For we were born only yesterday and know nothing, and our days on earth are but a shadow.

Book of Job 8:9

In a nutshell

Of all the subjects in The Every Day MBA, leadership holds the greatest promise for both personal learning and organisational development. Our culture has given us a number of iconic ideas and images around leadership, yet we have found it very difficult to agree on one definition. Management organises what is already there and uses this to make plans for what is to come. Leadership, meanwhile, actively steers towards a future that would not just happen by management alone. It is a conscious, deliberate movement from the known to the unexplored and untested. Leadership is relational. It is just as much about followers as it is about leaders.

Because of its transformational potential, I want you to think critically about leadership and this means deliberately questioning some of the assumptions behind the beliefs that you and others hold.

In this chapter you will:

• understand the different ways of defining leadership
• establish a difference between managing and leading
• review the main theories and models of leadership
• contrast the traditional view of the leader with a systemic view of leadership

Why talk about leadership?

It’s a truism that the need for good leadership has never been greater. But no one can deny that our interest in leadership is also at an all-time high. There are three reasons why:

1. It is relevant. Our general belief is that we live in increasingly complex and challenging times. In the next 10, 20 or 30 years, sustainability, economic emergence of the developing world, population growth, poverty and environmental concerns, geo-politics and demands on scarce resources – as well as ideological diversity in management itself – will all require a response.
2. There is a demand. Organisations in emerging economies will be switching from manufacturing to knowledge. Value is now less anchored to tangible assets. As companies grow by acquisition and merger, they will look for ‘figureheads’ who can influence other people’s behaviours.
3. There is also a supply. Organisations need leadership and being placed in the role of leader brings that individual influence and authority, which is a popular idea in our culture. Leadership is flavour of the month and a goal for all aspiring managers. The cult of the leader can have a toxic side, too: leaders can be seen as both the solution and the problem. But perhaps this means we should not look for leadership only in the personality of the leader.

Are you a manager or a leader?

It doesn’t take long for this question to come up at business school. But it’s one that assumes that we already know what sort of a thing leadership is. People have enjoyed debating this since well before anyone started talking about management as a distinct activity and it is fair to say that no one has yet come up with a definitive answer. This chapter will consider the development of leadership, the key concepts and theories, and how they are applied to change in organisations.

Broadly, there are four major perspectives on leadership:

• Authority and hierarchy: This views leadership as granted to those naturally best suited to it. This may be down to certain traits or innate qualities, or simply the product of position in society. Being born into or being naturally suited for leadership is perhaps the oldest view – and it explains why leadership training was once an elite and exclusive type of education.
• Learned competencies: This sees leadership as a profession, and people can and need to be prepared (trained up) to lead others whenever called upon to do so. Different personalities may develop different leadership styles, but it is definitely a learnable skill, even a profession.
• Activities, tasks and practice: Leadership is whatever needs to be done when there is a collective need to overcome a challenge, problem or crisis. In other words, it is a need that brings the leader, not the other way round. There is often a belief that ‘the right person for the task’ is important, so a link to competencies is maintained.
• Systemic: Complexity may look messy, but from a holistic view studying leaders in isolation is half-baked; a bit like studying a marriage only by observing one person. Without followers there are no leaders and vice versa; the concept of leadership makes no sense except in context. Systems thinking suggests that leadership is defined in wider systems.

The first three cover the conventional views of leadership in management today, especially in large organisations, and they have in common that leadership can be understood by studying what leaders do, or who leaders are. In other words, you need to understand the individual. Only the fourth, the systemic view, does not isolate the leader from the context of leadership.

In summary, some theories focus on the skill, tactics and characteristics of people, while others try to understand what leadership is by seeing how it emerges from a context or situation. In both cases, however, the contrast between managing and leading is the next thing to consider.

Management vs. leadership

What people study on an MBA are the tools, techniques and theories for analysing, planning and controlling. The task is for an organisation to perform effectively and efficiently and meet or exceed its goals. This feels solid; it sounds like management. At the same time, MBAs are told that they are also in preparation for leadership in times of change and uncertainty, where flexibility, creativity and ‘out-of-the-box’ thinking are important. This feels less concrete. Leadership is much harder to grasp because it concerns things that do not yet exist. Both management and leadership deal with values as well as value, both address purpose as well as process, and each can claim it aims for achievement as well as attainment. Both happen in the present moment.

