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Part I The Fundamentals of Leadership

CHAPTER 1 Leadership in a Dynamic World 1.1 Defining Leadership and Key Leader Activities

1.2 Relationships Between Leadership and Management

1.3 Leadership and Organizational Success

1.4 Understanding the Leadership Context: The Leader, Followers, and Situation

1.5 Are Leaders Born or Made?

Chapter Summary

CHAPTER 2 Preparing to Lead 2.1 Commitment to Excellence

2.2 The Role of Character in Leader Success

2.3 Personal Characteristics and Actions

2.4 The Keys to Personal Growth and Change

2.5 Changing Behaviors

2.6 A Whole Person Approach

2.7 How To Stay Motivated and Continue to Grow

Chapter Summary

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1 Leadership in a Dynamic World

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Learning Objectives

After reading this chapter, you should be able to:

• Explain how various individuals define and describe leadership. • Analyze the similarities and differences between leadership and management. • Apply basic leadership concepts in order to create more effective companies. • Integrate the roles of the leader, the followers, and the situation in organizations. • Describe the scholarship surrounding the question of whether leaders are born or made.

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Introduction

In 1981, Richard Teerlink joined the Harley Davidson Motor Company as its chief financial officer. At that point, Japanese companies had been making dramatic inroads into the United States economy, and the motorcycle market was no exception. Harley Davidson’s market share had dwindled to a meager 15% of total national sales and the company experienced an annual loss of $15 million.

Teerlink became the CEO of Harley Davidson in 1989. Under his leader- ship, the company regained its mojo by concentrating on world-class heavy- weight motorcycles. His vision for the organization involved a marketing plan that emphasized the company’s place in American culture while seeking out innovative ways to reach three core constituencies: customers, dealers, and employees (Rifkin, 1997). This included expanding product lines by featuring clothing and even hamburgers at the Harley Davidson Midtown Café in Man- hattan. During Teerlink’s tenure, Har- ley’s market share soared to 50% of the domestic market and the organization enjoyed sales of more than $1.7 billion,

with a corresponding return to profitability. The Harley Davidson brand remains powerful and popular to this day.

Richard Teerlink provides a powerful example of the impact of quality leadership. Effective leaders make a difference. They improve both small and larger organizations. They have a contagious passion for excellence. Recent research suggests that effective leaders are humble and teachable. They know how to get things done and are skilled at bringing out the best in people.

Organizations require leadership skills at all levels, not just by people in formal supervisory roles or top-level management positions. It takes leadership skills to manage a project, initi- ate a change, or collaborate and be constructive with people from other departments in the company. These skills help inspire organizational success.

It seems contradictory that while many recognize the value of effective leadership and the difference quality leaders can make at all levels of an organization, a significant gap often exists between the need for skilled leadership and its actual practice. A recent study of nearly 4,000 leaders worldwide revealed that most frontline leaders do not have the fundamental interpersonal skills needed to be effective leaders, and senior leaders also lacked key inter- personal skills (Frasch, 2013).

In recent years, I’ve surveyed more than 1,000 MBA students who were already in the work- place. My studies indicate that most organizations place a higher value on management than leadership, do little if anything to prepare new leaders for their jobs, and rarely have an

Fred Field/Portland Press Herald/Getty Images

Richard Teerlink (left) has a conversation with Maine Governor Angus King. Teerlink is credited with turning around Harley Davidson motorcycles beginning in 1986.

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Section 1.1 Defining Leadership and Key Leader Activities

ongoing process for developing leadership skills. That means that, unfortunately, while lead- ership is important to the success of organizations and groups of all types, it is more talked about than practiced. Organizations of all types need skilled leaders. Further, becoming one will add to your value personally and professionally.

The purpose of this book is to help develop skilled leaders at all levels of organizations. It explains principles related to better directing individuals and teams. Currently, most organi- zations face inevitable changes that require continual adaptation in today’s dynamic global marketplace. This examination of leadership and the strategies to become an effective leader will be structured as follows:

1. Motivating and preparing people to lead and make a difference (Chapters 1–2) 2. Providing an understanding of fundamental leadership theories (Chapters 3–4) 3. Explaining how communication skills, skills in motivating people to excel, and team

skills are crucial to effective leadership (Chapters 5–7) 4. Exploring how leaders bring about successful, productive organizations and lead

change (Chapters 7–9) 5. Describing how leaders can and should strike a healthy and constructive work-life

balance (Chapter 10)

1.1 Defining Leadership and Key Leader Activities

Leadership has been a subject of interest since the beginning of recorded history. Ancient writings describe how leaders led battles, started and conquered nations, taught religious principles, and championed ideas that changed the world.

In the effort to study and understand leadership, some recurring themes appear while many differences remain, even when you look at the basic characteristics of leaders. For instance, Napoleon was short and somewhat frail, while David of biblical times was muscular and strong. Margaret Thatcher, the former Prime Minister of Great Britain, was known for being calm, low-key, wise, and uncompromising in her principles. Former President Reagan of the United States garnered fame for being a charismatic communicator. Meg Whitman, the former CEO of eBay who grew the company from $4 million in 1998 to $8 billion in 2008, was a warm and friendly leader who some called “Mom.” In contrast, Steve Jobs, the founder of Apple, was a visionary, intellectual leader who some complained lacked people skills. As a result, we can learn a lot about leadership and what effective leaders do while recognizing that there is the flexibility for leaders to be different. Note that none of these leaders was perfect. Each had weaknesses. This suggests that if leaders do enough things right, they are likely to be success- ful, even though there will always be opportunities for improvement.

Definitions of Leadership

So, what is leadership? After evaluating many definitions of leadership, such as those dis- played in Table 1.1, and making an effort to integrate the key ideas and themes, the leadership definition we will use in this book is as follows:

Leadership is the process of providing vision, direction, and inspiration and bringing out the best in people, teams, and organizations.

