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Available online at www.sciencedirect.com

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Business Horizons (2008) 51, 131–139

Transcendent leadership

Mary Crossan ⁎, Daina Mazutis

Richard Ivey School of Business, University of Western Ontario, 1151 Richmond Street North, London, Ontario, Canada N6A 3K7

⁎ Corresponding author. E-mail addresses: [email protected]

[email protected] (D. Mazutis). 1 Statistics gathered from http://ww

decadebookproduction.html.

0007-6813/$ - see front matter © 200 doi:10.1016/j.bushor.2007.11.004

Abstract

Leadership theories abound, but few have provided a means to integrate the depth and breadth of the vast literature available. Building on the research of Crossan, Vera, and Nanjad (who propose Transcendent Leadership as an integrative frame- work), we describe the key leadership challenges of leading across the levels of self, others, organization, and society. We argue that much of the leadership discourse has focused almost exclusively on leadership of others and occasionally on the leadership of the organization as a whole, yet little has focused specifically on the integral component of leadership of self. We provide evidence of the necessity of multiple levels of leadership, as well as some practical guidance, by drawing from in-depth interviews of six leaders in various contexts. © 2007 Kelley School of Business, Indiana University. All rights reserved.

KEYWORDS Transcendent leadership; Leadership of self; Strategic leadership

“Mastering others is strength. Mastering yourself is true power.”

—Lao Tzu

1. Will the real leader please stand up?

The publishing industry in the United States produces over 5000 new business titles every year, selling billions of dollars worth of business advice for managers and would-be corporate leaders.1 Of these five thousand titles, a large number are on leadership specifically. To make matters worse,

wo.ca (M. Crossan),

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7 Kelley School of Business, In

leadership advice is not restricted to the business shelves; recommendations can also be found in other sections: self-help, finance, home, career, and even religion. In their sincere efforts to lead effectively, managers may therefore become understandably confused by the plethora of new and fashionable leadership theories from which to choose the strategies that promise to make them successful.

Unfortunately, the discourse on leadership in academia is not much different. A recent review by Yammarino, Dionne, Chun, and Dansereau (2005) found at minimum 17 different leadership theories, ranging from the classical approaches (such as path- goal theory and Ohio State) to more contemporary forms (such as charismatic and transformational leadership). However, this study did not include other dominant streams of leadership such as upper echelon/strategic leadership or shared leadership perspectives. In addition, the field has also recently

diana University. All rights reserved.

132 M. Crossan, D. Mazutis

seen an upsurge of research into new positive forms of leadership (authentic, spiritual, servant, moral, ethical, prosocial, responsible, Level 5, primal, etc.) which were not included in this discussion. This begs the question: How many different “effective” leader- ship theories are there? And could the real leader please stand up?

We argue, as well, that much of the discourse on leadership has focused almost exclusively on leader- ship of others and occasionally on the leadership of the organization as a whole, yet little has focused specifically on perhaps the most integral component of leadership: leadership of self. Managing in increasingly complex and dynamic environments, today's strategic leaders can benefit greatly from learning how to “master themselves” (in addition to others and the organization) by developing self- awareness and self-regulatory capabilities. By doing so, they would be less susceptible to following the latest management fads and fashions as propagated by the 5000-plus new business books and 17-plus leadership theories, through a better alignment of their internal values and beliefs with their strategic decisions and actions.

Our knowledge of how successful leaders master this level of leadership is virtually non-existent, however. The extant literature has focused instead on how these leaders have either transformed their organizations or their employees. There has been a notable absence in linking success at the organiza- tional level to success in leadership of self. We concur with Crossan, Vera, and Nanjad (in press) that in order for long term sustained firm perfor- mance to materialize in today's dynamic business environment, today's leader needs to master lea- dership at all three levels – self, others, and the organization – a concept the previously-cited authors refer to as transcendent leadership. In fact, leadership at the societal level is also a likely requirement of transcendent leadership.

Crossan et al.'s use of “transcendent” is consistent with that of Aldon (1998) and Gardiner (2006), among others. Gardiner, for example, focused on the transcendent qualities of self and the transcending of the organization to the societal level. Aldon focused on the levels of self and others to bridge spirituality and science. As such, the term transcendent is ideally suited to a model holding that leaders need to transcend the levels, as it captures the quality of going above and beyond, within and between levels.

