Leadership Perspectives 0754626121, 9780754626121

Citation preview

Leadership Perspectives

Leadership Perspectives

Edited by

Alan Hooper The Centre for Leadership Studies, University of Exeter, UK

First published 2006 by Ashgate Publishing Published 2016 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OXI4 4RN 711 Third Avenue, New York, NY 10017, USA

Routledge is an imprint oJthe Tay/or & Francis Group. an informa business Copyriglu 0 Alan !-Iooper 2006. For copyright of individual articles please refer to the Acknowledgements.

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any rorm or by any electronic, mechanical, or other means, now known or Ilereafier invented, including photocopy ing and recording, or in any information storage or retrieval system, without perm ission in writing from the publishers. Notice: Product or corporate names may be trademarks or registered trademarks, and arc used only ror identification and explanation without intent to infringe. British Library Cataloguing in Publication Data Leadership perspectives I. Lcaderhship I. Hooper. Alan. 1941 658.4'092 Library of Co ngress Control Number: 2006928397 ISBN: 9780754626 121 (hbk)

Contents Acknowledgements Introduction Notes on the Editorial Team PART I

UNDERSTANDING LEADERSHIP

Introduction to Part I 1 John P. Kotter (1990), 'What Leaders Really Do', Harvard Business Review, 90,pp.l03-11. 2 Howard S. Schwartz (1987), 'On the Psychodynamics of Organizational Totalitarianism', Journal of Management, 13, pp. 41-54. 3 Michael Maccoby (2004), 'Narcissistic Leaders: The Incredible Pros, the Inevitable Cons', Harvard Business Review, January, pp. 1-9 [Original pp.92-101]. 4 Jonathan Gosling and Henry Mintzberg (2003), 'The Five Minds of a Manager', Harvard Business Review, November, pp. 1-9 [Original pp. 54-63]. 5 Peter M. Senge (1990), 'The Leader's New Work: Building Learning Organizations', Sloan Management Review, 32, pp. 7-23. PART II

ix xi xiii

3

7 17

31 41

51

RELATIONSHIPS

Introduction to Part II 6 Robert Tannenbaum and Warren H. Schmidt (1973), 'How to Choose a Leadership Pattern', Harvard Business Review, May-June, pp. 3-12. 7 Daniel Goleman (2000), 'Leadership That Gets Results', Harvard Business Review, March-April, pp. 79-90. 8 Chi-Sum Wong and Kenneth S. Law (2002), 'The Effects of Leader and Follower Emotional Intelligence on Performance and Attitude: An Exploratory Study', Leadership Quarterly, 13, pp. 243-74. 9 John Antonakis and Leanne Atwater (2002), 'Leader Distance: A Review and a Proposed Theory', Leadership Quarterly, 13, pp. 673-704. 10 Jay A. Conger (1998), 'The Necessary Art of Persuasion', Harvard Business Review, May-June, pp. 84-95. 11 James Waldroop and Timothy Butler (1996), 'The Executive as Coach', Harvard Business Review, November-December, pp. 111-17. 12 Holly Weeks (200 I), 'Taking the Stress Out of Stressful Conversations', Harvard Business Review, July-August, pp. 113-19.

71 75 85

97 129 161 173 181

Leadership Perspectives

vi

PART III POWER AND LEADERSHIP Introduction to Part III

13 Bertrand Russell (1986), 'The Fonns of Power', in Steven Lukes (ed.), Power: A Radical Review, Basingstoke: Palgrave Macmillan, pp. 19-27. 14 John Kenneth Galbraith (1986), 'Power and Organization', in Steven Lukes (ed.), Power: A Radical Review, Basingstoke: Palgrave Macmillan, pp. 211-28. 15 Robert Dahl (1986), 'Power as the Control of Behavior', in Steven Lukes (ed.), Power: A Radical Review, Basingstoke: Palgrave Macmillan, pp. 37-58. 16 Gareth Morgan (1986), 'Exploring Power', in Gareth Morgan (ed.), Images of Organization, London: Sage Publications, pp. 158-85. 17 David C. McClelland and David H. Burnham (1976), 'Power is the Great Motivator', Harvard Business Review, January, pp. 3-11. 18 Rosabeth Moss Kanter (1979), 'Power Failure in Management Circuits', Harvard Business Review, July-August, pp. 3-12.

189 193 203 221 243 271 281

PART IV LEADERSHIP, IDENTITY AND DIFFERENCE Introduction to Part IV

19 Carl R. Rogers (1967), 'What It Means to Become a Person', in Carl R. Rogers (ed.), On Becoming a Person: A Therapist's View of Psychotherapy, Melksham: Redwood Press, pp. 107-24. 20 Peter F. Drucker (1999), 'Managing Oneself, Harvard Business Review, 77, pp.65-74. 21 Robert Goffee and Gareth Jones (2000), 'Why Should Anyone Be Led By You?' , Harvard Business Review, 78, pp.I-8 [Original pp. 63-70]. 22 Jeffrey Pfeffer (1977), 'The Ambiguity of Leadership', Academy of Management Review, 2, pp. 104-12. 23 Richard A. Barker (2001), 'The Nature of Leadership', Human Relations, 54, pp. 469-94. PART V

293

297 315 325 333 343

IMAGINATION

371 Introduction to Part V 24 Keith Grint (2000), 'The Who Question: Constructing Identity and the Construction of Truth', in Keith Grint (ed.), The Arts of Leadership, Oxford: Oxford University Press, pp. 6-28, 28a, 28b. 375 25 lain L. Mangham (1996), 'Beyond Goffman: Some Notes on Life and Theatre as Art', Studies in Cultures, Organizations and Societies, 2, pp. 31--41. 401 26 Henry Mintzberg (1989), 'Planning on the Left Side, Managing on the Right', in Henry Mintzberg (ed.), Mintzberg on Management, London: Free Press, pp.43-55,55a 413

Leadership Perspectives

vii

27 Gareth Morgan (1993), 'The Theory Behind the Practice', in Gareth Morgan (ed.), Imaginization: New Mindsets of Seeing, Organizing and Managing, London: Sage,pp.271-94,294a,294b,294c,294d. 427 28 Alfred North Whitehead (1933), 'Foresight', in Alfred North Whitehead (ed.), Adventures of Ideas, New York: Macmillan, pp. 87-99. 455 PART VI SPIRITUALITY IN ORGANIZATIONS Introduction to Part VI

29 Philip H. Mirvis (1997), '''Soul Work" in Organizations', Organization Science, 8, pp. 193-206. 30 Willa Bruce and John Novinson (1999), 'Spirituality in Public Service: A Dialogue', Public Administration Review, 59, pp. 163-69. 31 Robert C. Tucker (1970), 'The Theory of Charismatic Leadership', in Dankwart Rustow (ed.), Philosophers and Kings: Studies in Leadership, New York: George Braziller, pp. 69-94. 32 Adrian Fumham (2003), 'Ethics at Work: Money, Spirituality, and Happiness', in Robert A. Giacalone and Carole L. Jurkiewicz (eds), Handbook of Workplace Spirituality and Organizational Performance, New York: M.E. Sharpe, pp. 257-76. 33 Margaret J. Wheatley (2005), 'Leadership in Turbulent Times is Spiritual', in Margaret J. Wheatley (ed.), Finding Our Way, San Francisco: Berrett-Koehler, pp. 125-33. Name Index

471 477 491

499

525

545 555

Acknowledgements The editors and publishers wish to thank the following for permission to use copyright material. Blackwell Publishing for the essays: Bertrand Russell (1986), 'The Fonns of Power', in Steven Lukes (ed.), Power: A Radical Review, Basingstoke: Palgrave Macmillan, pp. 19-27; John Kenneth Galbraith (1986), 'Power and Organization', in Steven Lukes (ed.), Power: A Radical Review, Basingstoke: Palgrave Macmillan, pp. 21128; Robert Dahl (1986), 'Power as the Control of Behavior', in Steven Lukes (ed.), Power: A Radical Review, Basingstoke: Palgrave Macmillan, pp. 37-58; Willa Bruce and John Novinson (1999), 'Spirituality in Public Service: A Dialogue', Public Administration Review, 59, pp. 163-69. Copyright Clearance for the essay: Jeffrey Pfeffer (1977), 'The Ambiguity of Leadership' , Academy of Management Review, 2, pp. 104-12. Copyright © 1977 Academy of Management. Elsevier for the essays: Chi-Sum Wong and Kenneth S. Law (2002), 'The Effects of Leader and Follower Emotional Intelligence on Perfonnance and Attitude: An Exploratory Study', Leadership Quarterly, 13, pp. 243-74. Copyright © 2002 Elsevier Science Inc.; John Antonakis and Leanne Atwater (2002), 'Leader Distance: A Review and a Proposed Theory', Leadership Quarterly, 13, pp. 673-704. Copyright © 2002 Elsevier Science Inc. Harvard Business School Publishing Corporation for the essays: John P. Kotter (1990), 'What Leaders Really Do', Harvard Business Review, 90, pp. 103-1l. Copyright © 1990 Harvard Business School Publishing Corporation. All rights reserved; Michael Maccoby (2004), 'Narcissistic Leaders: The Incredible Pros, the Inevitable Cons', Harvard Business Review, January, pp. 1-9 [Original pp. 92-10 1]. Copyright © 2004 Harvard Business School Publishing Corporation. All rights reserved; Jonathan Gosling and Henry Mintzberg (2003), 'The Five Minds of a Manager', Harvard Business Review, November, pp. 1-9 [Original pp. 54-63]. Copyright © 2003 Harvard Business School Publishing Corporation. All rights reserved; Robert Tannenbaum and Warren H. Schmidt (1973), 'How to Choose a Leadership Pattern', Harvard Business Review, May-June, pp. 3-12. Copyright © 1973 Harvard Business School Publishing Corporation. All rights reserved; Daniel Goleman (2000), 'Leadership that Gets Results', Harvard Business Review, March-April, pp. 79-90. Copyright © 2000 Harvard Business School Publishing Corporation. All rights reserved; Jay A. Conger (1998), 'The Necessary Art of Persuasion' ,Harvard Business Review, May-June, pp. 84-95. Copyright © 1998 Harvard Business School Publishing Corporation. All rights reserved; James Waldroop and Timothy Butler (1996), 'The Executive as Coach', Harvard Business Review, November-December, pp. 111-17. Copyright © 1998 Harvard Business School Publishing Corporation. All rights reserved; Holly Weeks (2001), 'Taking the Stress Out of Stressful Conversations', Harvard

x

Leadership Perspectives

Business Review, July-August, pp. 113-19. Copyright © 2001 Harvard Business School Publishing Corporation. All rights reserved; David C. McClelland and David H. Burnham (1976), 'Power is the Great Motivator' , Harvard Business Review, January, pp. 3-11. Copyright © 1976 Harvard Business School Publishing Corporation. All rights reserved; Rosabeth Moss Kanter (1979), 'Power Failure in Management Circuits', Harvard Business Review, JulyAugust, pp. 3-12. Copyright © 1979 Harvard Business School Publishing Corporation. All rights reserved; Peter F. Drucker (1999), 'Managing Oneself', Harvard Business Review, 77, pp. 65-74. Copyright © 1999 Harvard Business School Publishing Corporation. All rights reserved; Robert Goffee and Gareth Jones (2000), 'Why Should Anyone Be Led By You?', Harvard Business Review, 78, pp.1-8 [Original pp. 63-70]. Copyright © 2000 Harvard Business School Publishing Corporation; All rights reserved.

Houghton Mifflin for the essay: Carl R. Rogers (1967), 'What it Means to Become a Person', in Carl R. Rogers (ed.), On Becoming a Person: A Therapists View of Psychotherapy, Melksham: Redwood Press, pp. 107-24. Copyright © 1961 Carl R. Rogers, renewed 1989 by David E. Rogers and Natalie Rogers. M.E. Sharpe, Inc. for the essay: Adrian Furnham (2003), 'Ethics at Work: Money, Spirituality, and Happiness' , in RobertA. Giacalone and Carole L. Jurkiewicz (eds ), Handbook ofWorkplace Spirituality and Organizational Performance, New York: M.E. Sharpe, pp. 257-76. Oxford University Press for the essay: Keith Grint (2000), 'The Who Question: Constructing Identity and the Construction of Truth', in Keith Grint (ed.), The Arts of Leadership, Oxford: Oxford University Press, pp. 6-28, 28a, 28b. Copyright © 2000 Oxford University Press. Simon & Schuster, Inc. for the essay: Alfred North Whitehead (1933), 'Foresight', in Alfred North Whitehead (ed.), Adventures ofIdeas, New York: Macmillan, pp. 87-99. Taylor & Francis for the essay: lain L. Mangham (1996), 'Beyond Goffman: Some Notes on Life and Theatre as Art', Studies in Cultures, Organizations and Societies, 2, pp. 31--41. Copyright © 1996 OPA (Overseas Publishers Association). Tribune Media Services for the essay: Peter M. Senge (1990), 'The Leader's New Work: Building Learning Organizations', Sloan Management Review, 32, pp. 7-23. Copyright © 1990 Massachusetts Institute of Technology. Margaret Wheatley (2005), 'Leadership in Turbulent Times Is Spiritual', in Margaret J. Wheatley (ed.), Finding Our Way, San Francisco: Berrett-Koehler, pp. 125-33. Copyright © 2005 Margaret Wheatley. Every effort has been made to trace all the copyright holders, but if any have been inadvertently overlooked the publishers will be pleased to make the necessary arrangement at the first opportunity.

