible leader for the New York Times; but because of his position as chairman of the board and his family’s significant stake in the company, he is protected from the harsh reading that any objective observer would give in assessing on his performance over the last decade. He is responsible for the downfall of the New York Times, and if he doesn’t want that responsibility, he should resign as Chairman of the Board.
There are two views that are often advanced to remove responsibility from the likes of Sulzberger. First, the Internet has destroyed the current model; newspapers cannot survive in the current climate of new technology. Second, conglomeration is destroying news delivery.
The first point is ridiculous. Technological advancement has change the model, but it has not destroyed newspapers. For that to be true, there would need to be no newspapers that are surviving in this climate. But this is completely false. Take for example the media giant Axel Springer (http://www.axelspringer.de/en/index.html): here is a company that is doing very well in the new economic climate. In 2008, under the leadership of Chief Executive Officer Dr. Mathias Döpfner, this media giant, which publishes several of Europe’s most important newspapers, achieved record profitability. They have done this through engaging their senior executive staff in figuring out the trajectory of the new technology and taking advantage of it. If they can do it, why can’t the New York Times Company? To bail out the New York Times at this point would be to destroy the market incentives that are ushering in a new model of news delivery.
On the second point (the Klinenberg point), conglomeration is surely a bad thing. It not only makes corporate interests first and foremost, but also diminishes competition of smaller innovators. But conglomeration and monopolies are part of the logic of capitalism. Even the most libertarian of economists would agree that the Sherman Anti-Trust Act of 1890 was a good thing because it placed competition as the most important aspect of capitalism. Professor Klinenberg is right. And perhaps Senator Cardin is right. But bailing out the newspapers is not the answer here. I would much rather see anti-trust legislation against conglomeration of the news. But to reward poor leadership with a bailout only destroys the incentives of a market economy. Good leaders will see their ways through this. Bad leaders will not. In the end, we will have better newspapers as a result. But if you bail out poor market behavior, no one wins.
As a final anecdote to close off this discussion: a couple of years ago Robert F. Kennedy Jr. came to talk to one of my classes (at NYU-Stern) about business and social responsibility. With decades of liberal activism under his belt and a strong line about advocating regluation and control, Kennedy comes across as a staunch liberal. However, when challenged by one of the students about his position on CAFE standards, Kennedy spoke eloquently about the corporate lobby and the distortions of the market. He said (I'm paraphrasing here), "I think I am probably at my core a more true capitalist than most in this room are. Let's do it. Let's set up a true laissez-faire market economy right now. But if we are going to have a free market, it needs to be truly free--no subsidies for anyone. Period. That means no subsidies for oil, no subsidies for developers building roads, no subsidies for any corporations at all. And if we did that, gas would have cost $12 a gallon a long time ago and we would have had an electric car decades ago, and we wouldn't even need to discuss CAFE standards. The problem is that the corporations are not willing to give up what they get from the government. The want more and more deregulation but they want to keep their subsidies and access to policy influence at the same time." At that moment, the room full of 400 budding neoliberals at Stern had no answer for him.
Next post: On Being Wrong
Showing posts with label Leadership. Show all posts
Showing posts with label Leadership. Show all posts
Friday, October 2, 2009
Thursday, August 20, 2009
Overlooked Aspects of Leadership (Part II): Fear
As a second installment in the “Overlooked Aspects of Leadership” series, I turn once again to the Berlin School Executive MBA theses. Lucia Tarbajovska, Vice President of Marketing Communications at T-Mobile, researched and wrote about fear. Like Craig Markus’ work, this study was a truly original piece of research and writing; indeed, this thesis was awarded the Michael Conrad Award for Best Thesis in the Graduating Class.
Just like with Markus’ work on rage and grace, Tarbajovska’s work on fear delves into the psyche of leadership. Fear is an emotion we are all familiar with, but spend far too little time acknowledging and talking about. Fear of failure; fear of the unknown; fear of disappointing; for some, even fear of succeeding. We all know these experiences, and they shape the way we approach problems, work, relationships, life in fundamental ways. In Tarbajovska’s empirical survey on the topic, she found that nearly 90% of the creative leaders that participated in her survey acknowledged that fear is a critical factor influencing the ways they make decisions and ultimately influencing creativity.