Building on the work of Crossan et al., we provide practitioners with some evidence of the necessity of multiple levels of leadership, as well as some practical guidance, by drawing from in-depth inter- views of six North American business leaders in various contexts, both profit and not-for-profit. We

begin by reviewing what we know about leadership and what has changed in the business landscape of the 21st century that necessitates a different approach. We conclude by giving some practical advice on leadership at all three levels – self, others, and the organization – to help leaders ensure long term, sustainable firm performance in today's dynamic environments. Leadership at the societal level is also discussed.

2. What we know for sure

Many authors have put forth lists of “must-dos” for successful strategic leadership in and of the organization (Boal & Hooijberg, 2000). With regards to leadership in organizations, much work has been done on understanding dyadic and small-group level leadership, anchored heavily in a supervisor's transactional and/or transformational leadership roles. Transformational leadership is described as the ability to induce immediate followers to deliver performance beyond expectations through inspira- tional motivation, individualized consideration, intellectual stimulation, and idealized influence (Bass, 1985). Transactional leadership focuses more on the exchange between managers and subordi- nates through constructive and corrective behaviors (Avolio & Bass, 2004). Both types of leadership, however, focus on the leader's immediate followers and define success in terms of positive follower outcomes such as increased employee commitment, job satisfaction, empowerment, task engagement, job performance, and extra effort (Avolio, Gardner, Walumbwa, Luthans, & May, 2004).

With regards to leadership of the organization, or strategic leadership, even more lists of required activities exist. For example, Ireland and Hitt (2005) state that strategic leadership in the 21st century is based on determining the firm's purpose and vision, exploiting and maintaining core com- petences, developing human capital, sustaining an effective organizational culture, emphasizing ethi- cal practices, and establishing balanced organiza- tional controls. In his competing values model, Quinn (1988) argues that executives must play eight competing leadership roles simultaneously: innovator, broker, facilitator, mentor, coordinator, monitor, producer, and director. Similarly, Hart and Quinn (1993) assert that CEOs play four roles – vision setter, motivator, analyzer, and taskmaster – to affect firm performance. House and Aditya (1997, p. 445) describe the main tasks of strategic leadership in both transactional (e.g., implemen- tation of compensation and control systems) and transformational terminology (e.g., formulation of organizational goals and strategy).

133Transcendent leadership

Nonetheless, very little is said in these models about the critical component of leadership of self. In fact, the original model of strategic leadership (or, upper echelon theory) specifically highlights that strategic decisions taken by members of the top management team or dominant coalition are bound by cognitive processes of which they are likely unaware (Hambrick & Mason, 1984). A leader's values and beliefs are said to affect the selective perception of information on which decisions are made, as well as the final strategic decisions taken. Furthermore, one of the major causes of CEO failure has specifically been identified as “mindset failure,” whereby leaders are either blind to the changes that need to be made or too arrogant to admit they are on the wrong path (Finkelstein, 2003). As such, execu- tive cognitions can and do play a critical role in the success, or failure, of the organization.

In the end, while the individual tasks and roles of strategic leaders are clearly very important to firm performance, ensuring that any competitive advan- tage is sustained will also depend on a leader's ability to manage oneself in addition to others and the organization. The ability to recognize your own internal biases, to be aware of the mental maps that are causing your selective perception, and to self- regulate your actions to be consistent with internal standards will be crucial to navigating the complex changes in today's business environment.

3. What has changed

Today's business climate has been described as fast changing and disruptive, hostile and turbulent (Bettis & Hitt, 1995; Brown & Eisenhardt, 1998; D'Aveni, 1994; Hambrick, 1988). The era of globalization, of the knowledge worker, and of relentless technologi- cal innovation has given rise to unprecedented complexity, uncertainty, and dynamism in today's business environment (Hitt, Keats, & DeMarie, 1998; Ireland & Hitt, 2005; Nadler & Tushman, 1999). This hyper-competition, characterized by intense and rapid competitive moves, makes sustainable compe- titive advantage extremely difficult to achieve and leads to environments where discontinuous change occurs more rapidly (D'Aveni, 1994; Hambrick, 1988). The accompanying increased risk and uncertainty has rendered a firm's strategic response capabilities a key source of competitive advantage (Bettis & Hitt, 1995), thereby placing particular demands on today's strategic leaders with respect to interpreting the environment, crafting the appropriate strategy, and building an organization that thrives in such contexts.

