Radical Leadership - Reinhard K. Sprenger - E-Book

Radical Leadership E-Book

Reinhard K. Sprenger

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In his search for what is really crucial in leadership, Reinhard K. Sprenger decided to gain some practical experience once again. For a period of three and a half years he assumed operational responsibility in the executive committee of a company which generates a turnover of approximately 21 billion euro in almost eighty countries. He wished to experience the daily routine of management again, separate the wheat from the chaff and the indispensible from the merely desirable.

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Reinhard K. Sprenger
Radical Leadership
TranslatedfromGermanbyMyrnaLesniak
Campus Verlag Frankfurt/New York
About the book
In his search for whatisreallycrucialinleadership, Reinhard K. Sprenger decided to gain some practical experience once again. For a period of three and a half years he assumed operational responsibility in the executive committee of a company which generates a turnover of approximately 21 billion euro in almost eighty countries. He wished to experience the daily routine of management again, separate the wheat from the chaff and the indispensible from the merely desirable.
He learned much about what executives do, but more than that, he learned what they do not do; what they in fact left out – because they considered it to be irrelevant or they simply did not wish to or were unable to do it. This, in turn, helped him to concentrate on the essentials.
At the same time he realized more and more that the actual tasks to be performed are not discussed by the executives but are taken for granted. The executives do not see their actions in a wider context; they just »manage«, which means that they muddle through. Thinking about what they are doing is only disruptive. These are not trifles which can be ignored. On the contrary!
Never before has there been a book which aims to delineate the coretasks of leadership archaeologically. There has never been a book which gives a comprehensive account of the timeless and essential aspects of leadership by imparting systemic guidelines and individual attributes. Therefore, anyone using this book as a basis for leadership will be a radical leader becauseheknowstherootsofleadership.
»Germany’s only management-guru, who really deserves this crown.« FinancialTimesDeutschland
»Germany’s management-author No. 1« Handelsblatt
»Germany’s most widely read management-author.« DerSpiegel
»If there’s a management-consultant that really made a difference in the last years, then it's Reinhard Sprenger.« NeueZüricherZeitung
About the author
Dr.ReinhardK.Sprenger ranks as one of the most distinguished management consultants in Germany. Born in Essen in 1953, he now lives near Zürich and in Santa Fe, New Mexico. Among his many clients are numerous international companies and almost all of the 100 Dax-listed companies. Nearly all of his books have become bestsellers and are obtainable in many languages.

Contents

Introduction – What this book is not about
What exactly is this book about then?
Human beings within the organization
What’s new?
Leadership
Why leadership?
The purpose of leadership
That is not what you are being paid for
Success – What is that?
Does “good” leadership exist?
What is leadership?
Leadership as an incidental activity
Leadership as a label
In observation, who is observing who?
Interdependence
What shapes leadership behavior?
Leadership – more than just being an executive
The institution and the individual
Good people? Or appropriate people?
Work within the system and work on the system
The manager: hero or victim?
The system has a face
How can leadership effect change?
First core task: Organizing co-operation
One for all and all for one
A little natural history
Co-operation as the core of the company
What obstructs co-operation?
The institution
What enables co-operation
Co-operation-supporting systems
Small units
Spatial proximity
Altering the title
The consequence for the selection of personnel
The individual
The otherness of the other
When the other cannot co-operate
Optimizing others
Commitment to co-operation
Second core task: Lowering transaction costs
What are transaction costs?
Shortage
Efficiency
From competitor to co-operation partner
Internal markets
Institution
Checking planning and target agreements
Increasing staff loyalty; reducing fluctuation
Customer orientation
Culture of trust
The individual
Seeing the invisible
“Approaching the other”
Risk awareness and self-confidence
Third core task: Resolving conflicts
Decisions
A plethora of possibilities
Ensuring decidability
Decision or choice?
“Right” decisions
Goal conflicts and value conflicts
The institution
Dispensing with principles
Putting up with contradictions
Away from morality and towards the customer
The individual
Leadership – the art of ‘as-if’
Decisiveness
Tolerating ambiguities
Equanimity – the passion of balance
Behavior when conflicts arise
Decision-making with Sherlock Holmes’ rule
Fourth core task: Ensuring sustainability
General Remarks
We reactionaries
The success trap
Recipes for success: cause, effect and the problem of the future
After the crisis is before the crisis
Why resilience is gaining in importance
The management’s assignment to disturb
The tension between sustainability and transaction costs
The institution
Tents instead of palaces
Experimenting
Recognizing weak signals
Thinking from the point of view of the future
Project management
Decentralized is stronger
Mid-range planning
Creating redundancies
Disturbance
The individual
Awareness of opportunities and other requirements
Recruiting the future
Taking the offensive more often
Interrupting yourself
Developing trust in a common future
Fifth core task: Leading staff
Find the right staff!
Who are we looking for?
How do you recognize the best?
Challenge them!
What drives us on
Being allowed to prove yourself
Talk to each other frequently!
Contact instead of praise
Taking time
Talking instead of writing
“… as yourself”
Trust them!
Why trust?
What is trust?
Creating trust
Destroying trust
Trust creates entrepreneurship
Offer a good and fair salary!
Get out of the way!
Leadership to self-leadership
What is to be done?
Make your contribution!
Literature
Index

