Leadership and Management

BEST OF HBR 1977

The traditional viewof management, back ini977 when Abraham Zaieznik

wrote this article, centered on organizational structure and processes. Manage*

rial development at the time focused exclusively on building competence, con-

trol, and the appropriate balance of power. That view, Zaieznik argued, omitted

the essential /eoc/ers/j/p elements of inspiration, vision, and human passion-

which drive corporate success.

The difference between managers and leaders, he wrote, lies in the concep-

tions they hold, deep in their psyches, of chaos and order. Managers embrace

process, seek stability and control, and instinctively try to resolve problems

quickly-sometimes before they fully understand a problem's significance.

Leaders, in contrast, tolerate chaos and lack of structure and are willing to

delay closure in order to understand the issues more fully. In this way, Zaieznik

argued, business leaders have much more in common with artists, scientists,

and other creative thinkers than they do with managers. Organizations need

both managers and leaders to succeed, but developing both requires a reduced

focus on logic and strategic exercises in favor of an environment where

creativity and imagination are permitted to flourish.

Managers and Leaders Are They Different? by Abraham Zaieznik

w. Business leaders have

much more in common

with artists than they

do with managers.

'HAT IS THE IDEAL WAYtodevelOp

leadership? Every society provides its own answer to this question, and each, in groping for answers, defines its deep- est concerns about the purposes, distri- butions, and uses of power. Business has contributed its answer to the leadership question by evolving a new breed called the manager. Simultaneously, business has established a new power ethic that favors collective over individual leader- ship, the cult of the group over that of personality. While ensuring compe- tence, control, and the balance of power among groups with the potential for rivalry, managerial leadership unfortu- nately does not necessarily ensure imag- ination, creativity, or ethical behavior in guiding the destinies of corporations.

Leadership inevitably requires using power to influence the thoughts and actions of other people. Power in the hands of an individual entails human risks: first, the risk of equating power with the ability to get immediate re- sults; second, the risk of ignoring the many different ways people can legiti- mately accumulate power; and third, the risk of losing self-control in the de- sire for power. The need to hedge these risks accounts in part for the developy- ment of collective leadership and the managerial ethic. Consequently, an in- herent conservatism dominates the cul- ture of large organizations. In The Second American Revolution, John D. Rocke- feller III describes the conservatism of organizations:

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"An organization is a system, with a logic of its own, and all the weight of tra- dition and inertia. The deck is stacked in favor of the tried and proven way of do- ing things and against the taking of risks and striking out in new directions."'

Out of this conservatism and inertia, organizations provide succession to power through the development of man- agers rather than individual leaders. Ironically, this ethic fosters a bureau- cratic culture in business, sup- posedly the last bastion protect- ing us from the encroachments and controls of bureaucracy in government and education.

Manager Versus Leader Personality A managerial culture empha- sizes rationality and control. Whether his or her energies are directed toward goals, re- sources, organization struc- tures, or people, a manager is a problem solver. The manager asks: "What problems have to be solved, and what are the best ways to achieve results so that people will cominue to con- tribute to this organization?" From this perspective, leader- ship is simply a practical effort to direct affairs, and to fulfill his or her task, a manager requires that many people operate effi- ciently at different levels of sta- tus and responsibility. It takes neither genius nor heroism to be a man- ager, but rather persistence, tough- mindedness, hard work, intelligence, analytical ability, and perhaps most im- portant, tolerance and goodwill.

Another conception of leadership, however, attaches almost mystical be- liefs to what a leader is and assumes that only great people are worthy of the drama of power and politics. Here lead- ership is a psychodrama in which a bril-

Abraham Zaleznik is the Konosuke Mat- sushita Professor of Leadership Emeritus at Harvard Business School in Boston.

liant, lonely person must gain control of himself or herself as a precondition for controlling others. Such an expecta- tion of leadership contrasts sharply with the mundane, practical, and yet impor- tant conception that leadership is really managing work that other people do.

