Breaking the Leadership Mold E-Book

Rosie Steeves

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 454

Veröffentlichungsjahr: 2010

Beschreibung

Much has been written about leaders and leadership. Journal articles, blogs and books try to home in on the essence of an effective leader. While there is common agreement that a executive's performance can make or break company, defining that essence of effective leadership remains the Holy Grail for those who find themselves at the top, for those who are responsible for carrying out the strategies and dictates of their managers, and for the shareholders who want to see commitment, action and positive financial return. Breaking the Leadership Mold is designed to help senior executives and managers respond to the challenges of today and shed the vestiges of days gone by. In so doing they will better lead and enable their staff, and create a work environment that is healthy, engaging, productive and sustainable. Based on the author's extensive research and 35 years' experience in working with local, national and international companies, Breaking the Leadership Mold offers 20 principles-such as Principle #10: Recognize How Executive Team Dynamics Promote Mediocrity and Principle #14: Get Other Executives On Board (or Out of the Way)--that when implemented will ensure that not only is there effective communication throughout the organization, from top to bottom and bottom to top, but also that employees and executives alike contribute to their full potential. The net result -- the organization wins on every measure. The 20 principles are built on the pillars of case studies, experience and research. Effective leadership is an absolute in any business environment, but becomes even more critical in times when businesses face unprecedented challenges and need to be nimble and responsive to change. Breaking the Mold has proven strategies to empower, unite and galvanize managers and employees -- and their organization - to enable them to prosper and adapt in a swift-changing environment.

Leseprobe

Table of Contents

Title Page

Copyright Page

PREFACE

Acknowledgements

Dedication

PART ONE

PRINCIPLE # 1 : - FACE THE FACTS

THE LINK BETWEEN ENGAGEMENT AND THE BOTTOM LINE

TODAY’S ORGANIZATIONS: A FAILING GRADE

ORGANIZATIONAL EVOLUTION (OR LACK THEREOF)

CHANGING ORGANIZATIONS DEMANDS A CHANGE IN LEADERSHIP

PRINCIPLE # 2 : - BREAK THE MOLD

WHAT IS LEADERSHIP?

TWO EXTREMES OF LEADERSHIP

THE RISE OF EMOTIONAL INTELLIGENCE

THE CURRENT STATE OF LEADERSHIP AFFAIRS

WHAT IS THE PROBLEM?

THE LEADERSHIP MOLD THAT MUST BE BROKEN

PRINCIPLE # 3 : - DEFINE A BETTER WAY

LEADERSHIP BRAND

PRINCIPLE # 4 : - FIGURE OUT IF YOU HAVE WHAT IT TAKES

A DEVELOPMENTAL FRAMEWORK FOR LEADERS

ACTION LOGIC AND LEADERSHIP EFFECTIVENESS

GREAT ORGANIZATIONS NEED STRATEGISTS

THE STARTING POINT: DISCOVERING YOUR OWN ACTION LOGIC

PART TWO

PRINCIPLE # 5 : - GIVE YOURSELF A LEADERSHIP REALITY CHECK

WHAT IS SELF-AWARENESS?

SENIOR LEADERSHIP AND SELF-AWARENESS

PRINCIPLE # 6 : - CONDUCT A PERSONAL LEADERSHIP AUDIT

PASSIVE OPTIONS

ACTIVE OPTIONS

PRINCIPLE # 7 : - EMBARK ON A LEADERSHIP MAKEOVER

WHAT TO CHANGE

MAKING CHANGE HAPPEN

PRINCIPLE # 8 : - PUT YOURSELF FIRST

THE PROBLEMS OF ROLE OVERLOAD

ROLE OVERLOAD CAUSES SUCCESSFUL LEADERS TO FAIL

ENERGY MANAGEMENT

PART THREE

PRINCIPLE # 9 : - UNDERSTAND WHAT COULD BE AMISS WITH YOUR TOP TEAM

HOW EXECUTIVE TEAMS ARE PERFORMING

EXECUTIVE TEAM DEMOGRAPHICS

PRINCIPLE # 10 : - RECOGNIZE HOW EXECUTIVE TEAM DYNAMICS PROMOTES MEDIOCRITY

BARRIERS TO TOP TEAM EFFECTIVENESS

THE CONTINUUM OF AUTHENTICITY

PRINCIPLE # 11 : - GET THE TOP TEAM WORKING

STEP ONE: ASSESS THE TEAM’S PERFORMANCE

STEP TWO: GET THE RIGHT PEOPLE ON THE TEAM

STEP THREE: DEFINING A COMPELLING PURPOSE

STEP FOUR: CREATE A SENSE OF PSYCHOLOGICAL SAFETY

STEP FIVE: HAVE THE RIGHT PROCESS

WHO’S RESPONSIBLE? DEVELOPING THE TEAM WHEN YOU’RE NOT THE CEO

PRINCIPLE # 12 : - GET THE BOARD ON BOARD

AWARENESS OF EFFECTIVENESS

IS THE BOARD PAYING ATTENTION TO WHAT MATTERS?

BOARD ORGANIZATION

WHAT TO DO

PART FOUR

PRINCIPLE # 13 : - DEVELOP EVERYONE’S LEADERSHIP

ORGANIZATIONAL CULTURE

AN EXECUTIVE’S GUIDE TO LEADERSHIP DEVELOPMENT

A FEW CRITICAL DESIGN FEATURES

HOW IT WORKS: A CASE STUDY

PRINCIPLE # 14 : - GET OTHER EXECUTIVES ON BOARD (OR OUT OF THE WAY)

EXECUTIVE ORGANIZATIONAL INFLUENCE

PURPOSE OF THE LEADERSHIP DEVELOPMENT INTERVENTION

THE DIFFERENT TYPES OF EXECUTIVE SUPPORT

HOW IT WORKS—A REAL-LIFE EXAMPLE

PRINCIPLE # 15 : - FIGURE OUT COMMUNICATION

WHAT IS IT AND WHY DOES IT MATTER?

