What are legitimate and illegitimate measures of leadership?
Leadership and Structural Alignment
We live in a world of broken organizations. They are out of alignment as measured by my Circle of Impact model of leadership.
The dilemma is like the person who knows they need to go on a diet, but just does not have the motivation to do so. What I want to say here builds on what I have written in the past.* This is not a new topic for me.
Leadership culture is the chief reason for this brokenness.
Modern leadership cultures in business, politics, sports, and entertainment are seduced by a culture of simulation. This culture I call The Spectacle of the Real. Leadership functions differently. It isn’t a role or even a measurement focus of impact. It is a role that designates status.
I have found throughout my consulting career that whoever is this “leader” has been chosen based on the perception of the needs of the organization. As a result the leader fills a role that the structure of the organization requires. The measures of this role are less about leadership and more about the management of the company. This has been true for so long that leadership and management are viewed as synonymous.
David Leonhardt’s article on David Gelles book on former General Electric CEO Jack Welch describes this development.
“For decades after World War II, big American companies bent over backward to distribute their profits widely. In General Electric’s 1953 annual report, the company proudly talked about how much it was paying its workers, how its suppliers were benefiting and even how much it paid the government in taxes.
That changed with the ascendance of men like Jack Welch, who took over as chief executive of G.E. in 1981 and ran the company for the next two decades. Under Welch, G.E. unleashed a wave of mass layoffs and factory closures that other companies followed. The trend helped destabilize the American middle class. Profits began flowing not back to workers in the form of higher wages, but to big investors in the form of stock buybacks. And G.E. began doing everything it could to pay as little in taxes as possible. …
Welch transformed G.E. from an industrial company with a loyal employee base into a corporation that made much of its money from its finance division and had a much more transactional relationship with its workers. That served him well during his run as C.E.O., and G.E. did become the most valuable company in the world for a time.
But in the long run, that approach doomed G.E. to failure. The company underinvested in research and development, got hooked on buying other companies to fuel its growth, and its finance division was badly exposed when the financial crisis hit. Things began to unravel almost as soon as Welch retired, and G.E. announced last year it would break itself up.”
The effect of this shift that Gelles attributes to Welch is an uncoupling of the structure from a unified purpose. Welch transformed a company that my grandparents proudly invested in a century ago into a finance-focused operation. As a former GE stockholder, I remember the day when the per-share price dropped below $10. This is an example of how a company fragments into a collection of discrete financial centers for sale to the highest bidder.
I remember the day my father called to say his company was closing. He was on a business trip. His boss called to tell him that the company could not make payroll. Several years before a holding company purchased the company and systematically extracted the financial value of its assets to the point there was nothing left.
The alternative is like a client of mine’s social culture. They survived a twenty-year-long tenure of an executive team that followed Welch’s finance orientation. They did because of “the persistent, residual culture of values that persisted because it resided in the relationships of the people.” Ultimately that historic culture was a more powerful organizing force than a financial orientation.
In many communities, small businesses have closed because of the predatory character of much larger businesses. The problem is not the financial function itself. It is the over-valuing of finance. Or as Bill George, the former C.E.O. of Medtronic remarked about the impact of Jack Welch, “A lot of G.E. leaders were thought to be business geniuses, but they were just cost cutters. And you can’t cost-cut your way to prosperity.”
When product development, customer service, and governance take a back seat to finance, there is a misalignment that will ultimately reveal the weaknesses of the company. It is the same as when the structure of an organization takes precedence over values and purpose creation. The result is the loss of an environment for relationships of respect, trust, and mutuality.
What is Leadership?
It is not my purpose to sound like some old curmudgeon complaining about the world of leadership. I’m not a complainer. I am only speaking about what I see.
What I see is a lot of people who know how to run their organizations, do not know how to lead them.
This is why it is important to talk about what constitutes legitimate and illegitimate measures of leadership.
We need to begin with an understanding of what leadership is and what it isn’t. The conventional thought throughout my almost 70 years of life is that leaders occupy a role and a title within an organizational structure. The result is an assumption that the only measure of leadership is the internal efficiency of the organization. Is the Profit/Loss report a legitimate measure of leadership? Or, is it, as I believe it is, a measure of managerial ability?
Mohamed Al Zarooni writes.
“Manager and leader are two completely different roles, although we often use the terms interchangeably. Managers are facilitators of their team members’ success. They ensure that their people have everything they need to be productive and successful; that they’re well trained, happy and have minimal roadblocks in their path; that they’re being groomed for the next level; that they are recognized for great performance and coached through their challenges.
Conversely, a leader can be anyone on the team who has a particular talent, who is creatively thinking out of the box and has a great idea, who has experience in a certain aspect of the business or project that can prove useful to the manager and the team. A leader leads based on strengths, not titles.”