And, for leaders of organizations, the stakes are high. Inasmuch as these experiences and emotions live deep inside of us, they also live deep inside of organizations, and ignored or left unaddressed, they will ultimately drive an organization or a brand toward mediocrity.
Tarbajovska plainly stakes her claim on the relationship between leadership and fear, saying: “Leadership is all about confronting fears and overcoming them. Furthermore, it is not only about overcoming their own fears but fears of people around them, all stakeholders - people they lead directly and the entire employee base, partners, suppliers, shareholders, public etc. And not only that, it is about overcoming the systems that we live in – the structures, the norms, the templates, the processes, the hierarchies, the rules, the guides etc… Most leaders are under a constant pressure of fear of failure that ultimately locks them in a routine and pushes them to comfort zones, to consensus, to mediocre decisions… [Yet] a business environment like [the current economic crisis] requires managers to be courageous. I suggest taking it a step further by adopting courage as a key value of your organization and injecting it into your organizational culture. The courage to listen, act, make mistakes, admit failure – or rather promote it as learning, and most importantly stay the courage is essential to survival in times like these – the times of economic crisis and separates successful businesses from the rest in more stable times.”
In my reading of Tarbajovska’s thesis, there are three key points that come out of the discussion. First, she argues that, with respect to organizations and brands, it is not just general fear that drives us. It is actually the fear to differentiate. If you were to boil down strategy guru Michael Porter’s views on what lies at the core of effective strategy, differentiation would be a central theme. But, according to Tarbajovska, we fear this more than anything else: We are much more comfortable staying within the norms of society and the norms of the competition because there are signals all around us that this is a right and appropriate thing to do. Differentiation is the most important thing, but it is also the thing we fear the most.
Second, for leaders, the challenge is not just overcoming their own fear, it is about creating a culture of courage in the organizations they lead; it is about leading a team or an organization in which all members of that system live the values of fighting fear.
Third, creating an anti-fear culture is as much about organizational design as it is about simply being a fearless leader yourself. Great leaders must think hard about how to design an organizational system that produces and nurtures such a culture. Now Tarbajovska has her own views on how to structure an organization like this—low hierarchy, few rules, forcing people to stretch and rewarding mistakes. But the main insight here is the creative leaders need to think hard about how to structure their organizations to produce a culture of fearlessness.
Creative leaders that can accomplish that are truly great leaders.
Look for the final installment of "Overlooked Aspects of Leadership (Part III): Being Wrong"... Coming soon.
Just like with Markus’ work on rage and grace, Tarbajovska’s work on fear delves into the psyche of leadership. Fear is an emotion we are all familiar with, but spend far too little time acknowledging and talking about. Fear of failure; fear of the unknown; fear of disappointing; for some, even fear of succeeding. We all know these experiences, and they shape the way we approach problems, work, relationships, life in fundamental ways. In Tarbajovska’s empirical survey on the topic, she found that nearly 90% of the creative leaders that participated in her survey acknowledged that fear is a critical factor influencing the ways they make decisions and ultimately influencing creativity.
And, for leaders of organizations, the stakes are high. Inasmuch as these experiences and emotions live deep inside of us, they also live deep inside of organizations, and ignored or left unaddressed, they will ultimately drive an organization or a brand toward mediocrity.
Tarbajovska plainly stakes her claim on the relationship between leadership and fear, saying: “Leadership is all about confronting fears and overcoming them. Furthermore, it is not only about overcoming their own fears but fears of people around them, all stakeholders - people they lead directly and the entire employee base, partners, suppliers, shareholders, public etc. And not only that, it is about overcoming the systems that we live in – the structures, the norms, the templates, the processes, the hierarchies, the rules, the guides etc… Most leaders are under a constant pressure of fear of failure that ultimately locks them in a routine and pushes them to comfort zones, to consensus, to mediocre decisions… [Yet] a business environment like [the current economic crisis] requires managers to be courageous. I suggest taking it a step further by adopting courage as a key value of your organization and injecting it into your organizational culture. The courage to listen, act, make mistakes, admit failure – or rather promote it as learning, and most importantly stay the courage is essential to survival in times like these – the times of economic crisis and separates successful businesses from the rest in more stable times.”