ATTITUDE

AWARENESS

METHODOLOGY

PRINCIPLE # 16 : - CREATE COMMUNITIES

COMMUNITIES IN THE ORGANIZATIONAL CONTEXT

HOW CAN COMMUNITIES OF PRACTICE IMPACT ORGANIZATIONS?

CREATING EFFECTIVE COMMUNITIES—AN EXECUTIVE’S CHALLENGE

WHAT DOES IT LOOK LIKE IN ACTION?

PART FIVE

PRINCIPLE # 17 : - TELL PEOPLE HOW THEY’RE DOING

PAY ATTENTION TO WHAT’S WORKING

THE INSTITUTIONALIZATION OF FEEDBACK

RECOGNITION PROGRAMS

PERFORMANCE MANAGEMENT PROGRAMS

PRINCIPLE # 18 : - PROMOTE FOR THE FUTURE

SIZING UP YOUR TALENT: MISTAKES EXECUTIVES MAKE

A BETTER ASSESSMENT PROCESS

WHEN THE RUBBER HITS THE ROAD: TALKING ABOUT YOUR SUCCESSION DECISIONS

PRINCIPLE # 19 : - INTEGRATE THE HARD AND THE SOFT

MANAGEMENT VERSUS LEADERSHIP

DECISION-MAKING

PLANNING STRATEGY

OTHER EVIDENCE OF THE HARD-SOFT SEPARATION

PRINCIPLE # 20 : - NEVER STOP

ENDNOTES

BIBLIOGRAPHY

INDEX

Copyright © 2010 by Rosie Steeves

All rights reserved. No part of this work covered by the copyright herein may be reproduced or used in any form or by any means—graphic, electronic or mechanical—without the prior written permission of the publisher. Any request for photocopying, recording, taping or information storage and retrieval systems of any part of this book shall be directed in writing to The Canadian Copyright Licencing Agency (Access Copyright). For an Access Copyright license, visit www.accesscopyright.ca or call toll free 1-800-893-5777.

Care has been taken to trace ownership of copyright material contained in this book. The publisher will gladly receive any information that will enable them to rectify any reference or credit line in subsequent editions.

Library and Archives Canada Cataloguing in Publication Data

Steeves, Rosie, 1957-

Breaking the leadership mold : an executive’s guide to achieving organizational excellence / Rosie Steeves.

Includes index.

ISBN 978-0-470-67766-7

1. Leadership. 2. Executive ability. 3. Corporate culture. I. Title.

HD57.7.S.4’092 C2010-901767-6

Production CreditsCover and Interior Design: Michael Chan Typesetter: Thomson Digital Front Cover Image: ©istockphoto.comPrinter: Friesens Printing Ltd.

Editorial CreditsEditor: Don Loney Production Editor: Pamela Vokey

John Wiley & Sons Canada, Ltd. 6045 Freemont Blvd. Mississauga, Ontario L5R 4J3

FP

PREFACE

Do you want your legacy to be a mediocre organization? Are you passionately striving to disengage employees, alienate the senior team from the rest of the organization, limit communication, and create huge inefficiencies? Have you made it your life’s work to create a dysfunctional and unprofitable organization?

These are silly questions, I know. No one purposely wants to achieve mediocrity or unprofitability. Every leader worth his or her salt strives to create a great organization. Too bad it’s not working out that way for most companies. Mediocre organizations dominate business today, while great ones are few and far between.

What do I mean by a great organization? In simple terms, I consider it to be an organization that is competitive and sustainable. Let’s be clear: in today’s world, profitability and competitiveness are key. But these goals must be attained in a manner that does not threaten the organization’s very existence—short or long term. In other words, the organization must be sustainable. Furthermore, I believe (and hope you do too) that organizational success must not be achieved at any cost. Ethics and values must be taken into consideration. We must value and respect the people we interact with, because it is the right thing to do. This is the hallmark of a healthy (or great) organization. It’s nice to know that such an attitude also makes good business sense, as you’ll discover throughout this book.

Unfortunately, many leaders focus solely on profitability and competitiveness, paying little attention to the “people” aspect of the business. They assume their human resources (HR) department takes care of this for them. “Hard” takes precedence over “soft” in every facet of organizational life, whether it is resources invested in development, the focus of the strategic planning process, or how individual decisions are made. The irony is that such a myopic view works against the very thing they so anxiously seek—great margins.

While close attention to the bottom line is clearly necessary, such a single-minded focus fails to account for the fact that organizations are groups of people who collectively strive to produce a product or service. Thus, it is the people and the way they feel and interact that make or break an organization.

The increasing focus on people mirrors the change in organizational paradigms that has occurred in recent years. In the past, a mechanistic world-view suggested that organizations are best thought of as machines and employees as interchangeable parts. In such organizations, employees’ output on a production line is believed to be driven by the production process and not the employees’ sense of engagement or well-being. The idea of empowering or engaging employees to take the initiative was not seen to be of any value. Indeed, such efforts were to be avoided, as they were believed to negatively impact the bottom line.

Those days are now gone, replaced by a more organic and humanistic approach to organizations. Today, we understand that the quality of relationships, leadership, and people practices all have a direct impact on the bottom line. Despite this, mechanistic thinking pervades every aspect of organizational life. Senior leaders, many of whom began their career under traditional “command and control” managers, are often unaware of how these practices negatively impact the bottom line.

Make no mistake: many senior leaders are failing to acknowledge the human element of business. The numbers we see regarding the level of employees’ engagement and satisfaction are appalling, pointing to serious problems in many organizations. For example, on average, less than 30 percent of employees are engaged at work and only 6 percent believe that senior management treats them as though they are the organization’s “most valuable asset.”1 These figures are astounding when we know that the level of employee engagement is directly linked to an organization’s profitability. Something is clearly wrong.