There has also been a shift in the moral and ethical climate of business, particularly since the very well-publicized failures of WorldCom, Enron,

and Tyco. In a post 9/11 world plagued by com- promised Western ideals of security and prosperity, corporate scandals that recount individual greed and rampant materialism have led to an increased distrust of, if not disdain for, corporate leaders. It has also brought to the forefront a more public discourse on issues of trust, honesty, integrity, and morality. Today's leaders are therefore exposed to a much higher level of public scrutiny in an environ- ment where most corporate actions must be completely transparent, given that global informa- tion dissemination is almost instantaneous. Given the increasing complexity of today's business con- text, what actions can leaders take to secure long term sustained performance?

4. What needs to be done

As discussed, skill sets including leadership of others and leadership of the organization are critical in today's dynamic environments. In addi- tion to these very well documented roles and functions of strategic leaders, however, today's leaders must also learn and master leadership of self. Leadership of self includes the responsibility of being self-aware and proactive in developing personal strengths. Building on the work of Crossan et al. (in press), a strategic leader who leads within and amongst the levels of self, others, and the organization is defined as a transcendent leader and will be better positioned to rise to the challenge of leading in a complex, turbulent, and highly transparent environment.

To demonstrate, a leader who excels at only one level of leadership cannot realize sustained perfor- mance benefits for the organization. For example, despite being adept at leading your team and instilling motivation, commitment, and loyalty in your immediate followers (leadership of others), leadership in today's dynamic environment necessi- tates a coherent alignment of your actions with the strategy of the organization as a whole (leadership of the organization), as well as strong self-leader- ship to effectively navigate the difficult tradeoffs in complex decisions (leadership of self). Even leader- ship at two levels will not lead to long term performance, for the leader who is able to turn a company around and motivate employees to follow is still very susceptible to falter without a strong sense of self, a moral or ethical compass, or the character strengths to help them face inevitably difficult decisions. Leadership at all three levels, or transcendent leadership, is therefore key to effec- tive strategic leadership in today's dynamic envir- onments (see Fig. 1).

134 M. Crossan, D. Mazutis

5. Leadership of self

In order to lead in today's turbulent times, during which both competitive and ethical stakes have been raised, strategic leaders must actively develop personal strengths such as self-awareness and self- regulation. Self-awareness “refers to one's aware- ness of, and trust in, one's own personal character- istics, values, motives, feelings, and cognitions” (Ilies, Morgeson, & Nahrgang, 2005, p. 377). Only by being aware of one's limited field of vision, which is influenced by one's values and cognitive base, can a leader understand his/her own selective percep- tions and interpretations, and the manner in which these influence the strategic decisions they make (Hambrick & Mason, 1984). Today's leader must be aware of their own weaknesses and cognitive biases, and acknowledge the role their perceptions may have on their thoughts, feelings, actions, and strategic decisions. Self-awareness does not refer only to recognizing one's shortcomings; it can also be key to understanding your own unique capabil- ities and in leveraging that knowledge and experi- ence to make smarter decisions. As such, self- reflection and introspection are key mechanisms through which leaders can achieve clarity with regard to their core values and mental models, and how these shape the decisions they make (Gardner, Avolio, Luthans, May, & Walumbwa, 2005).

Coupled with the ability to be self-aware, the capability of self-regulation is also critical to leader- ship of self and is the process whereby a leader aligns his/her values with intentions and actions (Avolio & Gardner, 2005). This process includes making one's motives, goals, and values completely transparent to followers, leading by example, and demonstrat-

Figure 1 Transcendent leadership: Strategic leadership within and amongst three levels. Source: Crossan, Vera, and Nanjad (in press).

ing consistency between what one says and what one does. Today's strategic leaders cannot get by with deliberately manipulating their image, falsely por- traying their intentions, or engaging in impression management. Rather, they must ensure that they self-regulate their behaviors so that the outcomes they anticipate from their actions are congruent with their internal standards (Gardner et al., 2005). By doing so, they effectively manage internal tensions and avoid conflicts between their personal values and organizational responsibilities, allowing for more honest and transparent interactions with multiple constituents.