In my reading of Tarbajovska’s thesis, there are three key points that come out of the discussion. First, she argues that, with respect to organizations and brands, it is not just general fear that drives us. It is actually the fear to differentiate. If you were to boil down strategy guru Michael Porter’s views on what lies at the core of effective strategy, differentiation would be a central theme. But, according to Tarbajovska, we fear this more than anything else: We are much more comfortable staying within the norms of society and the norms of the competition because there are signals all around us that this is a right and appropriate thing to do. Differentiation is the most important thing, but it is also the thing we fear the most.
Second, for leaders, the challenge is not just overcoming their own fear, it is about creating a culture of courage in the organizations they lead; it is about leading a team or an organization in which all members of that system live the values of fighting fear.
Third, creating an anti-fear culture is as much about organizational design as it is about simply being a fearless leader yourself. Great leaders must think hard about how to design an organizational system that produces and nurtures such a culture. Now Tarbajovska has her own views on how to structure an organization like this—low hierarchy, few rules, forcing people to stretch and rewarding mistakes. But the main insight here is the creative leaders need to think hard about how to structure their organizations to produce a culture of fearlessness.
Creative leaders that can accomplish that are truly great leaders.
Look for the final installment of "Overlooked Aspects of Leadership (Part III): Being Wrong"... Coming soon.
Wednesday, August 12, 2009
Shifts in Approaches to Leadership
In the August 17, 2009, edition of BusinessWeek, Jack and Suzy Welch’s long-running backpage commentary had been replaced by the sage words of Henry Mintzberg, a management professor at McGill and author of numerous excellent books on the topics of management and leadership. The move brought forth wonderful ideas but also signaled some important changes that are afoot in the study and understanding of leadership in the business world.
In contrast to Jack and Suzy Welch, Henry Mintzberg is a very different kind of authority on leadership. He has always been a scholar and educator that promoted deep thinking about the hard work of organizational structure, process, the right (limited) role for strategic planning, and how to create the right kinds of culture. In addition, he has always struck me as being among the most humble of gurus. One time, several years ago, I had the honor of sharing the stage with him at some event in China; I was there to give a talk about some aspect of economic development in China and he was there to get some quite significant honor. We spent some of the next day together and I found him to be an engaged, intellectually curious, and unassuming figure, especially given his international prominence.
As for substance, Mintzberg’s views voiced in the BusinessWeek commentary, which not surprisingly reflect his larger body of work, are a breath of fresh air. The article, entitled “We’re Overled and Undermanaged: Too many ‘leaders’ fancy themselves above the messy, but crucial, work of managing,” is an excellent treatment of how we need to shift our thinking in how we teach, nurture, train and what we emphasize for leaders. Too often, educators, consultants, corporate boards, and CEOs themselves emphasize the issues of charisma, courage, and vision at the expense of the difficult day-to-day work of mentoring, designing organizational processes, analyzing the structure of the organization, and working toward building the right organizational culture. As Minzberg notes “CEOs [today]… don’t manage so much as deem – pronouncing performance targets… that are supposed to be met by whomever is doing the real managing.” Minzberg goes on to remind us that “American enterprise, so admired around the globe, was not built by the currently fashionable ‘heroic’ leadership but with leaders tangibly engaged in managing – and without today’s bonuses.” There are many ways to think about leadership, but following Minzberg, in my own approach to teaching executives and MBA students, I place much more emphasis on analysis, organizational design and the creation of a culture of innovation. Building a lasting culture of creativity, innovation, and passion that transcends a given leader is the ultimate expression of excellent leadership. But how is this achieved? How do leaders construct truly innovative organizations? I focus below on 3; they are surely many more. But the main thing to notice here is that these are qualities that are as much about rolling up your sleeves and doing the hard work of analyzing environments (and ourselves) and building appropriate organizational processes that align with them.