Introduction – What this book is not about

If you enter the word “management” in the search engine of a well-known mail-order bookshop, guess how many books would be shown? Five thousand? Fifty thousand?
In actual fact, it would be more than five hundred thousand. Just imagine book shelves for more than half a million books! Everything on this subject must have been said already, which raises the question: why on earth should you bother to read this book at all? The first answer is: because it omits a lot.
For that reason, it is essential to state at the very beginning what this book is not about. It is not about a new leadership mode. Many authors only address specific aspects of managerial work and do so in great detail – but the overall picture remains blurred. A large number of books (including my early works) also lay claim to relatively abstract aspects of value in order to criticize management structures which actually exist for the sake of what ought to be. Therefore you will not find a whole collection of anecdotes, no examples of excellent man|11|agement and no limitless range of strategies to be learned and implemented. Nor do I speculate on a possible connection between management styles, personality traits and managerial success. No distinction is made between leadership and management. I assume that most managers interact with their employees, i.e. lead and that most staff at managerial level also carry out tool-based administrative tasks, in other words, manage. Moreover, a leader who possesses no management skills will soon run out of steam; a manager with no leadership skills lacks direction. At the same time I do not distinguish between staff orientation and task orientation. In practice this distinction is artificial – both are necessary.
What exactly is this book about then?
In order to answer this question I would like to give a few biographical details. In my search for whatisreallycrucialinleadership, I decided to gain some practical experience once again. For a period of three and a half years I assumed operational responsibility in the executive committee of a company which generates a turnover of approximately 21 billion euro in almost eighty countries. I wished to experience the daily routine of management again, separate the wheat from the chaff and the indispensible from the merely desirable.
I learned much about what executives do, but more than that, I learned what they do not do; what they in fact left out – because they considered it to be irrelevant or they simply did not wish to or were unable to do it. This, in turn, helped me to concentrate on the essentials.
At the same time I realized more and more that the actual tasks to be performed are not discussed by the executives but are taken for granted: “It isn’t necessary for me to take care of these, as well – after all I am already an executive because my boss thinks I am equal to the tasks.” They do not see their ac|12|tions in a wider context; they just “manage,” which means that they muddle through. Thinking about what they are doing is only disruptive. And even if they do reflect on their actions, then this is only in connection with HOW, with adjectives such as “co-operative,” “dialogic” or even “transforming”- but not with WHAT, whereby this WHAT is by no means obvious. In fact, it meets with astonishment when it is mentioned. These are not trifles which can be ignored. On the contrary! It is precisely this blind spot in most executives which I wish to address. Therefore: leadership is the answer – what was that question you asked? Can you repeat it?
At the same time I take the following situation as a starting point: a group of people have got together for a specific purpose. It does not take long before someone establishes himself as the leader and depending on the size of the group and how long it has been in existence, leadership structures also evolve. Why? What are the “reasons” for leadership, reasons which arise from facts and not from arbitrary objectives? What is the problem to which leadership is the answer?
I am convinced that the tasks involved in leadership are universals– they will still be the same in many hundreds of years. After all, leadership has always existed – ever since people have lived in groups. Nor can I imagine the new world of networks and heterarchies without leadership. On the contrary: people long for nothing more than a powerful idea of leadership and a person who personifies this. For that reason we can speak of an “archaeo”, a first principle, on which “archaeo-logy” focuses and explores. In any case, it seems to me that the search for sound “reasons” for leadership even in times of contingency and the absence of the final reason has not been called off.
I would, therefore, like to get to the bottom of leadership on the basis of archaeology and offer examples of its practical application. And although the choice, of course, is connected to an unavoidable factor of subjectivity, it is by no means arbitrary but lays claim to the status of necessity – for that is the |13|basic experience in the history of humanity where in the end so little changes and yet where almost everything has changed.
At the same time, anyone speaking of “radical leadership” has to expect to be misunderstood. In this country and in times of politically correct ambiguity, it is possible to be anything you like, but one thing you may not be and that is radical. This proviso, however, fails to recognize the origin of the word: the Latin word “radix” means “the root”. In the case of radical leadership it is a question of the root of leadership – in which it is firmly grounded and from which it develops. An executive who really wishes to make changes within a company has to start at the root. The innumerable initiatives for change fail because they – to stick to the imagery – remain on the surface and do not get down to grass roots. They would succeed if they were rooted in the core tasks of leadership.
Human beings within the organization
When I ask: “What is the problem to which leadership is the answer?” I am deliberately speaking of leadership – and I do not just mean executives. Leadership is more than mere action by individuals. Leadership also finds expression in structures, instruments and institutions – in other words in organization. No one ever starts right at the very beginning. Something already exists and it is into this that you step and take from there.
This book is to convey the strength of the ego in the individual and the management of structures by the organization. In fact, it is not possible to make either of these disappear entirely (not even in a totalitarian system). I wish to do justice to both aspects because I am convinced that they are not mutually exclusive and that the stand taken in defence of the one or the other is artificial.
Consequently, I am going to outline, first of all, the institutional framework as a requirement for leadership with respect |14|to each of the core tasks of leadership and in a second step define the individual attributes which are suitable for the fulfilment of these management tasks.
What’s new?
The experienced reader will ask me: Is there anything new in your book? Permit me to answer with a question: When has anything new ever been written? It wouldn’t be the first time that I considered an idea to be new and then I read something similar or even identical in some old book. Genuine originality is extremely rare. It is not the content but the choice of words and the form of the presentation which make it appear original.
Nevertheless, in reply to the question about something new: Naturally I am following up on what I have already expressed in earlier books. However, it must be said: never before has there been a book which aims to delineate the coretasks of leadership archaeologically. There has never been a book which gives a comprehensive account of the timeless and essential aspects of leadership by imparting systemic guidelines and individual attributes. Therefore, anyone using this book as a basis for leadership will be a radical leader becauseheknowstherootsofleadership. Therefore, I hope that what I write will be a seed which forms new roots.|15||16|