The responsibility for these terrible numbers lies, I believe, fairly and squarely on the shoulders of senior management. Not because we need these individuals to be larger-than-life charismatic leaders, but because they are simply not doing what must be done to create an engaged workforce, and along with it a healthy, sustainable, and, yes, profitable organization. They have not adapted their leadership style or their organizational people practices to the present reality and, instead, remain firmly embedded in the model of mechanistic thinking, despite what many may preach. Senior management are in a position to be able to effect an organization’s transformation, but unless they open their eyes to alternative paradigms and changing roles, their organization will continue to disengage employees and be a fine example of mediocrity. Organizational greatness will remain simply a pipe dream.

We know what to do. Organizational greatness is not some unattainable nirvana. It simply requires those at the top to do the following:

• Ensure their own leadership behavior is relevant for today’s organizations. Organizations have changed, but unfortunately, many senior leaders continue to rely on the behaviors that got them to the top. It’s just not working. For example, a recent study revealed that only 38 percent of employees believe that senior management communicates openly and honestly.2 A hierarchy does not exclude executives from the need for ongoing development. Rather, it demands it. Yet a willingness to take a long hard look at one’s leadership practices is a rare phenomenon at the top of the management ladder. It seems like everyone’s just too busy “leading.”

• Develop a collaborative and effective senior leadership team. The rapidly changing environment in which organizations now operate means that the leadership of an organization must fall into the hands of not one all-powerful CEO, but the team at the top. Unfortunately, most executive team members fail to fully comprehend the dynamics of the executive team. As a result, executive team dysfunction is rampant. One study suggested that only 6 percent of organizations could boast that the executives in their C-suite were a well-integrated team.3

• Purge the organization of all remnants of mechanistic thinking. It can be found everywhere, from how we implement change, to how we recognize and reward employees. Many times, we are not even aware that commonly accepted practices come from a long-gone era of a mechanistic world-view.

In the chapters that follow, I offer some clear guidelines for any leader who wishes to create a great organization. While written primarily for those at the top, the lessons outlined in the following pages are relevant for all who are no longer willing to tolerate organizational mediocrity.

In Part One, I propose that those at the top who want to create a great organization first need to increase their understanding and appreciation of how modern organization life has failed to evolve in parallel with our increased knowledge of what makes for an effective organization. The first four principles are as follows:

• Principle #1: Face the Facts

• Principle #2: Break the Mold

• Principle #3: Define a Better Way

• Principle #4: Figure Out if You Have What It Takes

Despite their best intentions, many executives continue to operate using outdated paradigms. The net result of this is employees who are disengaged and organizations that are fractured, creating silos and a gulf between senior management and employees. Executives would be well advised to reflect on, and clarify, their own personal beliefs regarding organizational leadership and to define for themselves what they want. More than motherhood statements, wishful thinking, and lists of competencies, those at the top need to ensure that they can clearly articulate a leadership brand that links behavior and results. They also need to understand how such behavior is only possible by those who have achieved a certain level of personal development. All leaders need to accept that the developmental level of those at the top is a “show-stopper.” In other words, organizational transformation is simply not possible unless a sufficient number of senior leaders have attained a sufficiently high stage of developmental maturity. And few have.

The first four principles demand some deep reflection and a willingness to let go of old paradigms and the belief that all is well. Once this occurs, an individual is able to explore new ways of leading the organization. As they embark on this journey, they will acquire a deeper understanding both of themselves as a leader and their organization, which will, in turn, impact their organizational change efforts. Thus, the cycle continues.

In Part Two, I suggest that prior to embarking on organizational transformation efforts, executives first consider how they are leading.

The four principles that embody this concept are these:

• Principle #5: Give Yourself a Leadership Reality Check

• Principle #6: Conduct a Personal Leadership Audit

• Principle #7: Embark On a Leadership Makeover

• Principle #8: Put Yourself First

One of the vestiges of the outdated, mechanistic model of leadership is that those at the top rarely have a good sense of how they are leading. Worse, they convince themselves that a senior position in the organizational hierarchy is clear evidence of leadership effectiveness. Yet despite good intentions, many executives are using methods that do not meet the needs of their employees, with the net result an ineffective and unhealthy organization.

Any executive who wishes to create a great organization must ensure that their own personal leadership skills and capacity helps, rather than hinders, their organization. Although many at the top may acknowledge that development is a never-ending journey, their behavior suggests something quite different. Once they reach the upper echelons of the hierarchical pyramid, their development efforts take a back seat to what they perceive to be the more important needs of the organization.

Such leaders would do well to recognize that the organization first needs them to lead more effectively. In trying to do the right thing, they are actually accomplishing the opposite. For example, many executives try to meet the needs of their organization by assuming ridiculous workloads with little, if any, down time. They fail to realize that such work habits are counterproductive to their efforts to create a great organization.

In Part Three, I explore the importance of developing a highly functioning executive team. Prior to focusing on the entire organization, leaders must first get their own house in order, whether this be with respect to their own personal leadership or the leadership and behavior of their peers and colleagues. The four principles presented in Part Three are these:

• Principle #9: Understand What Could Be Amiss with Your Top Team

• Principle #10: Recognize How Executive Team Dynamics Promotes Mediocrity

• Principle #11: Get the Top Team Working

• Principle #12: Get the Board on Board

It is in the area of the senior leadership team effectiveness where much work is required. Many paradigms exist in organizations about the team at the top. In most cases, this mythology stems more from actions in the past, rather than present-day reality, yet stories still persist of arrogant, grossly overpaid, and out-of-touch senior executives.

Given this persistent negative image, great effort must be taken by the senior team, not only to enhance their effectiveness, but also to create a different story about the team at the top. This is not an easy task given the powerful dynamics present in any senior team. As many executives are unaware of these dynamics, senior team mediocrity is rampant. Furthermore, with all the pressures on their time, rarely do executives make senior team development a priority.