Three questions come to mind. Is the leadership mystique merely a holdover from our childhood-from a sense of dependency and a longing for good and

heroic parents? Or is it true that no mat- ter how competent managers are, their leadership stagnates because of their limitations in visualizing purposes and generating value in work? Driven by narrow purposes, without an imagina- tive capacity and the ability to commu- nicate, do managers then perpetuate group conflicts instead of reforming them into broader desires and goats?

If indeed problems demand great- ness, then judging by past performance, the selection and development of lead- ers leave a great deal to chance. There are no known ways to train "great" lead-

ers. Further, beyond what we leave to chance, there is a deeper issue in the relationship between the need for com- petent managers and the longing for great leaders.

What it takes to ensure a supply of people who will assume practical re- sponsibility may inhibit the develop- ment of great leaders. On the other hand,the presence ofgreat leaders may undermine the development of manag-

ers who typically become very anxious in the relative disorder that leaders seem to generate.

It is easy enough to dismiss the dilemma of training man- agers, though we may need new leaders, or leaders at the ex- pense of managers, by saying that the need is for people who can be both. But just as a man- agerial culture differs from the entrepreneurial culture that develops when leaders appear in organizations, managers and leaders are very different kinds of people. They differ in moti- vation, in personal history, and in how they think and act.

Attitudes Toward Goals Managers tend to adopt imper- sonal, if not passive, attitudes toward goals. Managerial goals arise out of necessities rather than desires and, therefore, are deeplyembedded in their orga-

nization's history and culture. Frederic G. Donner, chairman and

chief executive officer of General Motors from 1958 to 1967, expressed this kind of attitude toward goals in defining GM's position on product development:

"To meet the challenge of the market- place, we must recognize changes in cus- tomer needs and desires far enough ahead to have the right products in the right places at the right time and in the right quantity.

"We must balance trends in prefer- ence against the many compromises that are necessary to make a final prod-

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uct that is both reliable and good look- ing, that performs well and that sells at a competitive price in the necessary vol- ume. We must design not just the cars we would like to build but, more im- portant, the cars that our customers want to buy."̂

Nowhere in this statement is there a notion that consumer tastes and prefer- ences arise in part as a result of what manufacturers do. In reality, through product design, advertising, and promotion, consumers learn to like what they then say they need. Few would argue that peo- ple who enjoy taking snapshots need a camera that also devel- ops pictures. But in response to a need for novelty, convenience, and a shorter interval between acting (snapping the picture) and gaining pleasure (seeing the shot), the Polaroid camera suc- ceeded in the marketplace. It is inconceivable that Edwin Land responded to impressions of con- sumer need. Instead, he trans- lated a technology (polarization of light) into a product, which proliferated and stimulated con- sumers'desires.

The example of Polaroid and Land suggests how leaders think about goals. They are active in- stead of reactive, shaping ideas instead of responding to them. Leaders adopt a personal and active attitude toward goals. The influence a leader exerts in altering moods, in evoking images and expecta- tions, and in establishing specific desires and objectives determines the direction a business takes. The net result of this influence changes the way people think about what is desirable, possible, and necessary.

Conceptions of Work Managers tend to view work as an en- abling process involving some combi- nation of people and ideas interacting to establish strategies and make deci- sions. They help the process along by cal-

culating the interests in opposition, planning when controversial issues should surface, and reducing tensions. In this enabling process, managers' tac- tics appear flexible: On one hand, they negotiate and bargain; on the other, they use rewards, punishments, and other forms of coercion.

Alfred P. Sloan's actions at General Motors illustrate how this process works in situations of conflict. The time was

the early 1920s when Ford Motor Com- pany still dominated the automobile industry using, as did Genera! Motors, the conventional water-cooled engine. With the full backing of Pierre du Pont, Charles Kettering dedicated himself to the design of an air-cooled copper en- gine, which, if successful, would be a great technical and marketing coup for GM. Kettering believed in his product, but the manufacturing division heads opposed the new design on two grounds: First, it was technically unreliable, and second, the corporation was putting all its eggs in one basket by investing in a

new product instead of attending to the current marketing situation.