In our interviews with corporate leaders, leader- ship at this level was readily apparent in only about half the subjects. For example, the President and CEO of a major metropolitan hospital exhibited significant leadership of self; she regularly engages in self-assessment exercises to better understand her leadership and communication styles and their impact not only on her top management team, but also on the organization as a whole. Furthermore, she has made self-awareness a mandatory practice throughout the organization via the implementation of self-diagnosis tools that have allowed all manage- ment and staff to engage in more open and efficient communications. Approximately 70% of her staff has also engaged in Koestenbaum's Leadership Diamond analysis, a systems tool which allows one to discuss his/her strengths and weaknesses with their imme- diate subordinate(s) and supervisor(s), particularly as they relate to their leadership style and percep- tions of their leadership style. This CEO is also attempting to implement the practice of developing and sharing personal vision statements to better align individual, group, and organizational objec- tives. Leading by example, she was the first to complete her personal vision statement and share it with her entire management staff, calling the self- reflective and self-disclosure exercise “one of the hardest things I have ever done.”

Other leaders interviewed also indicated that they were highly self-aware and engaged in self- regulatory behaviors. The president and owner of a direct marketing company, for example, acknowl- edged that in addition to setting the strategic vision for her firm, she also sets out every year a personal strategic plan whereby she outlines what she wants to accomplish in her own life (e.g., establishing an African outreach program). The president and owner of a multi-million dollar retail operation also demonstrated that she was highly self-reflec- tive, stating that one of the issues that regularly ‘kept her up at night’ is “yesterday…you always question; did I do yesterday as good as I could have?”

135Transcendent leadership

In contrast, other leaders could not provide any examples of self-reflective behaviors – even upon direct questioning – and seemed to lack self- awareness and self-regulatory capabilities, in gen- eral. When asked what he would do differently from a leadership perspective if he were to run the same event over again, the chairperson of a national sporting event, for instance, replied that he would take more time to select a better top management team. When asked if any of the negative reactions to his hands-on leadership style prompted him to reconsider his leadership approach, he said: “No. It is just part of the job,” which was to articulate the vision and ensure buy-in. If there was dissention, his job was to rein people in. In the end, although the event was successful, his impact on the organization appears to have been somewhat different from the other leaders interviewed. Had this been a recurring event, we doubt that his leadership style would have been conducive to long term sustained performance.

Leadership of self may also extend beyond self- awareness and self-regulation to developing a parti- cular set of character strengths that can help guide leaders through the dynamic competitive, and challenging ethical, climate of our time. The exten- sive research of Peterson and Seligman (2004) on character strengths and virtues, for example, can be employed to describe leadership of self. They identify “six core moral virtues that emerge con- sensually across cultures and throughout time” and which are associated with a set of character strengths, as follows:

(1) Wisdom and knowledge – Creativity, curiosity, open-mindedness, love of learning, perspective;

(2) Courage–Bravery,persistence,integrity,vitality;

(3) Humanity – Love, kindness, social intelligence;

(4) Justice – Citizenship, fairness, leadership;

(5) Temperance – Forgiveness and mercy, humility or modesty, prudence, self-regulation; and

(6) Transcendence – Appreciation of beauty and excellence, gratitude, hope, humor, spirituality.

Although some of these character strengths may seem at odds with the commonly held view of strategic leaders, personal attributes such as humi- lity, modesty, and persistence have been empirically linked to Level 5 Leaders, or those leaders who have led companies that have gone from Good to Great (Collins, 2001). Positive moral and psychological capital are also theorized to be core strengths in authentic, spiritual, servant, and ethical leadership

models (Fry, 2003; Greenleaf, 1977; Kanungo & Mendonca, 1996; Luthans & Avolio, 2003).

Dynamic environments will therefore place a premium on leadership of the self. When facing the many tradeoffs that arise in complex and changing environments, the leader will need a high level of self-awareness and deep judgment. A strong indivi- dual compass will prevent today's leader from simply drifting or responding to the environment and ensure that the strategic decisions made on behalf of the firm are not simple enactments of their cognitive biases, but rather self-aware, self-regulated actions rooted in introspection and self-reflection.