Introduction Leadership is such a vast subject that it is quite daunting when a publisher asks you to produce a book containing the best published essays on this topic. However, it is easier to accept this challenge with the help of associates, and [ am greatly indebted to the work of my colleagues at or associated with the Centre for Leadership Studies, University of Exeter, for their assistance in editing this collection. This has been very much a team effort that is, after all, an essential part of leadership. The members of the editorial team were: Group Captain Dan Archer, Professor Peter Case, Professor Jonathan Gosling, Professor Alan Hooper, Mr Pat Lyons, Mr David Pearce, Doctor John Potter and Doctor Martin Wood. The team was most ably supported by Mrs Tricia Doherty. The purpose of this publication is to meet a need of all those who have an interest in leadership, be they students at business schools, academic researchers, leadership consultants or practical leaders. [ have acted in all these capacities, and one of the recurring issues has been what are the key writings on leadership - and where do [ find them? Well, at last, we have a collection of 33 essays and book chapters in one volume. When the editorial team sat down to consider the publication we agreed on two guiding principles, and also acknowledged an overriding practical consideration. First, we agreed that we would only consider essays from peer-reviewedjoumals and self-contained book chapters. This guaranteed that the selection had already been subjected to a rigorous process of peer review and editing. Second, after much discussion, we agreed on six core themes. These six core themes emerged out of a series of detailed and fascinating discussions representing the diverse views of the editorial team. It was agreed that, where possible, each theme should contain some five essays ranging from key classic texts on the original root of the ideas through to recent essays on interpretation and application. This would provide the reader with a full range of essays on a particular theme in one volume - something that has not been done before. After much deliberation, we decided to divide the volume into six parts covering the following themes: Understanding Leadership Relationships Power and Leadership Leadership, Identity and Difference Imagination Spirituality in Organizations Whilst these themes offer a wide view on leadership, and were chosen specifically to cover a broad spectrum, such an approach cannot claim to produce a definitive list of essays. Turning now to the format of the book, we decided to write separate introductions for each of the six core themes. These explain the thinking behind the selection of the various essays for each

xii

Leadership Perspectives

theme and also provide a guide to their key points. It is suggested that the reader cast their eye over these before reading the essays in the relevant parts. As has been mentioned above, this volume does not claim to provide a definitive set of readings. However, it is hoped that this publication will satisfy the need that has been identified and thus make it much easier for people to access some of the best published writing on leadership. A final thought. The renewed interest in the topic of leadership in the past few years has led to an explosion in published works on this intriguing topic. This has led to a dynamic that both refers back to some of the classic essays and also embraces new approaches and ideas. 'Leadership' is thus a 'living' topic that embraces an international population including the academic researcher, the business student and the practical leader. It is therefore hoped that this publication is the first of a series of collected essays on leadership.

Leadership Perspectives

viii

Notes on the Editorial Team Group Captain Dan Archer is a graduate of the University of Exeter's Centre for Leadership Studies MA programme. His specific area of interest lies in the leadership of change and the role of leadership within organizational culture and development, as well as the concept of facilitated leadership exchanges. He has wide experience in leadership development, having been an instructor on Initial Officer Training, and also commander of the Airmen's Command Squadron. Peter Case was Professor of Leadership and Organizational Studies atthe Centre for Leadership Studies, University of Exeter, from 2003 until 2005. He is a sociologist by training and his research interests revolve around the manner in which humans pursue strategies of self-defeat in the organizations they co-create and the means by which such strategies are rationalized. He contributes regularly to management education workshops throughout Europe, and is a chair of the International Standing Conference on Organizational Symbolism. He joined the University of the West of England, Bristol Business School, as Professor of Organization Studies, in September 2005. Jonathan Gosling is Director of the Centre for Leadership Studies and Head of Executive Education School of Business and Economics at the University of Exeter. He has designed and directed development programmes for many companies, focusing in particular on international and rapidly changing businesses. His current research looks at how leadership can foster continuity through tough transitions. Jonathan was co-founder of the International Masters Program in Practicing Management (IMPM), a collaboration of business schools around the world. Alan Hooper is the founder and first Director ofthe Centre for Leadership Studies, University of Exeter. He is also a visiting Professor at British Business School. Formerly a colonel in the Royal Marines, Alan has broad leadership experience at the strategic level and consults widely on leadership and change management with a particular focus on helping people realize their leadership potential. He is the author of four books. Pat Lyons is Chief Executive of Europa Academy and Human Resource Director of Glen cullen Holdings. With a background in Human Resource, Marketing and Commercial Management, his career has encompassed senior positions within several multinational organizations. An experienced leadership development professional, he has a proven track record in creating and delivering high-value and effective business solutions for clients, especially within leadership, team and personal effectiveness projects. He has worked in Europe and Africa with a range of private and public sector organizations, including the University of Exeter, the Open University Business School and the Irish Management Institute. His professional and research interests lie in the areas of leadership, emotion in organizations and team development. David Pearce is an independent coach and facilitator in management and leadership development. He assisted in the founding of Ashridge Consulting, and has been an associate tutor, consultant, coach and facilitator at Ashridge Management College for 25 years. David

xiv

Leadership Perspectives

worked on the creation of a senior management leadership programme at GEC, utilizing action learning principles. This work was captured in the book More than Management Development, Action Learning at GEe, edited by David Casey and David Pearce (AN COM, 1977).

Dr John Potter is a Chartered Psychologist with a PhD in Leadership. His current work is in management development with a particular interest in leadership, corporate culture and teamwork. John specializes in training and development programmes involving the whole workforce and promoting their commitment to the corporate vision and mission. He is joint author, with Alan Hooper, of Intelligent Leadership (Random House, 2000). Dr Martin Wood is a former Programme Director for the Masters Degree in Leadership Studies at the Centre for Leadership Studies, University of Exeter. His research interests include process metaphysics and post-structural approaches to organization theory. In January 2005 he joined the Department of Management Studies at the University of York as a Senior Lecturer in Social Theory and Organization. He has published in top international organization studies, social science and applied health care journals and has also authored significant reports aimed at influencing national practice in the UK National Health Service.

Part I Understanding Leadership

Introduction to Part I Understanding Leadership Alan Hooper 'Leadership' is a word that is used frequently in our everyday lives, and yet there appears to be little common understanding about what it really means. For instance, when we talk about 'leadership' are we referring to the qualities of a particular leader? Are we reflecting on the difference between leadership and management? Or are we talking about the leadership issues in an organization? This lack of clarity about the word 'leadership' is not solely due to the richness of the English language, it is also affected by the changing nature of leadership (such as the shift from autocracy to empowerment), by the constant change of the environment in which leadership operates and also by our growing comprehension about the different aspects ofthis illusive topic. A significant contribution to our growing understanding about leadership has been made by Chris Argyris. In his excellent essay, 'Teaching Smart People How to Learn' (1991), he revealed that the dilemma for companies was the fact that it was the smartest people who found it the hardest to learn. As there are a lot of smart people at the top of organizations, it is therefore hardly surprising that 'understanding' leadership has been difficult. It has also not been helped by the fact that leadership has often been associated with doing - taking decisions and action - rather than with thoughtful reflection. This tendency towards 'single-loop' as opposed to 'double-loop' learning (Argyris, 1991, p.l 00) has led to the perception that there are not many thoughtful leaders. This perception is not true (consider Mahatma Gandhi and Nelson Mandela), but the myth persists. Thankfully, much has been written in the last few years to enable us to gain a better understanding of the nature of leadership. The five essays in Part I explore this topic by examining the difference between leadership and management; managerial mindsets; narcissism; organizational totalitarianism; and the learning organization. In the first essay John Kotter points out that leadership and management are both distinctive and complementary systems - and that not everyone can be good at both. Kotter's distinction between the two is that' [m ]anagement is about coping with complexity' whereas' Leadership, by contrast, is about coping with change' (p. 8). He then goes on to discuss in some detail the different processes between leadership and management (for example, setting a direction versus planning and budgeting; motivating people versus controlling and problem-solving). His major contribution is the explanation of the distinctive leadership and management roles in practical terms, reinforced with appropriate case studies. This, in tum, shows why it is difficult to be good at both. However, Kotter points out (p. 13) that the best companies have an ability to develop outstanding 'leader-managers' by introducing significant challenges early in their careers, and providing continual growth opportunities as these individuals progress up the managerial ladder.

Leadership Perspectives

4

In Chapter 4 Jonathan Gosling and Henry Mintzberg agree with Kotter that management is complicated and also stress that 'the separation of management from leadership is dangerous' (p. 41). Their significant contribution to the understanding of leadership is their finding that in order to focus not only on what needs to be done, but also on how they have to think, managers need various 'mindsets'. They stress the need for both action and reflection, which involves five perspectives: • • • • •

Managing Managing Managing Managing Managing

self: the reflective mind-set organisations: the analytic mind-set context: the worldly mind-set relationships: the collaborative mind-set change: the action mind-set (p. 42).

This essay takes the thinking a step further than Kotter in that it addresses the difficult areas of leadership and management and acknowledges the complexity. In particular, Gosling and Mintzberg challenge some of the accepted conventions ('the problem for many managers today ... is not a lack of analysis but too much of it - at least, too much conventional analysis' (p. 45)); point out the realities ('[t]his is a world made up of edges and boundaries, like a patchwork' (p. 46)); and indicate how to achieve success by 'moving towards a more engaging style. Engaging managers listen more than they talk' (p. 47). Their recipe for success in the action mindset 'is to mobilize energy around those things that need changing, while being careful to maintain the rest' (p. 48). The problem is that, as sound as this advice is, those people who oppose change tend to maintain the status quo with a persistent and annoying stubbornness. However, Gosling and Mintzberg stress the need to consider the five mindsets as a whole and point out that' [e ]ffective organizations tailor handsome results out of the woven mindsets of their managers' (p. 49). This poetic language is in contrast to the world of the superstar CEOs. In Chapter 3 Michael Maccoby explores the characteristics of narcissistic leaders who are egotistical and self-promoting, with larger-than-life personalities. Throughout history such individuals have shaped the destiny of countries and organizations through their vision and their ability to inspire people. These are the leaders that people talk about. They fascinate us because it is difficult to understand why they are so effective, especially as many seem to lack empathy. It is in helping us to understand narcissistic leaders that Maccoby's work is so useful, especially because such individuals can be dangerous for organizations. Maccoby provides three reasons why business leaders have higher profiles today: first, the fact that nowadays business plays a bigger role in our lives; second, the enormous changes in the business world, which call for more visionary leadership; and, third, the change in the personality of strategic leaders at the top (pp. 31-32). He goes on to explain that there are two types of narcissism: 'productive' and 'non-productive', and then considers their strengths and weaknesses. The strengths are well understood (for example, great vision and an ability to attract followers) but the weaknesses are less so, and are therefore worth exploring because these can be the root cause offailure. Maccoby identifies these as being sensitive to criticism, being poor listeners, lacking empathy, distaste for mentoring and an intense desire to compete (pp.

Leadership Perspectives

5

35-37). These characteristics could be considered to be typical of many individualistic leaders which, in excess, could lead to self-destruction. Maccoby's essay includes some useful advice for how such leaders can avoid the traps, and how others can best work with them. Given the energy which surrounds such individuals and the significant impact they can have on organizations, for good or ill, it is easy to see why the Harvard Business Review included this essay in both its Best of HBR in 2000 and Inside the Mind of the Leader edition in 2004. Narcissism also features in Howard Schwartz's essay (Chapter 2). Here, the emphasis switches to the organization, and Schwartz's thesis is based on the premise that 'the perfect organization' does not exist, but because people fail to accept that fact, many organizations delude themselves, which is both dangerous and non-productive. Such organizations tend to live out the narcissistic fantasies of those in power (p. 17). An extreme example ofthis was the Nazi party where officials wielded power 'even over their nominal superiors through their capacity for denunciation' (p. 23). Such self-delusion can lead to those at or near the top of the hierarchy being perceived as representing 'the organizational ideal'. The fantasy is played out through 'passivity and slavishness, shamefulness, cynicism, loneliness' (p. 17). All ofthis can have a real impact on output because 'in the totalitarian organization, productive work comes to be less important than the maintenance of narcissistic fantasy' (p. 28). There are many organizations with these characteristics, and Schwartz helps us to understand why this is so. The final essay in Part I has made a major contribution to our understanding ofthe 'learning organization.' At the beginning of his essay, Peter Senge points out that 'superior performance depends on superior learning' (p. 51), and that this develops effectively within an organization which is not only inquisitive, but also generates and adapts its learning, constantly adjusting to the changing environment. This dynamism requires leadership, but a different type to that of the past in which the emphasis has been on 'heroes - great men (and occasionally women) who rise to the fore in times of crisis' (p. 52-53). In contrast, leadership in learning organizations requires a more subtle and adaptive approach. Senge then explains that the key to a learning organization is leadership - and this starts with the creative tension between the vision and current reality (p. 53). This requires leaders to adopt the critical roles of designer, teacher and steward. These three roles are explained in detail, as are the skills and tools required to achieve the appropriate kind of leadership. In this essay, Senge brings together very effectively the essential thinking of the late 1980s and early 1990s, which has since become the cornerstone of effective leadership (namely, leader as teacher and steward, building a shared vision, systems thinking, coaching and so on). It is significant that the organizations that have managed change best in the last decade (such as BP, GE and the British military) are those that have become true 'learning organizations'. The key is proper empowerment which is well summarized at the end of the essay in the words of Lao Tsu: The great leader is he who the people say 'We did it ourselves.' (p. 66)

This section on 'Understanding Leadership' is not all-embracing (that would be impossible), but the five selected essays give us an insight into key aspects of leadership and thus enable us to have a better understanding of this complicated, illusive and fascinating subject.

6

Leadership Perspectives

Reference Argyris, Chris (1991), 'Teaching Smart People How to Learn', Harvard Business Review, May-June, pp.99-109.

[1] Good management controls complexity; effective leadership producesproduceschange.

What Leaders Really Do by John P. Kotter Leadership is different from management, but not for the reasons most people think. Leadership isn't mystical and mysterious. It has nothing to do with having "charisma" or other exotic personality traits. It is not the province of a chosen few. Nor is leadership necessarily better than management or a replacement for it. Rather, leadership and management are two distinctive and complementary systems of action. Each has its own function and characteristic activities. Both are necessary for success in an increasingly complex and volatile business environment. Most U.S. corporations today are overmanaged and underled. They need to develop their capacity to exercise leadership. Successful corporations don't wait for leaders to come along. They actively seek out peofohn P Kotter is professor of organizational behavior at the Harvard Business School and th e author of The General Managers (Free Press, 1982), Power and Influence (Free Press , 1985), and The Leadership Factor (Fre e Press, 1988). His most recent book is A Force for Change: How Leadership Differs from Management (Free Press, 1990) .

pIe with leadership potential and expose them to career experiences designed to develop that potential. Indeed, with careful selection, nurturing, and encouragement, dozens of people can play important leadership roles in a business organization.

I

Leadership complements management; it doesn't replace it.