In the summer of 1923, after a series of false starts and after its decision to recall the copper engine Chevrolets from dealers and customers, GM manage- ment scrapped the project. When it dawned on Kettering that the company had rejected the engine, he was deeply discouraged and wrote to Sloan that, without the "organized resistance"

against the project, it would have succeeded and that, unless the project were saved, he would leave the company.

Alfred Sloan was all too aware that Kettering was un- happy and indeed intended to leave General Motors. Sloan was also aware that, while the company's manufacturing di- visions strongly opposed the new engine, Pierre du Pont sup- ported Kettering. Further, Sloan had himself gone on record in a letter to Kettering less than two years earlier expressing full confidence in him. The prob- lem Sloan had was how to make his decision stick, keep Ketter- ing in the organization (he was much too valuable to lose), avoid alienating du Pont, and encourage the division heads to continue developing product lines using conventional water- cooled engines.

Sloan's actions in the face of this conflict reveal much about how managers work. First, he tried to reas- sure Kettering by presenting the prob- lem in a very ambiguous fashion, sug- gesting that he and the executive committee sided with Kettering but that it would not be practical to force the divisions to do what they were opposed to. He presented the problem as being a question ofthe people, not the prod- uct. Second, he proposed to reorganize around the problem by consolidating all functions in a new division that would be responsible for the design, produc- tion, and marketing ofthe new engine.

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Managers and Leaders: Are They Different?

This solution appeared as ambiguous as his efforts to placate Kettering. Sloan wrote at the time: "My plan was to cre- ate an independent pilot operation under the sole jurisdiction of Mr. Ket- tering, a kind of copper-cooled car divi- sion. Mr. Kettering would designate his own chief engineer and his production staff to solve the technical problems of manufacture."^

Sloan did not discuss the practical value of this solution, which included saddling an inventor with management responsibility, but in effect, he used this plan in order to limit his conflict with Pierre du Pont.

Essentially, the managerial solution that Sloan arranged limited the options available to others. The structural solu- tion narrowed choices, even limiting emotional reactions to the point where the key people could do nothing but go along. It allowed Sloan to say in his memorandum to du Pont,"We have dis- cussed the matter with Mr. Kettering at some length this morning, and he agrees with us absolutely on every point we made. He appears to receive the sugges- tion enthusiastically and has every con- fidence that it can be put across along these lines.'"'

Sloan placated people who opposed his views by developing a structural so- lution that appeared to give something but in reality gave only limited options. He could then authorize the car divi- sion's general manager, with whom he basically agreed, to move quickly in de- signing water-cooled cars for the imme- diate market demand.

Years later, Sloan wrote, evidently with tongue in cheek, "The copper- cooled car never came up again in a big way. It just died out; I don't know why.'""

To get people to accept solutions to problems, managers continually need to coordinate and balance opposing views. Interestingly enough, this type of work has much in common with what diplomats and mediators do, with Henry Kissinger apparently an out- standing practitioner. Managers aim to shift balances of power toward solutions

acceptable as compromises among con- flicting values.

Leaders work in the opposite direc- tion. Where managers act to limit choices, leaders develop fresh ap- proaches to long-standing problems and open issues to new options. To be effec- tive, leaders must project their ideas onto images that excite people and only then develop choices that give those images substance.

John F. Kennedy's brief presidency shows both the strengths and weak- nesses connected with the excitement leaders generate in their work. In his inaugural address he said,"Let every na- tion know, whether it wishes us well or ill, that we shall pay any price, bear any

Is THE LEADERSHIP MYSTIQUE merely a holdover from our childhood-from a sense of dependency and a longing for good and heroic parents?

burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty."