Understanding Complexity--It is a little too easy to take pot-shots at the fields of strategy and economics right now, but it is relevant for our discussion here, so I must. For three decades, economists have been content to analyze the world through theoretical mathematical models, which are impressively complex in terms of math but horribly simplistic in their assumptions about the real world. Such approaches contributed greatly to the accounting scandals of 2000-01 and the economic meltdown of 2008. However, truly creative leaders recognize that complexity is something to be cherished, examined, analyzed for opportunities; it is not something to be assumed away for the elegance of a theoretical mathematical model. Complexity exists on two levels: (1) the macro-level complexity of the environment in which the organization is embedded; and (2) the micro-level complexity of the human dynamics on which the organization is built. Let's face it: organizations are messy; they are human, organic, political, rife with power struggles and inequalities; and the leaders that face and embrace this fact perform better than those who want to simplify the world and pretend those power struggles or politics don't exist in their organizations. Similarly, those that believe you can simplify the world, that global complexity can be captured in abstract theoretical modeling, are simply missing what is happening in the global economy today.
Analysis and Alignment--In 1977, Harvard Business School Professor, Abraham Zaleznik, set a new course for the field of leadership when he penned the essay “Managers and Leaders: Are They Different?” From that point forward, the field of leadership has been defined around individual personality traits, as visionary, intuitive, inspiring individuals who understand work and interpersonal relationships differently than other people do. What was lost in the personal and individualistic turn in leadership was the importance analysis. In our approach to creative leadership, we shift the discussion away from individualistic traits like charisma, personality, and style. Instead, we emphasize an analytical approach to organizational design focusing on alignment—creating harmony among all of the organization’s component parts. Truly creative leaders do not lead by intuition or charisma but instead by having the patience to take a step back and think analytically about how the complex parts of their organizations fit together. They think deeply and carefully about how to put the structures in place that will produce a culture of innovation and change.
Introspection--Ultimately, the most difficult, yet also the most important, thing for leaders is knowing themselves: knowing their strengths; knowing their weaknesses; knowing their style; knowing the things that tend to set them off or respond in certain (unproductive ways); and being honest about these qualities. The best leaders surround themselves with people who can help to compensate for and balance their qualities.
***
The fact that BusinessWeek replaced Jack and Suzy Welch with Professor Minzberg should probably not be taken as some fundamental shift in business reporting. Who knows, perhaps it is just a one-week guest appearance. Nor is this a dramatically new approach to these issues: scholars like Mintzberg, Mike Tushman, Richie Freedman, and many others have been making this case for years, but in recent years, it seems that the charismatic and heroic leader approach has been winning at least in the popular media and with corporate boards (witness the many ridiculous appointments of CEOs to Fortune 500 companies in the last 10 years). That is why we need to think more about what it takes to be a good leader in today's global economy, and Minzberg's voice is a welcome addition to this conversation (especially in venues like BusinessWeek). It is easy to imagine all the great individual qualities that might help leaders to be effective (courage, charisma, vision). And it is all too often the case that prescriptions for leadership focus on changing individual personalities. But the real key to effective leadership is a deep analytical understanding of the organizations these individuals run; having the courage to embrace the complexity of the world in which the organization is embedded; having the courage understand who you are as a leader and surround yourself with individuals who will complement and compensate for your weaknesses; and having the wisdom to listen to those people. Leadership is hard work and it is much less about powerful speeches than it is about rolling up your sleeves and getting your hands dirty in the details of the organization you are leading.
In contrast to Jack and Suzy Welch, Henry Mintzberg is a very different kind of authority on leadership. He has always been a scholar and educator that promoted deep thinking about the hard work of organizational structure, process, the right (limited) role for strategic planning, and how to create the right kinds of culture. In addition, he has always struck me as being among the most humble of gurus. One time, several years ago, I had the honor of sharing the stage with him at some event in China; I was there to give a talk about some aspect of economic development in China and he was there to get some quite significant honor. We spent some of the next day together and I found him to be an engaged, intellectually curious, and unassuming figure, especially given his international prominence.