But while improving their ability to lead, companies should remember that strong leadership with weak management is no better, and is sometimes actually worse, than the reverse. The real challenge is to combine strong leadership and strong management and use each to balance the other. Of course, not everyone can be good at both leading and managing. Some people have the capacity to become excellent managers but not strong leaders. Others have greatleadership potential but, for a variety of

8

Leadership Perspectives LEADERS

reasons, have great difficulty becoming strong managers. Smart companies value both kinds of people and work hard to make them a part of the team. But when it comes to preparing people for executive jobs, such companies rightly ignore the recent literature that says people cannot manage and lead. They try to develop leader-managers. Once companies understand the fundamental difference between leadership and management, they can begin to groom their top people to provide both. .

The Difference Between Management and Leadership Management is about coping with complexity. Its practices and procedures are largely a response to one of the most significant developments of the twentieth century: the emergence of large organizations. Without good management, complex enterprises tend to become chaotic in ways that threaten their very existence. Good management brings a degree of order and consistency to key dimensions like the quality and profitability of products. Leadership, by contrast, is about coping with change. Part of the reason it has become so important in recent years is that the business world has become more competitive and more volatile. Faster technological change, greater international competition, the deregulation of markets, overcapacity in capitalintensive industries, an unstable oil cartel, raiders with junk bonds, and the changing demographics of the work force are among the many factors that have contributed to this shift. The net result is that doing what was done yesterday, or doing it S% better, is no longer a formula for success. Major changes are more and more necessary to survive and compete effectively in this new environment. More change always demands more leadership. Consider a simple military analogy: a peacetime army can usually survive with good administration and management up and down the hierarchy, coupled with good leadership concentrated at the very top. A wartime army, however, needs competent leadership at all levels. No one yet has figured out how to manage people effectively into battle; they must be led. These different functions-coping with complexity and coping with change-shape the characteristic activities of management and leadership. Each system of action involves deciding what needs to be done, creating networks of people and relationships that can accomplish an agenda, and then trying to ensure that those people actually do the job. But each accomplishes these three tasks in different ways. 104

Companies manage complexity first by planning and budgeting- setting targets or goals for the future (typically for the next month or year), establishing detailed steps for achieving those targets, and then allocating resources to accomplish those plans. By contrast, leading an organization to constructive change begins by setting a direction - developing a vision of the future (often the distant future) along with strategies for producing the changes needed to achieve that vision. Management develops the capacity to achieve its plan by organizing and staffing-creating an organizational structure and set of jobs for accomplishing plan requirements, staffing the jobs with qualified individuals, communicating the plan to those people, delegating responsibility for carrying out the plan, and devising systems to monitor implementation. The equivalent leadership activity, however, is aligning people. This means communicating the new direction to those who can create coalitions that understand the vision and are committed to its achievement. Finally, management ensures plan accomplishment by controlling and problem solving-monitoring results versus the plan in some detail, both formally and informally, by means of reports, meetings, and other tools; identifying deviations; and then planning and organizing to solve the problems. But for leadership, achieving a vision requires motivating and inspiring-keeping people moving in the right direction, despite major obstacles to change, by appealing to basic but often untapped human needs, values, and emotions. A closer examination of each of these activities will help clarify the skills leaders need.

Setting a Direction VS. Planning and Budgeting Since the function of leadership is to produce change, setting the direction of that change is fundamental to leadership. Setting direction is never the same as planning or even long-term planning, although people often confuse the two. Planning is a management process, deductive in nature and designed to produce orderly results, not change. Setting a direction is more inductive. Leaders gather a broad range of data and look for patterns, relationships, and linkages that help explain things. What's more, the direction-setting aspect of leadership does not produce plans; it creates vision and strategies. These describe a business, technology, or corporate culture in terms of what it HARVARD BUS[NESS REVlEW

May-Tune 1990

Leadership Perspectives should become over the long term and articulate a feasible way of achieving this goal. Most discussions of vision have a tendency to degenerate into the mystical. The implication is that a vision is something mysterious that mere mortals, even talented ones, could never hope to have. But developing good business direction isn't magic. It is a tough, sometimes exhausting process of gathering and analyzing information. People who articulate such visions aren't magicians but broadbased strategic thinkers who are willing to take risks. Nor do visions and strategies have to be brilliantly innovative; in fact, some of the best are not. Effective business visions regularly have an almost mundane quality, usually consisting of ideas that are already well known. The particular combination or patterning of the ideas may be new, but sometimes even that is not the case. For example, when CEO Jan Carlzon articulated his vision to make Scandinavian Airline Systems ISAS I the best airline in the world for the frequent business traveler, he was not saying anything that everyone in the airline industry didn't already know. Business travelers fly more consistently than other market segments and are generally willing to pay higher fares. Thus focusing on business customers offers an airline the possibility of high margins, steady business, and considerable growth. But in an industry known more for bureaucracy than vision, no company had ever put these simple ideas together and dedicated itself to implementing them. SAS did, and it worked. What's crucial about a vision is not its or(ginality but how well it serves the interests of important constituencies - customers, stockholders, employees -and how easily it can be translated into a realistic competitive strategy. Bad visions tend to ignore the legitimate needs and rights of important constituencies-favoring, say, employees over customers or stockholders. Or they are strategically unsound. When a company that has never been better than a weak competitor in an industry suddenly starts talking about becoming number one, that is a pipe dream, not a vision. One of the most frequent mistakes that overmanaged and underled corporations make is to embrace "long-term planning" as a panacea for their lack of direction and inability to adapt to an increasingly competitive and dynamic business environment. But such an approach misinterprets the nature of direction setting and can never work. Long-term planning is always time consuming. Whenever something unexpected happens, plans have to be redone. In a dynamic business environment, the unexpected often becomes the no=, and HARVARD BUSINESS REVIEW

May·June 1990

9

long-term planning can become an extraordinarily burdensome activity. This is why most successful corporations limit the time frame of their planning activities. Indeed, some even consider " long-term planning" a contradiction in terms. In a company without direction, even short-term planning can become a black hole capable of absorbing an infinite amount of time and energy. With no vision and strategy to provide constraints around the planning process or to guide it, every eventuality deserves a plan. Under these circumstances, contingency planning can go on forever, draining time and attention from far more essential activities, yet without ever providing the clear sense of direction that a company desperately needs. After awhile, managers inevitably become cynical about all this, and the planning process can degenerate into a highly politicizedgame. Planning works best not as a substitute for direction setting but as a complement to it. A competent planning process serves as a useful reality check on direction-setting activities. Likewise, a competent direction-setting process provides a focus in which planning can then be realistically carried out. It helps clarify what kind of planning is essential and what kind is irrelevant.

Aligning People VS. Organizing and Staffing A central feature of modem organizations is interdependence, where no one has complete autonomy, where most employees are tied to many others by their work, technology, management systems, and hierarchy. These linkages present a special challenge when organizations attempt to change. Unless many individuals line up and move together in the same direction, people will tend to fall all over one another. To executives who are overeducated in management and undereducated in leadership, the idea of getting people moving in the same direction appears to be an organizational problem. What executives need to do, however, is not organize people but align them. Managers "organize" to create human systems that can impleinent plans as precisely and efficiently as possible. Typically, this requires a number of potentially complex decisi ons. A company must choose a structure of jobs and reporting relationships, staff it with individuals suited to the jobs, provide training for those who need it, communicate plans to the work force, and decide how much authority to delegate and to whom. Economic incentives also need to be constructed to accomplish the 105

10

Leadership Perspectives

Setting Direction: Lou Gerstner at American Express When Lou Gerstner became president of the Travel Related Services ITRS) arm at American Express in 1979, the unit was faCing one of its biggest challenges in AmEx's 130-year history. Hundreds of banks were offering or planning to introduce credit cards through Visa and MasterC~rd that would compete with the American Express card. And more than two dozen financial service firms were coming into the traveler's checks business. In a mature marketplace, this increase in competition usually reduces margins and prohibits growth. But that was not how Gerstner saw the business. Before joining American Express, he had spent five years as a consultant to TRS, analyzing the money-losing travel division and the increasingly competitive card operation. Gerstner and his team asked fundamental questions about the economics, market, and competition and developed a deep understanding of the business. In the process, he began to craft a vision of TRS that looked nothing like a 130-year-old company in a mature industry. Gerstner thought TRS had the potential to become a dynamic and growing enterprise, despite the onslaught of Visa and MasterCard competition from thousands of banks. The key was to focus on the global marketplace and, specifically, on the relatively affluent customer American Express had been traditionally serving with top-of-theline products. By further segmenting this market, aggressively developing a broad range of new products and services, and investing to increase productivity and to lower costs, TRS could provide the best service possible to customers who had enough discretionary income to buy many more services from . TRS than they had in the past. Within a week of his appointment, Gerstner brought together the people running the card organization and questioned all the principles by which they conducted their business. In particular, he challenged two Widely shared beliefs - that the division should have only one product, the green card, aud that this product was Iimi ted in potential for growth and innovation.

106

Gerstner also moved quickly to develop a more entrepreneurial culture, to hire and train people who would thrive in it, and to clearly communicate to them the overall direction. He and other top managers rewarded intelligent risk taking. To make entrepreneurship easier, they discouraged unnecessary bureaucracy. They also upgraded hiring standards and created the TRS Graduate Management Program, which offered high-potential young people special training, an enriched set of experiences, and an unusual degree of exposure to people in top management. To encourage risk taking among all TRS employees, Gerstner also established something called the Great Performers program to recognize and reward truly exceptional customer service, a central tenet in the organization's vision. These initiatives led quickly to new markets, products, and services. TRS expanded its overseas presence dramatically. By 1988, AmEx cards were issued in 29 currencies las opposed to only 11 a decade earlier). The unit also focused aggressively on two market segments that had historically received little attention: college smdents and women. In 1981, TRS combined its card and travel-service capabilities to offer corporate clients a unified system to monitor and control travel expenses. And by 1988, AmEx had grown to become the fifth largest direct-mail merchant in the United States. Other new products and services included 90-day insurance on all purchases made with the AmEx card, a Platinum American Express card, and a revolVing credit card known as Optima. In 1988, the company also switched to image-processing technology for billing, producing a more convenient monthly statement for customers and reducing billing costs by 25%. As a result of these innovations, TRS's net income increased a phenomenal 500% between 1978 and 1987 -a compounded annual rate of about 18%. The business outperformed many so-called high-techl high-growth companies. With a 1988 return on equity of 28%, it also outperformed most lowgrowth but high-profit businesses.

HARVARD BUSINESS REVIEW May-June 1990

Leadership Perspectives

11

LEADERS

plan, as well as systems to monitor its implementation. These organizational judgments are much like architectural decisions. It's a question of fit within a particular context. Aligning is different. It is more of a communications challenge than a design problem. First, aligning invariably involves talking to many more individuals than organizing does. The target population can involve not only a manager's subordinates but also bosses, peers, staff in other parts of the organization, as well as suppliers, governmental officials, or even customers. Anyone who can help implement the vision and strategies or who can block implementation is relevant. Trying to get people to comprehend a vision of an alternative future is also a communications challenge of a completely different magnitude from organizing them to fulfill a short-te= plan. It's much like the difference between a football quarterback attempting to describe to his team the next two or three plays versus his trying to explain to them a totally new approach to the game to be used in the second half of the season. Whether delivered with many words or a few carefully chosen symbols, such messages are not necessarily accepted just because they are understood. Another big challenge in leadership efforts is credibility - getting people to believe the message. Many things contribute to credibility: the track record of the person delivering the message, the content of the message itself, the co=unicator's reputation for integrity and trustworthiness, and the consistency between words and deeds. Finally, aligning leads to empowerment in a way that organizing rarely does. One of the reasons some organizations have difficulty adjusting to rapid changes in markets or technology is that so many people in those companies feel relatively powerless. They have learned from experience that even if they correctly perceive important external changes and

Management controls people by pushing them in the right direction; leadership motivates them by satisfying basic human needs. then initiate appropriate actions, they are vulnerable to someone higher up who does not like what they have done. Reprimands can take many different fo=s: "That's against policy" or "We can't afford it" or "Shut up and do as you're told!' HARVARD BUSINESS REVlEW May-june 1990

Alignment helps overcome this problem by empowering people in at least two ways. First, when a clear sense of direction has been communicated throughout an organization, lower level employees can initiate actions without the same degree of vulnerability. As long as their behavior is consistent with the vision, superiors will have more difficulty reprimanding them. Second, because everyone is aiming at the same target, the probability is less that one person's initiative will be stalled when it comes into conflict with someone else's.