My take on this is that the crucial difference comes from leadership being about a future state. Management struggles with the future and acts to minimise unpredictability.

Leadership is found in many parts of life, which is one of the reasons it is difficult to define. In business, the scope of leadership is anything and everything that is a challenge to the stability or future of the organisation. Managers who are leaders are also still managers. Unless you own the company, your management task is first and foremost to protect the interests of the owners, founders or shareholders. A tension comes because leadership is a kind of exploration and this involves risk. Leaders have to be risk takers, of course, but there are limits because the new course must still perform the managerial goal of creating value.

The development of models of leadership

Earlier in the chapter I told you there were four major perspectives on leadership. There are also many models and theories. In the next section I’d like to give you an example of the range available. It’s not a complete list, of course, but all are well established and as you read, you might want to reflect on each from your own experience, or from examples of leadership you are familiar with.

Leadership as authority, hierarchy and innate quality

Trait theory says leaders are leaders because they possess a set of innate qualities and characteristics. ‘Leaders’ are born with these traits: they cannot be developed. This theory dates back to Thomas Carlyle’s ‘Great Man’ theory in the mid-1800s. History, it was said, was the story of the biography of great men (women were almost entirely excluded). This now seems dated, but echoes of trait theory live on in the growing interest in charismatic leadership and in tests such as the ‘Big Five’ personality questionnaire, which assumes innate qualities play a part in our ability to undertake leadership roles. These modern traits are less to do with physical attributes than with innate psychological preferences.

Trait theory relied on a deduction based on inductive observation; it saw successful examples and then drew wider generalisations and predictions based on those. For example, transactional models of leadership, where leadership is based on hierarchical positions of power over subordinates, rely on this logic. Over time, the theories and models have been adjusted, but this view of leadership can become a self-fulfilling concept.

Leadership as learned competencies

If Drucker is the first voice in management writing, veteran scholar Warren Bennis can claim the same for leadership studies. In 1985, with Burt Nanus, he published Leaders, which has set the tone for the subject ever since.¹ Bennis was influenced by the hardships of the Great Depression but also by the series of iconic leaders in the decades following. This formative experience comes across in his four requirements for leadership:

1. An adaptive capacity for being resilient, creative and aware of opportunities.
2. A capacity to engage followers and align them around a common goal.
3. The undertaking of a life-long process of self-awareness.
4. A moral compass or set of principles and convictions.

On top of the subject-specific knowledge each sector or business requires, Bennis is a firm believer that leadership has a moral shape and that it can be learned.

Leadership style is all about behaviours rather than personal characteristics. Leadership is what leaders are able to do and how the leader copes with the balance between concern for the task and concern for people. This model is very popular because it fits easily into existing ideas about the role of management and so is used extensively in organisations. The two sets of concerns translates nicely onto a leadership grid with five styles, developed in the 1960s by Robert Blake and Jane Mouton and shown in Figure 10.1.

FIGURE 10.1 Leadership grid
Source: Adapted from Blake, R. and Mouton, J. (1985) The Managerial Grid III: The key to leadership excellence, Gulf Publishing Co. Reproduced with permission.

The grid began life describing managerial work, so its claim to say something about leadership leaves open the question whether there is any difference between the two.

Action-centred leadership theory is a straightforward framework developed by John Adair. Its simplicity makes it applicable to leadership in any of the functional areas we have covered in management, but especially to strategy. There are three parts to the model: team, task and individual (see Figure 10.2).

The skill of the leader is in balancing their attention among all three things in order to achieve targets while building morale among teams and productivity among individuals. There is an elegant simplicity to the model, which I like, but again it applies to management just as easily as to leadership.

FIGURE 10.2 Adair’s action-centred leadership
Source: Adapted from Adair, J.E. (1973) Action-Centred Leadership, McGraw-Hill Education. Reproduced with permission.

Leadership as activities, tasks and practices

The idea of leadership as a process and not a list of attributes, skills or traits moves the topic closer to a more contextual (and strategic) view. A process suggests that leadership occupies the space between leaders and followers. Leadership can then be more distributed and may appear at many levels. The leader’s role is still multifaceted but is more subtle than earlier models because followers are now just as important to the concept of leadership.