6. Leadership of self and others

Unlike leadership of self, much has been written on leadership of others, ranging from the behavioral theories and the effect of leaders on followers to the interaction of the leader and follower relation- ship with the organizational context (Vera & Crossan, 2004). Most of the research in leadership, in fact, has focused on the dyadic or small-group interface at various managerial levels throughout the organization. However, our focus herein is the strategic leader at the top of the organization and we add only that in today's dynamic environments, leaders must have a portfolio of both transforma- tional and authentic leadership behaviors to effec- tively lead others. The integration of leadership of self with leadership of others is therefore just one necessary component of transcendent leadership.

For example, in addition to crafting a compelling vision, transformational leaders are said to move followers beyond self-interest to self-actualization through charisma, inspiration, intellectual stimula- tion, and individual consideration (Bass, 1985). We argue, however, that in order to do so effectively in the challenging ethical climate of our time, these transformational leadership behaviors must also be married with deep introspection and leadership of self. Authentic leaders are said to be:

“those who are deeply aware of how they think and behave and are perceived by others as being aware of their own and others' values/moral perspectives, knowledge, and strengths; aware of the context in which they operate; and who are confident, hopeful, optimistic, resilient, and of high moral character.” (Avolio, Luthans, & Walumbwa, 2004, p. 4, as cited by Avolio et al., 2004)

These character strengths are embodied in the self-awareness and internalized regulatory pro- cesses described above, as well as in the framework presented by Peterson and Seligman (2004), and are

136 M. Crossan, D. Mazutis

considered essential in developing similar strengths in one's followers.

The interviewed hospital President and CEO speci- fically noted how important it was, in setting the strategic plan for the hospital, to be aware of others' values and perspectives, including all levels of the organization in drafting the vision for the next five years:

“We talk about that a lot, about being self aware….In order for an organization to change, each individual has to change. And you don't change unless you are very aware of how you need to change, and are willing to do that.”

Furthermore, she incorporates different learning styles into her communications, noting if others are more visual, oral, or sensory learners and then modifying her approach. This awareness is also used in generative coaching sessions with her top man- agement team and has cascaded down in dyadic sessions throughout the organization. The aim is to engage the staff, energize them, and encourage them not only to learn about their own strengths and weaknesses, but also to feel safe in expressing their ideas. These generative coaching sessions build relationships and understanding between the two team members to support self-awareness and facil- itate the capacity of all members of the organization to be more resourceful, flexible, and creative in the achievement of the strategy.

This CEO claims that the process of building self- awareness and self-regulatory leadership capabilities in her management team is a process built on trust. Importantly, she notes that “trust is not just about having good characteristics, such as integrity. It is about being consistent. If you say you are going to do something, you do something.” With regards to valuing her people, she emphasizes that “it is all about the workplace. We don't get a part of a person; we get the whole person. So, what goes on here affects your family…happy staff members are more likely to provide better care.” By modeling positive leader behaviors in dyadic and small group situations, this leader is able to shape the self-awareness and self-regulatory processes of her followers, helping them develop clarity about their values, identity, and emotions (Gardner et al., 2005). These skills have been formalized in the institute's shared values of:

• Listening to appreciate diversity; • Learning through dialogue and reflection; • Leading with courage, transparency, and forgive-

ness; and

• Servingpatients,families,andotherswithkindness.

In contrast, a recent study on managerial failure highlighted personality-based factors as one of the causal variables resulting in a leader's inability to obtain results during times of change. Specifically, managers believed that only those leaders who apply themselves to breaking bad habits and personally adhere to the highest standards of integrity, con- sciously expressing humility and genuine concern, were likely to achieve the results desired (Long- enecker, Neubert, & Fink, 2007). Thus, integrating leadership of self with leadership of others can be said to be a key requirement of today's strategic leaders.

7. Leadership of self and of organizations

Crossan et al. (in press) state that leadership of self and others must also be integrated with leadership of organizations, which includes setting strategy, managing the non-human elements of the firm such as structures, rules, and procedures, and ensuring fit with the external context. Today's leaders are not just passive recipients of the rapid and turbulent changes in their environments, but rather can be dominant forces in affecting change both in their own strategies and organizations, as well as in how they interact with the overall external context.