Motivating People vs. Controlling and Problem Solving Since change is the function of leadership, being able to generate highly energized behavior is important for coping with the inevitable barriers to change. Just as direction setting identifies an appropriate path for movement and just as effective alignment gets people moving down that path, successful motivation ensures that they will have the energy to overcome obstacles. According to the logic of management, control mechanisms compare system behavior with the plan and take action when a deviation is detected. In a well-managed factory, for example, this means the planning process establishes sensible quality targets, the organizing process builds an organization that can achieve those targets, and a control process makes sure that quality lapses are spotted immediately, not in 30 or 60 days, and corrected. For some of the same reasons that control is so central to management, highly motivated or inspired behavior is almost irrelevant. Managerial processes must be as close as possible to fail-safe and risk-free. That means they cannot be dependent on the unusual or hard to obtain. The whole purpose of systems and structures is to help no=al people who behave in normal ways to complete routine jobs successfully, day after day. It's not exciting or glamorous. But that's management. Leadership is different. Achieving grand visions always requires an occasional burst of energy. Motivation and inspiration energize people, not by pushing them in the right direction as control mechanisms do but by satisfying basic human needs for achievement, a sense of belonging, recognition, selfesteem, a feeling of control over one's life, and the ability to live up to one's ideals. Such feelings touch us deeply and elicit a powerful response. Good leaders motivate people in a variety of ways. First, they always articulate the organization's vision 107

12

Leadership Perspectives

Aligning People: Chuck Trowbridge and Bob Crandall af Eastman Kodak Eastman Kodak entered the copy business in the early 1970s, concentrating on technically sophisticated machines that sold, on average, for about $60,000 each. Over the next decade, this business grew to nearly $1 billion in revenues. But costs were high, profits were hard to find, and problems were nearly everywhere. In 1984, Kodak had to write off $40 million in inventory. Most people at the company knew there were problems, but they couldn't agree on how to solve them. So, in his first two months as general manager of the new copy products group, established in 1984, Chuck Trowbridge met with nearly every key person inside his group, as well as with people elsewhere at Kodak who could be important to the copier business. An especially crucial area was the engineering and manufacturing organization' headed by Bob Crandall. Trowbridge and Crandall's vision for engineering and manufacturing was simple: to become a world-class manufacturing operation and to create a less bureaucratic and more decentralized organization. Still, this message was difficult to convey because it was such a radical departure from previous communications, not only in the copy products group but throughout most of Kodak. So Crandall set up dozens of vehicles to emphasize the new direction and align people to it: weekly meetings with his own 12 direct reports; monthly" copy product forums" in which a different employee from each of his departments would meet with him as a group; quarterly meetings with all 100 of his supervisors to discuss recent improvements and new projects to achieve still better results; and quarterly "State of the Department" meetings, where his managers met with everybody in their own departments. Once a month, Crandall and all those who reported to him would also meet with 80 to 100 people from some area of his organization to discuss anything they wanted. To align his biggest supplier - the

108

Kodak Apparatus Division, which supplied onethird of the parts used in design and manufacturing-he and his managers met with the top management of that group over lunch every Thursday. More recently, he has created a format called "business meetings," where his managers meet with 12 to 20 people on a specific topic, such as inventory or master scheduling. The goal is to get all of his 1,500 employees in at least one of these focused business meetings each year. Trowbridge and Crandall also enlisted written communication in their cause. A four- to eight-page "Copy Products Journal" was sent to employees once a month. A program called "Dialog Letters" gave employees the opportunity to anonymously ask questions of Crandall and his top managers and be guaranteed a reply. But the most visible, and powerful, form of written communication were the charts. In a main hallway near the cafeteria, these huge charts vividly reported the quality, cost, and delivery results for each product, measured against difficult targets. A hundred smaller versions of these charts were scattered throughout the manufacturing area, reporting quality levels and costs for specific work groups. Results of this intensive alignment process began to appear within six months and still more after a year. These successes made the message more credible and helped get more people on board. Between 1984 and 1988, quality on one of the main product lines increased nearly one-hundredfold. Defects per unit went from 30 to 0.3. Over a three-year period, costs on another product line went down nearly 24%. Deliveries on schedule increased from 82% in 1985 to 95% in 1987. Inventory levels dropped by over 50% between 1984 and 1988, even though the volume of products was increasing. And productivity; measured in units per manufacturing employee, more than doubled between 1985 and 1988.

HARVARD BUSINESS REVIEW May-June 1990

Leadership Perspectives

13

LEADERS

in a manner that stresses the values of the audience they are addressing. This makes the work important to those individuals. Leaders also regularly involve people in deciding how to achieve the organization's vision lor the part most relevant to a particular individual). This gives people a sense of control. Another important motivational technique is to support employee efforts to realize the vision by providing coaching, feedback, and role modeling, thereby helping people grow professionally and enhancing their self-esteem. Finally, good leaders recognize and reward success, which not only gives people a sense of accomplishment but also makes them feel like they belong to an organization that cares about them. When all this is done, the work itself becomes intrinsically motivating. The more that change characterizes the business environment, the more that leaders must motivate people to .provide leadership as well. When this works, it tends to reproduce leadership across the entire organization, with people occupying multiple leadership roles throughout the hierarchy. This is highly valuable, because coping with change in any complex business demands initiatives from a multitude of people. Nothing less will work. Of course, leadership from many sources does not necessarily converge. To the contrary, it can easily conflict. For multiple leadership roles to work together, people's actions must be carefully coordinated by mechanisms that differ from those coordinating traditional management roles. Strong networks of informal relationships-the kind found in companies with healthy cultureshelp coordinate leadership activities in much the same way that formal structure coordinates managerial activities. The key difference is that informal networks can deal with the greater demands for coordination associated with nomoutine activities and change. The multitude of communication channels and the trust among the individuals connected by

Despite leadership's growing importance, the on-the-job experiences of most people undermine their ability to lead. those channels allow for an ongoing process of accommodation and adaptation. When conflicts arise among roles, those same relationships help resolve the conflicts. Perhaps most important, this process of dialogue and accommodation can produce visions HARVARD BUSINESS REVIEW May·June 1990

that are linked and compatible instead of remote and competitive. All this requires a great deal more communication than is needed to coordinate managerial roles, but unlike formal structure, strong informal networks can handle it. Of course, informal relations of some sort exist in all corporations. But too often these networks are either very weak - some people are well connected but most are not-or they are highly fragmented-a strong network exists inside the marketing group and inside R&D but not across the two departments. Such networks do not support multiple leadership initiatives well. In fact, extensive informal networks are so important that if they do not exist, creating them has to be the focus of activity early in a major leadership initiative.

Creating a Culture of Leadership Despite the increasing importance of leadership to business success, the on-the-job experiences of most people actually seem to undermine the development of attributes needed for leadership. Nevertheless, some companies have consistently demonstrated an ability to develop people into outstanding leadermanagers. Recruiting people with leadership potential is only the first step. Equally important is managing their career patterns. Individuals who are effective in large leadership roles often share a number of career experiences. Perhaps the most typical and most important is significant challenge early in a career. Leaders almost always have had opportunities during their twenties and thirties to actually try to lead, to take a risk, and to learn from both triumphs and failures. Such learning seems essential in developing a wide range of leadership skills and perspectives. It also teaches people something about both the difficulty of leadership and its potential for producing change. Later in their careers, something equally important happens that has to do with broadening. People who provide effective leadership in important jobs always have a chance, before they get into those jobs, to grow beyond the narrow base that characterizes most managerial careers. This is usually the result of lateral career moves or of early promotions to unusually broad job assignments. Sometimes other vehicles help, like special task-force assignments or a lengthy general management course. Whatever the case, the breadth of knowledge developed in this way seems to be helpful in all aspects of leadership. So does the network of relationships that is often acquired both inside and outside the company. When 109

14

Leadership Perspectives

Motivating People: Richard Nicolosi at Procter &Gamble For about 20 years since its founding in 1956, Procter & Gamble's paper products division had experienced little competition for its high-quality, reasonably priced, and well-marketed consumer goods. By the late 1970s, however, the market position of the division had changed. New competitive thrusts hurt P&G badly. For example, industry analysts estimate that the company's market share for disposable diapers fell from 75% in the mid-1970s to 52% in 1984. That year, Richard Nicolosi came to paper products as the associate general manager, after three years in P&G's smaller and faster moving soft-drink business. He found a heavily bureaucratic and centralized organization that was overly preoccupied with internal functional goals and projects. Almost all information about customers came through highly quantitative market research. The technical people were rewarded for cost savings, the commercial people focused on volume and share, and the two groups were nearly at war with each other. During the late summer of 1984, top management announced that Nicolosi would become the head of paper products in October, and by August he was unofficially running the division. Immediately he began to stress the need for the division to become more creative and market driven, instead of just trying to be a low-cost producer. "I had to make it very clear," Nicolosi later reported, "that the rules of the game had changed:' The new direction included a much greater stress on teamwork and multiple leadership roles. Nicolosi pushed a strategy of using groups to manage the division and its specific products. In October, he and his team designated themselves as the paper division "board" and began meeting first monthly and then weekly. In November, they established "category teams" to manage their major brand groups (like diapers, tissues, towels) and started pushing responsibility down to these teams. "Shun the incremental," Nicolosi stressed, "and go for the leap." In December, Nicolosi selectively involved himself in more detail in certain activities. He met with the advertising agency and got to know key creative

110

people. He asked the marketing manager of diapers to report directly to him, eliminating a layer in the hierarchy. He talked more to the people who were working on new product-development projects. In January 1985, the board announced a new organizational structure that included not only category teams but also new-brand business teams. By the spring, the board was ready to plan an important motivational event to communicate the new paper products vision to as many people as possible. On June 4, 1985, all the Cincinnati-based personnel in paper plus sales district managers and paper plant managers - several thousand people in all-met in the local Masonic Temple. Nicolosi and other board members described their vision of an organization where" each of us is a leader:' The event was videotaped, and an edited version was sent to all sales offices and plants for everyone to see. All these activities helped create an entrepreneurial environment where large numbers of people were motivated to realize the new vision. Most innovations came from people dealing with new products. Ultra Pampers, first introduced in February 1985, took the market share of the entire Pampers product line from 40% to 58% and profitability from break-even to positive. And within only a few months of the introduction of Luvs Delux in May 1987, market share for the overall brand grew by 150%. Other employee initiatives were oriented more toward a functional area, and some came from the bottom of the hierarchy. In the spring of 1986, a few of the division's secretaries, feeling empowered by the new culture, developed a Secretaries Network. This association established subcommittees on training, on rewards and recognition, and on the "secretary of the future:' EchOing the sentiments of many of her peers, one paper products secretary said: "I don't see why we too can't contribute to the division's new direction./I

By the end of 1988, revenues at the paper products division were up 40% over a four-year period. Profits were up 66%. And this happened despite the fact that the competition continued to get tougher.

HARVARD BUSINESS REVlEW May·June 1990

15

Leadership Penpectives LEADERS

enough people get opportunities like this, the relationships that are built also help create the strong informal networks needed to support multiple leadership initiatives.

l

One way to develop leadership is to create challenging opportunities for young employees,

Corporations that do a better-than-average job of developing leaders put an emphasis on creating challenging opportunities for relatively young employees. In many businesses, decentralization is the key. By definition, it pushes responsibility lower in an organization and in the process creates more challenging jobs at lower levels. Johnson & Johnson, 3M, Hewlett-Packard, General Electric, and many other well-known companies have used that approach quite successfully. Some of those same companies also create as many small units as possible so there are a lot of challenging lower level general management jobs available. Sometimes these businesses develop additional challenging opportunities by stressing growth through new products or services. Over the years, 3M has had a policy that at least 25% of its revenue should come from products introduced within the last five years. That encourages small new ventures, which in turn offer hundreds of opportunities to test and stretch young people with leadership potential. Such practices can, almost by themselves, prepare people for small- and medium-sized leadership jobs. But developing people for important leadership positions requires more work on the part of senior executives, often over a long period of time. That work begins with efforts to spot people with great leadership potential early in their careers and to identify what will be needed to stretch and develop them. Again, there is nothing magic about this process. The methods successful companies use are surprisingly straightforward. They go out of their way to

HARVARD BUSINESS REVIEW May-june 1990

make young employees and people at lower levels in their organizations visible to senior management. Senior managers then judge for themselves who has potential and what the development needs of those people are. Executives also discuss their tentative conclusions among themselves to draw more accurate judgments. Armed with a clear sense of who has considerable leadership potential and what skills they need to develop, executives in these companies then spend time planning for that development. Sometimes that is done as part of a formal succession planning or high-potential development process; often it is more informal. In either case, the key ingredient appears to be an intelligent assessment of what feasible development opportunities fit each candidate's needs.

I

Institutionalizing a leadershipcentered culture is the ultimate act of leadership,

To encourage managers to participate in these activities, well-led businesses tend to recognize and reward people who successfully develop leaders. This is rarely done as part of a formal compensation or bonus formula, simply because it is so difficult to measure such achievements with precision. But it does become a factor in decisions about promotion, especially to the most senior levels, and that seems to make a big difference. When told that future promotions will depend to some degree on their ability to nurture leaders, even people who say that leadership cannot be developed somehow find ways to do it. Such strategies help create a corporate culture where people value strong leadership and strive to create it. Just as we need more people to provide leadership in the complex organizations that dominate our world today, we also need more people to develop the cultures that will create that leadership. Institutionalizing a leadership-centered culture is the ultimate act of leadership. C1

111

[2] On the Psychodynamics of Organizational Totalitarianism Howard S. Schwartz Oakland University

A theory of organizational totalitarianism is developed, based on Freud's concept of narcissism and his theory of the "ego ideal" (1921/ 1955, 191411957) Klein's (1948) theory of "splitting" and Shorris' (1981) thinking concerning the totalitarian aspects of the corporation. The idea of a perfect organization, referred to here as the' 'organization ideal," is a symbol that represents the return to narcissism-to being the center of a loving world. Since the return to narcissism is impossible, committed participants in the totalitarian organization maintain a belief in the organization ideal by believing that its attainment is achieved by progress through the organization's hierarchy. This requires commitment to the belief that individuals more advanced in the hierarchy represent the organization ideal. This turns organizational process into the living out of the narcissistic fantasies of those in power. Consequences of this are passivity and slavishness, shamefulness, cynicism, loneliness and the loss of the psychological gains that could otherwise come from socially useful work. The problems of American industry may be partly due to totalitarian processes and present attempts at management through culture may be afurther stage of the disease.

Understandably, discussions of totalitarianism tend to focus upon its more dramatic manifestations. An unfortunate consequence of this is that it has led us to miss aspects of totalitarianism which pervade our own times and culture and which may be, if not equally destructive, at least sufficiently destructive to require study and criticism. An exception is the work of Earl Shorris (1981) on totalitarian aspects of corporate life. Shorris defines totalitarianism as the process of defining people's happiness for them. The element that makes this process noxious is that the definer of hapVersions of this paper have been presented at the Conference on Critical Approaches to Organizational Theory, Baruch College, City University of New York, September 5-7, 1985; and at "Cultural Engineering-The evidence for and against," Standing Conference on Organizational Symbolism, University of Quebec at Montreal, June 25-27, 1986. The author wishes to thank Katherine Schwartz, Harry Levinson, Chris Argyris, Howell Baum, Abraham Korman, Lizabeth Barclay, David Doane and the reviewers of the Journal of Management for important help in revising the manuscript. Address all correspondence to Howard S. Schwartz, School of Business Administration, Oakland University, Rochester, MI 48063.