Situational leadership starts from the idea that different situations call for different kinds of leadership. It is an extension of the leadership style model because it says that a leader adapts their style and develops their skills in order to meet the varied needs in each situation. Situational leadership begins to recognise that leaders interact with followers (in fact, there is no leader until there is at least one follower). Based on the work of Paul Hersey and Ken Blanchard, the model puts forward the idea of a connection between the leader and the readiness of the follower that establishes leadership as relational.

There are four leadership styles, each associated with a different context in the management of people, processes and projects. The first of these is directing – appropriate when your followers have high commitment but low competence. This may be typical of the start of employment or kick-off of a new project; sometimes people just need to be shown or told what to do. A second, more supportive, style – coaching – is suitable when your followers already have some experience of what they are doing but still need or look for direction, though in this context coaching often looks a lot like training. As your staff gain in confidence, they can take more responsibility for themselves and their tasks. The third leadership style is when you remain high in terms of being supportive but more hands-off when it comes to you giving direction. Typically, you will intervene either when asked to, or through your own questions. Lastly, at its most developed level, situational leadership requires low levels of support and direction, and you are delegating, trusting that your staff will flag up any issues when they come across them. The implicit idea is that leadership is being transferred downward over time.

Situational leadership is popular in management development because it fits with conventional views of organisations as hierarchical but complex, and also with the widely held opinion that leaders should change to meet changing needs of subordinates. It relies on the leader, however, to make the running. They need to read the situation (and are therefore separate from it) and know exactly the levels of competence and commitment among those lower down in the organisation.

Leadership as humility, service and transformation

Lao Tzu, philosopher and founder of Taoism in China, managed to capture a very modern take on leadership many centuries before it emerged in our post-industrial society:

A leader is best when people barely know he exists, not so good when people obey and acclaim him, worse when they despise him. But of a good leader who talks little when his work is done, his aim fulfilled, they will say: We did it ourselves.²

Several influential theories and models have said much the same.

Level 5 leadership arises from one of the most robust studies of leadership, conducted by Jim Collins, whose book Good to Great ought to be on every manager’s reading list.³ After a longitudinal study of nearly 1,500 companies, what Collins found surprised him. Only 11 companies made the transition from strong performance to consistent outperformance of others in their sector. In every case where this was achieved, the person in charge was not the outgoing, high-profile and larger-than-life character that usually appears as a role model in the media. Such stars may be effective in the short term, but they tend to bring division and personal ego to the organisation. Collins noted that great leaders, in commerce at least, began by surrounding themselves with the right team and then credited those people for any success. Collins also found that great leaders are strong-willed professionally while humble personally. He called these people ‘Level 5’ leaders. They have egos but their energy is focused in service of the organisation and not in praise for themselves (you might think back to the Erikson life cycle in Part 1 and the topic of generativity). Collins found that such leaders had often undergone a personal trauma in which they had learned this life lesson.

Good to great companies:

• confront current reality head-on with the belief that they will survive
• take their time in getting things done – they keep steady and do not swing wildly from one change programme or restructuring to the next
• keep their business model simple – you find what is your passion, do the one thing you are best at, engage the right people in the process. This is sometimes known as the ‘hedgehog concept’, innovating only in line with what you already do well (i.e. the hedgehog knows one thing, the fox many)
• are highly disciplined in rejecting hierarchies and bureaucracy while highly focused on promoting activity, new ideas and entrepreneurship.

Servant leadership is an extension of the logic above. The idea was developed by retired AT&T executive Robert Greenleaf in the 1970s. Servant leadership is seen as part of a participative style of management, where the manager or leader is effective without resorting to hierarchy or authoritative power. A servant leader, according to Larry Spears, influences in 10 ways:⁴

• Listening: being receptive to the group and helping to clarify what they want.
• Empathy: accepting others and seeing things through their eyes.
• Healing: an appreciation of the natural ability of others to be whole.
• Awareness: starting with self-awareness.
• Persuasion: building agreement through sound argument, not coercion.
• Conceptualisation: finding and nurturing vision in self and others.
• Foresight: intuitively understanding past lessons, present realities and the likely outcome of a decision for the future.
• Stewardship: remembering to be in service of the needs of the system.
• Commitment to the growth of people: personal, professional and spiritual.
• Building community: the pursuit of societal justice, well-being and progress and concern for the underprivileged.