He points to a Daniel Goleman HBR study of middle managers in 2000 that identified the following types of leaders.
1. The pacesetting leader
2. The authoritative leader
3. The affiliative leader
4. The coaching leader
5. The coercive leader
6. The democratic leader
The problem here is that this is not a holistic understanding of leadership.
Two questions.
How do we measure each as a function of organizational leadership?
What is missing?
Look again at the list above. This version treats leadership as a performance role in the organization. It is a limited role. Are there only six types of leaders? This is the wrong way to see leadership.
In an aligned structure, the organization is a whole entity. It isn’t fragmented into these parts. How often have you had conversations about the silos at work? This is because leadership has been designed to serve the structure of the organization. It serves best those who benefit the most. I believe there is another way.
Leadership as a Function of Human Performance
I see that “all leadership begins with personal initiative to create impact that makes a difference that matters.” This means that everyone in an organization from the CEO all the way down to the maintenance staff can function in a leadership capacity. If everyone can have a leadership impact, then everyone can be measured for their leadership.
As much as I want to celebrate Mohamed Al Zarooni and Daniel Goleman’s perspectives, it does not really change anything. It doesn’t provide a ground for legitimate measures of leadership.
Let’s do a little exercise. Ask these questions about the place where you work.
What has changed over the past three years? How is the company in transition?
What is the impact that the company is having? What is the difference that matters that the company creates every day?
Who is the company impacting? Who should the company be impacting?
What opportunities for impact does the company have right now?
What problems has the company created that inhibit its ability to create impact? What obstacles does the company face?
These are the Five Questions that Everyone Must Ask.
If you and your team were to answer the questions on a weekly basis, you will find that your orientation toward impact grows. More importantly, you will know what to do and what you can stop doing.
The Means and The Ends of Impact
From my observations, most of the measures that we use to define leadership are not the ends of leadership, but rather the means to it. Those means should lead to some change that makes a difference that matters.
What then should be the impact on every worker? Who should be their leadership impact? What is the qualitative difference that they could make?
What should be the impact of every middle manager? Who should they be impacting?
What should be the impact of executives in the C-suite? Who should they be impacting?
An organization’s culture for impact reveals the company’s actual values and purpose. To be absolutely clear, each person in a company should be able to state not only what the values are, but what the impact of those values should be. This is how a persistent, residual culture of values ultimately defines the impact of the company.
This is also why the Culture of Simulation is so insidious. What is the impact of the simulation? The means to that impact is seduction into a belief system that fosters, not the freedom of the individual to take personal initiative to create impact, but rather to submit to the controlling interests of those in power.
Through the Culture of Simulation, every CEO, every National President or Prime Minister, every Governor of a State, and every Mayor of a major city, is telling us that they are responsible for the way the world is. The impact that you experience in your work and life is the product of their leadership. That is if we believe that leadership is a role and a title in an organizational structure.
When they do not accept responsibility, when they point their finger toward someone else or some group, they are then telling us that they have failed in their capacity as the leader of their organization or nation. Casting blame rather than offering constructive criticism displays weakness. It erodes the ground for unifying society to address its crises. The reason the Culture of Simulation exists is to hide the real impact of their leadership which is their greed and lust for power.
This distinguishes between the people who only know how to run their business from those who lead their businesses. To lead is to elevate the capacity of everyone to be a person of impact.
Impact – The Only Legitimate Measure of Leadership
Impact is change.
It is a change that makes a difference that matters. You can only know what matters by being clear about your values and purpose for impact.
If you don’t know what your company’s purpose for impact is?
Ask: What do you want to change?
The crises that we face on a global scale are not accidents. They are the leadership impact of the Culture of Simulation.
So, what should you do?
First, embrace reality by asking what is the impact that we are experiencing.
Second, embrace your people, your network of relationships.
Respect and Trust them.
Train them to be impact leaders.
Equip them to solve problems, communication better, and innovate how they do their work.
Support and celebrate their personal initiatives.
Create a way to be mutually accountable by being clear about our shared values for impact.
Third, do not dream of a better world instead create impact in the areas that are within your reach right now.
What then is a legitimate measure of leadership?
Impact is a change that makes a difference that matters.
Every other measure is just talking around the subject of results.
Note:
* The idea of the brokenness of modern organizations I first developed in my book, Circle of Impact: Taking Personal Initiative To Ignite Change. See Chapter 6 Organizations in Transition. Almost three years later, I returned to the question of organizational brokenness after a conversation with leaders about government corruption. My thoughts are captured in two short books, Seeing Below The Surface of Things: The Brokenness of the Modern Organization and Where Did Trust Go? Restoring Authority and Accountability in Organizations.