Leadership

Leadership where its objectives are unknown lacks purpose. For that reason, the question about the purpose of leadership is the first of our considerations. Following that, we will turn our attention to leadership itself, searching for goodleadership and the requisite conditions which characterize leadership behavior.

Why leadership?

The purpose of leadership

What are executives paid for? In order to answer this question I would like to begin with what appears to be self-evident. The German word for “economize” comes from “create wealth,” and that is also the objective of a company – a form |17|of economizing. And in a company there is something along the lines of “leadership”. What value does leadership create? Ask yourself what contribution you make as an executive? What do you sell to your company? Why are you on the payroll?
It is astonishing that the question as to what the end product of leadership is has received scant attention up to now. It is always a question of HOW leadership functions, of “right” and “good” management, of leadership style and techniques, which, depending on your point of view, sound more or less acceptable. However, getting away from the over-emphasis placed on leadership style seems to be urgently required. As far as leadership is concerned we need to start addressing the purpose rather than the means. What is the purpose of leadership?
Put in a nutshell the answer is: ensuring the survival of the company. Like all social systems a company strives for self-preservation. Continuing to exist and being allowed to “join in” take precedence and to that end executives – that means you! – are to make a contribution.
At least one condition is required in order to contribute to ensuring the company’s survival: an executive must achieve more than s/he costs. We often forget that it is only when that is the case that we have a raison d’être in the company; when our productivity is higher than what we cost the company; or, to put it even more fundamentally, when we “give” more than we “take”. There is justifiable doubt that this maxim is heeded everywhere.
You may well argue that “survival of the company” is not a relevant category as far as you are concerned. You are not a member of the executive board; you are given precise details of your objectives. Of course, that has to be taken into account, but if we stick to the bare essentials, to the core business of leadership, then it applies almost equally at all managerial levels; the only difference is in the scope.|18|
Moreover, a contribution to ensuring the survival of the company – as far as you are concerned, there can be no doubt about your contribution, whatever it may be: turnover, growth, cost cutting, an increase in the production rate, reduction in the number of working days lost due to illness, lower fluctuation and shorter delivery periods.
Securing survival- this very general answer to the question on the purpose of leadership is very difficult to operationalize. On what are you to base your contribution to ensuring survival? Some sort of criteria is needed that indicates whether you are doing your job or not.
Let us just consider a few criteria, whereby we will proceed negatively at first – by having a look at what the company is not paying you for.