Executives would be well advised to avoid this trap and spend the time that is necessary to develop a highly functioning senior team. By doing so, not only will better decisions be made for the organization, but also all employees will understand the expected standards of communication and collaboration. The senior team can, in effect, model through their actions the type of organizational culture that they are trying to create. This also means ensuring relationships with board members are equally productive, open, and healthy.

Once personal and team leadership have been developed, a senior leader has then earned the right to focus on transforming the organization. The four principles presented in Part Four are these:

• Principle #13: Develop Everyone’s Leadership

• Principle #14: Get Other Executives on Board (Or Out of the Way)

• Principle #15: Figure Out Communication

• Principle #16: Create Communities

One of the most effective strategies for transforming an organization to greatness is to develop the leadership of everyone within the organization. This requires an investment in everyone, regardless of their position in the hierarchy. While the format of leadership development will vary depending on an employee’s role, there must be a personal investment in every employee. Those at the top should not naïvely assume that the more senior leaders have the skills or capacity to develop the leadership of those who report to them. Furthermore, influential senior executives must be committed to and supportive of all leadership development initiatives.

Organizations will transform when the individuals who make up that organization are connected to each other. This requires that those at the top pay close attention to communication and adjust their communication strategies to the needs of employees. Technology is opening up new avenues in this regard. In addition, a wide range of employees can be connected through communities. Such communities can be effective structures to ensure that organizational boundaries are spanned. The net result will be an organization that develops the capacity to learn, grow, and change.

In Part Five, I discuss the need for an ongoing focus on improvement, which demands an effective feedback system that incorporates all aspects of organizational life. The four principles presented in Part Five are these:

• Principle #17: Tell People How They’re Doing

• Principle #18: Promote for the Future

• Principle #19: Integrate the Hard and the Soft

• Principle #20: Never Stop

An organization is a system and all parts of that system must be aligned and integrated. Behaviors that are advocated through leadership development initiatives or senior leadership communication must be rewarded and supported. Those individuals who are the “early adopters” should be recognized and placed into positions where they can have the most influence. Action must also be taken with those who struggle with these changes.

The responsibility for these organizational systems does not reside solely with the HR department. All senior executives should be intimately involved with talent management processes and must recognize that the enactment of these systems sends a loud message to the organization regarding what is expected. They are, in effect, powerful communication tools.

The same applies to many other internal processes that tend to separate out the hard and the soft elements of organizational life. Senior leaders would be well advised to continually consider how integration, rather than separation, can occur in processes such as leadership and management development, strategic planning, and decision-making.

The shift to organizational greatness never ends. Those in the C-suite must dispel the myth that they and their organization have “arrived.” Change is an ongoing process that must be normalized within any organization.

If you follow the guidelines outlined in this book, your organization will indeed make the shift to greatness. Oh, and it will also be profitable, healthy, and sustainable. But if you read and don’t act, rest assured you will be a champion of mediocrity.

The choice is yours.

ACKNOWLEDGMENTS

A number of people were instrumental in seeing this book through to fruition. I’d like to thank John Hoover, who got me started on the right path and gave me the tools and assurance I needed to move ahead. Don Loney from Wiley proved to be my greatest supporter. I thank him for having faith in me from the outset and the unwavering confidence he has shown in me every step of the way. To Carol Bonnett, who with eagle eyes did an incredible editing job, and to everyone at Wiley for welcoming me in ways I never imagined. I must thank the clients who have allowed me into their inner organizational sanctuaries and who have been courageous enough to make changes and, in doing so, made a difference to so many. And finally, to my family, who have put up with a restless Mom and the crankiness that not enough outdoor time produces. You guys are the best!

Dedication

This book is dedicated to Kelly and Megan, who have taught me more about leadership than anyone; to Bob, who has always been there for me; and to Tatlow, for her constant companionship.

PART ONE

PRINCIPLE # 1 :

FACE THE FACTS

The vice president of operations of a mining company recognizes that the leaders in his organization are too focused on short-term tactics to be able to lead the organization into an anticipated aggressive growth phase. The director of human resources (HR) of an engineering company believes her organization’s leaders are technical experts, but they are sorely lacking in people skills. Following the merger of three separate companies, the CEO of a gaming company recognizes a key opportunity to create a corporate identity and ensure the consistency of people practices. A government assistant deputy minister has a strong desire to improve engagement. The manager of organizational development of a credit union sees a need to revamp and implement the organization’s talent and performance management system.

All of the case studies above are examples of people in positions of responsibility attempting to effect change in different situations, and one thing unites them. They all require an organizational intervention that necessitates changing the behaviors of individuals within the organization, which, in turn, demands an investment in developing people skills.

If these executives act boldly and aggressively to develop the “people” side of their respective businesses, not only will they create great organizations, but they will leave their competition far behind. However, as we will see in this book such executive action is rare or, at best, limited. Let’s be clear: this inaction is not due to bad intentions, but a simple lack of awareness of the lost opportunity. The net result is disengaged, inefficient, and uncompetitive organizations, simply because executives are not doing what is required.

What should executives be doing? As I will outline in future chapters, there are numerous things that they should do. But first, it is important to set the scene—and face the facts.

THE LINK BETWEEN ENGAGEMENT AND THE BOTTOM LINE

Regardless of who initiates change, regardless of who drives it, and regardless of what form it takes, the very acknowledgment of the need to change the behavior of people assumes that the effectiveness and efficiency of an organization is driven by the manner in which people behave. Any “people” intervention consumes resources, most notably time and money. Thus, implicit in the acknowledgment that this consumption is necessary is the assumption that such an investment will, ultimately, yield a better bottom line.

Increasingly, research is confirming that there is indeed a direct correlation between behavior (in particular, the behavior of leaders) and results. Managers who create motivating and energizing climates have been found to deliver double the margins of those who create neutral or de-motivating climates.1 Furthermore, the average five-year annualized returns of the 20 companies with the best leaders beat the S&P 500 over the same period by 3.53 percent.2 Another study determined that, on average, 14 percent of a firm’s performance is dependent on its leader.3

The term “engagement” is often used to describe the behavior leaders are endeavoring to facilitate. We know results are positively impacted when leaders create engaging environments and do not act in ways that cause employees to become disengaged. However, while the concept of engagement is increasingly gaining popularity as a way to define the desired employees’ behavior, a myriad of definitions exist that only adds to the degree of confusion for a manager trying to create a more engaged organization.