A servant organisation puts its people before profits. This contrasts with the conventional view of organisations as places where personal development is a nice-to-have and not a must-have. However, there is some confusion over whether servant leadership is prescriptive (this is what you should be doing) or descriptive (this is what leaders actually do). In addition, the link between the goals of the organisation and the goal of societal change is difficult to identify.

Other concepts in a similar space are authentic leadership and transformational leadership. The authentic leader is a character wished for following the wave of corporate scandals at the turn of the twenty-first century in the United States. The theory behind transformational leadership precedes this and combines the humanistic concerns with employee well-being and empowerment with some metrics around the delivery of change. The leader, in both cases, is a role model for change.

All these theories of leadership locate leadership in the role of a person who is a ‘leader’. They therefore set up a contrast with the role of a person as ‘manager’. It is possible, likely even, that we will always look at (or to) individuals as leaders, but the question of ‘leadership’ may prove to be a bit more complex than this. Can doing nothing also be an act of leadership, for example?

Where is the study of leadership going next? In Chapter 9 I looked at the way that globalising forces are affecting the size and scope of organisations, and there is an obvious connection between this and the readiness and resilience of managers to take on these international leader roles, as well as the readiness of the organisations they work for to rise to new challenges.

Leadership as a systemic phenomenon

A systems view challenges all the assumptions underpinning the last 60 years of theory in leadership development. Every organisation functions as a system. This system has a boundary, but this is not closed. In fact, the organisation knows it exists only because of those relationships with what lies outside the boundary. Open systems are unpredictable and complex and therefore you cannot hope to understand your organisation simply by analysis of its parts. This is true of leadership as well.

Figure 10.3 shows the main contrasts between the analytical and the systems approaches.

Systemic leadership explains how a leader is only one part of the sense making of a wider context. Of course, the concept of leader is real in a social sense – someone will take or be given the role, so this view doesn’t wish to do away with the idea.

Complexity theory says that an organisation is not a closed system with fixed variables and linear processes but rather it is a complex adaptive system (CAS). A CAS is an open system, with too many variables at too many levels to map using conventional analysis. It also means you cannot reduce leadership to the level of an individual. Complexity leadership does, however, provide a model to reflect a concept of leadership as an emergent property distributed in the interactions between the inside and the outside of an organisation. What is also new here is that it includes the random or chance as part of leadership (every open system is subjected to the random). Under the right conditions, says this view, leadership is bound to emerge. Researchers Benyamin Lichtenstein and Donde Plowman identified four conditions for this:⁶

1	A dis-equilibrium state: something happens that is out of the ordinary and this initiates a real imbalance in the system. This sort of crisis is sometimes known as ‘the edge of chaos’.
2	Amplifying actions: when a system is not in equilibrium, small actions or events can create differences that jump across in a non-linear way and produce unexpected changes in other parts. These are ‘positive feedback loops’ (positive here means an injection of energy into the system). If enough of these occur, a threshold of change will eventually be crossed by the system.
3	Self-organisation: under these changing conditions, the system will either collapse or it will reorganise itself into a new order or new state. The system is, in some way, ‘learning’. The process of change here is highly creative (i.e. it is volatile and disruptive), but so eventually negative feedback loops (negative means it is self-sustaining) are needed to balance the positive ones.
4	Stabilising feedback: positive feedback cycles in a system will eventually be dampened by negative ones to some kind of stabilisation. These negative loops are imposed from a higher-level system (e.g. the market). The organisation adjusts to the new situation.

FIGURE 10.3 The contrast between analytical and systemic explanation

In each phase leaders may choose their own actions and behaviours, which are part of the system, too. A leader may embrace and even exaggerate uncertainty when faced with it and they may act to support people in the organisation as they try to make sense of change. The leader may even act to calm things down when the system is ready to return to a steady state. The main difference between complexity leadership and other theories of leadership is that explanation of what happens is found in the way that a system works, not in the way a personality is measured. In fact, complexity leadership is not a recipe of what to do.