This much-quoted statement forced people to react beyond immediate con- cerns and to identify with Kennedy and with important shared ideals. On closer scrutiny, however, the statement is ab- surd because it promises a position, which, if adopted, as in the Vietnam War, could produce disastrous results. Yet unless expectations are aroused and mobilized, with all the dangers of frus- tration inherent in heightened desire, new thinking and new choice can never come to light.

Leaders work from high-risk posi- tions; indeed, they are often tempera- mentally disposed to seek out risk and

danger, especially where the chance of opportunity and reward appears promis- ing. From my observations, the reason one individual seeks risks while another approaches problems conservatively depends more on his or her personality and less on conscious choice. For those who become managers, a survival in- stinct dominates the need for risk, and with that instinct comes an ability to tolerate mundane, practical work. Lead- ers sometimes react to mundane work as to an affliction.

Relations with Others Managers prefer to work with people; they avoid solitary activity because it makes them anxious. Several years ago, I directed studies on the psychological aspects of careers. The need to seek out others with whom to work and collabo- rate seemed to stand out as an impor- tant characteristic of managers. When asked, for example, to write imaginative stories in response to a picture showing a single figure (a boy contemplating a violin or a man silhouetted in a state of refiection), managers populated their stories with people. The following is an example of a manager's imaginative story about the young boy contemplat- ing a violin:

"Mom and Dad insisted that their son take music lessons so that someday he can become a concert musician. His in- strument was ordered and had just ar- rived. The boy is weighing the alterna- tives of playing football with the other kids or playing with the squeak box. He can't understand how his parents could think a violin is better than a touchdown.

"After four months of practicing the violin, the boy has had more than enough. Dad is going out of his mind, and Mom is willing to give in reluctantly to their wishes. Football season is now over, but a good third baseman will take the field next spring."

This story illustrates two themes that clarify managerial attitudes toward human relations. The first, as I have sug- gested, is to seek out activity with other people (that is, the football team), and

INSIDE THE MIND OF THE LEADER JANUARY 2004 77

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the second is to maintain a low level of emotional involvement in those rela- tionships. Low emotional involvement appears in the writer's use of conven- tional metaphors, even clichés, and in the depiction of the ready transforma- tion of potential conflict into harmo- nious decisions. In this case, the boy. Mom, and Dad agree to give up the vio- lin for sports.

These two themes may seem para- doxical, but their coexistence supports what a manager does, including recon- ciling differences, seeking compromises, and establishing a balance of power. The story further demonstrates that manag- ers may lack empathy or the capacity to sense intuitively the thoughts and feel- ings of those around him. Consider an- other story written to the same stimulus picture by someone thought of as a leader by his peers:

"This little boy has the appearance of being a sincere artist, one who is deeply affected by the violin, and has an in- tense desire to master the instrument.

"He seems to have just completed his normal practice session and appears to be somewhat crestfallen at his inability to produce the sounds that he is sure lie within the violin.

"He appears to be in the process of making a vow to himself to expend the necessary time and effort to play this instrument until he satisfies himself that he is able to bring forth the qualities of music that he feeis within himself

"With this type of determination and carry-through, this boy became one of the great violinists of his day."

Empathy is not simply a matter of pay- ing attention to other people. It is also the capacity to take in emotional sig- nals and make them meaningful in a re- lationship. People who describe another person as "deeply affected," with"intense desire,""crestfallen," and as one who can "vow to himself" would seem to have an inner perceptiveness that they can use in their relationships with others.

Managers relate to people according to the role they play in a sequence of events or in a decision-making process.

while leaders, who are concerned with ideas, relate in more intuitive and em- pathetic ways. The distinction is simply between a manager's attention to how things get done and a leader's to what the events and decisions mean to par- ticipants.

In recent years, managers have adopted from game theory the notion

accept present losses, believing that next timethey will win.