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Section 1.1 Defining Leadership and Key Leader Activities

Table 1.1: Definitions of leadership

• Leadership defines what the future would look like, aligns people with that vision, and inspires them to make it happen despite the obstacles (Kotter, 1996, p. 25).

• Leadership is about articulating visions, embodying values, and creating the environment within which things can be accomplished (Richards & Engle, 1986, p. 206).

• The process of influencing the activities of an individual or group toward accomplishing objectives (Ivancevich & Duening, 2007, p. 675).

• “[L]eadership is not magnetic personality—that can just as well be a glib tongue. It is not ‘making friends and influencing people’—that is flattery. Leadership is lifting a person’s vision to higher sights, the raising of a person’s performance to a higher standard, the building of a personality beyond its normal limitations” (Drucker, 2008, p. 288).

• Leadership is the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives (Yukl, 2010, p. 8).

• Leadership is the ability to influence followers to achieve common goals through shared purposes (Rost & Barker, 2000).

• Leadership is a process whereby an individual influences a group of individuals to achieve a common goal (Northouse, 2013, p. 5).

• “Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion” (Welch, quoted in Tichy & Charan, 1989, para. 8).

• Leadership is the process of influencing the activities of an organized group toward goal achievement (Rauch & Behling, 1984, p. 46).

• The ability to inspire confidence and support among the people who are needed to achieve organizational goals (Dubrin, 2010, p. 3).

The definitions displayed in Table 1.1 offer many varying perspectives. We can derive a num- ber of themes from them. Each adds to our understanding of the nature of leadership.

The definitions describe effective leaders. Each seeks to describe the best of leadership practices—what leaders should aspire to. The definitions focus on defining best rather than worst practices.

The principles apply to formal and informal leaders. Definitions of leadership tend to focus on higher-level leaders who are leading large groups or organizations. At the same time, the fundamental principles apply to formal or informal leaders and leadership roles at all levels of organization. A formal leader is a person who has been promoted, appointed, or elected to serve in a leadership capacity in an organization. An informal leader, or emergent leader, is a person who engages in leadership activities without being formally selected to do so, serving various organizational needs.

Leadership is a process. A process is a series of actions and interactions that bring about a particular result. Leadership is not as much about personality and traits as it is about specific things that leaders do in interacting with others to achieve the desired outcomes.

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Section 1.1 Defining Leadership and Key Leader Activities

Leaders influence others. Leaders are particularly talented at influencing the activities of peo- ple and groups and motivating them to raise their aspirations and perform at a high level.

Leaders care about their people. Quality leaders genuinely are concerned about people and their welfare and are skilled at raising spirits and aspirations.

Leaders are visionary. Skilled leaders look ahead for what is possible and what needs to be accomplished and are able to articulate a clear vision, mission, and purpose for what needs to be done.

Leaders are goal oriented. Leaders are driven to accomplish challenging goals and are skilled at engaging people and groups in accomplishing purposeful and shared goals.

Leaders inspire excellence. Effective leaders inspire others to excel, overcome obstacles, and persevere.

Quality leadership reflects example, character, and integrity. Even the best leaders have weak- nesses and opportunities to learn and grow. Over time, the most effective leaders set exam- ples worthy of following and gain recognition for their character, integrity, and principles.

As you can see, the term “leadership” encompasses many ideas. An effective leader is able to incorporate these concepts into a style and process that obtains results from individual work- ers, his or her department, and the overall organization. Doing so involves engaging in several major activities.

Key Leadership Activities

Many people have examined leadership from a variety of perspectives. Search Google and you will find an overwhelming amount of books, articles, and information available on the sub- ject. Leadership draws increasing interest in these times of dynamic change, fierce competi- tion, ever-changing technology, and global influences. An urgent need for skilled leaders who know how to build organizations for success exists. To meet these challenges, the key lead- ership activities that we will focus on throughout this book include providing vision, moti- vation, inspiration, and direction, while bringing out the best in organizations, developing high-performing teams, and building trust. A brief description of these vital actions follows.

Creating a Vision Vision means providing a clear and compelling big picture perspective of what needs to be or could be accomplished and why. Vision could include crafting a compelling and easy-to- understand mission for an organization or giving a small group a clear picture of something that needs to be accomplished and why it is important. Providing a clear vision implies that a leader is knowledgeable and competent in his or her areas of expertise and keenly aware of what is going on. Some leaders naturally seem to have a clear vision for the future, and oth- ers become visionary by acting as students of current conditions, best practices, and future trends, and by virtue of this knowledge, begin to see what is possible.

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Section 1.1 Defining Leadership and Key Leader Activities

An effective leader must not only have a strong vision but also a means to get there. For exam- ple, when Seth Goldman founded Honest Tea, he had a simple mission: To create and promote great-tasting, truly healthy, organic beverages. This vision extended to treating all employees with dignity and seeking to help less advantaged individuals achieve through the company’s purchasing systems, all the while maintaining an environmentally friendly climate (Honest- tea.com, 2015).

Providing Direction Direction involves providing clear goals, values, and priorities, which give meaning to vision. A vision offers the big picture and direction provides clarity on the specifics of the goals to pursue (what tasks we need to do), the values that are important in accomplishing goals (how we need to do things), and the priorities that determine what we need to do when (what is most important). Visionary leaders who fail to provide clear direction will get people excited about what they can accomplish and then frustrate them because of the confusion over how to achieve the vision. Effective leaders stand for clear values and high standards. They also recognize that how you do things is as important as what you do. Priorities are especially essential to providing direction, as people are often very busy and have to make choices about what is most important to do.