Leading change

One name dominates the subject of change as it intersects with conventional ideas of leadership: John Kotter.
Leadership isn’t about dreams and visions, it’s about dealing with the fact, says Kotter, that at least 70 per cent of change projects don’t work. In his research among the relatively small numbers that do, he identified a pattern for success in eight steps, shown in Figure 10.4.⁷

The inclusion of several commonly accepted features of leadership such as tenacity and vision is no surprise, but Kotter has stressed the first step (‘a sense of urgency’) as being the most important to leadership of change. He cautions that at each step there may be pitfalls – complacency or false urgency at the start are unproductive, a failure to build a team or an alliance to overcome resistance to change (people tend to be very conservative when faced with the idea of change) is another, while organisational politics or lack of a clear vision can disrupt a reorganisation or change project. Perhaps the most striking aspect of this (and other change models) is its linear design.

FIGURE 10.4 Kotter’s eight steps of change
Source: http://www.kotterinternational.com/our-principles/changesteps/changesteps, Kotter International. Reproduced with permission.

A systems view, meanwhile, warns us to expect change to be more fluid, turbulent and full of feedback loops (as well as unintended consequences). Some of these aspects appear only later, after the change agent (leader) has moved on. In this case, putting too much store just in the persona of a leader to deliver will result in disappointment. This brings us back to a general theme: learning.

The organisational development (OD) movement of the last 20 years sees leadership as located throughout the system – embedded in the ‘learning organisation’. The original influences for the term ‘learning organisation’ were the work of Donald Schön and Chris Argyris in the 1980s⁸ and Peter Senge’s influential book The Fifth Discipline.⁹ These promoted a systems perspective but failed to challenge the non-systems dogma prevalent in all hierarchical or individualistic versions of leadership.

How do you reorganise and transform without destroying the very thing you want to preserve? This is a real problem faced by everyone who finds themselves drawn to a position of change leadership.

Putting it together: how heroic is leadership?

What leaders do has much in common with what managers do, though in one respect there is a big difference. Perhaps this is the only difference that matters. Management is about trying your best to avoid nasty surprises. In all but the most trivial cases of trial and error, management does not embrace the unknown. But leadership emerges whenever we do not know with absolute certainty what is going to happen next. And because we live in open systems, we really never know what’s going to happen next.

No one seems to have solved the riddle of defining leadership. Like many concepts in management, its definition shifts over time and with the fashions of the age. Our recent attitude has been that if you can’t find a ready-made leader, then at least you can develop one, although complexity theory offers us a chance to look at leadership in a new light. Arguably, the one thing standing between you and leadership is the word ‘leadership’.

Further reading

A classic text:	The Prince by Niccolò Machiavelli (2003), Penguin. A treatise on leadership, change and power written 500 years ago but with plenty to say that is relevant to current topics.
Going deeper:	Good to Great by Jim Collins (2001), Random House Business. One of the best books on leadership.
Watch this:	‘What it takes to be a great leader’, a TED talk from 2013 by researcher Roselinde Torres, who has distilled three questions for the twenty-first century leader: www.ted.com/talks/roselinde_torres _what_it_takes_to_be_a_great_leader

Notes

1 Bennis, W. and Nanus, B. (1986) Leaders: Strategies for taking charge, New Edition, HarperBusiness.

2 Tzu, L. (1989) The Complete Works of Lao Tzu, Seven Star Communications.

3 Collins, J. (2001) Good to Great, Random House Business.

4 Greenleaf, R. and Spears, L. (2002) Servant Leadership: A journey into the nature of legitimate power and greatness, 25th Anniversary Edition, Paulist Press International.

5 www.catalyst.org/knowledge/women-ceos-fortune-1000

6 Lichtenstein, B.B. and Plowman, D.A. (2009) ‘The leadership of emergence: A complex systems leadership theory of emergence at successive organizational levels’, The Leadership Quarterly, 20(4): 617–630.

7 Kotter, J. (2012) Leading Change, with a new preface by the author, Harvard Business Review Press.

8 Argyris, C. and Schön, D. (1995) Organizational Learning: Theory, method and practice, 2nd Edition, Financial Times/Prentice Hall.

9 Senge, P. (2006) The Fifth Discipline: The art and practice of the learning organization, 2nd Edition, Random House Business.