That is not what you are being paid for

For example: for leadership! We hit upon the greatest peculiarity in management theory, if we realize that executives are paid for all sorts of things but not for leadership because there is no such “thing per se” as leadership. Despite years of searching I have never managed, no matter how hard I have tried, to come across leadership as “a thing per se”. Should I happen upon it, I would not, of course, hesitate to inform all those interested, but this is highly unlikely in the near future. No, seriously: I have never seen or met anyone who was promoted because of “good leadership”.
Even if you hesitate to agree with this point of view, the following may perhaps convince you: At a Swiss bank, executives were asked: “Do you receive recognition and are you rewarded for your daily management tasks?” About 70 percent of those surveyed replied mainly or entirely in the negative. As a result, the answer to the question: “Do you spend most of your working hours on management tasks or operational tasks?” showed|19| that perceptibly more than 70 percent dealt primarily with operational tasks. Against the background of the first answer, this is no surprise. There is apparently a wide gulf between good intentions and the daily operative routine with regards to leadership. No, the leadership is not paid for leadership.
Let’s continue with the questions: Are you paid for your capacity for team work? It is true that I have never seen an advertisement for a vacancy in which the ability to work in a team is not an indispensable condition for employment that is consequently offered as a reward. But corporate reality speaks a different language or have you ever heard of a team being promoted?
Furthermore, what about working hours? Are you paid for these? Certainly not! Indeed the sale of working hours still dominates the old smokestack industries, but a purely quantitative work concept is totally out of date. We often forget that fact when we automatically go to work in the morning, are on the payroll and have a permanent employment contract – whatever “permanent” means nowadays.
Well then, do you sell “motivation”? Motivation alone doesn’t get us very far; it is not even a condition for performance (as is claimed rather naively again and again), but rather its result. Of course you have made an effort, have worked long hours, could always be contacted and were always on the spot – but what was the outcome? At any rate, it would be a mistake to believe that it was primarily a matter of hard work and commitment. Your performance potential is at least just as crucial. Moreover, the opportunities for performance need to be in place. Besides, many “attempts” (such as visiting customers for example) do not count, no matter how countable they are.
Well then, do you sell “performance”, something which superficially everyone likes to agree on? Now things are getting complicated. Performance is one of the concepts which are loaded with enormous significance and plainly demand too much of simple decisions. The recourse to physics –performance is force multiplied by distance divided by time – is not |20|very helpful in social contexts. Compare a worker who year after year delivers 100 percent of some measured variable with another worker who increases his performance by 10 percent every year: from 60 to 70, from 70 to 80. Whose performance can be judged superior? The answer only appears to be easy; after all 100 percent is more than 80. But there is a dynamic in the improvement in performance which can have a favorable effect on the company. The one performance is perceived as a result and the other is perceived as a process. Moreover, there is an awful lot more involved in ”performance” including non-tangibles: for example, how you helped a colleague; appropriate behavior, too; or the proverbial “there’s something about him/her” in terms of self-presentation which some people have in abundance and others just don’t have.
Let’s ask one last question: Do you sell “results”? Is it a question of “results” as is so often condensed into “Leading for results”? But that does not go far enough because facts and data mean first and foremost – nothing. They are meaningless. They only acquire meaning when compared with expectations. For example, if you wish to achieve a return on equity capital of – let’s say – 20 percent, then that can be, under normal circumstances, an excellent result. If a competitor achieves 30 percent, then your result is a flop. Thus, it becomes obvious that the concepts “performance” and “result” fake the degree of objective assessment of work in a company. They are unsuitable as a basis for assessing this work.
But what are you paid for?
For success!

Success – What is that?

Success is socially recognized performance – that means what has been agreed on by two or more contracting parties. Whatever that means! A family business may rate their long-stand|21|ing independence as success; the manager may see the trend of the share price as a success and the employee may regard a pay rise or further step in his career as a success. It might be profit, turnover, a return on sales, a return on equity, market share, fluctuation or delivery deadlines. They can all be regarded as success. Consequently, the concept “success” is open to interpretation. Success will mean different things to you – just whatever you like!
It is essential to note that success, what is at issue here, is not, as it were, determined by the laws of nature but is open to negotiation. It is merely a matter of agreeing on what is to be deemed a success. This agreement applies for a clearly defined period of time and may not be changed arbitrarily during this period (which in practice happens frequently, unfortunately). Afterwards, the results are compared with the agreement and if the comparison turns out to be favorable, then we are allowed to continue. If it is the reverse, we run into difficulties. Success, therefore, singles out performance and makes it easy to recognize.
In a very general way, success can therefore mean “what follows” and what can be attributed to leadership action as a whole. At the same time success does not necessarily have to be quantifiable, it can also be qualitative. It is hardly possible for a book-keeper to assess a person in his entirety. It can also mean the fulfilment of a criterion based on normative standards. For example, it can be the image a company has in the surrounding climate of opinion – but this has to be worked at for decades. And success – if that is what is agreed upon – can comprise both results and processes i.e. the way in which a result is achieved. However, immaterial values are subordinate in the order of importance. It would be foolish to gloss over that fact. As they say, it’s the result that matters. “Success is the return on the money we earn.”
Many will rush to enlighten me straightaway on the “Iceberg Theory”, according to which it would not be going far |22|enough to look only at the tip of the iceberg. Nine tenths of the iceberg – the processes sustaining results – lie hidden under the surface; ignoring that would have fatal results, as in the case of the Titanic. They will say it would be short-sighted, therefore, to pay attention exclusively to the result merely because it is measurable and to ignore what is not measurable, even though it is important. Who would contradict that? Perhaps they will refer to the notorious assessment system of the “Nine Box Matrix” by Sergio Marchionne, the CEO of Fiat and Chrysler, a system which has the “potential” of the employee on one axis and “performance” on the other and thus relativizes success because it plays off the expectations of good performance against the current success. But let’s make it clear: anyone who makes such distinctions over a longer period of time burns money which does not belong to him.
I do not want to be misunderstood: there is no doubt that it is helpful to have a high level of potential and leadership skills in a company. But that is not an end in itself. Moreover, it is of no help; consoling relativizations are futile: ultimately and in the long term we sell success and not the requisite conditions for success. Sometimes, as far as I am concerned, that is unfair, even regrettable and, as sociologists would say, simplistic. But anyone deploring that fact should consider how many unsuccessful managers have been permitted to wreak havoc for years because the old-boy network has kept them in power.