Motivation and Inspiration Leaders get results and make things happen primarily by influencing the behavior and activi- ties of others. Motivating individuals, therefore, is perhaps the most fundamental element of effective leadership. This often involves a leader tailoring his or her approach to fit both the individual and the situation.

An organization is only as good as the individuals who comprise it, which is why all effective leadership practice must first begin on the level of the individual. Effective leaders under- stand how to assist and motivate individuals to reach their highest potential. Such leadership is then not only good for each individual but also for the organization as a whole.

Furthermore, in order to motivate others, a leader has to inspire. Inspiration, in the context of leadership, means leading by example, encouraging excellence, and helping people to meet challenges, overcome obstacles, and persevere. A leader must be worthy of following while also being humble and selfless. Leaders who inspire others also have a passion for excellence that is contagious. Such passion often manifests itself in a leader’s vision.

Bringing Out the Best in People and Organizations Successful leaders look for ways to do whatever they can to help people, teams, and organi- zations become the best they can be. This may include a variety of efforts such as providing encouragement, training, resources, and a stimulating and supportive work environment. The key is to have this as a personal goal, to be aware of ways to bring out the best in people, teams, and organizations, and to look for opportunities.

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Section 1.1 Defining Leadership and Key Leader Activities

High-impact leaders develop great workers. They should do everything possible to ensure that employees receive good training for their jobs, encouragement, and opportunities to uti- lize their capabilities; remain up to date in their areas of expertise; and get the chance to champion needed projects and changes. They can also help employees adapt to changes by involving and engaging them in the change process and listening to their ideas and concerns.

Committing to bringing out the best in people, teams, and organizations can be a life-changing approach perspective for leaders. It changes how they think, act, view and treat people, and spend their time. It influences their priorities and creates a positive impact on others. To understand this concept and the difference it can make in how leaders think and act, consider choosing one day in your life where, along with your usual tasks, you make bringing out the best in people your number one priority. It would significantly change the way you invest your day and the impact you have on others. It would change the way you view people, how you treat people, what you say to people, and how you spend your time. It may also have a significant impact on others. Research on organizations that have leaders committed to build- ing organizations that perform at a high level and are a great place to work and do business with shows that these organizations are likely to achieve results far above the industry norm (Ready, Hill, & Thomas, 2014; Kanter, 2011).

General Roger Teague: Humble Leadership That Makes a Difference

I recently attended an inspiring promotion ceremony that reinforced my beliefs and experience that effective leaders make a significant difference in the performance, morale, and lives of people. The ceremony was for the promotion of Brigadier General Roger Teague to Major General. In attendance were more than 30 generals and several hundred other officers, many of whom had come from all over the United States to attend the ceremony. When General Teague spoke, he used no notes and did not stand behind a podium. Instead he stood directly in front of all those who were there to honor him and spent the duration of his speech thanking all those who helped him achieve his goals.

While the whole ceremony was upbeat and inspiring, perhaps most inspiring was interacting with people who had worked for General Teague. I heard story after story of how General Teague was a humble, approachable leader who set an inspiring example, knew and cared about everyone in his command, and motivated them to excel. They spoke of the groups he led as feeling like a family that cared about what they did, worked like a focused and united team, and performed at a high level because they didn’t want to let their leader down. Some individuals I talked to were so inspired by General Teague that they accomplished more than they ever thought was possible. One enlisted person had gone on to earn several degrees, become a highly decorated officer, and was getting ready to work on her PhD in leadership.

General Teague no doubt has his flaws and perhaps enemies as well. However, it’s clear that his humble and conscientious approach to leadership and to others has helped change lives and make a difference!

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Section 1.1 Defining Leadership and Key Leader Activities

Developing High-Performing Teams Building high-performance teams and teamwork between groups constitutes a critical activ- ity for leaders and a key organizational need. Excelling at teamwork has been shown to have a significant impact on the performance and success of organizations (Carson, Tesluk, & Mar- rone, 2007; Lawler, Mohrman, & Ledford, 1995). It makes sense that an organization that takes a systems approach to teamwork and excels at teamwork at the top, within teams, between teams, and outside the organization with key stakeholders can perform at higher levels than organizations that do not take this approach. Further, we can often see substantial differences in performance, morale, quality of work, and speed in getting things done.

It seems ironic that while leaders frequently preach the importance of teamwork, and a cen- tral theme of many books and articles about how to build successful organizations and gain competitive advantage is teamwork, often these same leaders don’t learn how to build high- performance teams and organizations and do little to build teamwork. The goals of this book include helping leaders understand the advantages of a collaborative perspective, preparing them with the skills necessary to help build highly performing teams, developing quality net- works between teams, and encouraging teamwork at all levels of the organization.

Building Trust Leaders build or tear down trust. People accomplish work better and faster with minimal obstacles and delays when they can trust their leaders to be honest and straightforward, to look out for their best interests, and to do what is right. Conversely, people question almost everything, including well-intentioned decisions, when they cannot trust their leaders. A lack of trust creates an environment of anxiety, suspicion, and fear, and people take longer to do things, if they do them at all. Studies reported in the book Building the High-Trust Organiza- tion (Shockley-Zalabak, Morreale, and Hackman, 2010) indicate that high-trust organizations outperformed low-trust organizations by 286% in total return to shareholders (stock price plus dividends) and that high-trust organizations earned more than four times the returns of the broader market over a period of seven years.

Earning the trust and confidence of those you lead takes time and effort but results in some positive outcomes. Kouzes and Posner (2012, pp. 33–34) asked people in a study to describe the personal traits, characteristics, and attributes they look for and admire most in a person they are willing to follow. They concluded in the following order that the leader must be: (1) honest; (2) forward looking; (3) competent; and (4) inspiring. Followers want leaders who tell the truth and who they can trust to keep their word. The most effective leaders consis- tently act in honorable, transparent, and trustworthy ways.