Second, the manager communicates to subordinates indirectly, using "sig- nals" instead of "messages." A signal holds a number of implicit positions, while a message clearly states a posi- tion. Signals are inconclusive and sub- ject to reinterpretation should people

FOR THOSE WHO BECOME MANAGERS; a survival instinct dominates the need for risk, and with that instinct comes an ability to tolerate mundane, practical work.

that decision-making events can be one of two types; the win-lose situation (or zero-sum game) or the win-win situa- tion in which everybody in the action comes out ahead. Managers strive to convert win-lose into win-win situations as part of the process of reconciling dif- ferences among people and maintain- ing balances of power.

As an illustration, take the decision of how to allocate capital resources among operating divisions in a large, de- centralized organization. On the sur- face, the dollars available for distribu- tion are limited at any given time. Presumably, therefore,the more one di- vision gets, the less is available for other divisions.

Managers tend to view tbis situation (as it affects human relations) as a con- version issue: how to make what seems like a win-lose problem into a win-win problem. From that perspective, several solutions come to mind. First, the man- ager focuses others' attention on proce- dure and not on substance. Here tbe players become engrossed in the bigger problem of how to make decisions, not what decisions to make. Once commit- ted to the bigger problem, these people have to support the outcome since they were involved in formulating the deci- sion-making rules. Because they believe in tbe rules they formulated, they will

become upset and angry; messages in- volve the direct consequence that some people will indeed not like what tbey hear. Tbe nature of messages beigbtens emotional response and makes manag- ers anxious. Witb signals, the question of who wins and wbo loses often becomes obscured.

Tbird, tbe manager plays for time. Managers seem to recognize that with tbe passage of time and tbe delay of major decisions, compromises emerge tbat take tbe sting out of win-lose situa- tions, and tbe original "game" will be superseded by additional situations. Compromises mean tbat one may win and lose simultaneously, depending on which of tbe games one evaluates.

Tbere are undoubtedly many otber tactical moves managers use to cbange human situations from win-lose to win- win. But the point is tbat sucb tactics focus on tbe decision-making process it- self, and tbat process interests managers ratbertban leaders. Tactical interests in- volve costs as well as benefits; tbey make organizations fatter in bureaucratic and political intrigue and leaner in direct, bard activity and warm buman rela- tionships. Consequently, one often bears subordinates cbaracterize managers as inscrutable, detacbed, and manipula- tive. These adjectives arise from the subordinates' perception that they are

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Managers and Leaders: Are They Different?

linked together in a process whose pur- pose is to maintain a controlled as well as rational and equitable structure.

In contrast, one often hears leaders referred to with adjectives rich in emo- tional content. Leaders attract strong feelings of identity and difference or of love and hate. Human relations in leader-dominated structures often ap- pear turbulent, intense, and at times even disorganized. Such an atmosphere intensifies individual motivation and often produces unanticipated outcomes.

Senses of Self In The Varieties of Religious Experience, William James describes two basic per- sonality types, "once-born" and "twice- born." People of the former personality type are those for whom adjustments to life have heen straightforward and whose lives have been more or less a peaceful flow since birth. Twice-borns, on the other hand, have not had an easy time of it. Their lives are marked by a continual struggle to attain some sense oforder. Unlike once-boms,they cannot take things for granted. According to James, these personalities have equally different worldviews. For a once-born personality, the sense of self as a guide to conduct and attitude derives from a feeling of being at home and in har- mony with one's environment. For a twice-born, the sense of self derives from a feeling of profound separateness.

A sense of belonging or of being sep- arate has a practical significance for the kinds of investments managers and leaders make in their careers. Managers see themselves as conservators and reg- ulators of an existing order of affairs with which they personally identify and from which they gain rewards. A man- ager's sense of self-worth is enhanced by perpetuating and strengthening existing institutions: He or she is per- forming in a role that is in harmony with the ideals of duty and responsibil- ity. William James had this harmony in mind-this sense of self as fiowing easily to and from the outer world - in defin- ing a once-born personality.