Does “good” leadership exist?

Executives, therefore, are paid for success. Moreover, we have ascertained that agreement has to be reached on what we mean by success. Most of us probably manage to arrive at an agreement. It only becomes really complicated when not only success (the objective or result) is measured but also the method|23| which is used to achieve it is supposed to meet certain criteria. In that case, it is not only a matter of whether an executive makes a contribution to the survival of the organization but also how he does it. In everyday language that is called “good leadership”.

Companies or churches?

Behind the concept of “good” leadership is a lack of differentiation which can be observed in management. In a society where a guilty conscience has become normality, the management also moralizes about itself particularly after the events of an economic crisis. Driven by politics, the media and by consumers, too, companies not only have to operate economically but more than anything else, they are supposed to do so in a “responsible” manner. It is not quality that has its price but the degree of moral integrity. Moreover, executives are supposed to be models of virtue, moral integrity and values, authentic, role models as far as possible, humane and competent, in equal measure. The questions asked are: Is the executive “co-operative”? Does he offer “long-term” perspectives? Is he ethical? At the same time, “sustainability” has become our new religion. Everywhere companies are trying to mould their executives’ behavior with guidelines, management maxims and other quasi-religious publications. Managers are scarcely judged by their successes any more but by whether their appearance is unassuming enough. More than a few of them succumb to the temptation of these moralizing excesses. At times they sound as if they had strayed into a Salvation Army meeting. They continue, however, as before – the only difference is that they now have a guilty conscience.
Let’s be level-headed and clarify matters. Firstly: When two people speak of “good leadership”, do they mean the same thing? Secondly: Can it be proved that success can really be attributed to “good leadership”? Thirdly: Can companies be |24|understood as a community of like-minded people (such as political parties).
Questions demand answers: The answer in all cases is “No”.
The reply to question 1: For decades there have been studies which distinguish self-image from public image. For example, most executives see themselves as “co-operative” and yet their employees frequently regard them as being authoritarian. Correspondingly, it is easy to accuse someone of weak leadership, simply because each individual has a different understanding of “leadership”, even if one of the usual definitons has been agreed upon.
The reply to question 2: So far there has not been a single study which has proved a causal relationship between “good leadership” and “corporate success” – much as I would welcome it. Certain correlations have been observed but a causal relationship has remained wishful thinking so far. One reason (among many) is that chance plays a considerable role in success. What would have become of Bill Gates if IBM had not signed the contract with Microsoft for the development of an operating system for the new personal computer? It was sheer chance that just prior to this, Gates’ competitor had put himself out of the running. Thus the way was completely clear for Gates’ MS-DOS. Moreover the question whether good managerial behavior leads to the success of the company or whether the success of the company encourages good managerial behavior – is unresolved.
The reply to question 3: In a pluralistic society companies have to be open- minded about various values, traditions and attitudes. A corporate culture which is too specific would be a competitive disadvantage. That is why companies ought to concentrate on fulfilling their core economic function within the framework of secure proprietary rights and open competition. They are not churches and if an executive is successful and keeps withinthelegalframework, then there is no reason to intervene and take corrective steps. That is, unless you are from the|25| Department for “Enforcing Attitudes” which encourages a culture of yes-men, adapting and anonymity. It supports the disastrous trend of undermining justifiable individual interests on the basis of the ethical conviction.
If “good leadership” is not to remain an empty concept, then the crucial question would be: As a manager, am I prepared and entitled to run the risk of economic disadvantages in order to conform to a certain idea of “good” leadership? Anyone claiming a special position for this value has to insist that opportunities for earning money are abandoned.
But no one with a sense of reality can make such a demand. The only one able to do that – on an interim basis – would be an owner-industrialist; he is free to burn his own money if he wants to, but that does not apply to a manager. He manages other people’s money. It would be an action at the expense of a third party; it would be, to put it bluntly, sheer misappropriation. But in the long term calculable moral earnings matter both to the industrialist and the manager. Anything else is just fashionable make-up applied to the surface.
Companies are events for the production and sale of goods and services whereby the economic principle is obligatory. The essence of leadership is ensuring the survival of this event. The main concern is safeguarding the existence and the steady profitability of the company. A company is only well managed if it manufactures good products and offers them at a fair price dictatedbythemarket. In this latter respect there are quite a few companies (because they are subsidized) which are badly managed. Therefore, corporateresponsibilitywithinthelegalframework remains valid. That is precisely what good leadership does.