In a recent study, Towers Perrin defined engagement as employees’ willingness and ability to contribute to company success. They measure engagement based on employees’ connections to the organization across three dimensions:

• Rational: How well employees understand their roles and responsibilities (the “thinking” part of the equation).

• Emotional: How much passion and energy they bring to their work (the “feeling” part of the equation).

• Motivational: How well they perform in their roles (the “acting” part of the equation).4

In 2008, Hewitt & Associates advocated that employee engagement is best defined as

• Say—consistently speak positively about the organization to co-workers, potential employees, and customers.

• Stay—have an intense desire to be a member of the organization despite opportunities to work elsewhere.

• Strive—exert extra time, effort, and initiative to contribute to business success.5

Another consulting group, BlessingWhite, suggests that full engagement represents an alignment of maximum job satisfaction (I like my work and do it well) with maximum job contribution (I help achieve the goals of my organization).6

In his book Getting Engaged: The New Workplace Loyalty, Tim Rutledge proposes that truly engaged employees are attracted to, and inspired by, their work (I want to do this), committed (I am dedicated to the success of what I am doing), and fascinated (I love what I am doing).7

And so it goes on. There’s no shortage of definitions or theories when it comes to engagement, but it’s clear that an engaged organization is one in which all employees, regardless of where they work or the position they hold, care passionately about the future of the company and are willing to invest the discretionary effort necessary to ensure the organization succeeds. It’s more than just working hard—it’s doing what must be done for success. It’s going above and beyond, not because someone tells you to, but because you care.

Not surprisingly, studies are confirming the link between engagement and the bottom line. For example, organizations in the top quartile on engagement have revenue growth that is 2.5 times higher than that of organizations in the bottom quartile.8 Towers Perrin determined that companies with high employee engagement had a 19 percent increase in operating income and almost a 28 percent growth in their earnings per share. Conversely, companies with low levels of engagement saw their operating income drop more than 32 percent and their earnings per share decline more than 11 percent.9 Gallup found that public companies ranking in the top quartile for employee engagement had earnings per share growth that was 2.6 times the rate of those that were below average. Conversely, it is estimated that disengaged employees cost U.S. companies as much as $350 billion annually in lost productivity.10 Likewise, Hewitt’s 2008 research has confirmed that employee engagement at double-digit-growth companies exceeds employee engagement at single-digit-growth companies by over 20 percent.11

TODAY’S ORGANIZATIONS: A FAILING GRADE

Clearly, good leadership and effective people practices can positively impact the bottom line. To many, this is akin to stating the obvious. However, as obvious as it may be, organizations appear to be failing miserably when it comes to fully utilizing their greatest asset. The current numbers emerging from various studies on engagement are astounding and disturbing. For example,

• After surveying 90,000 employees worldwide, Towers Perrin found that only 21 percent were fully engaged. A worrying 38 percent were partially or fully disengaged. And in Canada, 32 percent of employees were found to be disengaged. 12

• BlessingWhite determined in a 2008 study that just 29 percent of North American employees were fully engaged.13

• In 2008, the American Society for Training and Development found that just 34 percent of U.S. workers were engaged. 14

• In 2007, Ott and Killham found that just 26 percent of employees were engaged.15

So, although we know that engagement is clearly linked to successful financial performance, many organizations appear to be doing a less-than-stellar job in engaging their employees and, as a consequence, are losing a lot of money for their organization.

The problem lies, I believe, in the fact that our philosophy regarding people practices and the “softer” side of organizational life has not kept up with the times. Over the past few decades, the environment in which organizations operate has changed dramatically. This, in turn, has precipitated some radical changes in organizational design. Yet vestiges of our past philosophy regarding the required investment in people have not evolved in parallel. Despite what they may preach, the extent to which organizations invest in and value people is more akin to days gone by. Simply put, there is a huge disconnect between our investment in people and relationships, and the associated job expectations.

In order to understand the origins of this problem, a brief history lesson is in order.

ORGANIZATIONAL EVOLUTION (OR LACK THEREOF)

Prior to 1500 in Europe, most people adopted an organic world-view. Society, communities, and individuals were defined by relationships. The nature of medieval science was to understand the meaning and significance of things—control was deemed to be in the hand of the creator.

The scientific discoveries by Copernicus, Galileo, and Newton radically changed this world-view. With increased understanding, a desire to describe the workings of the world as mechanistic developed. If the world was a machine, the thinking went, then surely prediction and consequently, control, were possible. This, in turn, would allow emancipation from such things as prejudice, superstition, and unjust authority. This belief soon took hold and the age of enlightenment emerged.

As a consequence of these developments, a Cartesian/Newtonian world was developed, which was defined by the following beliefs:

• The universe is a mechanical system composed of a series of building blocks.

• The universe can best be comprehended by understanding the individual building blocks (reductionism).

• The purpose of science is prediction and control.

• Reality and truth are absolutes that can be uncovered.

• Valid knowledge is obtained only through the positivistic scientific method that emphasizes the rational, mathematical, objective approach. Intuitive wisdom is not scientific and must, therefore, be discounted.

Events such as the Industrial Revolution solidified the Cartesian/ Newtonian world-view as the “correct” way to regard the world. Despite the fact that it was developed in the seventeenth century, the design of our modern organization is still derived from philosophies aligned to this mechanistic viewpoint.