Note that the ideas in this section do not constitute a complete list of all leader activities. Other actions range from the mundane (making coffee for others) to the extraordinary. As you will see in the upcoming pages, leader styles may vary greatly; however, the activities noted in this section are at the core of effective leadership practices.

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Section 1.2 Relationships Between Leadership and Management

1.2 Relationships Between Leadership and Management

Experts have provided several perspectives regarding the relationships between the concepts of leadership and management. As we have noted, leadership provides the vision, direction, and inspiration required to keep people focused and performing at high levels. Management involves the activities of planning, organizing, staffing, directing, and controlling needed to make organizations (whole organizations, departments, teams, etc.) operate effectively and efficiently. Table 1.2 summarizes these major functions. Note that executing could be consid- ered another function, as the other skills are not relevant if the manager cannot execute.

Self-Reflection Questions

1. Explain the difference between a formal leader and an informal leader. How might each one have a different effect on a department or organization?

2. Provide an instance in your life when you served under an effective leader. What strategies did that person employ to achieve success?

3. Provide an instance in your life when you worked for an ineffective leader. Which of the activities described in this section were missing?

Table 1.2: The management functions

Planning—choosing appropriate organizational goals and identifying the courses of action needed to best reach those goals.

Organizing—the process of establishing task and authority relationships that allow people to work together to achieve the organization’s goals.

Staffing—recruiting, selecting, training, evaluating, compensating, and disciplining employees within the organization.

Directing—coordinating and organizing individuals and groups to work together to achieve organizational goals.

Controlling—measuring and monitoring systems to evaluate how well the organization achieved its goals.

Some scholars believe that there are no differences because leadership is a part of the man- agement functions, specifically directing (Fayol, 1949). Others argue that leadership and management are distinctly different and that the same person is unlikely to be able to per- form both activities at the same time (Bennis & Nanus, 1985; Zaleznik, 1977). This position suggests that leaders think and act differently than managers. Those who express this point of view posit that leaders are passionate and creative and are concerned about vision, strategy, innovation, change, inspiring excellence, and creating challenges, while managers are tough minded, rational, analytical, and risk averse and are concerned about stability, order, and effi- ciency (Simonet & Tett, 2013).

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Bi-modality

Leadership Management

Leadership &

Management

Uni-dimensionality

Leadership Management

Bi-dimensionality

Section 1.2 Relationships Between Leadership and Management

A third viewpoint suggests that leadership and management require different thinking and skills but that both are important, at times overlap, and can exist in the same person (Bass, 1990; Hickman, 1990; Kotter, 1988; Rost, 1991). Figure 1.1 illustrates the three perspectives regarding the relationships between leadership and management. The challenge is to find the right balance for different levels in the organization and different situations. The position of this book is to agree with the balance scholars. In other words, effective leaders need leader- ship skills along with managerial skills.

Leaders need to understand the importance of these roles. They should seek to understand where they are personally strong and weak in the roles. Managers tend to help companies cope with complex environments through stan- dard mechanisms such as planning and control- ling. Leaders, in contrast, may seek to instill change by creating and implementing a plan for the future. Managers try to moderate and con- trol risk; leaders inspire desire and imagination (Simonet & Tett, 2013).

Therefore, some may excel at one skillset but not the other. It is not uncommon for vision- ary leaders who built something special to lack management skills. When this is the case, rapid growth in such an organization may begin to unravel due to the lack of good management. On the other hand, some excellent managers do not possess or understand how to deploy effec- tive leadership skills. Consequently, they try to manage their organization or group to great- ness with little success. In understanding their strengths and weaknesses, leaders can be aware enough to seek help when needed and can sur- round themselves with people who have com- pensating skills.

Figure 1.1: Three perspectives on the relationship between management and leadership

Bi-modality

Leadership Management

Leadership &

Management

Uni-dimensionality

Leadership Management

Bi-dimensionality

Self-Reflection Questions

1. Can you make the case that leadership is more important than management or vice versa? Explain your answer.

2. Explain an instance in your life in which you felt you were serving more as a man- ager, not a leader. Then describe an instance in which you felt more like a leader, not a manager. In what ways were these two situations different? In what ways were they the same?

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Section 1.3 Leadership and Organizational Success

1.3 Leadership and Organizational Success

At this point, we hope it is clear that many experts agree leadership constitutes one major key, if not the major key, to productive organization outcomes (Kouzes & Posner, 2012; Collins and Porras, 1997; Collins, 2001; Ulrich, Zenger, & Smallwood, 1999). This section highlights some of the major reasons leadership is important.

Leadership Is Pivotal to Organizational Outcomes

Many books and articles regarding the best-run organizations as well as Fortune Magazine’s annual review of best companies to work for suggest that, while there are many factors that influence the success of organizations, leadership remains one of the most important consid- erations. Peter Drucker, the renowned leadership and management expert, concluded that leadership, more than any factor, determines the success or failure of an organization (Zahra, Sapienza, & Davidson, 2003). Leaders, by virtue of how they facilitate and orchestrate organi- zations, and the decisions they make, have a significant influence on direction, performance, morale, results, teamwork, and the environment in which people work. Organizations can achieve success but rarely become great without quality leadership. Evidence of this comes in the form of stock market valuations as well as other measures.

The payoffs of effective leadership can be significant. One study revealed that farsighted, tolerant, humane, and prac- tical CEOs who inspire respect, loyalty, and affection rather than fear experi- enced a 785% gain in stock value over 10 years, versus a 128% gain for the overall S&P 500 (Tischler, 2005). In another example, the company that dismantled and cleaned up the Rocky Flats Nuclear Weapons Production Facility located near Denver, Colo- rado, trained leaders to use a positive leadership approach that focused on dramatically exceeding expected out- comes and on building positive cli- mates, relationships, communications, and meaningful work. They completed the assignment 60 years ahead of schedule, $30 billion under budget, and 13 times cleaner than required by federal standards (Cameron, 2012). Many other studies report the impact effective leadership can have on organizational success at the companywide, departmental, and individual levels.

