Why Leaders Must Evolve

The management model is being challenged. The weakening economy, an escalating credit crisis and the rising price of oil have led to market jitters and the departures of CEOs of major financial institutions like CitiCorp and Merrill Lynch. With those events as the backdrop, New York Times reporter Nelson D. Schwartz wondered in an article last month if we would see the rise of the CEO 3.0.

MORE ON LEADERSHIP

See all the Baldoni on Leadership columns

Version 1.0 featured the celebrity CEO—executives like Roberto Goizueta and Jack Welch who strode the corporate universe like titans. Version 2.0 saw the rise of the “Fix-it Men,” chieftains like Ed Breen of Tyco and Richard Parsons of Time Warner, who took over organizations in distress and turned them around. Version 3.0 is typified as a collaborative leader in the mold of Art Lafley of P&G and Jim McNerney of Boeing.

More collaboration

Schwartz’s concept has been postulated in the management and financial press. Gary Hamel has a new book about the topic, The Future of Management. In an interview with The McKinsey Quarterly, he said: “The outlines of the 21st century model are already clear. Decision-making will be more peer based; the tools of creativity will be widely distributed in organizations. Ideas will compete on an equal footing. Strategies will be built from the bottom up. Power will be a function of competence rather than of position.”

And so it is that the new model of management is evolving with less emphasis on hierarchy and more encouragement of team in order to stimulate creativity and front-line decision making. For leaders, however, this is nothing new. Paul Hersey, leadership thinker and creator of Situational Leadership, posited this theory more than a generation ago.

Managers are responsible for systems and detail; leaders are responsible for people and direction. While we intertwine the concepts regularly, the functions are distinct. Managers get the right things done; leaders get things done right, with an emphasis on doing it with and for people and in the best interest of the organization. Within that construct, leaders play multiple roles—visionaries, guides, servants, coaches, cheerleaders, team players and sometimes followers. Their role is, as Hersey believes, situational. In short, leaders need to do what needs doing. Toward that end, here are some roles to consider:

Leader as collaborator. Anne Mulcahy, whom Schwartz cites in his article, is the model of collaboration. Taking over as CEO when Xerox was in real trouble, she turned around the company—not through the power of her personality but by working collaboratively with employees of every level. She had to make tough decisions about cuts and layoffs, but she believed that if Xerox was ever to succeed again, it would need the commitment of everyone in the company—not just the senior leaders. Her town hall meetings stimulated thought and got people focused on what needed to be done. Their tactics, as shaped by corporate strategy, were essential to the turnaround.

Leader as gadfly. Let the sparks land where they may. That seems to be the model for leaders who commit themselves to innovation. Creativity, however, is not solely the responsibility of those at the top—it belongs to everyone. Hamel challenges CEOs interested in sparking innovation to visit their front-line folks and ask: “What investment has the company made in teaching you how to innovate?” My guess is very little. However, by studying how nimble organizations innovate, from W.L.Gore to the U.S. Marines, organizations can absorb and adopt best practices to suit their needs. But that will not happen unless the leaders commit to change.

Leader as servant. Tony Dungy, head coach of the Indianapolis Colts, epitomizes what it means to lead by meeting the needs of others. As coach he puts his players in strategies, schemes and positions where they can maximize their skills for the good of the team. Dungy is very low key; we are more likely to see him smile than scowl—rather unusual for an NFL coach—but he knows his role: to shepherd a team by letting each player shine.

Leader as one who takes charge. Crises require deliberate action. California Gov. Arnold Schwarzenegger played this role during the recent fires that ravaged San Diego. He was on the scene mobilizing action by his presence and the authority of his office. He marshaled state resources in terms of manpower and air power and made certain that food, supplies and shelter were available for fire evacuees. He was fully present.

Leader as deliberator. A leader needs to take his own counsel as well as seek it from others. Thinking ahead and considering the options&mdashas well as reflecting on what has happened—are essential leadership skills. To accomplish goals and objectives, the leader needs a grasp of the situation. Al Gore, newly minted Nobel Laureate for Peace, is a classic example. He has considered environmental issues—researched, studied, written about them—for more than 20 years. Now out of public office, he is turning his attention to effecting positive change through a variety of corporate, governmental and social initiatives.

Character counts

There is one aspect about leadership and management that is without dispute. The ability of a leader or manager to do her job depends upon her character. “Character,” wrote Abraham Lincoln, “is like a tree and reputation, like its shadow. The shadow is what we think of it; the tree is the real thing.”

Recently, the CEO of a major company held up the launch of a new product his company needed desperately. Immediate launch would have pleased the capital markets but antagonized customers because the product still had glitches. So the CEO said no to the street and yes to customers. It was the right move; the product launched later was a hit. A leader’s ability to manage and lead requires an inner core—a keen sense of integrity and honesty that is honed by doing what is right for the organization, employees, customers and shareholders.

Doing what needs to be done and doing it right may be a working definition of leadership that can stimulate and shape new models of management. Whatever the model—be it authoritarian, clean-up or collaborative—managers must demonstrate responsibility, the willingness to exert appropriate power as well as the duty to hold themselves accountable.

Management models are changing in response to the times and that’s a good thing. What cannot be allowed to change is the leader’s personal commitment to the integrity of the work and the well-being of the organization he leads. That forms the makings of a legacy that stands the test of time.

John Baldoni is a leadership communications consultant who works with Fortune 500 companies as well as nonprofits, including the University of Michigan. He is a frequent keynote and workshop speaker, and author of six books on leadership, the most recent being “How Great Leaders Get Great Results.” Visit his leadership resource website at www.johnbaldoni.com.