Leaders tend to be twice-born per- sonalities, people who feel separate from their environment. They may work in organizations, but they never belong to them. Their sense of who they are does not depend on memberships, work roles, or other social indicators of iden- tity. And that perception of identity may form the theoretical basis for ex- plaining why certain individuals seek opportunities for change. The methods to bring ahout change may be tech- nological, political, or ideological, but the object is the same: to profoundly alter human, economic, and political relationships.

In considering the development of leadership, we have to examine two dif- ferent courses of life history: (l) devel- opment through socialization, which prepares the individual to guide institu- tions and to maintain the existing bal- ance of social relations; and (2) develop- ment through personal mastery, which impels an individual to struggle for psy- chological and social change. Society produces its managerial talent through the first line of development; leaders emerge through the second.

Development of Leadership Every person's development begins with family. Each person experiences the traumas associated with separating from his or her parents, as well as the pain that follows such a wrench. In the same vein, all individuals face the diffi- culties of achieving self regulation and selfcontrol. But for some, perhaps a majority, the fortunes of childhood pro- vide adequate gratification and suffi- cient opportunities to find substitutes for rewards no longer available. Such individuals, the "once-borns," make moderate identifications with parents and find a harmony between what they expect and what they are able to realize from life.

But suppose the pains of separation are amplified by a combination of parental demands and individual needs to the degree that a sense of isolation, of

being special, or of wariness disrupts the bonds that attach children to parents and other authority figures? Given a special aptitude under such conditions, the person becomes deeply involved in his or her inner world at the expense of interest in the outer world. For such a person, self-esteem no longer depends solely on positive attachments and real rewards. A form of self-reliance takes hold along with expectations of perfor- mance and achievement, and perhaps even the desire to do great works.

Such self-perceptions can come to nothing if the individual's talents are negligible. Even with strong talents, there are no guarantees that achieve- ment will follow, let alone that the end result will be for good rather than evil. Other factors enter into development as well. For one, leaders are like artists and other gifted people who often strug- gle with neuroses; their ability to func- tion varies considerably even over the short run, and some potential leaders lose the struggle altogether. Also, be- yond early childhood, the development patterns that affect managers and lead- ers involve the selective infiuence of particular people. Managerial personal- ities form moderate and widely distrib- uted attachments. Leaders, on the other hand, establish, and also break off, in- tensive one-to-one relationships.

It is a common observation that peo- ple with great talents are often indiffer- ent students. No one, for example, could have predicted Einstein's great achieve- ments on the basis of his mediocre record in school. The reason for medi- ocrity is obviously not the absence of ability. It may result, instead, from self- absorption and the inability to pay at- tention to the ordinary tasks at hand. The only surefire way that an individual can interrupt reverie-like preoccupation and se If absorption is to form a deep attachment to a great teacher or other person who understands and has the ability to communicate with the gifted individual.

Whether gifted individuals find what they need in one-to-one relationships

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depends on tbe availability of teachers, possibly parental surrogates, wbose strengths lie in cultivating talent. For- tunately, wben generations meet and the self-selections occur, we learn more about how to develop leaders and bow talented people of different generations influence eacb other.

Wbile apparently destined for medi- ocre careers, people wbo form important one-to-one appren- ticesbip relationsbips often are able to accelerate and intensify their development. The psy- chological readiness of an indi- vidual to benefit from sucb a relationsbip depends on some experience in life tbat forces tbat person to turn inward.