7.1. Strategy

In setting the firm's strategy, today's leader under- stands the organization as a dynamic system of forces and actors that cannot be completely controlled, and therefore provides minimal constraints and simple rules within which strategy can emerge (Brown & Eisenhardt, 1998; Eisenhardt & Sull, 2001). Because the transcendent leader understands that he/she is simply part of this system, rather than setting tightly configured plans which are equally tightly controlled, he/she establishes performance aspirations within which individuals feel free to experiment and execute. The key skill is to balance stability and innovation, creatively disturbing the status quo of the organization but also enabling the firm to work at dynamic equilibrium by developing in the firm both planning and improvisational capabilities. The stra- tegic leader who has mastered the level of self should be able to communicate value-based visions, not of a specific future, but of a set of processes and principles that will lead to a higher state of capability. The hospital CEO, for example, has implemented the following guiding principles for strategic renewal, stating that the organization is aspiring to move from a culture of “blaming to accountability; from ‘command and control’ to stewardship; from bosses to coaches; and from silos to systems.”

137Transcendent leadership

7.2. Organization

In managing the non-human elements of the firm, it is the responsibility of today's leader to ensure that the organization operates adaptively by designing fluid structures, modularity of function, and easy recombination. Today's dynamic environment re- quires flexible, innovative, and responsive organi- zational structures and systems. Having provided a deep structure of values and vision, therefore, the transcendent leader can encourage initiative, own- ership, and flexible career paths for organizational members, combining entrepreneurship, self-orga- nization, and member ownership in mutually rein- forcing ways (Miles, Snow, Mathews, Miles, & Coleman, 1997). This type of structure supports meritocracy and considers leadership roles to be the domain of all organizational members, depending on their ability to best lead in a given context. The president of the direct marketing firm, for example, acknowledges that her organization has moved to this more organic level. While there is a formal structure in place, she says:

“It is turning into fun, and it is turning into opportunities. The people that are here, now more than ever, are picking up the reins where I don't have to….I am able to trust them. They are bringing in more technology, they are bringing in more ideas and concepts, and reaching out to new clients and acquiring different kinds of contracts…It is really exciting.”

7.3. Environment

In managing the organization's fit with the external context, today's leader ensures that individuals, groups, and the organization have a high capacity to learn from their external and internal environ- ments. The transcendent leader promotes learning through experimentation, experience, diversity of opinion, and collaboration. He/she understands the competitive challenges of the industry and ensures that the firm's systems, structure, and strategy are aligned to support the flow of ideas from individuals to the team and the organization and the flow of learning from the organization back to teams and individuals, managing the tension between exploi- tation and exploration (Crossan & Hulland, 2002; Vera & Crossan, 2004).

The CEO and President of the metropolitan hospital clearly embodies this learning orientation, building the organization's strategic map on learning and growth enablers, first asking: “What are the key strengths we need in structure, culture, and skills to excel at our desired customer and financial out- comes?” This is then manifest in the organization,

not only in the processes and procedures outlined previously in the sections on leadership of self and others, but also in the implementation of formal programs such as Kaizen analysis of work-flow bottlenecks and Nine Sigma review of operating procedures. Best practices and benchmarks are therefore sought not only from within the health- care field, but from manufacturing and other external “high consequence” industries, as well. This leader has a clear vision that more change, risk, and complexity is on the horizon and is ensuring that the internal processes are in place at the hospital to support the dynamic environment:

“The problems we are solving are no different [than the airline or chemical manufacturing industry] ….It is a cultural leadership backdrop: the engage- ment, and the empowerment, and that you can make your own changes…and make them work….That is what will sustain change. It is all about change.”

In fact, almost all of the executives interviewed explicitly or implicitly supported a learning organiza- tion by regularly attending and sending their staff to seminars, conferences, or other learning opportu- nities. For example, the owner of a retail operation believes strongly that her employees' willingness to learn is a key contributing factor to her company's continued growth and success, and regularly pays for staff to attend brand “universities,” an irregular practice in the competitive retail industry. The owner of a small electrical service business has also joined a community of best practices in his industry and takes his staff on learning expeditions at host businesses throughout North America, in addition to receiving guests himself.