18

Leadership Perspectives 42

SCHWARTZ

piness is not the person whose happiness is being defined. This has the effect of taking the sense of the direction of the individual's life away from the determination of the individual and ceding it to another. But it is the process of giving the sense of direction to our lives, even if only in thought, that constitutes our moral autonomy. For Shorris, who in this respect echoes George Herbert Mead's (1934) distinction between the "I" and the "me," the human being stands apart from any symbol. It is this standing apartness that constitutes one's self-consciousness, that is the source of one's specific identity. To cause a person to collapse into a symbol one has projected for him or her is to cause the self-consciousness to become, not the essence of that person's identity, but something alien to it-to separate the person from him or herself. This is the source of the fundamental psychodynamic of totalitarianism. It alienates people from themselves and gives them over to others. Whatever victories may ensue from this must be pyrrhic. Whatever happiness is to be attained here is not the happiness of the individual. Indeed, it is not happiness at all. It is the drama of happiness attaching to the role that the person plays in a play that is written and directed by others. We gain insight into the underlying psychodynamics of this process by exploring the connection between Shorris' view and Freud's theory of narcissism and the psychology of the ego ideal. Narcissism and the Ego Ideal For Freud (1914/1957) the infant starts off in the congenial state of being at the center of a loving world. It is thus the perfect combination of agency and communion, subjectivity and objectivity, activity and passivity, freedom and determinateness, yang and yin. Freud refers to this happy synthesis as "narcissism." But the world is, alas, not a loving place and we are not the center of it. No one in it loves us quite as much as we need to be loved. And if, as life goes on, they are to love us at all we must love them in return-to give up, in a word, the centrality that the love of others was an instrument for preserving. Further, even if I gain the love of a few individuals, what good does it do me? My real problem is with the world. And they cannot protect me from it any more than I can protect them. For the world can do very well without me. It did without me before I was and it will do without me after I am not. In the end, by virtue of the laws of biology if by nothing else, I get rubbed out. To be sure, I can make some contribution to the world. Perhaps, in some sense, that will live after me. But what is it that lives after me? Obviously, whatever it is, it is not me. Now, the world is precisely the arrangement that, among other things, this shall happen. Why should I love that? If I don't, what ground is there for my making any contribution to the world at all? Ultimately, the story of human life is this: the world does not care about me unless I become someone I am not. But if I become someone I am not, who does it care about that should make any difference to me? What I have just outlined is an existential interpretation of what Melanie Klein (1948) called the "depressive position." You can understand Why. But my purpose in this was not to depress anybody, but rather to show what it is that much of the psychology of social institutions is organized against. JOURNAL OF MANAGEMENT, VOL. \3, NO. I, 1987

19

Leadership Perspectives ORGANIZATIONAL TOTALITARIANISM

43

For Klein, the depression of the depressive position is often defended against by adopting an earlier stage of development called the' 'paranoid-schizoid position." The characteristic psychology here is determined by what she calls' 'splitting,' , which is a lack of integration of the good aspects of the world with the bad aspects, and a denial of the ultimate reality of the bad aspects. In one way or another, we attribute the cause of our anxiety to a person, or a place, or a time, or a group, or a social arrangement, or a part of ourselves, and direct our aggression at this "bad" stuff. We hold before us the image of a perfect "good" world that will be our world when the bad stuff is gotten rid of or gotten away from. This good world represents for us the possibility of a return to narcissism, to a world in which annihilation is not a problem, a world in which it is perfectly all right to do whatever we want to do, a world which has us as its reason for being, a world free of anxiety. Stories of the goodness of the good world and stories of the roots of our anxiety represent culture for us. The function of culture, that is to say, is to give content and direction, to render sensible, our longings to return to narcissism and to avoid the evil arising from our mortality (Becker, 1971, 1973). In Freudian terms, the representation that we make to ourselves of the good world is termed the" ego-ideal," and it is this toward which we are driven by our anxiety over our finitude, by our rejection of whatever it is about ourselves that is vulnerable and finite. Because this is our spontaneous self, it is always the case that the motivation toward the ego ideal involves the rejection (in Freudian terms, the repression) of our spontaneity. Thus, we experience the pursuit of the ego ideal as an obligation-as something that we ought to attempt, not a natural extension of what we are. The recognition that we are not what we are supposed to be, that we are playing a role rather than being the role which we are playing, is the experience of shame. Another consequence is that we never get to be the ego ideal. The ego ideal represents us as we believe we would be if we could get rid of what causes our anxiety. But what causes our anxiety is what is most specifically ourself. While we are alive we can never get rid of it-the reason being that it is our very life. As Freud (192111955) pointed out, the ego ideal may be formed in any of a number of ways. Of particular interest to us is the case in which an abstraction, a "leading idea," has taken the place of a leader, and in which that abstraction is the idea of the organization itself. In this case, we may recognize the committed organizational participant as a person whose ego ideal is the organization. Thus, for the committed organizational participant, the organization represents a project for the return to narcissism. In understanding how this is possible, we must realize that to talk about the organization as ego ideal is not to refer to the actual organization but to the committed person's idea ofthe organization, which may have little relation to the person's experience with the actual organization. It is what the committed organizational participant holds out as what the organization is supposed to be and would be except for the effect of ' 'bad" aspects of the world, and what he or she accepts as an obligation to help bring about. This is clearly an ideal organization. Indeed, giving it an appropriate name, the idea of the organization serving the JOURNAL OF MANAGEMENT, VOL. 13, NO. 1,1987

20

Leadership Perspectives 44

SCHWARTZ

function of the ego ideal will be referred to as the organization ideal. Now, how does the organization ideal serve as an ego ideal and what are the consequences of this? The Ego Ideal and the Organization Ideal

In the first place the organization ideal represents power. Denhardt (1981) has noted how deeply the concept of control is built into our concept of the organization. In psychoanalytic terms, the organization ideal serves as a "reaction formation" that covers over and represses the anxiety-evoking idea of our finitude, vulnerability, and mortality (Schwartz, 1985). Second, the organization ideal is a scenario of love as well and offers the possibility of a return to centrality in a loving world. For by taking the organization as ego ideal, the individual takes as well the possibility of a boundary-dispelling relationship to others who have done so as well. Both love and centrality are possible in this scenario, because each of the individuals who have taken the organization as their ego ideal assumes that the others have also redefined themselves as the organization and therefore as essentially the same and having the same interest. Conflict is defined away, therefore, and along with it all social anxiety within the organization. Indeed, what we have here is a perfect analog for Freud's reference to the tale of Narcissus, who falls in love with his own image in a pond. Here, the other organizational participants would ideally provide a mirror for the focal participant and reflect his love for himself. Third, a related point ties the intra-psychic processes involved to the normative structure of the organization. We have seen that individuals, by defining themselves in terms of the organization, put themselves into an interesting relationship with others who have done the same. On the one hand this is a relationship of idealized love that would not interfere with narcissism. On the other hand, it is a relationship of mutual responsibility because it is up to each to uphold the organization ideal for all the others. It becomes not only a matter of the fulfillment of mutual personal principle but the direct object of moral sanction-the threat of the loss of love-by ideally loved others. This gives a moral force to the maintenance of the definition of oneself and one's relations as the organization ideal. Fourth, and perhaps most comprehensively, defining oneself as the organization removes from consideration a problem that in a way contributed most powerfully to the anxiety which the participant was trying to allay. As noted before, the self-conscious self, the spontaneous self, Mead's (1934) "I," though it is on the one hand what is most intimately myself, is also the cause of my greatest ontological trouble. For it can never be fully represented by a symbol (Mead's "me' '), and therefore cannot become part ofthe enacted world, but always stands aside from my enactments and says of them, "that is not me, that is not me." Defining myself as the organization ideal solves this problem for me. Having defined myself in terms of the organization as an ethical standard, I have a basis upon which I can reject my spontaneous self-consciousness as an obstacle to my self and to my obligations. It becomes an impulse for me to negate: a source of shame and guilt. What I cannot deny phenomenologicaly, I can repudiate morally. To be sure, I can only do that by rejecting that part of me that is most uniquely JOURNAL OF MANAGEMENT. VOL. J3,NO.I, 1987

21

Leadership Perspectives ORGANIZATIONAL TOTALITARIANISM

45

myself. But after all, it was precisely the fact that I have a spontaneous self that got me into trouble in the first place. An example: When interviewed, Wheeler Stanley (Terkel, 1974) was the youngest general supervisor in a Ford assembly plant. From an impoverished background, he had come, through Ford, to a position of status in the world and felt that he was in line for more. His ambitions lay within the company hierarchy and his conscious concerns were company concerns. His ego ideal was the organization ideal. But listen to the way this conversation evolved: I've got a great feeling for Ford because it's been good to me .... My son, he's only six years old and I've taken him through the plant.. .. And that's all he talks about: ''I'm going to work for Ford, too." And I say, "Oh, no you ain't." And my wife will shut me up and she'll say, "Why not?" Then I think to myself, "Why not? It's been good to me." (p. 185)

What we see here was an underlying resentment at Ford, which was not acceptable to his moral consciousness. He reported an occasion when the veneer slipped and the thought was blurted out. But then it was repudiated as unworthy and the veneer ofthe company man was put back in place. "[Ford] has been good to me," replaced and covered over the apparent spontaneous opposite thought: "Ford has been bad to me." Fifth, the repudiation of the spontaneous self leaves open a possibility of a redefinition of the self that is wholly in accordance with the organization ideal. This is a redefinition of the "wants" of the individual. In terms of the organization ideal, the participant undertakes to "want" to do what the organization needs doing. Thus, the polarity of subject and object, activity and passivity, is projected to be overcome. The picture of the organization as organization ideal will be familiar to all teachers of organizational behavior. This is an organization in which everyone knows what they are doing, in which there is no conflict or coercion, in which communication is open and direct, in which people want to do what needs to be done, in which every member is solely concerned with and works diligently to promote the common good. The picture is of an organization that has never existed and never will. But somehow or other our students regard it as of the utmost importance for them to be able to believe in it. Indeed, the picture of the organization as ego-ideal is familiar and important not only to the naive, but to the presumably sophisticated as well. The idea of the model organization as the integration of individual spontaneity and organizational necessity is after all, in one fonn or another, at the heart of many normative theories of organization, and the attainment of the organization ideal is a large part of the promise made by practitioners of organization development. Often, as with Argyris (1957), organization development efforts are aimed at encouraging what Maslow (1970) called "self-actualization" through work. But notice here that an important shift takes place away from Maslow's concept. Instead of saying that self-actualization means: "Be healthy and then you may trust your impulses," (p. 179) these thinkers seem to say it means: "Want what the organization wants you to want, and then you may do what you want." JOURNAL OF MANAGEMENT, VOL. 13, NO.1, 1987

22

Leadership Perspectives 46

SCHWARTZ

To this point, we have considered the nature of the organization ideal and its relation to the individual who adopts it as his or her ego ideal. But though the organizational processes so characterized may show resemblances to totalitarianism, they show resemblances to social processes which are, arguably, not only more benign, but often even positive, such as idealistic movements for social change. Indeed, arguably, we have moved broadly to reveal the psychodynamic underpinnings of social organization generally, or at least to the extent that people put their faith in it. If we have found that it involves repression and de-centering of the self, we have said no more than what Freud said in Civilization and its Discontents (1930/1961). And if the impossibility of attaining the ego idealleads almost inevitably to disillusionment, it is at least arguable that disillusionment is a necessary element of adult development and growth (Levinson, 1978). In order to show how the processes we have described lead to totalitarianism, it will be necessary to show how they tend to degenerate in the context of organizational power. Hierarchy and Ontological Differentiation

Because the organization ideal represents the return to narcissism, and because the return to narcissism can never be achieved, there must be some way of accounting for the failure of the return to narcissism while still remaining true to the idea of the organization ideal. For the committed organizational participant, there are two available reasons why narcissism has not returned-why I still feel threatened, why everybody doesn't love me, why I am not doing what I want, and so on. One possibility is that the anxiety is due to "bad" forces, external or internal, that are threatening the organization. Once the forces can be given an identity, it is possible to struggle against them. The community of strugglers can be conceived as wholly good, because all the anxiety can be attributed to the enemy. Under the circumstances, a quite satisfying degree of localized collective narcissism can be achieved. This apparently represents the dynamic of the cohesiveness of many totalitarian organizations and cults. One might even see in it the root of the cohesiveness and high morale of work organizations that can reasonably identify some external threat or of parts of work organizations that can attribute the organization's problems to other parts of the same organization. Organization against an enemy is certainly a tool used by totalitarian work organizations to increase their control. Thus, the president of a major auto manufacturing company referred to the Japanese as "the enemy" in an address to Oakland University students. He made it manifest that this climate of warfare was very much a part of the cultural process underlying his organization's "quality of working life" program. Certainly threat from an enemy increases the level of dependency on the organization and therefore the need to believe that the organization is the organization ideal. But the threat of an outside enemy is difficult to sustain, within a business organization, and mobilizing against an internal enemy tends to have an adverse impact on coordination and communication. Hence, totalitarian corporate organization tends to be more characterized by the other way of accounting for the failure of the return to narcissism. JOURNAL OF MANAGEMENT, VOL. 13, NO. \, 1987

23

Leadership Perspectives ORGANIZATIONAL 1DTALITARIANISM.