Organizations Require More Than Management Activities

As previously noted, managing and leading may not always be the same thing. Quality man- agement activities continue to be important. Without them, organizations become inefficient

Mike Watson Images/moodboard/Thinkstock

Capable leaders provide direction and confidence in times of adversity.

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Section 1.3 Leadership and Organizational Success

and chaotic. At the same time, however, it takes visionary leaders to inspire people to accom- plish great things (Avery, Hughes, Luthans, & Norman, 2008; Bass & Avolio, 1990; Collins & Porras, 1999; Friedman, Langbert, & Giladi, 2000). Effective leaders enable people and teams to be results oriented, empowered, self-directing, productive, and united, and to seek the same goals.

Leadership and Organizational Culture

Strong leaders help refine an organization’s culture. The manner in which a leader operates and how he or she treats people influences the environment in which people work and how they do things. A lack of leadership or ineffective leadership creates a vacuum that will almost always be filled by confusion, inefficiency, and undesirable consequences that have tangible and intangible costs. Further, the culture of an organization also goes a long way in impacting employee trust in that organization.

The tangible costs of ineffective leadership have been reported in many studies. Research indicates that culture can be a major factor in determining the performance of organizations. For example, Kotter and Heskitt (1992) found that over an 11-year period, the companies they studied with healthy cultures increased in sales by an average of 682% versus only 166% for comparable companies. Furthermore, the stock performance of the healthy culture compa- nies increased 901% versus 74% for comparable companies. Likewise, there are intangible consequences for poor leadership. Particularly well documented are studies on incivility in the work place (Pearson & Porath, 2013; Roche, 2003; Cortina, Magley, & Langhout, 2001; Andersson & Pearson, 1999). Incivility occurs when employees experience disrespectful, rude, or condescending behaviors from supervisors and/or coworkers.

Leadership, Conflict Negotiation, and Change

Capable leaders provide direction and confidence in times of adversity and rapid growth or change. This means they approach challenges by involving and engaging people in find- ing solutions, keeping them well informed about what is happening, turning difficulties into opportunities, and when needed, approaching alternatives such as downsizing in a humane, well-thought-out way (Hsieh, 2010).

Skilled leaders effectively manage change. For example, when Coca-Cola acquired Honest Tea, many customers and employees became extremely upset, worrying that the entire identity of Honest Tea would change. CEO Seth Goldman went to great lengths to assure the public that his company would retain its values and methods of operation (DuBois, 2012).

Quality leaders exhibit the willingness to make needed changes and possess the skills required to successfully direct the change process. They provide a competitive advantage over orga- nizations that are slow to change and those that fail to effectively manage the change pro- cess. Experts estimate that significant organizational changes have a 70% or greater failure rate when leaders are not skilled at championing and managing change (Burke, 2015; Doyle,

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Section 1.4 Understanding the Leadership Context: The Leader, Followers, and Situation

1992; Miller, 2002; Senge, 1999). In contrast, leaders who are skilled at managing change can expect a 70% or greater success rate (Golembiewski & Luo, 2002/1994).

As these ideas suggest, we should not underestimate the role of leadership in the success of an organization. The impact of an effective leader pervades the entire sphere of his or her influ- ence. The next section examines the relationships among the leader, followers, and situations.

Self-Reflection Questions

1. Can you think of additional ways leaders might affect the welfare of an organization other than those presented in this section? Describe each one.

2. In your past experiences, did leaders tend to achieve these positive outcomes or defeat them? Explain how.

3. Can you link the key leadership activities noted in the previous section with the important outcomes described in this section? Be specific.

1.4 Understanding the Leadership Context: The Leader, Followers, and Situation

It is important to understand the context in which leaders operate. A leader’s effectiveness depends on more than his or her personal skills and activities. Instead, success depends on the interactions between the leader, their followers, and the situation (Fiedler, 1967; Hol- lander & Julian, 1978). The better the fit among the three variables, the more likely the leader is to succeed. Even the best leaders may experience difficulties due to issues with followers, situations they cannot control, or their own lack of fit with the situation.

Understanding the leadership context is important for a number of reasons. First, it can help in selecting and preparing leaders for specific jobs. Second, it can provide insights into what leaders need to do personally or with followers or the situation to improve performance and morale. And third, it can be used in designing leadership development programs that prepare leaders to succeed in particular situations.

Perhaps understanding the importance of the leadership context becomes apparent when considering how often boards select CEOs that fail. Often these individuals were not a good fit for the situation they sought to lead. Table 1.3 displays a model of the three components of the leadership context. It includes things to take into account in understanding the three variables and how they interact.

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Section 1.4 Understanding the Leadership Context: The Leader, Followers, and Situation

Table 1.3: Leader, followers, situation fit

Leader Followers Situation

Qualifications Commitment Internal Influences

Goals Capabilities External Influences

Skills Motivation Freedom to Lead

Style Attitudes Resources

Values Performance Infrastructure

Knowledge Morale Culture

Cultural Fit Cultural Fit Working Conditions

The Leader

Education, experience, past performance, and future potential, given the requirements of a job, often help predict the future effectiveness of a leader. A leader’s style either paves the way for getting things done or creates obstacles. A leader should have a style that emphasizes both people and performance. In today’s times with so much pressure on performance and doing more with less, it is not uncommon for even well-intentioned leaders to become preoccupied with performance while neglecting creating an environment where people can excel. This is like building a house on a weak foundation; there will surely be eventual consequences.