There are only two types of leadership – successful and unsuccessful

I would like to get to the heart of what has just been said: there is no such thing as “good” leadership; there is only successful leadership – or unsuccessful leadership. Success is more cru|26|cial than leadership style. Nor is there such a thing as “correct” management which guarantees inexorable advancement. A leadership personality, which quasi energizes the staff automatically, does not exist either. On the contrary, the “Evergreen Project”, which was headed by Nitin Nohria (2009) and in which 220 factors of success in the management of 160 companies were observed over a period of ten years, showed that there is no detectable connection between the personality traits of top managers and the economic success of the company. It is irrelevant, whether the managing director is charismatic, modest, visionary, technocratic, self-confident, reserved, exemplary or authentic – and that is precisely what has been my experience, too. Some of the successful executives whom I have met over the years have had an extremely different impact on me: I have met with all types from the quietly spoken aesthete and the primitive show-off to the eloquent sovereign. There are very few of them whom I would describe as charismatic; whether they were role models or not was immaterial to me; nor did they behave (to me) as if they wished to appear authentic. Fortunately! Most of them were quite ordinary people with slightly above-average self-confidence. But more than that: sometimes I was disconcerted to find that some of the managers who do not lay claim to “good” leadership are extremely successful. The results are correct and everything adds up to a congenial atmosphere among the people. But what is more astonishing is the fact that an executive who seems to have sprung from the pages of some management magazine on role models fails despite optimal conditions. Anyone who tries to explain that is merely speculating. But it is obvious that it is of little help when idealizations steeped in morals are bandied about or highly impressionistic assessments on “good leadership” are exchanged with thoughtful nods of the head.
But do we not need a common understanding of leadership? Well, to answer a question with a question: What should lead|27|ership look like? What should it be? Explain a distinction which would make the meaning clear to everyone. Should we not give everyone the freedom – within the legal framework- to act as he sees fit. Can we accept the fact that there are various ways to management success; that there is no certain proof of a causal relationship between success and a particular kind of managerial behavior; that it is up to everyone to create his own ideal of “good leadership”, but that – in the light of what we know – he cannot be certain that it will also prove to be a success? Can you accept the fact that it would be better to take advantage of other opportunities instead of reducing realities to norms; and that in doing so you should dispense with exerting direct influence but rather clearanyobstaclesoutoftheway which could hinder success?

What is leadership?

The objectives of leadership have now been described in sufficient detail. But what do we mean when we speak of “leadership”? What precisely is – leadership?

Leadership as an incidental activity

As usual, when a concept has to convey too much, it remains vague. That applies to the concept of leadership, too. The term is loaded with positive connotations including other similar collective nouns in the singular such as freedom, education or progress but also words and expressions such as mysterious, analyzed dispassionately or in a heated discussion. Everyone uses it but everyone means something different by it. Many decades of academic analysis have churned out hundreds of definitions and yet not one of them can claim to be universally |28|valid. Perhaps leadership is one of the things which, according to Blaise Pascal, cannot be defined without its being obscured. Yet it is not despite but because of its obfuscation that the concept “leadership” is so popular in the economic world. It is particularly suited to elevating partial aspects to dogma without having to state reasons. Consequently there are few subjects about which so much unadulterated nonsense has been written.
Let us try to approach the concept of leadership by referring to the strictest criteria we have for assigning meaning: time. If we wish to know what a person finds really important, we ought to look at how he spends his time. If we do so, we can ascertain that if there is a clash of appointments, it is the appointments pertaining to leadership that are readily rescheduled. Moreover, anyone who asks: “How much time do you spend on real leadership tasks?” regularly triggers great speculation as to what “real” leadership tasks actually are. The most appropriate description I have ever heard was by a manager of American car component manufacturers Federal Mogul: “I don’t have time to lead, I have to work.” He hit the nail on the head. Apparently leading is not work but an incidental activity which quasi connects various actions and arranges them into an understandable whole. And it becomes an incidental activity to an even greater extent the further down the hierarchy you go.

Leadership as a label

Let us make a further attempt to find a definition by looking at what happens in practice. Almost nothing interests executives more than an answer to the question about what they actually do. But the problem is not that there are few answers but that there are too many. Is leadership a science; an art; a trade; a profession in the classical sense? Ask yourself what your con|29|ception of yourself is as an executive? Do you have the feeling you conduct a symphony orchestra – as can be read quite often? Do you – according to past master Peter Drucker – create one overall performance from many individual performances? Do you formulate strategies, plan or think “ahead”? Do you see yourself as a “trouble shooter” or more as a “juggler”? Do you develop visions and point in the right direction? Do you charge forward – like the captain of a troupe of Prussian soldiers or, as Buddhist teachings recommend, do you look at the intention “behind” people?
Probably your answer would be a little of everything.
Many consider leadership to be an inner conviction, a particular quality of awareness. But somehow these vivid comparisons do not appear to bring us any nearer to the core of leadership, either.
For that reason, let us persist for a moment and look from the outside at the actions of an executive. What do you do when you manage? What can be seen when you are observed in this capacity? The answer is probably that you speak a lot – so that other people do something; you sit around in meetings; you make phone calls; you talk to customers, colleagues, employees; you travel all over the world, wait in airport lounges for flights that are delayed, play with your mobile phone and stare at the screen on your laptop. When you were not an executive, you were not doing anything different. But now it is simply termed leadership.
When an employee carries out his boss’s instructions, for example, is that leadership? Or is it not, at best, an explanationof this connection? No one can see into an employee and recognize her/his motivation. Maybe the employee would have done exactly what he did, even there had been no boss.
That is mirrored in the reply given by many executives to the question as to what had actually changed in their daily routine when they became executives. The most frequent answer was that nothing had changed. Basically everything continues |30|as before. Yesterday you did something, today you manage– but you more or less do the same thing because performance, responsibility and communication also exist beyond the management task. It is only later that a few priorities shift and a few activities are added.
Therefore leadership is not something which is immediately perceptible, but is a label which is stuck on the outside. Anyone who observes leadership takes it forgranted that it is the motivational background to certain activities. It is a comprehensive description of various activities which simply “lead” somewhere. You can register the conduct but its meaning is added – it is an attribute. Consequently “leadership” is a construct, just like the yeti, the mysterious Abominable Snowman: everyone talks about him, but no one has ever seen him.
Let us bear in mind: we shouldn’t try to define at all costs what leadership is. It would be easy to do; it is like someone trying to get an echo to speak. Leadership is realized in the impact it has; you cannot see it, you can only “do” it.