Consider Dwigbt Eisenbower, whose early career in tbe army foreshadowed very little about bis future development. During World War I, wbile some of his West Point classmates were al- ready experiencing tbe war firstband in France, Eisenhower telt "embedded in the monot- ony and unsought safety of tbe Zone of tbe Interior...tbat was intolerable punishment."^

Shortly after World War I, Eisenbower, then a young offi- cer somewbat pessimistic about bis career cbances, asked for a transfer to Panama to work under General Fox Connor, a senior officer whom he ad- mired. Tbe army turned down bis re- quest. Tbis setback was very mucb on Eisenbower's mind when Ikey, bis first born son, succumbed to infiuenza. Tbrougb some sense of responsibility for its own, the army tben transferred Eisenbower to Panama, where be took up his duties under General Connor witb tbe sbadow of bis lost son very mucb upon bim.

In a relationsbip witb tbe kind of fa- tber be would bave wanted to be, Eisen- bower reverted to being the son be bad lost. And in tbis bigbly cbarged situa- tion, be began to learn from his teacber. General Connor offered, and Eisen-

hower gladly took, a magnificent tuto- rial on the military. The effects of tbis relationship on Eisenbower cannot be measured quantitatively, but in exam- ining bis career patb from tbat point, one cannot overestimate its significance.

As Eisenbower wrote later about Con- nor, "Life with General Connor was a sort of graduate school in military af-

fairs and tbe humanities, leavened by a man wbo was experienced in bis knowledge of men and tbeir conduct. 1 can never adequately express my grat- itude to tbis one gentleman....In a life- time of association witb great and good men, be is the one more or less invis- ible figure to wbom I owe an incalcula- ble debt."^

Some time after bis tour of duty witb General Connor, Eisenhower's break- through occurred. He received orders to attend tbe Command and General Staff Scbool at Fort Leavenwortb, one of the most competitive schools in tbe army. It was a coveted appointment, and Eisenbower took advantage of tbe opportunity. Unlike bis performance in bigb scboot and at West Point, bis work

at the Command Scbool was excellent; be graduated first in bis class.

Psycbological biograpbies of gifted people repeatedly demonstrate tbe im- portant part a teacher plays in devel- oping an individual. Andrew Carnegie owed mucb to bis senior, Thomas A. Scott. As head of tbe Western Division of the Pennsylvania Railroad, Scott rec-

ognized talent and tbe desire to learn in the young telegra- pher assigned to him. By giving Carnegie increased responsi- bility and by providing bim with the opportunity to learn tbrougb close personal obser- vation, Scott added to Carne- gie's self-confidence and sense of achievement. Because of bis own personal strength and acbievement, Scott did not fear Carnegie's aggressiveness. In- stead, be gave it full play in en- couraging Carnegie's initiative.

Great teachers take risks. They bet initially on talent tbey perceive in younger people. And they risk emotional in- volvement in working closely witb tbeir juniors. The risks do not always pay off, but tbe will- ingness to take tbem appears to be absolutely crucial In devel- oping leaders.

Can Organizations Develop Leaders?

A mytb about bow people learn and de- velop that seems to have taken bold in American culture also dominates think- ing in business. Tbe mytb is tbat people learn best from tbeir peers. Supposedly, tbe threat of evaluation and even hu- miliation recedes in peer relations be- cause of the tendency for mutual iden- tification and tbe social restraints on autboritarian bebavior among equals. Peer training in organizations occurs in various forms. Tbe use, for example, of task forces made up of peers from several interested occupational groups (sales,production, researcb, and finance)

HARVARD BUSINESS REVIEW

Managers and Leaders: Are They Different?

supposedly removes the restraints of authority on the individual's willing- ness to assert and exchange ideas. As a result, so the theory goes, people in- teract more freely, listen more objec- tively to criticism and other points of view, and, finally, learn from this healthy interchange.

Another application of peer training exists ¡n some large corporations, such as Philips N.V. in Holland, where orga- nizational structure is built on the prin- ciple of joint responsibility of two f>eers, one representing the commercial end ofthe business and the other the tech- nical. Formally, both hold equal re- sponsibility for geographic operations or product groups, as the case may be. As a practical matter, it may tum out

the operation and opens the way for the formation of cliques in an atmosphere of intrigue.