In short, the responsibilities of crafting strategy, establishing the structure of the organization, and making sense of the environment are key to leading in today's dynamic context. Only through deep self- awareness and the aligning of internal values and beliefs with strategic actions, will leadership of others and the organization intersect to ensure transcendent leadership and sustained, long term firm performance.

8. Beyond the organization

Although not explicitly included in the original model of transcendent leadership, Crossan et al. (in press) suggest that, given today's complex and uncertain yet increasingly transparent environment, today's lea- ders are likely to have to transcend the organizational level and master leadership at the societal level, as well. Consistent with the growing literature on cor- porate social responsibility and performance, we

138 M. Crossan, D. Mazutis

agree with the contention that the responsibilities of today's strategic leaders have moved beyond making a profit and obeying the law, to include being ethical and a good corporate citizen (Carroll, 1999). In fact, doing so is unequivocally aligned with leadership of self and displaying enduring character strengths such as courage, humanity, and justice (Peterson & Selig- man, 2004).

Most leaders interviewed did extend their leader- ship beyond the immediate organization and into the community, serving on boards, getting involved in local causes, and organizing charity fundraisers. Explaining why he funds a yearly event for over 600 people (this year, to salute the military), the president of the small electrical services company claimed that one reason he likes to get involved is because:

“It sets an example in the community and maybe somebody else will do something like that… maybe not for that same cause….I'm not looking for it to happen, but I know that it does. If I do something nice, somebody else will do something nice, as well.”

The president of the direct marketing firm looks forward to the opportunity to partner with local not-for-profit organizations as a way of giving back to the community, and states this as part of her leadership philosophy: “I volunteer in a variety of areas, and so do most of my management team….It is something that is encouraged at every level, being involved in the community…because we are very blessed by this community.”

Yet, simply focusing on the societal level without regard for the organization has been referred to by some as self-serving at best, and corporate theft at worst. Transcendent leaders need to understand the inter-relationship of leadership across levels and have the capacity to do so.

9. Transcendent leadership: Leading within and across (and beyond) levels

In today's dynamic and ethically challenging envir- onment, strategic leaders must be able to lead within and amongst the levels of self, others, and the organization, and likely beyond to even the societal level. Leadership at one level will no longer be sufficient to guarantee high firm performance in the long run. The era of the turnaround CEO, for example, is over. Although highly adept at leader- ship of the organization, this singular focus on restructuring or cost-cutting has proven to lead mostly to short term financial gains, but not to long term sustainable performance. Similarly, firm per-

formance will also suffer if the strategic leader is focused only on transformational leadership, instil- ling followers with high levels of motivation, commitment, and loyalty. Without leadership of self, employees may be motivated and committed to the wrong projects; without leadership of the organization in its changing and dynamic environ- ment, the potential for failure is magnified.

As such, only the transcendent leader (who possesses high levels of leadership of self, others, and the organization) can deliver higher sustained firm performance in today's dynamic environments. If you haven't stopped to reflect on your own leadership style, now is the time to become more self aware of your own cognitive biases and capa- bilities, and to understand how these may have shaped or continue to shape your strategic decisions. One former CEO of a large consumer foods company emphasized that major strategy change must begin with yourself. He remarked: “How do you expect the organization to change if you don't?” One of his more difficult experiences included confronting what he referred to as his “rackets”: the excuses individuals build up in advance to explain any possible failing. He suggests they are our personal safety valve to avoid holding ourselves accountable. It is impera- tive, therefore, that you ask yourself if the direction your firm is headed is aligned with your internal values and beliefs. Then, look to see if this self- regulated behavior is reflected in your interactions with others and the systems and procedures you have put in place in your organization.

If you've read just a couple of last year's leadership best sellers, you have likely received only a third of this advice. Most contemporary books on the subject, and in fact much of the academic discourse as well, has focused on one level of leadership only: either leadership of the organization or leadership of others and, less frequently, leadership of self. Nonetheless, in order to navigate today's dynamic environments and the heightened moral and ethical climate of our time, developing the skills of a transcendent leader will be key to ensuring sustained long term perfor- mance for your firm. Learning to lead within and amongst the levels of self, others, and the organiza- tion – and beyond – will be associated with the highest level of firm performance in today's con- tinually changing business landscape.

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