47

This other way involves what I shall call the process of ontological differentiation. In this alternative the attribution of the cause of anxiety is made to the self and experienced as shame-shame for oneself and for the parts of the organization with which one is associated. Because the organization is understood as the organization ideal, and because one and one's associates fall short of this ideal, these have evidently not been fully integrated into the organization. This shame is experienced by contrast to others who are believed to be what they are supposed to be-who are more integrated with the organization ideal and presumably do not have the deficiency in their identity that one is ashamed of. This contrast is ontological differentiation. In the classic bureaucratic organization, ontological differentiation takes the structural form of vertical differentiation, or hierarchy. As Arendt (1966) and Shorris (1982) note, what I am calling ontological differentiation does not always correspond precisely with the organizational pyramid. Arendt, for example, compares the totalitarian organization to an onion, in which one goes deeper and deeper, rather than higher and higher. I Thus, the Nazi party, for example, contained ideological fanatics at all levels of the state apparatus, trusted to wield power even over their nominal superiors through their capacity for denunciation. Nonetheless, as Shorris notes, the pyramid and the onion intersect at the point which is both highest and deepest. In traditional organizational terms, this is the top of the organization. For the purposes of this paper, the dimensions of vertical differentiation and depth will be taken to be combined in the organization's hierarchy. In the traditional view, hierarchy serves a variety of managerial functions, such as coordination, control, and the like. Although there is certainly some truth to this view, it cannot provide fully for a phenomenology of hierarchy-for the simple fact that hierarchy represents not only a differentiation of function and task, but a moral differentiation as well (Parsons, 194011954). Thus, the organizational ladder is conceived as a sort of "great chain of Being." It represents, in a word, a structured adaptation to the idea that organizational participation does not amount to a return to narcissism, while retaining the idea of the organization as organization ideal, and therefore permitting the idea of the return to narcissism as a possibility. Thus, it is easy to suppose that more status in the organization's hierarchy will represent a greater degree of attainment of the organization ideal, and therefore progress in the return to narcissism. On the one hand, the organization's actions will be more the result of my actions and its deliberations will include my thoughts. On the other hand, by definition, my actions and thoughts will be the appropriate actions and thoughts with regard to the organization. 2 The problem is that if I am going to hold the belief that progress in the hierarchy will mean progress in the attainment of the organization ideal for me, I am committed to the belief that it represents such progress for others as well. Ontological differentiation is the vehicle through which social structure be'Note the connection between this depth dimension and Schein's (1980) concept of organizational "centrality." 'For a further discussion of the psychodynamics of hierarchy, see Schwartz (in press). JOURNAL OF MANAGEMENT, VOL. 13, NO.1, 1987

24

Leadership Perspectives 48

SCHWARTZ

comes totalitarian. For at this point it becomes possible for some to use their ontological stature, and the power that goes with it, to impose their own narcissistic fantasies upon others as the organization ideal-in Shorris' terms, for some to define the happiness of others. The point is that the top of the organization is not merely an abstract position, but has a population and a history of action. Locating the return to narcissism at the head of the organization means more than estab~ lishing a direction toward the ego ideal. It involves establishing certain definite others, with their own way of looking at the world and at themselves, and with their own history of actions, as already ideal. It involves, in other words, acquiescing to the narcissism of some specific others as one's own moral obligation, collectively enforcable by all others who have done so and with whom one defines oneself as ideally in community. It legitimizes the use of coercion, on the part of the powerful, to cause the less powerful to act out a drama whose theme is the perfection of the powerful. And it does so in such a way that the powerful can feel self-righteous about this coercion-as if they were performing a service or committing a sacrifice. Totalitarianism and Ontological Differentiation The human consequences of ontological differentiation can be explored in any of a number of ways. One way is through consideration of the ways in which people's defenses work. It has become a commonplace of cognitive psychology that persons see the world in ways that are systematically biased. Weiner, et al. (1971), for example, note a self-enhancing bias that consists of seeing oneself responsible for positive outcomes and others responsible for negative outcomes. The self-enhancement that this bias promotes is the attributional correlate of narcissism. Now, consider the vicissitudes of this bias in the structure we have described. Here, because the head of the organization serves as the specification of the organization ideal and hence as the definer of reality, we may expect that the reality so defined will have the leader's self-enhancing bias built into it. In terms of maintaining the stability of the organization ideal, this is necessary, but consider the consequences for the subordinate. The subordinate has to see the world in a way that enhances, not his or her own self-image, but the self-image of the leader. The self-enhancing bias which operates within the subordinate must be abandoned and overruled in favor of the self-enhancing bias of the leader. But whereas the self-enhancing bias of the leader arises naturally and almost automatically in the mind of the leader, approximating the leader's self-enhancing bias on the part of the subordinate must be tortuous, contrived, painful, and self-destructive. And yet the organization ideal demands just that. It demands, in a word, that in the name of the common good, the individual must not only deny his or her own natural tendencies toward self-enhancement and even self-protection, but morally condemn them. Moreover, informal pressure on the part of other participants and even legitimized formal coercion on the part of authorities may be used to enforce this self-abasement. This, it seems to me, is the source of the slavishness and passivity Shorris, for example, finds so common in totalitarianism. What has been said with regard to cognitive bias could have been said as well JOURNAL OF MANAGEMENT, VOL. 13, NO. I, 1987

25

Leadership Perspectives ORGANIZATIONAL WTALITARIANISM

49

in terms of the theory of retrospective sense-making (Weick, 1979). Here, a distinction would be noted between the leader, whose retrospective justifications would be taken as valid, and followers, who would have to adapt to the retrospective sense of the leader while being subject to having the sense of their own actions determined for them by the leader. Alternatively, the differentiation could have been drawn in terms of Argyris and Schon's (1974) distinction between espoused theories and theories-in-use. In this case, the espoused theories of the leader would have to be taken by followers as being the leader's theory-in-use, while the followers' theory-in-use would always be available to be held up by the leader as differing from the acceptable espoused theories--espoused theories which, as has been noted, must be publicly declared as guiding the behavior of the leader. A related feature of totalitarian life is uncertainty regarding the appropriate. If the definition of the appropriate is based retrospectively on the actions and words of the leader, the subordinate must be in constant uncertainty as to what actions will correspond to the leader's whims. If the rationale ofthe leader's whims is not comprehended, the result must be not only uncertainty with regard to appropriate action, but uncertainty over one's own moral worth, because one's own perceptions, instincts and analyses cannot be relied upon as grounds for moral judgment, and because actions which turn out laterto be deviations from the leader's position are condemnable. This is liable to be all the more so to the extent that the subordinate maintains the organization ideal and therefore cannot blame what are seen as inadequacies on the organization, but rather has to accept him or herself as the source of the blame. The result of this must be a more or less permanent state of shamefulness. The alternative here is cynicism. Remember that the leader is defined as the ideal, rather than having that capacity in reality. The wisdom of the leader's actions and thoughts are limited in just the same way that the rest of ours are. Accordingly, rationality cannot be used as a guide to action on the part of the subordinate. Rather, the particular irrationality that the leader manifests must be the criterion. But a person's specific irrationality, we may suppose, is an outgrowth of that particular person's personality. Although it may come naturally to him or her, it must seem to others, if they understand it at all, as some sort of systematic quirkiness. Understanding this quirkiness, the subordinate may well be able to anticipate the leader's judgments and use this knowledge as a way of' 'playing the game." The problem is that this can only be achieved through giving up idealization of the organization ideal while, at the same time, one's actions conform to it and one's sense of value, such as it is, is structured by the attainment of it. This is cynicism. Another feature of totalitarianism is the isolation of people from one another. This isolation is related to a similar dynamic. The organization ideal is held in place not only by the subordinates' own need to do what he or she feels ought to be done, but by sanctions issuing from ideally loved others. This means that deviations from them threaten the meaning structures of others whose love is needed to maintain one's own meaning structure. There is something not only unnatural but positively impossible about becoming someone else. But this is JOURNAL OF MANAGEMENT, VOL. 13, NO.1, 1987

26

Leadership Perspectives 50

SCHWARTZ

obligatory. The result is that the person one really is not only is unacceptable to oneself, but is unacceptable in social company, which is in turn composed of persons who are each unacceptable in social company for the same reasons. The result is that social interaction takes place not between persons, but between performances. Roles utter words at other roles. And if at any time anyone of them said, as each of them somehow knows, "this is a bunch of nonsense," that person would become a pariah because he or she would bring out in all these people the anxiety that motivated the perforniance in the first place and maintains it at all times. Thus, each of these persons must live in more or less complete isolation and be terribly lonely. An example may be useful to illustrate some of these processes. Some colleagues were doing consulting work for a corporation in our area that was getting ready to open a new plant. A distinguished professor, call him D, well known for his organization development work, was to give a presentation to the "design team," made up of middle managers recruited from the rest of the corporation, to help them in designing a compensation system for the new plant. I wangled an invi tation. The presentation turned out to be mostly a summary of D's widely published work, spiced with anecdotes about the utopian bliss in the factories he had installed. As the day went on, I shifted my interest from D's presentation to the response of the design team. I eavesdropped on their informal conversations and watched their body language. Particularly suggestive was the way they responded when it appeared that their leader was going to ask them a question. They looked for all the world like unprepared schoolchildren trying to make themselves inconspicuous so the teacher would not notice them. It became increasingly clear to me that this was the first time the members of the "design team" had ever been exposed to systematic thinking about compensation systems. Aside from various idiosyncratic attitudes toward certain aspects of what D was saying, none of them had any thoughts on the matter at all. Moreover, they appeared to know that they were in over their heads. Behind a certain bluster in their facade, I thought I could detect shamefacedness and panic. Evidently, this was not unique to this particular subject. A colleague who had been sitting in on the meetings where they "designed" other "behavioral systems" reported that, despite tremendous time investment, very little progress was ever made. From my colleague's account, it appeared that the meetings were consumed by dependency reactions. These team members had apparently been recruited into what they thought was a fast track position in a new direction the corporation was taking. Elements of the corporate personnel and training staffs, led by a guru who was officially a "consultant," had managed to persuade the corporate hierarchy to give them wide ranging control over the design of the new plant, which would employ a new culture, based upon a team concept. So, naturally, a team was recruited to do the design work, with the guru acting as "facilitator." Something magical was supposed to happen when a number of people got together in a room. They were each supposed to contribute themselves and the synergism of their cooperation would add up to a whole that was greater than the parts. JOURNAL OF MANAGEMENT, VOL. 13, NO.1, 1987

27

Leadership Perspectives ORGANIZATIONAL TafALITARIANISM

51

But, as it turned out, it was not themselves that they were contributing at all. What they had to do, instead, once they were committed, was to figure out what the guru thought the selves were that they were supposed to be, contribute those, and hope for the best. For their future was out of their own hands and in the hands of the guru. The best the group could do (the hidden agenda, really) was simply to take D's package and adopt it. But they would not be able to admit that they were doing this, because they were supposed to be the "design team" and to fit D's "recommendations" into their own conceptual framework. For the same reason, they couldn't even admit that the "facilitator" was in fact running the show. For the show that the guru was running was one in which they were autonomous, self-determining agents. The point is that it was the guru's fantasy that was being enacted here. We can imagine that he saw himself as the shepherd loved by his flock, the Lone Ranger who makes factories and travels on, the Taoist sage who moves others without moving himself, perhaps even the revolutionary in the pin-striped suit. There is no place in any of these for the design team members as the persons that they were. Their function was to be absorbed into the guru's fantasy. Even the promise of the fast track, by which they were enticed, must have been felt as shameful in the fantasy they undertook to enact. No self-serving fantasy can fit into an organization designed around somebody else's narcissism. To be sure, one could come back and say that no narcissistic fantasy has a place in an organizationeven the guru's. But that would be naive. For what we mean when we conceive an organization as being what it is supposed to be is an organization ideal; and an organization ideal is a narcissistic fantasy. The only question is who ultimately gets to be the narcissist. In this case none of them got to be the narcissist. Not even the guru. The company did not build the plant. All of the design team members were laid off. I don't know where the guru is. He is probably pursuing his dream someplace else. And he has another line in his resume. Finally, perhaps the most poignant loss suffered by participants in organizations of this sort is the loss of the sense of worth and human connectedness that could otherwise come from work. For organizations of this sort do not exist to do useful work. They do work in order to exist. And because their existence is the fiction of their organization ideal, we may say that everything that goes on within them finds its meaning in connection with maintaining this fiction. One of my students invited me after class one night to have a drink. One drink turned to many and I soon was involved in a heart-crushing story of the crippling of a soul that bore upon many of the points I have described here. He was employed by a large corporation in a unit whose function had almost ceased to exist. Yet his supervisor spent all his time trying to expand his empire by hiring more people. What my student did all day, when he did anything at all, was to play up to the vanity of his supervisor and tell him and others how important the supervisor and the department were. He had to do this because he hated it there and wanted a transfer, which politically required the blessing of the supervisor. The heart of the dilemma turned out to be thatthe more he was successful at building up the supervisor's image, the more the supervisor refused to permit him to transJOURNAL OF MANAGEMENT, VOL. 13, NO.1, 1987

28

Leadership Perspectives 52

SCHWARTZ

fer, because the department was, according to the drama, already short on personnel. I asked him why he hated this so much; what he would do if he could do whatever he wanted to at work. He said: ''I'm an engineer. All I want to do is build cars." Concluding Reflections

This last observation, that totalitarianism may deprive organizational participants of the opportunity to do useful work, suggests that there is a practical dimension to this issue. It appears that, in the totalitarian organization, productive work comes to be less important than the maintenance of narcissistic fantasy. This cannot help but have an impact on the productivity of the entire enterprise. For totalitarianism represents a turning away from reality. And to the extent that organizations need to deal with real environments, even if this only means that they need to deal with narcissism projects that are not represented by the organization's own organization ideal, such turning away from reality must have serious consequences for the organization's effectiveness. Indeed, it is tempting to speculate that part of the trouble in which American industry now finds itself may be due to the totalitarian processes that have been going on within it. If this is so, it is further tempting to speculate that current efforts to renew American industry by changing organizational culture may not be a cure, but rather a further development of the disease. In this view, the movement toward cultural management might be a case of escalating commitment to a mistaken course of action (Staw, 1980). Specifically, in this case we may be witnessing the attempt to replace reality by pretense, carried through on a redoubled scale, raised from unconsciousness to consciousness, and becoming not a sideshow that characterizes the dark side of organizational life, but the main organizational act (Schwartz, 1986). Finally, a word should be said about the scope of the problem we are talking about. Is it possible to redesign organizations to avoid it? We might consider this question by examining an alternative proposed by Culbert and McDonough (1980). They make much of the idea that individuals in organizations should develop and maintain an alignment of their own personal values, interests, and skills with what they perceive to be the task requirements of the job. In our terms this would mean maintaining one's own ego ideal. But this ego ideal is embedded in an organization ideal in which all participants do their work within the context of their own self-serving alignments (recognizing that others are doing so as well) and in which all contributions within this context are adequately valued-the narcissistic synthesis of self and other again. But how much is adequate? My own reasoning concerning the ego ideal suggests that no valuation of an individual's alignment can be permanently satisfying, which would lead the individual to seek to have his or her alignment increasingly valued. But the capacity to frame organizational meaning to enhance the appreciation of one's alignment is Culbert and McDonough's definition of power. Thus, the self-serving alignments of the more powerful are valued and have legitimacy whereas the self-serving alignments of the less powerful are devalued and lack legitimacy-and back we are with ontological differentiation again. JOURNAL OF MANAGEMENT. VOL. 13, NO.1, 1987