One large, integrated oil company has accepted the importance of developing leaders through the direct influence of senior on Junior executives. The chair- man and chief executive officer regu- larly selects one talented university graduate whom he appoints as his spe- cial assistant and with whom he will work closely for a year. At the end ofthe year, the junior executive becomes avail- able for assignment to one ofthe oper- ating divisions, where he or she will be assigned to a responsible post rather than a training position. This appren- ticeship acquaints the junior executive firsthand with the use of power and

Leaders tend to feel SEPARATE FROM THEIR ENVIRONMENT. They may work in organizations, but they never belong to them.

that one or the other ofthe peers dom- inates the management. Nevertheless, the main interaction is between two or more equals.

The principal question I raise about such arrangements is whether they per- petuate the managerial orientation and preclude the formation of one-to-one relationships between senior people and potential leaders.

Aware of the possible stifling effects of peer relationships on aggressiveness and individual initiative, another com- pany, much smaller than Philips, utilizes joint responsibility of peers for operat- ing units, with one important differ- ence. The chief executive ofthis com- pany encourages competition and rivalry among peers, ultimately reward- ing the one who comes out on top with increased responsibility. These hybrid arrangements produce some unin- tended consequences that can be disas- trous. There is no easy way to limit ri- valry. Instead, it permeates all levels of

with the important antidotes to the power disease called /îi/ijrfs - perfor- mance and integrity.

Working in one-to-one relationships, where there is a formal and recognized difference in the power of the players, takes a great deal of tolerance for emo- tional interchange. This interchange, in- evitable in close working arrangements, probably accounts for the reluctance of many executives to become involved in such relationships. Fortune carried an interesting story on the departure of a key executive, John W. Hanley, from the top management of Procter & Gamble to the Chief executive officer position at Monsanto.*^ According to this account, the chief executive and chairman of P&G passed over Hanley for appointment to the presidency, instead naming another executive vice president to this post.

The chairman evidently felt he could not work well with Hanley who, by his own acknowledgment, was aggressive, eager to experiment and change prac-

tices, and constantly challenged his su- perior. A CFO naturally has the right to select people with whom he feels con- genial. But I wonder whether a greater capacity on the part of senior officers to tolerate the competitive impulses and behavior of their subordinates might not be healthy for corporations. At least a greater tolerance for interchange would not favor the managerial team player at the expense ofthe individual who might become a leader.

I am constantly surprised at the fre- quency with which chief executives feel threatened by open challenges to their ideas, as though the source of their au- thority, rather than their specific ideas, was at issue. In one case, a chief execu- tive officer, who was troubled by the ag- gressiveness and sometimes outright rudeness of one of his talented vice pres- idents, used various indirect methods such as group meetings and hints from outside directors to avoid dealing with his subordinate. I advised the executive to deal head-on with what irritated him. I suggested that by direct, face-to-face confrontation, both he and his subordi- nate would learn to validate the dis- tinction between the authority to be preserved and the issues to be debated.

The ability to confront is also the abil- ity to tolerate aggressive interchange. And that skill not only has the net effect of stripping away the veils of ambiguity and signaling so characteristic of mana- gerial cultures but also encourages the emotional relationships leaders need if they are to survive. ^

1, (HarperCollins, 1973).

^.Alfred P. Sloan, jr., My Years with General Motors (Doub)eday,i964).

3. Ibid.

4. Ibid.

5. Ibid.

b. Dwight D. Eisenhower, At Ease: Stories I Tell to Friends (Doublcday. 1967).

7. Ibid.

8. "Jack Hanley Cot There by Selling Harder," For- tuiK; November 1976.

Reprint RO4O1G; HBR OnPoint 8334

To order, see page 115.

INStDETHE MIND OF THE LEADER JANUARY 2004 81

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