In observation, who is observing who?

There are three reasons for the fact that leadership is not visible.
The first reason is the fact that people like to talk of leadership when it appears to be missing. It is just like trust – only when it is absent does it become discernible. Then they say: “You know, leadership is what is needed here!” or “This is a matter for the boss!” and if an organization has a problem, then there is talk of “a lack of leadership”. As far as its non-visibility is concerned, leadership is like housework which is often not valued until it hasn’t been done. Anyway, we only realize the deeper significance of something that is vital, when we never paid any attention to it before, but now miss it. Consequently, |31|leadership –as philosopher Martin Heidegger would have said –is absent by dint of its very presence. It manifests itself in its non-existence. The more we have to do with leadership, the less we seem to have of it. There are so many things that only become visible in the presence of a negative. The discovery made by space travel was not outer space but the earth which until then had always been invisible to its inhabitants and which now became visible like an inhabited island in a sea of inhabitability.
The second reason is to be found in the fact that there is no set of procedures specified for leadership. Unlike medicine or the work of an engineer there is little codified knowledge, there are few rules and formulas which could lay claim to general validity. For that reason anyone can have a say in leadership.
The third reason is that leadership has always been socially integrated and is firmly established in meeting others. It cannot obtain its identity from its own resources (be it through entitlement, “natural” authority, or the authority lent by position or training) but remains dependent on recognitionbyothers. That means that leadership, whatever you mean by it, has to be recognized by others, otherwise it does not exist. This recognition is dependent on:
what can be observed in general
how much of it can actually be observed
who observes whom and
what relation exists between the person being observed and the observer
The interpretations can differ widely. One observer can regard an action as active leadership, and another observer considers it to be inactivity and perhaps a third one doesn’t even notice it. As stated above, leadership is an echo of action – others judge what you do to be leadership; or as far as others are concerned you just run around causing confusion.|32|
In hierarchical systems the recognition of leadership has two sides: “at the top” and “at the bottom” of the hierarchy. Someone “at the top” can observe differently to someone “at the bottom”. Let’s keep to the “top of the hierarchy” for the moment. Studies have revealed that there are a quite a few people who display distinct leadership skills, but who have never become executives. For some reason or other they were overlooked, passed over, did not fit into the company strategy, were not available at the time or were indispensable in their particular operational task. If you are asked why you became an executive, you may justifiably draw attention to your talent. However, a level-headed answer might be that the management had picked you out, that an executive further up the hierarchy considered you to be capable. Mostly, this is not done very scientifically, often it is not done fairly either, and it is certainly not “objective” – but that is the way the system works and there is no better alternative in sight. Leadership is therefore what leadership defines as leadership.
The question arises for anyone who is very career- minded: “Who is observing me and in what respect?
If someone at the top of the hierarchy says: “You are now an executive!” does that mean you are one in the proper sense of the word? Officially you are, in the sense that you are a superior within the administrative body, with medals and decorations, disciplinary power and usually a higher income. Besides, leadership is often understood to be primarily the wielding of formal authority. But formal authority is very restricted as a source of power. Not that anyone openly offers opposition. That seldom happens. On the contrary, the official authority (which you thus presume you have) by dint of position is quietly thwarted by the staff. They see to it that initiatives come to nothing and initiatives peter out. After all, a stone thrown into a swamp cannot cause a ripple. Consequently, if leadership wishes to accomplish anything, then it is dependent on the approval of the staff.|33|