As for substance, Mintzberg’s views voiced in the BusinessWeek commentary, which not surprisingly reflect his larger body of work, are a breath of fresh air. The article, entitled “We’re Overled and Undermanaged: Too many ‘leaders’ fancy themselves above the messy, but crucial, work of managing,” is an excellent treatment of how we need to shift our thinking in how we teach, nurture, train and what we emphasize for leaders. Too often, educators, consultants, corporate boards, and CEOs themselves emphasize the issues of charisma, courage, and vision at the expense of the difficult day-to-day work of mentoring, designing organizational processes, analyzing the structure of the organization, and working toward building the right organizational culture. As Minzberg notes “CEOs [today]… don’t manage so much as deem – pronouncing performance targets… that are supposed to be met by whomever is doing the real managing.” Minzberg goes on to remind us that “American enterprise, so admired around the globe, was not built by the currently fashionable ‘heroic’ leadership but with leaders tangibly engaged in managing – and without today’s bonuses.” There are many ways to think about leadership, but following Minzberg, in my own approach to teaching executives and MBA students, I place much more emphasis on analysis, organizational design and the creation of a culture of innovation. Building a lasting culture of creativity, innovation, and passion that transcends a given leader is the ultimate expression of excellent leadership. But how is this achieved? How do leaders construct truly innovative organizations? I focus below on 3; they are surely many more. But the main thing to notice here is that these are qualities that are as much about rolling up your sleeves and doing the hard work of analyzing environments (and ourselves) and building appropriate organizational processes that align with them.
Understanding Complexity--It is a little too easy to take pot-shots at the fields of strategy and economics right now, but it is relevant for our discussion here, so I must. For three decades, economists have been content to analyze the world through theoretical mathematical models, which are impressively complex in terms of math but horribly simplistic in their assumptions about the real world. Such approaches contributed greatly to the accounting scandals of 2000-01 and the economic meltdown of 2008. However, truly creative leaders recognize that complexity is something to be cherished, examined, analyzed for opportunities; it is not something to be assumed away for the elegance of a theoretical mathematical model. Complexity exists on two levels: (1) the macro-level complexity of the environment in which the organization is embedded; and (2) the micro-level complexity of the human dynamics on which the organization is built. Let's face it: organizations are messy; they are human, organic, political, rife with power struggles and inequalities; and the leaders that face and embrace this fact perform better than those who want to simplify the world and pretend those power struggles or politics don't exist in their organizations. Similarly, those that believe you can simplify the world, that global complexity can be captured in abstract theoretical modeling, are simply missing what is happening in the global economy today.
Analysis and Alignment--In 1977, Harvard Business School Professor, Abraham Zaleznik, set a new course for the field of leadership when he penned the essay “Managers and Leaders: Are They Different?” From that point forward, the field of leadership has been defined around individual personality traits, as visionary, intuitive, inspiring individuals who understand work and interpersonal relationships differently than other people do. What was lost in the personal and individualistic turn in leadership was the importance analysis. In our approach to creative leadership, we shift the discussion away from individualistic traits like charisma, personality, and style. Instead, we emphasize an analytical approach to organizational design focusing on alignment—creating harmony among all of the organization’s component parts. Truly creative leaders do not lead by intuition or charisma but instead by having the patience to take a step back and think analytically about how the complex parts of their organizations fit together. They think deeply and carefully about how to put the structures in place that will produce a culture of innovation and change.
Introspection--Ultimately, the most difficult, yet also the most important, thing for leaders is knowing themselves: knowing their strengths; knowing their weaknesses; knowing their style; knowing the things that tend to set them off or respond in certain (unproductive ways); and being honest about these qualities. The best leaders surround themselves with people who can help to compensate for and balance their qualities.
***
The fact that BusinessWeek replaced Jack and Suzy Welch with Professor Minzberg should probably not be taken as some fundamental shift in business reporting. Who knows, perhaps it is just a one-week guest appearance. Nor is this a dramatically new approach to these issues: scholars like Mintzberg, Mike Tushman, Richie Freedman, and many others have been making this case for years, but in recent years, it seems that the charismatic and heroic leader approach has been winning at least in the popular media and with corporate boards (witness the many ridiculous appointments of CEOs to Fortune 500 companies in the last 10 years). That is why we need to think more about what it takes to be a good leader in today's global economy, and Minzberg's voice is a welcome addition to this conversation (especially in venues like BusinessWeek). It is easy to imagine all the great individual qualities that might help leaders to be effective (courage, charisma, vision). And it is all too often the case that prescriptions for leadership focus on changing individual personalities. But the real key to effective leadership is a deep analytical understanding of the organizations these individuals run; having the courage to embrace the complexity of the world in which the organization is embedded; having the courage understand who you are as a leader and surround yourself with individuals who will complement and compensate for your weaknesses; and having the wisdom to listen to those people. Leadership is hard work and it is much less about powerful speeches than it is about rolling up your sleeves and getting your hands dirty in the details of the organization you are leading.
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