When choosing a leader, those involved should consider the leader’s leadership style. Does the person display an autocratic style (high emphasis on performance and low emphasis on people), laissez-faire style (low emphasis on performance and people), human relations style (low emphasis on performance and high emphasis on people), or a high-performance style (high emphasis on both performance and people)? Further, does the leader’s style invite or discourage open communication and collaboration?

Selection teams should also try to understand a leader’s goals. They should discover whether the individual is committed to maintaining the status quo, making incremental changes, or building something great. Another consideration is whether the leader has the leadership, management, technical, relational, and team-building skills needed for the job as well as other skills that the job requires.

Other aspects of the leader should also be examined. A leader’s values, which are apparent by how he or she views the company, are important to analyze. They will likely indicate how the leader will operate within the organization’s culture. The selection team should also consider the knowledge of the leader and his or her desire to acquire knowledge. Also, the team will determine whether the leader is up to date on the latest thinking in leadership and his or her area of expertise. Finally, the team should deliberate on whether a leader is a good fit for the present or desired culture and needs for success in the job.

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Section 1.4 Understanding the Leadership Context: The Leader, Followers, and Situation

The Followers

Ideally, leaders want followers who are committed to the success of the organization, who have or are developing capabilities that are important to the organization, and who are moti- vated to do excellent jobs. They prefer followers who demonstrate good attitudes, perform at a high level, have high morale, and fit the job and the organization’s culture. Being surrounded by the right people is a significant key to a leader’s success. This rarely happens by chance. Leaders have a responsibility to do all they can to hire, prepare, coach, motivate, develop, uti- lize, and bring out the best in employees.

Leaders also have a responsibility to make clear the vision, mission, and direction of the orga- nization and what they expect for followers to succeed. They should also deal in helpful, effec- tive ways with personnel and team issues. One or more troublesome followers can undermine the effectiveness of leaders and everyone else involved.

Effective leaders guide individuals to become (1) well trained and competent at what they do; (2) excellent performers with good attitudes; (3) diligent at keeping up to date on the latest thinking and practices in their area of expertise; (4) willing to champion needed changes; and (5) teachable and willing to adapt to changing situations. The payoffs and competitive advan- tage available from a workforce of efficient and productive workers can be significant (Pfef- fer, 1995). One can well imagine the productivity advantage over the typical company when employees are well trained, highly motivated, and on the leading edge of their disciplines.

The Situation

Leaders rarely if ever have perfect situations to deal with. What makes effective leaders spe- cial is that they find ways to operate at a high level despite the obstacles. They deal with internal influences such as the support or lack of support they receive from their supervisor and others in the organization they depend on for their success. External influences such as market and economic conditions, events, and circumstances that impact their organizations can also affect them in either positive or negative ways. In addition, they may or may not have the freedom to run their team, department, or organization in a manner they know would achieve the best results.

Resources often constitute a challenge for leaders. Does the leader have the human and capi- tal resources needed to succeed? The infrastructure of an organization can become a signifi- cant factor that works for or against the success of a leader. Leaders must work to ensure that the structures, processes, systems, policies, and technologies are in place to accomplish tasks. Many leaders currently must deal with a growing number of government regulations and legal issues that can complicate accomplishing various organizational objectives.

Another consideration is the organization’s culture. A leader may have the advantage of oper- ating in a positive, open, supportive, and innovative culture or the disadvantage of operating in a culture that discourages excellence and a high level of productivity. Working conditions can assist or constrain a leader’s efforts. Quality working conditions can help leaders attract and retain talented followers, and poor working conditions can create obstacles for leaders to overcome.

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Section 1.4 Understanding the Leadership Context: The Leader, Followers, and Situation

Effective leaders are never satisfied with the status quo, and their goal is to build a situation in which the company performs above the norm. How they will approach building a highly efficient and productive organization and how much they will engage others in the process depends on the situation. The fundamentals are to:

1. Know what it would take to perform at a high level (this can be done by the leader or the leader and key players) and evaluate what is possible given the realities of the situation.

2. Engage key players in developing broad, clear, and easy-to-understand goals and plans for being a high-performing organization.

3. Make sure that the essentials of being a high-performing organization include more than just performance goals. At a minimum, being world class requires perform- ing at a high level, creating a quality work environment, providing superior ser- vice internally and externally, and becoming known for high-quality products and processes.

4. Clearly articulate what is required in a compelling and understandable way. Keep people focused on what is possible and what needs to be done, and make step-by-step moves to aim the organization toward the ideal.

Meg Whitman: Aligning Followers to Leaders

Meg Whitman provides an exceptional example of a leader who matched the followers and her unique situation. She showed the courage and passion to create something great, understood the importance of an emphasis on both people and performance, and stayed strongly committed to being a values- driven leader and to do what she believed was right no matter what the cost.

Whitman clearly leads by example. She genuinely cares about her people, treats them with respect, and believes that collaborating is a much better way of getting things done than controlling. As the new CEO of HP, she took a small cubicle for an office and asked her executives to do the same so they could have a more open relationship with employees. She also asked the executives to park with everyone else. In addition to being a people-oriented leader, she also is a results-oriented leader who has a passion for great results and backs up her passion with a vision and strategy for achieving them.

Meg Whitman believes strongly in being a values-driven leader. She believes in fundamental values like honesty, treating others the way you want to be treated, and doing what is right, and she expects her followers to practice these values. Adding to her practices as a people- driven, performance-driven, and values-driven leader is her emphasis on taking great care of customers. She has introduced a number of programs at HP to help the company excel in this important area as well. To discover more about Meg Whitman’s leadership philosophies, readers are encouraged to read her book, The Power of Many (Whitman, 2010).

David Paul Morris/Bloomberg/ Getty Images

Meg Whitman, chief exec- utive officer of Hewlett- Packard Co., during an interview in 2015.

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Section 1.5 Are Leaders Born or Made?