Interdependence

Philosopher Friedrich Hegel made this concept immortal in his parable of the master and his servant. We can put aside the basic philosophical problem here and concentrate on one aspect only: how does the master become a master? – By the fact that the servant recognizes him as such! He is dependent on his authority being recognized by the servant – his status is derived from the servant. There is no master if there is no servant. On the other hand an employee is and remains an employee even if there is no executive; but there can be no executive it there is no employee. The employee is the requisite condition for his existence.
And how does the servant become a servant? By the fact that he submits to the authority of the master! The master is only master by dint of the fact that the servant recognizes him as master; and the servant is only a servant because the master recognizes him as a servant. Consequently, in Hegel’s point of view, we are, in our roles, interdependent on recognition by others. That means: in every management task we are compelled to rely on the involvement of and with others. In a certain sense the antitheses between leading and being led are dissolved. For that reason it is useful in real life to speak of interdependence.
However, recognition is never a finite, nor a complete process. It has to be earned daily. Therefore leadership is an event which happens daily and always only describes one possible relationship between people. Naturally it could dispense with recognition from below – and there are quite a number of executives who are able to keep their jobs solely because they are protected from above. But you become ridiculous in your role of executive if this recognition is withheld; if you think you could lead without people following you.
In summary we can claim that it is a paradox. Leadership is notdirectlyobservable and yet observers turn leadership into leadership by recognizing it as such.|34|

What shapes leadership behavior?

That leadership is only recognizable if it is observed already indicates that anyone trying to explain it in his own terms will fall short of the mark. Just as leadership requires another person for recognition, then in practice it is not shaped by the individual executive alone but also by the system in which it operates – by institutions.

Leadership – more than just being an executive

The first concepts of leadership in management theory linked leadership success closely to the attributesoftheindividual. If we reduce it to a common denominator, then charismatic people – males, of course – were deemed natural leaders. The problem with this concept was that there was scarcely any room to manoeuvre. Leaders were “born” not made. Either you could – or you couldn’t.
The next generation of theories believed less in this innate characteristic but rather (in the course of the optimism about education which prevailed in the 1960s) in “malleability”. Leadership was now depicted as being learnable. An ideal of typical leadership style – quasi as a trade with the corresponding toolbox and available to anyone willing to learn – was mapped out. Video cameras were installed, conversations with staff or “constructive criticism” were practised and the necessary instruments – giving presentations, conducting meetings, and structuring operating procedures – were brushed up.
Well, it cannot be denied that leadership is also a trade, but conducting a conversation, which is to deserve the honorary title of “conversation”, with an employee goes beyond craftsmanship. Thus, leadership, with regard to employees, was regarded increasingly as public relations. The human aspect be|35|came more crucial than the technical aspect. Besides, there was a growing awareness that people differ and that concepts such as “personnel” or “staff” did not do adequate justice to any variance. In short: we could not be indiscriminate and lump everyone together.
From this perception there arose the demand for “situational leadership”. What that meant was the executive’s ability to adapt her/his own conduct to the maturity level of the employee. That was an ambitious (presumptuous – if you wish to be critical) proposition but with regard to the staff much more optimistic than the “great-man” thinking of the previous generation. But basically “situational leadership” was also little more than the avoidance of extreme situations where employees were deemed incapable.
The problem of all these concepts is that leadership is personalized – as a one-sided exertion of influence emanating from one person. Accordingly, leadership is both the attribute and the conduct of a single person – to be precise, of an executive. That means: what appears to be the result of leadership is attributed to the individual. The executive is conceived as actively giving and driving, the employee as passively receiving and being driven. In practice, this person-centred concept has, for the most part, held until today. Anyone speaking of leadership normally speaks of executives, of people. These individuals either do their job well or they do it badly.
At the same time, two things are ignored. Firstly: the reciprocity between people. A person’s behavior is not always uniform but it is influenced in certain situations by other people. The interactions are circular, i.e. the people who interact influence each other. You can see this in yourself. In the presence of some people you thrive; in the presence of others you shrink. It is in this respect that person-centred concepts have always fallen short of the mark.
Secondly and much more crucially: the company’s institutionalframework within which interactions take place remained |36|entirely hidden, but it is this framework which shapes conduct much more than most leadership concepts were prepared to acknowledge. Leadership just “happens” irrespective of people’s individual needs and situations. The following diagram summarizes what has been stated so far:
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The institution and the individual

If we consider the influences which shape human managerial behavior, we can distinguish between two points of view. The one personalizes conduct; it focuses on the character traits and skills of individuals. According to this blueprint executives are supposed to be primarily strong personalities. They are supposed to be conscientious, visionary and emotionally intelligent (whatever that is). Psychology’s time has come! Based on trait theories it favors a point of view which looks at “good people”, their attitudes, skills and talents. Correct and wrong decisions are then the result of the individual’s competence, his |37|ability and his failures. It is a heroic management concept in the best sense, a heroic type of leadership, the absolute of managerial thought. He or she leads!
If you then ask what characterizes the actions of the individual executive, you hit on a motley bunch of psychodynamic explanations which are condensed into a person’s history and add up to a leadership personality. The individual understanding of leadership develops without a doubt from experiences within the family, e.g. how father and mother “led”; but also from a sports trainer or a teacher. These are followed by experiences with the first boss, experiences which often form the positive or negative blueprint for one’s own leadership style for the whole of one’s professional life. Added to this are cultural influences as a result of which, for example, leadership in Europe and Asia differs in significant aspects.
In this blueprint, leadership is an inward-to-outward action and if you wish to know why