A mechanistic world-view suggests that organizations are generally thought of as machines. Organizational charts depict the workings of a machine. As Margaret Wheatley points out in her book Leadership and the New Science, there is an emphasis on structure and parts, responsibilities are organized into functions, people are organized into roles, numerical data is gathered and valued, decisions are made on the basis of mathematical rationalizations.16

Reductionism is evident in the way groups focus on improving their own efficiency, having little concern for their relationships to other groups. Mechanistic organizations are driven by a belief that if every business unit and individual employee works effectively, then the organization will be effective. We understand organizations by reducing, describing, and separating people and departments into little boxes and lines. The emphasis on parts has led to a tendency to focus on the tasks and functions of individuals, rather than the relationships individuals have with each other.

The mechanistic organization was further consolidated in the early twentieth century with the development of the scientific management method. The father of this methodology, Frederick Winslow Taylor, believed that the application of the scientific method to the management of workers could greatly improve productivity. Rather than work being performed by skilled craftsmen who made their own decisions about how their job was to be performed, supporters of the scientific management method suggested that better productivity could be achieved by taking away much of this autonomy. Skilled tasks were converted into a series of simplified jobs that could be performed by unskilled workers easily trained to perform these tasks efficiently.

Taylor argued that even the most basic, mindless tasks could be planned in a way that would dramatically increase productivity and that scientific management of the work was more effective than the “initiative and incentive” method of motivating workers. The initiative and incentive method offered an incentive to increase productivity, but placed the responsibility on the worker to figure out how to do it.

The scientific method soon gained popularity in organizations where mass production and cost efficiency were the primary goals. Employees performed unskilled tasks and had no special status. Management’s goal was to extract maximum output while minimizing their cost, and in this regard, employees were viewed in the same way as other inputs such as raw materials. Employees were considered expendable commodities; in effect, they were interchangeable parts of a machine.

With this philosophy of management, the idea of empowering or engaging employees to take the initiative was not seen to be of value. Indeed, such efforts were to be avoided, as they would negatively impact the bottom line. An employee’s output on a production line was driven by the production process and not their sense of engagement or well-being. Given the design of the organization, employee satisfaction was irrelevant to productivity. Furthermore, such satisfaction was seen as a measure of poor productivity, as it occurred only when employees were overpaid or underworked, both of which are detrimental to shareholder value.

Mechanistic organizations work well in a stable and predictable environment, but a rapidly changing environment demands a different type of organization. Today’s world is full of unknowns, rapid change, and disappearing boundaries. This different world demands a different organization. While many organizations still bear vestiges of the mechanistic organization, the organic organization has taken root.

Organic organizations are characterized by decentralization, flexible and broadly defined jobs, interdependence among employees and units, and multi-directional communication. Employees are required to think creatively and take the initiative. Employee satisfaction and participation in problem solving and decision-making are seen as essential to organizational success. As a consequence, typically there are relatively few, broadly defined rules, regulations, procedures, and processes. In organic organizations, the emphasis is on effectiveness, problem solving, responsiveness, flexibility, adaptability, creativity, and innovation. Such an organization is able to respond in a timely manner to environmental changes because employees are empowered to be creative, to experiment, and to suggest new ideas.The process of innovation is triggered by employees throughout the organization in a “bottom-up” manner.17

Clearly, in such an organization employees are not simply expendable or interchangeable commodities, but unique individuals who can directly impact the success of the organization. Human relations theorists such as Maslow or McGregor supported this belief by suggesting that employees are best viewed as key organizational assets who can create substantial value by inventing new products or building client relationships. These theories suggest that satisfaction can improve employee retention and motivation, benefiting the shareholders. Relationships, effective leadership, and people practices become key to improving the bottom line.

Our organizations have, fundamentally, evolved from mechanistic to organic (although vestiges of the old world order exist). With this shift, a change has come in the extent to which employees and their sense of satisfaction can impact profitability.

In a mechanistic organization, efforts are focused on ensuring the systems and processes are effective and efficient. Few, if any, resources are spent on people initiatives such as creating environments where employees are content in their work and have great relationships with each other and their manager. After all, productivity is driven by the process, and employees have little discretion in their work. Time is spent educating the future workers on the technical aspect of their job.

But in the organic organization, the manner in which profitability is achieved is different. The quality of relationships within the organization, an employee’s happiness, sense of engagement, and satisfaction will all determine the extent to which they are willing to give discretionary effort. This, in turn, directly impacts profitability.

Let me offer an example. Several years ago I was working with the maintenance crew of a lumber mill. Because of different shifts, this crew reported to two supervisors—one whom they respected and one whom they didn’t. The supervisor they detested treated them with disdain and no respect. At times, each of these supervisors would have to phone the crew, asking them to come and deal with a problem at the mill. When the well-liked supervisor phoned, the crew instantly put down their coffee cups, picked up their tools, and hurried over to the site. Conversely, when the other supervisor called, the crew responded in a much more leisurely way. In both cases, the crews were doing what was asked of them. However, the degree of effort was discretionary and this was due solely to the behavior of the different supervisors.

It wasn’t always this way. Years ago, when direct orders came from supervisors to fix a problem, a timeline was set and everyone’s roles were spelled out clearly. But with the increasing complexity of technology, more decision-making license is given to employees. In the case of the maintenance crew, they were required to solve complex problems, take the initiative, and have input into the decisions. Thus, the crew could no longer be viewed as simply part of a machine, but as a critical asset to the organization. One of the supervisors understood this, while the other did not. The net result was a variance in productivity on the part of the crew.

CHANGING ORGANIZATIONS DEMANDS A CHANGE IN LEADERSHIP

The advent of organizations that are dependent on the quality of relationships requires that we do not concern ourselves solely with systems and processes, but instead pay attention to the human side of organizations. In order to do this, we must ensure managers are well versed in the complexity of human behavior with a deep and rich understanding of leadership, motivation, and engagement.

Unfortunately, much of the focus in the area of development of people remains embedded in the era of scientific management.The manner in which we prepare and continually develop workers in organizations has not yet changed to reflect the current reality. For example,

• While training for a profession, little, if any, time is spent learning the complexities of human nature. The emphasis continues to be on our learning the technical aspects of the job, whether it is engineering, accounting, marketing, or some other profession. This emphasis on the technical continues to dominate, despite the fact that an individual’s ability to work with people will likely make or break a person’s career.