Success only occurs when the right type of leader engages with the right type of followers in a situation that provides the opportunity for success. Your ability to understand these variables and respond accordingly will determine at least part of your career success.

Self-Reflection Questions

1. Which of the three components of the leadership context do you believe is the most critical to the emergence of an effective leader? Why?

2. What should you do when you discover that either the followers or the situation do not match with your personal strengths and weaknesses as a leader? Should you attempt to change or seek out a better situation? Explain your answer.

1.5 Are Leaders Born or Made?

Was Walt Disney a born leader or made into one? In The Disney Version, author Richard Schickel suggests that Disney’s greatest creation was his company. Disney displayed the char- acteristics of a visionary leader who kept employees focused on making people happy and bringing joy to children. He paid great attention to developing his company and its capabili- ties and finding ways to bring out the best and most creative efforts in employees.

In the late 1920s, Disney paid his creative staff more than he paid himself. In the early 1930s he established art classes for all animators, installed a small zoo on location to provide live creatures to help improve their ability to draw animals, invented new animation team pro- cesses such as storyboards, and continually invested in the most advanced animation technol- ogy. In the late 1930s Disney installed the first generous bonus system in the cartoon industry to attract and reward good talent. In the 1950s he instituted employee “You Create Happi- ness” training programs, and in the 1960s he established Disney University to orient, train, and educate Disney employees on how Disney does things. He genuinely cared about employ- ees and their development and welfare. Did this all happen due to his innate skills, or did he learn them?

The question of whether leaders are born or made constitutes an important issue because it gets to the heart of what we believe about leadership and developing leaders. If the answer to this age-old debate is that they are born leaders, it leaves little hope for those committed to learning to be quality leaders and false hope for those who think they are natural leaders and do not need to learn and grow. In a study where the question was asked of top level execu- tives, 19% said they are born, 52% said they are made, and 29% said they are both born and made (Gentry, Deal, Stawiski, & Ruderman, 2012).

Clearly, some people seem to have a natural gift for leadership. From an early age, these individuals tended to emerge as leaders. This can mislead observers because leaders need to utilize and continually develop even gifts or strengths or they can lose them. Research- ers estimate that as much as 30% of leadership is innate and 70% is developed (Klimoski &

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Chapter Summary

Amos, 2012). A person may have an innate athletic or musical ability, but if he or she does not develop and utilize it consistently over time, the natural gift will eventually be lost or greatly diminished. Researchers have also concluded that there is little question that leadership is a learnable skill and can be developed (Bass & Stogdill, 1990.)

There are also people who are more likely to be followers and rarely take a leadership role. This may be because leadership does not come naturally to them, does not appeal to them, or perhaps because they have not encountered many opportunities to lead. Some of these indi- viduals may develop into exceptional leaders, although they may never be as skilled as com- mitted natural leaders. Others may never aspire to a formal leadership role but can develop skills in playing a more informal leadership role.

For those who are committed to developing their leadership skills and becoming skilled man- agers, it might help to understand that leadership is part science and part art and that it takes study and practice to be a skilled leader. From the science perspective, there is a wealth of information available regarding leadership theory and practice. Those who are commit- ted to being students of leadership can also avail themselves to a wide range of educational, training, and leadership coaching opportunities. From the art perspective, it takes experience, practice, wisdom, judgment, trial and error, and a willingness to continuously learn and grow to develop leadership skills. There is no limit to what we can learn and practice in developing leadership skills. We will integrate both perspectives in our discussion of leadership in this text.

Self-Reflection Questions

1. Which side of this question do you come out on? Do you feel leaders are born or made? Explain your rationale.

2. If you were asked to explain why someone is a “natural leader,” what would you say?

Chapter Summary

Defining Leadership and Key Leader Activities Leadership is the process of providing vision, direction, and inspiration, as well as motivating and bringing out the best in people, teams, and organizations. A formal leader is a person who has been promoted, appointed, or elected to serve in a leader- ship capacity in an organization. An informal leader, or emergent leader, is a person who engages in leadership activities without being formally selected to do so, serving various organizational needs. The key leader activities noted in this chapter include:

• motivation and inspiration;

• creating a vision;

• providing direction;

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Chapter Summary

• bringing out the best in others;

• developing highly performing teams; and

• building trust.

Relationships Between Leadership and Management Management involves the activities of planning, organizing, staffing, directing, and con- trolling needed to make organizations (whole organizations, departments, teams, etc.) operate effectively and efficiently. Some scholars believe that there are no differences because leadership is a part of the management functions, specifically directing. Others argue that leadership and management are distinctly different and that the same per- son is unlikely to be able to perform both activities at the same time A third viewpoint suggests that leadership and management require different thinking and skills but that both are important, at times overlap, and can exist in the same person. The position of this book is to agree with the balance scholars. In other words, effective leaders need leadership skills along with managerial skills.

Leadership and Organizational Success Effective leadership is strongly tied to organizational success. This is because:

• Leadership is closely linked to key organizational outcomes.

• Organizations require more than strong management.

• Effective leaders mesh with an organization’s culture.

• Leaders play key roles in dealing with conflict, negotiation, and change.

Understanding the Leadership Context: The Leader, Followers, and Situation

Success only occurs when the right type of leader engages with the right type of follow- ers in a situation that provides the opportunity for success. Your ability to understand these variables and respond accordingly will determine at least part of your career success.

Are Leaders Born or Made? The question remains as to whether leaders are born or made. In either case, for those who are committed to developing their leadership skills and becoming skilled manag- ers, it might help to understand that leadership is part science and part art and that it takes study and practice to be a skilled leader.

In these times of dynamic change where we’ve raised the bar and must do everything faster, better, and smarter, there is an urgent need for skilled leaders. Leaders make a difference. They impact individuals, teams, and organizations in all facets of life.