29

Leadership Perspectives ORGANIZATIONAL TOTALITARIANISM

53

It appears that the problem goes deeper than Culbert and McDonough imagined. I suggest it lies with our tendency to assign responsibility for the fulfillment of the ego ideal, the return to narcissism, to a social process-a tendency that arguably is becoming increasingly pronounced among us (Lasch, 1979). For the problems that the narcissistic defense is a defense against are existential problems-finitude, vulnerability, mortality-and social processes can deal only with the problems of the collective. They can deal with the problems of the individual only as an abstraction. But it is just the fact that the individual is not an abstraction, but a flesh-and-blood human being, that gives rise to existential problems in the first place. Thus, the attempt to assign the fulfillment of the ego ideal to social process has an illusion at its core-the illusion that the individual is the abstraction. I suggest that when we weave illusion so deeply into our social life that in order to maintain that social life we have to conceal from ourselves the fact that the illusion is an illusion, the result is, inevitably, totalitarianism. References Argyris, C. (1957). Personality and organization: The conflict between the system and the individual. New York: Harper and Row. Argyris, C. & Schon, D.A. (1974). Theory in practice. San Francisco: Jossey-Bass. Arendt, H. (1966). The origins of totalitarianism. New York: Harcourt, Brace and World. Becker, E. (1971). The birth and death of meaning. (2nd. ed.). New York: Free Press. Becker, E. (1973). The denial of death. New York: Free Press. Culbert, S.A. and McDonough, J.J. (1980). The invisible war: Pursuing self-interests at work. New York: Wiley, 1980. Denhardt, R.D. (1981). In the shadow of organization. Lawrence, Kansas: The Regents Press of Kansas. Freud, S. (1961). Civilization and its discontents. (Standard edition, Volume 21). London: Hogarth Press. (Original work published 1930) Freud, S. (1955). Group psychology and the analysis of the ego. (Standard edition, Volume 18). London: Hogarth Press. (Original work published 1921) Freud, S. (1957). On narcissism: An introduction. (Standard edition, Volume 14). London: Hogarth Press. (Original work published 1914) Klein, M. (1948). Contributions to psychoanalysis: 1921-1945. London: Hogarth Press. Lasch, C. (1979). The culture of narcissism: American life in an age of diminishing expectations. New York: Warner. Levison, D.J. (1978). The seasons ofa man's life. New York: Knopf. Maslow, A. H. (1970). Motivation and personality. (2nd. ed.). New York: Harper and Row. Mead, G.H. (1934). Mind, self and society. Chicago: University of Chicago Press. Parsons, T. (1954). An analytical approach to the theory of social stratification. In Essays in sociological theory (rev. ed.). New York: Free Press. (Original work published 1940) Schein, E.H. (1980). Organizational psychology. (3rd. ed.). Englewood Cliffs, N.J.: PrenticeHall. Schwartz, H.S. (1983). Maslow and the hierarchical enactment of organizational reality, Human Relations, 36 (10), 933-956. Schwartz, H.S. (1985). The usefulness of myth and the myth of usefulness: A dilemma for the applied organizational scientist. Journal of Management, 11 (1), 31-42. Schwartz, H. S. (1986, June). Totalitarianism and cultural engineering. Paper presented at Standing Conference on Organizational Symbolism, Montreal. Schwartz, H. S. (in press). Rousseau's Discourse on Inequality revisited: Psychology of work at the public-esteem stage of Maslow's hierarchy. International Journal of Management. Shorris, E. (1981). The oppressed middle: Politics of middle management/scenes from corporate life. Garden City, New York: Anchor Press/Doubleday. Staw, B.M. (1980). Rationality and justification in organizational life. In B.M. Slaw & L.L. CumJOURNAL OF MANAGEMENT, VOL. 13, NO. I, 1987

30

Leadership Perspectives 54

SCHWARTZ

mings (Eds.), Research in Organizational Behavior (VoL 2). (pp. 45-80). Greenwich, CT: JAI Press. Terkel, S. (1974). Working. New York: Pantheon. Weick, K.E. (1979). The social psychology of organizing (2nd. ed.). Reading, Mass.: AddisonWesley. Weiner, B., Frieze, L, Kulka, A., Reed, L., Rest, S., & Rosenbaum, R.M. (1971). Perceiving the causes of success and failure. Morristown, N.J.: General Learning Press. Howard S. Schwartz is an Associate Professor of Organizational Behavior in the School of Business Administration at Oakland University.

JOURNAL OF MANAGEMENT, VOL. 13, NO.1, 1987

[3] Narcissistic Leaders The Incredible Pros, the Inevitable Cons by Michael Maccoby

When Michael Maccoby wrote this article, which was first published in early 2000, the business world was stili under the spell ofthe Internet and its revo lu-

tionary promise. It was a time, Maccobywrote, that ca lled for larger-than-Jife leaders who could see the big picture and paint a compell ing portrait ofa dramaticallydifferentfuture. And that, he argued, was

one reason we saw the emergence ofthe superstar CEOs-the grandiose, actively self-promoting, and genuinely narcissistic leaders who dominated the covers of business magazines at that time. Skilled or-

ators and creative strategists, narcissists have vision and a great ability to attract and inspire followers. The times have chan ged, and we've learned a ol t about the dangers of overreliance on big personalities, but that doesn't mean narc issism can't be a useful leadersh ip trait. There's certain ly adark side to narcissism-narcissists, Freud told us, are emotionally isolated and highly distrustful. They're usually poor llsteners and lack empathy. Perceived threats can tflgger rage. The challenge today-as Maccoby understood it to be four years ago----is to take advantage of thei r strengths whi le tempering their weaknesses.

There's something new and daring about the CEOs who are transforming today's industries. Just compare them with the executives who ran large companies in the 1950S through the 1980s. Those executives shunned the press and had their comments carefully crafted by corporate PR departments. But today's CEOssuperstars such as Bill Gates, Andy Grove, Steve Jobs, Jeff Bezos, and Jack Welch-hire their own publicists, write books, grant spontaneous interviews, and actively promote their personal philosophies. Their faces adorn the covers of magazines like BusinessWeek, Time, and the Economist. What's more, the world's business personalities are increasingly seen as the makers and shapers of our public and personal agendas. They advise schools on what kids should learn and lawmakers on how to invest the public's money. We look to them for thoughts on everything from the future of e-commerce to hot places to vacation. There are many reasons today's business leaders have higher profiles than ever before. One is that business plays a much bigger role

32

Leadership Perspectives Narcissistic Leaders· BEST OF H BR 2000

Michael Maccoby is an anthropologist

and a psychoanalyst He

IS

also the

founder and president of the Maccoby Group, a management consultancy in Washington, DC and was formerly di-

rector of the Program on Technology, PublIC Policy, and Human Development at Harvard University's Kennedy School of Government in Cambridge, Massachusetts. This article was the basis for the book The Productive Narcissist: The Promise and PerI'l ofVisianary Leadership (Broadway Books, 2003).

in our lives than it used to, and its leaders are more often in the limelight. Another is that the business world is experiencing enormous changes that call for visionary and charismatic leadership. But my 25 years of consulting both as a psychoanalyst in private practice and as an adviser to top managers suggest a third reason-namely, a pronounced change in the personality of the strategic leaders at the top. As an anthropologist, I try to understand people in the context in which they operate, and as a psychoanalyst, I tend to see them through a distinctly Freudian lens. Given what I know, I believe that the larger-than-life leaders we are seeing today closely resemble the personality type that Sigmund Freud dubbed narcissistic. "People of this type impress others as being 'personalities,'" he wrote, describing one of the psychological types that clearly fall within the range of normality. "They are especially suited to act as a support for others, to take on the role of leaders, and to give a fresh stimulus to cultural development or damage the estal:>lished state of affairs." Throughout history, narcissists have always emerged to inspire people and to shape the future. When military, religious, and political arenas dominated society, it was figures such as Napoleon Bonaparte, Mahatma Gandhi, and Franklin Delano Roosevelt who determined the social agenda. But from time to time, when business became the engine of secial change, it, too, generated its share of narcissistic leaders. That was true at the beginning of this century, when men like Andrew Carnegie, John D. Rockefeller, Thomas Edison, and Heney Ford exploited new technologies and restructured American industry. And I think it is true again today. But Freud recognized that there is a dark side to narcissism. Narcissists, he pointed out, are emotionally isolated and highly distrustful. Perceived threats can trigger rage. Achievements can feed feelings of grandiosity. That's why Freud thought narcissists were the hardest personality types to analyze. Consider how an executive at Oracle describes his narcissistic CEO Larry Ellison: "The difference between God and Larry is that God does not believe he is Larry." That observation is amusing, but it is also troubling. Not surprisingly, most people think of narcissists in a primarily negative way. After all, Freud named the type after the mythical figure Narcissus, who died because of

HARVARD BUSINESS REVIEW· JANUARY 2004

his pathological preoccupation with himself. Yet narcissism can be extraordinarily useful-even necessary. Freud shlfted his views about narcissism over time and recognized that we are all somewhat narcissistic. More recently, psychoanalyst Heinz Kohut built on Freud's theories and developed methods of treating narcissists. Of course, only professional clinicians are trained to tell if narcissism is normal or pathological. In this article, I discuss the differences between productive and unproductive narcissism but do not explore the extreme pathology of borderline conditions and psychosis. Leaders such as Jack Welch and George Soros are examples of productive narcissists. They are gifted and creative strategists who see the big picture and fmd meaning in the risky challenge of changing the world and leaving behind a legacy. Indeed, one reason we look to productive narcissists in times of great transition is that they have the audacity to push through the massive transformations that society periodically undertakes. Productive narcissists are not only risk takers willing to get the job done but also charmers who can convert the masses with their rhetoric. The danger is that narcissism can turn unproductive when, lacking self-knowledge and restraining anchors, narcissists become unrealistic dreamers. They nurture grand schemes and harbor the illusion that only circumstances or enemies block their success. This tendency toward grandiosity and distrust is the Achilles' heel of narcissists. Because of it, even brilliant narcissists can come under suspicion for self-involvement, unpredictability, and-in extreme cases-paranoia. It's easy to see why narcissistic leadership doesn't always mean successful leadership. Consider the case of Volvo's Pehr Gyllenhammar. He had a dream that appealed to a broad international audience-a plan to revolutionize the industrial workplace by replacing the dehumanizing assembly line caricatured in Charlie Chaplin's Modern Times. His wildly popular vision called for team-based craftsmanship. Model factories were built and publicized to international acclaim. But his success in pushing through these dramatic changes also sowed the seeds for his downfall. Gyllenhammar started to feel that he could ignore the concerns of his operational managers. He pursued chancy and expensive business deals,

PAGE 2

Leadership Perspectives

33 Narcissistic leaders· BEST OF H BR 2000

Productive narcissists have the audacity to push through the massive transformations that society periodically undertakes.

which he publicized on television and in the press. On one level, you can ascribe Gyllenhammar's falling out of touch with his workforce simply to faulty strategy. But it is also possible to attribute it to his narcissistic personality. His overestimation of himself led him to believe that others would want him to be the czar of a multinational enterprise. In turn, these fantasies led him to pursue a merger with Renault, which was tremendously unpopular with Swedish employees. Because Gyllenharnmar was deaf to complaints about Renault, Swedish managers were forced to take their case public. In the end, shareholders aggressively rejected Gyllenhamrnar's plan, leaving him with no option but to resign. Given the large number of narcissists at the helm of corporations today, the challenge facing organizations is to ensure that such leaders do not self-destruct or lead the company to disaster. That can take some doing because it is very hard for narcissists to work through their issues-and virtually impossible for them to do it alone. Narcissists need colleagues and even therapists if they hope to break free from their limitations. But because of their extreme independence and self-protectiveness, it is very difficult to get near them. Kohut maintained that a therapist would have to demonstrate an extraordinarily profound empathic understanding and sympathy for the narcissist's feelings in order to gain his trust. On top of that, narcissists must recognize that they can benefit from such help. For their part, employees must learn how to recognize-and work aroundnarcissistic bosses. To help them in this endeavor, let's first take a closer look at Freud's theory of personality types.

Three Main Personality Types While Freud recognized that there are an almost infinite variety of personalities, he identified three main types: erotic, obsessive, and narcissistic. Most of us have elements of all three. We are all, for example, somewhat narcissistic. If that were not so, we would not be able to survive or assert our needs. The point is, one of the dynamic tendencies usually dominates the others, making each of us react differently to success and failure. Freud's definitions of personality types differed over time. When talking about the erotic personality type, however, Freud generally did not mean a sexual personality but rather one

HARVARD BUSINESS REVIEW· JANUARY 2004

for whom loving and above all being loved is most important. This type of individual is dependent on those people they fear will stop loving them. Many erotics are teachers, nurses, and social workers. At their most productive, they are developers of the young as well as enablers and helpers at work. As managers, they are caring and supportive, but they avoid conflict and make people dependent on them. They are, according to Freud, outer-directed people. Obsessives, in contrast, are inner-directed. They are self-reliant and conscientious. They create and maintain order and make the most effective operational managers. They look constantly for ways to help people listen better, resolve conflict, and find win-win opportunities. They buy self-improvement books such as Stephen Covey's The 7 Habits of Highly Effective People. Obsessives are also ruled by a strict conscience-they like to focus on continuous improvement at work because it fits in with their sense of moral improvement. As entrepreneurs, obsessives start businesses that express their values, but they lack the vision, daring, and charisma it takes to turn a good idea into a great one. The best obsessives set high standards and communicate very effecrively. They make sure that instructions are followed and costs are kept within budget. The most productive are great mentors and team players. The unproductive and the uncooperative become narrow experts and rule-bound bureaucrats. Narcissists, the third type, are independent and not easily impressed. They are innovators, driven in business to gain power and glory. Productive narcissists are experts in their industries, but they go beyond it. They also pose the critical questions. They want to learn everything about everything that affects the company and its products. Unlike erotics, they want to be admired, not loved. And unlike obsessives, they are not troubled by a punishing superego, so they are able to aggressively pursue their goals. Of all the personality types, narcissists run the greatest risk of isolating themselves at the moment of success. And because of their independence and aggressiveness, they are constantly looking out for enemies, sometimes degenerating into paranoia when they are under extreme stress. (For more on personality types, see the sidebar "Fromm's Fourth Personality Type.")