• When an organizational initiative to develop people skills is proposed, it is frequently viewed with mixed support. While it may be recognized as a good thing for an organization, all too often people question the value to the bottom line. Those in charge demand metrics such as the return on investment (ROI). There is no doubt that people skills development is judged by a different standard than the so-called harder skills. For example, when employees take a computer skills course it is assumed that this is a necessary part of their job. There is rarely any follow-up to see if they are using the skills acquired on the course and the ROI is not discussed. The same cannot be said for people skills courses.

• Those whose organizational responsibilities lie in the realm of people are often not valued to the same extent as those who are responsible for systems, processes, and numbers. Even today, it is not uncommon to see HR “missing in action” from the executive table. Although some progress has been made in recent years, I know of many large organizations that relegate the HR function to a low level within the organizational hierarchy. One organization I work with has placed the person in charge of all leadership development four levels below the CEO—at the lowest supervisory level.

• When times get tough, the investment in people is typically one of the first things to be cut. Rather than recognizing that it is the people who will help the organization survive, those in charge revert to a more mechanistic mindset, and focus instead on tightening up systems and processes.

• Organizations continue to promote people into leadership positions based on their technical expertise. Furthermore, they give them limited, if any, training as they assume this new role. The assumption continues to be that the technical skill set is similar to the leadership skill set. This holds true only if those who fall under the leader’s responsibility are viewed as part of a machine, rather than as emotional humans.

These paradigms are holdovers from the days when relationships mattered less, employee satisfaction was seen as irrelevant to profitability, and there were limited opportunities for discretionary effort. But today’s organizations call for a different approach. The numbers we see concerning employee engagement (or lack thereof) are clearly a symptom that something is wrong with our organizations.

A new paradigm is required. People practices must no longer be synonymous with a mechanistic organization, but instead reflect that which is required in an effective organic organization—and when they do, profitability will increase dramatically.

A few years ago, a friend of mine was cooking a ham. Prior to putting it into the oven, she cut the end off. Her husband, who was sitting across the counter casually chatting with her, suddenly asked her why she did this. She stopped and looked at her husband. “I have no idea. My mom always did it.” She then phoned her mother and asked why she cut the end of a ham. Her mother’s reply? “I have no idea. My mom did it.” My friend then phoned her grandmother and repeated the same question. Her grandmother was finally able to shed some light on the mystery. “Oh, that was because we had a really small oven and a large ham would never fit in!”

All too often we fail to see what is wrong or what needs changing simply because it is familiar. This is also true with the value we place on people within organizations. We say employees are our biggest asset, yet only 6 percent of employees believe that managers act in a way that truly demonstrates this to be the case.

This is why your first task in Breaking the Leadership Mold is to determine the extent to which your organization is governed by outdated paradigms and beliefs regarding your people practices. And that starts with an examination into your organization’s leadership practices.

Chapter One Takeaways

1. Executives who act boldly and aggressively to develop the “people” side of their businesses will not only create great organizations, but will leave their competition far behind.

2. There is a direct correlation between behavior (in particular, the behavior of leaders) and an organization’s bottom line. Results are positively impacted when leaders create engaging environments and do not act in ways that cause employees to become disengaged.

3. The majority of organizations have a failing grade when it comes to employee engagement, despite the fact that engagement is clearly linked to successful financial performance. Recent estimates suggest that a lack of employee engagement in U.S. organizations costs approximately $350 billion per year.

4. The root of this problem is the failure of most organizations to change their people practices from those best suited for a mechanistic organization to those that support the more relevant and effective organic organization.

5. Despite the fact that it was developed in the seventeenth century, the design of our modern organization is still derived from philosophies aligned to a mechanistic viewpoint. In a mechanistic organization, employees are viewed as interchangeable commodities. An employee’s output on a production line is believed to be driven by the production process and not the employee’s sense of engagement or well-being. The idea of empowering or engaging employees so that they take the initiative is not seen to be of value. Indeed, such efforts are to be avoided, as they negatively impact the bottom line.

6. Organic organizations are characterized by decentralization, flexible and broadly defined jobs, interdependence among employees and units, and multi-directional communication. Employees are required to think creatively and take the initiative. Employee participation (and satisfaction) in problem solving and decision-making is seen as essential to organizational success. Relationships, effective leadership, and people practices are critical to improving the bottom line.

7. Unfortunately, much of the focus regarding people and relationships remains embedded in the era of the mechanistic organization. The manner in which we prepare, develop, and value those who work in organizations has not yet changed to reflect the current reality. As a result, engagement levels are low, employee dissatisfaction is high, and organizations are failing to achieve their full potential. Executives who fail to appreciate this fact are losing money for their organizations.

8. An executive’s first task in “breaking the leadership mold” is to determine the extent to which his or her organization is governed by outdated paradigms and beliefs regarding their people practices. The advent of organizations that are dependent on the quality of relationships requires that senior leaders concern themselves not just with systems and processes, but also with the human side of organizations.

PRINCIPLE # 2 :

BREAK THE MOLD

Given that the design of organizations has evolved during the previous decades, it would be safe to assume that the way organizations are led has also changed. The mechanistic model of organizations demands a certain style of leadership. The organic model demands something else.

For as long as humans have inhabited the world, there have been leaders. Leadership is not some man-made construct, but rather, it is deeply embedded in who we are as social beings. It is seemingly in our DNA. Whenever a group of people is faced with a task, whether it is now or back in the days of hunters and gatherers, successful accomplishment typically required at least one individual to take on a different coordination-type of role from the rest of the group. Unless this occurs, the chances of the task being successfully and efficiently completed are slim to none.