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Leadership Applications and Tools

Leadership Exercises

1. You are working on a construction crew. The foreman of the crew focuses on schedul- ing workers, meeting deadlines, cutting waste, and following safe work practices. One of your coworkers spends a great deal of time talking about how the crew could work together more effectively by taking advantage of each person’s strengths and weak- nesses. The coworker also listens to your peers when they talk about personal prob- lems, work issues, and relationships with other crew members.

Describe the leadership activities and managerial activities present in this situation. Which individual performs these activities? Explain your answer. How do the terms “formal” and “informal” leadership apply to this scenario?

2. This chapter describes six key leadership activities as:

• motivation and inspiration; • creating a vision; • providing direction; • bringing out the best in others; • developing high performing teams; and • building trust.

Using the information provided at the start of this chapter, explain how Richard Teer- link engaged in some of these activities. Then, using the Internet, read more about Mr. Teerlink to see if he was involved in any of the other activities.

Next, using the Internet, look up another leader you believe to be successful. Write a report explaining how that individual did, or did not, engage in these activities.

3. When comparing leadership to management, some argue that the two activities are completely distinct; others say they are the same thing; and a third group suggests that part of the time the two overlap and the part of the time they do not. The five manage- ment functions described in this chapter are:

• planning; • organizing; • staffing;

Key Terms formal leader A person who has been promoted, appointed, or elected to serve in a leadership capacity in an organization.

informal leader A person who engages in leadership activities without being formally selected to do so, serving various organiza- tional needs; also called an emergent leader.

leadership The process of providing vision, direction, and inspiration and bringing out the best in people, teams, and organizations.

management The process of planning, organizing, staffing, directing, and control- ling needed to make organizations (whole organizations, departments, teams, etc.) operate effectively and efficiently.

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Leadership Applications and Tools

• directing; and • controlling.

Explain how the concept of leadership might apply to each of these functions; or, make an argument as to why leadership is not a part of a particular function.

4. In terms of organizational success, this chapter suggests four areas:

• key organizational outcomes; • more than management activities; • organizational culture; and • conflict negotiation and change.

In terms of the three levels of management—supervisory, middle manager, top management—which of these activities is most associated with each level? Which is least likely to apply to a specific level of management? Explain and defend your answer.

5. You have just been promoted to night manager of a fast food restaurant. Your primary managerial duties include planning (scheduling workers for each shift; ordering materials for each night), organizing (maintaining a sense of authority and responsi- bility in the workers on your shift), staffing (training new employees; enforcing work and safety rules), directing (finding ways to motivate your workers; communicating with each employee), and control (performance appraisals for all night-shift workers; assessing success for your shift on a weekly and monthly basis in terms of sales and costs).

Using the materials presented in this chapter, describe this situation in terms of the leader, the followers, and the situation. How should you respond to each of the factors?

6. You have just been passed over for a promotion. In your frustration, you look over all of the information you can find regarding the education, experience, work history, and track record of success of the person chosen as compared to your own. It seems clear that you have a far better resume. As a result, you make an appointment with the human resources director, asking why the other person was chosen. The director responds, “He seems more like a natural-born leader.”

How should you respond to this comment? Do you believe it is a fair method for mak- ing the selection? Would your answer change if the person chosen was male and you are female? Defend your answer.

Applications and Tools

1. Complete the Leadership and Management Skills Questionnaire that follows and write a one- to two-page report that includes: (1) your results; (2) a summary of your major leadership strengths and weaknesses as a leader based on the results of the questionnaire and anything else you know about yourself as a leader; (3) a summary of your major management strengths and weaknesses as a manager based on the results of the questionnaire and anything else you know about your management skills; and (4) a list of the characteristics you most admire in leaders and would like to describe you as a leader.

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Underdeveloped Skill

Moderately Developed

Skill

Highly Developed

Skill

1 2 3 4 5 6 7

Leadership Applications and Tools

Leadership and Management Skills Questionnaire (LMSQ) Instructions: The LMSQ is a self-scoring instrument designed to help you evaluate your Leadership and Management Skills. Please complete the questionnaire as hon- estly as you can so an accurate analysis can be made. This is designed to be a feedback instrument that you can use for evaluating and improving your Leadership and Man- agement Skills, so there are no right or wrong answers. If you do not have prior man- agement experience, use your best judgment in rating yourself on each question based on the other experiences or how you believe you would perform.

Please use the following scale to rate yourself on each of the items below.

1. _____Inspire people to give their best. 2. _____Create a work environment that encourages innovation and creative thinking. 3. _____ Consistently recognize and reinforce high performance and desired behaviors

and attitudes. 4. _____Continuously make efforts to personally learn, grow, and improve. 5. _____Maintain a high level of personal productivity and effectiveness. 6. _____Keep up-to-date on the latest ideas, theories, and information on management. 7. _____Plan and manage my time effectively. 8. _____Keep personally well organized. 9. _____Communicate and listen in a caring and accurate way.

10. _____Establish minimal but effective controls. 11. _____Make people feel valued and important. 12. _____Create work environment where people are enthused and involved. 13. _____Continuously motivate individuals to perform at a high level. 14. _____Effectively coach and develop others. 15. _____Achieve or exceed the desired results and goals. 16. _____Have a well developed and sound personal philosophy about management. 17. _____Establish clear goals and responsibilities with others. 18. _____Successfully organize group activities. 19. _____Effectively confront people, problems, and issues. 20. _____ Effectively monitor and evaluate performance, goals, plans, and other key

indicators. 21. _____Provide vision and direction.

Underdeveloped Skill

Moderately Developed

Skill

Highly Developed

Skill

1 2 3 4 5 6 7

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LEADERSHIP SKILLS MANAGEMENT SKILLSTOTAL SCORE

FOR EACH