PAGE 3

Leadership Perspectives

34

Narcissistic Leaders· BEST OF H BR 2000

Strengths ofthe Narcissistic Leader When it comes to leadership, personality type can be instructive. Erotic personalities generally make poor managers-they need too much approval. Obsessives make better leaders-they are your operational managers: critical and cautious. But it is narcissists who come closest to our collective image of great leaders. There are two reasons for this: they have compelling, even gripping, visions for companies, and they have an ability to attract followers. Great Vision. I once asked a group of managers to define a leader. "A person with

vision" was a typical response. Productive narcissists understand the vision thing particularly well, because they are by nature people who see the big picture. They are not analyzers who can break up big questions into manageable problems; they aren't number crunchers either (these are usually the obsessives). Nor do they try to extrapolate to understand the future-they attempt to create it. To paraphrase George Bernard Shaw, some people see things, and they say "why?"; narcissists dream things that never were and say, "Why not?" Consider the difference between Bob Allen, a productive obsessive, and Mike Armstrong, a productive narcissist. In 1997, Allen tried to expand AT&T to reestablish the end-to-end ser-

Fromm's Fourth Personality Type Not long after Freud described his three personality types in 1931, psychoanalyst Erich Fromm proposed a fourth personality type, which has become particularly prevalent in teday's service econ-

omy. Fromm called this type the "marketing personality/' and it is exem-

plified by the lead character in Woody Allen's movie Zelig, a man so governed

by his need to be valued that he becomes exactly like the people he happens to be around. Marketing personalities are more detached than erotics and so are less likely to cement dose ties. They are also less driven by conscience than obsessives. Instead, they are motivated by a radarlike anxiety that permeates everything they do. Because they are 50 eager to

HARVARD BUSINESS REVIEW' JANUARY 2004

please and to alleviate this anxiety, marketing personalities excel at selling themselves to others. Unproductive marketing types lack direction and the ability to commit themselves to people or projects. But when productive, marketing types are good at facilitating teams and keeping the focus on adding value as defined by customers and colleagues. Like obsessives, marketing personalities are avid consumers of

self-help books. Like narcissists, they are not wedded to the past. But marketing types generally make poor leaders in times of crisis. They lack the daring needed to innovate and are too re5ponsive to current, rather than future, custamer demands.

vice of the Bell System by reselling local service from the regional Bell operating companies (RBOCs). Although this was a worthwhile endeavor for shareholders and customers, it was hardly earth-shattering. By contrast, through a strategy of combining voice, telecommunications, and Internet access by high-speed broadband telecommtmication over cable, Mike Armstrong has "created a new space with his name on it," as one of his colleagues puts it. Armstrong is betting that his costly strategy will beat out the RBOC's less expensive solution of digital subscriber lines over copper wire. This example illustrates the different approaches of obsessives and narcissists. The risk Armstrong took is one that few obsessives would feel comfortable taking. His vision is galvanizing AT&T. Who but a narcissistic leader could achieve such a thing? As Napoleon-a classic narcissist-once remarked, "Revolutions are ideal times for soldiers with a lot of wit-and the courage to act." As in the days of the French Revolution, the world is now changing in astounding ways; narcissists have opportunities they would never have in ordinary times. In short, today's narcissistic leaders have the chance to change the very rules of the game. Consider Robert B. Shapiro, CEO of Monsanto. Shapiro described his vision of genetically modifying crops as "the single most successful introduction of technology in the history of agriculture, including the plow" (New York Times, August 5, 1999). This is certainly a huge claim-there are still many questions about the safety and public acceptance of genetically engineered fruits and vegetables. But industries like agriculture are desperate for radical change. If Shapiro's gamble is successful, the industry will be transformed in the image of Monsanto. That's why he can get away with painting a picture of Monsanto as a highly profitable "life sciences" company---despite the fact that Monsanto's stock has fallen 12% from 1998 to the end of the third quarter of1999. (During the same period, the S&P was up 41%.) Unlike Armstrong and Shapiro, it was enough for Bob Allen to win against his competitors in a game measured primarily by the stock market. But narcissistic leaders are after something more. They want-and need-to leave behind a legacy. Scores of Followers. Narcissists have vi-

PAGE 4

Leadership Perspectives

35 Narcissistic Leaders· BEST OF HBR 2000

sian-but that's not enough. People in mental hospitals also have visions. The simplest definition of a leader is someone whom other people follow. Indeed, narcissists are especially gifted in attracting followers, and more often than not, tbey do so through language. Narcissists believe that words can move mountains and that inspiring speeches can change people. Narcissistic leaders are often skillful orators, and this is one of the talents that makes them so charismatic. Indeed, anyone who has seen narcissists perform can attest to tbeir personal magnetism and their ability to stir enthusiasm among audiences. Yet this charismatic gift is more of a twoway affair than most people think. Although it is not always obvious, narcissistic leaders are quite dependent on tbeir followers-they need affrrmation, and preferably adulation. Think of Winston Churchill's wartime broadcasts or J.F.K.'s "Ask not what your country can do for you" inaugural address. The adulation that follows from such speeches bolsters the self- The increasing national concern with the quality of working life and its relationship to worker productivity, participation, and satisfaction.

These and other societal changes make effective leadership in this decade a more challenging task, requiring even greater sensitivity and flexibility than was needed in the 1950's. Today's manager is more likely to deal with employees who resent being treated as subordinates, who may be highly critical of any organizational system, who expect to be consulted and to exert influence, and who often stand on the edge of alienation from the institution that needs their loyalty and commit· ment. In addition, the manager is frequently confronted by a highly turbulent, unpredictable environment. In response to these social pressures, new concepts of management have emerged in organizations. Open-system theory, with its emphasis on subsystems' interdependency and on the interaction of an organization with its environment, has made a powerful impact on managers' approach to problems. Organization development has emerged as a new behavioral science approach to the improvement of individual, group, organizational, and interorganizational perfonnance. New research has added to our understsnding of motivation in the work situation. More and more executives have become concerned with social responsibility and have explored the feasibility of social audits. And a growing number of organizations, in Europe and in the United States, have conducted experiments in industrial democracy. In light of these developments, we submit the fol· lowing thoughts on how we would rewrite certain points in our original article. The article described forces in the manager, subordinatcs, and the situation as givens, with the leadership pattern a result of these forces. We would now give more attention to the interdependency of these forces. For example, such interdependency occurs in: (a) the interplay between the manager's confidence in subordinates, their readiness to assume responsibility, and the level of group effectiveness; and (bl the impact of the behavior of the manager on that of subordinates, and vice versa. In discussing the forces in the situation, we primarily identified organizational phenomena. We would now include forces lying outside the organization and would explore the relevant interdependencies between the organization and its environment. In the original article, we presented the size of the rectangle in Exhibit I as a given, with its boundaries already determined by external forces-in effect, a closed system. We would now recoinize the possibility of the manager and/or the subordinates taking the initiative to change those boundaries through interaction with relevant external forces-both within their own organization and in the larger society. The article portrayed the manager as the principal and almost unilateral actor. He or she initiated and (continued)

10

HARVARD BUSINESS REVIEW

May-June 1973

83

Leadership Perspectives EXHIBIT EXHIBIT IIII

Continuum Continuum of of Manager-Nonmanager Manager-Nonmanager Behavior Behavior Nonmanager power and influence

Manager power and influence

Area a f freedom for manager

Area of freedom for nonmanagers Manager able to make decision which

must "sell" his or her decision

non· managers accept.

gaining acceptance.

Manager

before

Manager

presents

decision but must respond to

questions from non-

managers.

Manager

presents tentatlve decision

subject to change after nonmanager inputs.

determined group functions, assumed responsibility, and exercised controL Subordinates made inputs and assumed power only at the will of the manager. Although the manager might have taken outside forces into account, it was he or she who decided where to operate on the continuum-that is, whether to announce a decision instead of trying to sell the idea to subordinates, whether to invite questions, to let subor· dinates decide an issue, and so on. While the manager has retained this clear prerogative in many organizations, it has been challenged in others. Even in situations where managers have retained it, however, the balance in the relationship between managers and subordinates at any given time is arrived at by interaction--direct or indirect-between the two parties. Although power and its use by managers played a role in our article, we now realize that our concern with cooperation and collaboration, cornmon goals, commitment, trust, and mutual caring limited our

Manager presents problem, gets inputs from non-

managers, then

decides.

Manager defines limits within which

nonmanagers make

decision.

Manager and non-managers jointly make decision within limits defined by

organizational constraints.

vision with respect to the realities of power. We did not attempt to deal with unions, other forms of joint worker action, or with individual workers' expressions of resis· tance. Today, we would recognize much more clearly the power available to all parties and the factors that underlie the interrelated decisions on whether to use it. In the original article, we used the terms "manager" and "subordinate." We are now uncomfortable with "subordinate" because of its demeaning, dependencyladen cormotations and prefer "nonmanager." The titles "manager" and "nonmanager" make the terminological difference functional rather than hierarchical. We assumed fairly traditional organizational structures in our original article. Now we would alter our formulation to reflect newer organizational modes which are slowly emerging, such as industrial democracy, intentional communities, and "phenomenar· chy.''' These new modes are based on observations such as the following: (continued)

HARVARD BUSINESS REVIEW May-June 1973

11

84

Leadership Perspectives

> Both manager and nonmanagers may be governing forces in their group's environment, contributing to the definition of the total area of freedom. > A group can function without a manager, with managerial functions being shared by group members. > A group, as a unit, can be delegated authority and can assume responsibility within a larger organizational context.

The arrows in tlie exhibit indicate the continual iJow of interdependent iniJuence among systems and people. The points on the continuum designate the types of manager and nonmanager behavior that become possible with any given amount of freedom available to each. The new continuum is both more complex and more dynamic than the 1958 version, reflecting the organizational and societal realities of 1973.

Our thoughts on the question of leadership have prompted us to design a new behavior continuum {see Exhibit II) in which the total area of freedom shared by manager and nonmanagers is constantly redefined by interactions between them and the forces in the environment_

'For a description of phenomenarchy, see Will McWlrinoey, "Phenomenarchy: A Suggestion for Social Redesign," Tournai of Applied Behavioral Science, May 1973.

12

HARVARD BUSINESS REVIEW

May-June 1973

[7] The mystery 01 in order to sparI ,eople is age-old ; spawned an el lusands of "leal ; of testing and c creating busine res-be they stra

EADERSHIP THAT GETS ESULTS

distinct leadership !rent components ! styles, taken indi~ by Daniel Goleman Ild unique impact 1 company, divisiOi ancial performanl K ANY GROUP of businesspeople :, the research indi which precise leadership behaviors yield the question "What do effective esults do not rely ( positive results. Leadership experts profleaders do? n and you'll hear a fer advice based on inference, experience, and instinct. Sometimes that advice is sweep of answers. Leaders set strategy; right on target; sometimes it's not. they motivate; they create a mission; they build a culture. Then ask "What should leaders do?" If the But new research by the consulting firm Hay / McBer, which draws on a random sample of 3,871 group is seasoned, you'll likely hear one response: the leader's singular job is to get results. executives selected from a database of more than 20,000 executives worldwide, takes much of the But how? The mystery of what leaders can and mystery out of effective leadership. The research ought to do in order to spark the best performance from their people is age-old. In recent years, that found six distinct leadership styles, each springing mystery has spawned an entire cottage industry: from different components of emotional intelliliterally thousands of "leadership experts" have gence. The styles, taken individually, appear to have a direct and unique impact on the working atmomade careers of testing and coaching executives, all sphere of a company, division, or team, and in turn, in pursuit of creating businesspeople who can turn bold objectives-be they strategic, financial, organion its financial performance. And perhaps most zational, or all three -into reality. important, the research indicates that leaders with the best results do not rely on only one leadership Still, effective leadership eludes many people and organizations. One reason is that until recently, virstyle; they use most of them in a given week -seamtually no quantitative research has demonstrated lessly and in different measure- depending on the

11

86

Leadership Per~pectives

Leadership That Gets Results

Emotional Intelligence: A Primer Emotional intelligence - the OlblHty to mUl-ag\? QursE'tves .md our relattOflshtps effedJvelyc~ists

of four fundamental Qpabllilles:~ff · awanmess. sett..rnanagement. SOCIal awareness•

•30d social ~ill {ach c...apabi&ty, in tum. is compt»ed of speClnc sets of c('lmpelE'n(le~. Below IS a hit of Ihe capabilities and Im-ir corresponding uaits.

Self-Awareness

Self-Management

Social Awareness

Social Skill

• Emotfnnal l'd/-.Jl4lOfCNt'.)S:

• Empathy: ~lill at uonsillg

• t/lsicmary 1ender-Jhip:tlte aLil.ilyfot:tk£ch.1r~(,

11Ildcnund )'our erno

• Sf.'f-wn(I()I: ILt'~biliIyto keep disruplj\-e("motions .utJ imputus under control.

uons.'U WtU.1S ri'c0j2:nize

• TrustuX1r1hinHs' J

the :lhilil~' 10 rc;:art and

ILf>i.r'mp~OIl''IIork

performallcf'.

r~l.~tiotJ·

9hlp1 . ~t'h ... like.

• .-!.c~ urall.: self-ussessment: 4 fC3l.isti("~~\·alu.auon

\If yoursU'("n!!'ln however important 72

Leadership Perspectives

503

The Theory at Charismatic Leadership from the standpoint of political scientists, are only one of its manifold dimensions.

n An exposition of the concept of charisma can proceed in either of two ways. One is to bring together all that 'Weber himself wrote on the subject and systematize this material. Here the aim would be to present a general interpretation of Weber's thinking; and fidelity to his meaning and position would be the chief test of success. The alternative procedure-which is the one to be followed here-is to take "Weber's principal pertinent thoughts as a point of departure for an independent reformulation of the concept of charismatic leadership. In doing this, one's aim is not essentially to be exegetic, but rather to develop the theory of charisma into a more workable tool of understanding and research. Accordingly, the outcome may not be a faithful reflection in all ways of Weber's thinking. Certain of his thoughts may be neglected, others may be much more heavily emphasized than they were in his writings, and still others, which were not present in Weber, may be added. Here the result should be evaluated as a contribution not to the history of ideas, but to the needs of scholarship in the field of leadership. Weber uses "charisma" in a value-neutral manner: To be a charismatic leader is not necessarily to be an admirable individual. In Weber's own expression, the manic seizure and rage of the nordic beserker or the demagogiC talents of a Clean. are just as much "'charisma" as the qualities of a Napoleon, Jesus, Pericles. 6 Among the examples cited are founders of religions, prophets, warrior heroes, shamans, and great demagogues, such as the leader of the Bavarian leftist rising in 1918, Kurt Eisner. Owing to their extraordinary qualities, or what are perceived to be such, these leaders inspire followings among which their superior authority is freely accepted. Oftentime.