The same is true in organizations. Groups of people, sometimes numbering in the hundreds of thousands, are required to complete tasks. And this is possible only if some individuals assume different roles from others. But the question we must ask is: What is the nature of these different roles and how can these roles be best leveraged in order to ensure that the work to be done is completed effectively, efficiently, and in a sustainable manner? In other words, what is effective leadership? Before we can answer this, we must first understand what the term “leadership” means.

WHAT IS LEADERSHIP?

There is no shortage of information on leadership. A simple browse through the shelves of a local bookstore or an Internet search can easily become overwhelming. Yet despite the abundance of literature, or perhaps because of it, there is no clear, universally accepted, definition of leadership. As Bass and Stogdill noted in Bass & Stogdill’s Handbook of Leadership, “There are almost as many different definitions of leadership as there are persons who have attempted to define the concept.”1

In order to make some sense of the wide range of definitions of leadership, it becomes necessary to classify them in some way. While some researchers define leadership in terms of the traits of the individual leader, others focus more on the behaviors of that individual. Other definitions may focus on interaction patterns between leaders and followers, role relationships, hierarchical positions, power relationships, and influencing strategies.

Yet all of this is of little use to the senior executive trying to run his or her organization. Indeed, while leadership research may be intriguing and fascinating (at least to some), much of it is, unfortunately, of little practical use to today’s leaders.

J. Kotter, in an article in Harvard Business Review, states that leadership involves (1) establishing direction, (2) aligning people in terms of that direction, and (3) motivating and inspiring people to move in that direction.2 H. Knowles and B. Saxberg, in their book Personality and Leadership Behavior, suggest that leadership involves gaining another’s cooperation through the communication process. They emphasize the nature of the helping relationship defined by leadership and propose that leaders are change agents.3 Hogan, Curphy, and Hogan believe that “leadership involves persuading other people to set aside for a period of time their individual concerns and to pursue a common goal that is important for the responsibilities and welfare of a group.”4

A. Bryman wrote that leadership involves three main elements—influence, goal, and group. By recognizing the role of the group, Bryman acknowledges that followers may influence the leadership process.5 While E. Locke proposes that leadership is “the process of inducing others to take action towards a common goal,”6 J. A. Conger states that “leaders are individuals who establish direction for a working group of individuals, who gain commitment from these group members to this direction, and who then motivate these members to achieve the direction’s outcome.”7 Thus, the realm of influence may vary greatly.

While there is some difference in these definitions, some similarities are evident. R. Smith provides a simple consolidation of these ideas: (1) there are at least two people involved, the leader and the follower; (2) leadership happens where given, implied, or even unconscious goals or objectives are established; and (3) leadership is a process about influencing.8

Thus, in simplistic terms, leadership is best defined as the process of influence through which followers achieve goals. Note that this is not defined by hierarchical position. It also suggests that leadership inherently involves interaction with others. The use of the word “leader” to identify an individual who is an expert, but acts independently of others, is an adaptation of the primary concept.

The manner in which goals are set, influence occurs, and followers are defined is known as the leadership style. Leaders who do not clearly know what their goals are or the process by which to set them, who are unaware of who considers them to be their leader, and who only have limited means to influence others’ behaviors, will, in all likelihood, be poorly regarded as leaders.

An effective style is one that best matches the environment and situation. And it is in this arena of style that things have changed over the past decades. What was seen as effective in the past is, more often than not, now seen as outdated or inappropriate.

TWO EXTREMES OF LEADERSHIP

When organizations first came about in the era of the Industrial Revolution, the “great man” theory of leadership was alive and well. Also known as heroic leadership, command-and-control, or autocratic leadership, this style has been prevalent throughout history. Leadership was seen as the domain of those strong enough, charismatic enough, tall enough, and from a suitable genetic background. These men (and yes, they were men) were the ones to whom we looked to lead and guide us. Whether in organizations, politics, or the military, the success or failure of any undertaking lay in the hands of these great men. They willingly shouldered the huge responsibilities and we willingly let them.

This style of leadership is characterized by confidence, decisiveness, and strength. It is the leader who sets the goals, makes critical decisions, assigns the tasks, and holds the power. Input may be sought from others only to inform the leader’s decision-making process. As Richard Nixon once stated, “I would not think of making a decision by going around the table and then deciding on the basis of how everyone felt. Of course, I like to hear from everyone, but then I go off alone and decide. The decisions that are important must be made alone.”

The leader must, at all times, be confident, self-assured, and strong. Vulnerability, doubt, or “humanness” is a sign of weakness and, therefore, ineffective leadership. Any self-doubt must be masked and buried at all costs. The heroic leader is firmly convinced that any display of genuine openness or hesitation will be viewed by others as a failing in their leadership.

This model of leadership was in place well before the age of the Industrial Revolution. Leaders throughout history have been seen as strong, decisive, and heroic. It was, therefore, only natural that as organizations formed, this style of leadership was adopted. Furthermore, the lack of focus on the human element of followers that goes hand in hand with the heroic model of leadership was an ideal fit for the mechanistic organization. Those who were technical experts were promoted into leadership positions. Given the fact that people were viewed to be interchangeable parts of a machine, the skills required to lead were not that dissimilar from the skills required of a technical specialist, making such promotions generally successful. In addition, those new to a leadership position did not need a great deal of specialized training on how to deal with people. The command-and-control style of leadership does not require an adjustment to the nuances of followers.

For many years, this style of leadership prevailed. It proved to be seemingly ideal for those leading in mechanistic organizations that operated in a stable environment. Those in leadership positions were able to make good decisions as they had previously encountered similar situations. Unknowns were few, and problems, while they may have been complex, could be resolved through determination and a well-thought-out plan of attack.

As clear and unambiguous as it is, this style of leadership brings with it some serious shortfalls. While there is no doubt about who is ultimately responsible, great man leadership effectively abdicates others of responsibility. When things go well, the leader takes much of the credit. Conversely, when things do not go as planned, the leader shoulders the blame. Such a model does little to develop future leaders and, therefore, has a tendency to lead to succession problems.