Henry clearly thought we need less “leadership”, and more people who actually do stuff. And true; it has become a business buzz word and something that everyone puts on his list of career aspirations. However, not everyone can be a leader. Moreover, their effect often seems overestimated.
In reality, business leaders make very few decisions that really significantly impact the course of action of their firms. When a large corporation does well, we attribute it to the forceful, brilliant individual at the top (e.g. Jack Welch, Steve Jobs). When the corporation fails, we also hold the individual crook at its helm responsible beyond mercy (e.g. Jeff Skilling, Dick Fuld). Yet, these individuals’ influences might be overestimated, both positively and negatively, because their decisions often have very limited impact on the everyday practices in their firms.
Yet, I would say that that does not mean they have no influence. They surely do, but it might not be directly through their decisions. CEOs often have a much more symbolic role, in terms of providing inspiration and motivation. And that type of impact can be very real indeed.
Tolstoy – in his epic novel War & Peace, through the eyes of one of its main characters, Prince Andrei – seemed to understand that well. He described how one of the Russian commanders – prince Bagration – in a battle against Napoleon’s army, had very little real influence on how the battle unfolded: stuff just started to happen once the guns got rattling, whatever commands he did or did not shout. However, his presence, and perhaps his successful pretence of planning and control, did have some genuine impact:
Prince Andrei listened carefully to Bagration’s colloquies with the commanding officers and to the orders he gave them and remarked to his astonishment that in reality no orders were given but that Prince Bagration merely tried to make it appear as though everything that was being done of necessity, by accident or at the will of individual commanders, was performed if not exactly by his orders at least in accordance with his design. Prince Andrei noticed, however, that though what happened was due to chance and independent of the general’s will, the tact shown by Bagration made his presence extremely valuable. Officers who rode up to him with distracted faces regained their composure; soldiers and officers saluted him gaily, recovered their spirits in his presence, and unmistakably took pride in displaying their courage before him.
Hence, the impression we have of leaders’ actions, their determination and vision, do influence people lower in the organization, in terms of their commitment and motivation. For example, a study by professors Ping Ping Fu, of the Chinese University of Hong Kong and colleagues, published in the prestigious academic journal Administrative Science Quarterly, asked 177 executives of 42 companies to rate their CEOs in terms of the questions “the CEO shows determination when accomplishing goals”, “the CEO communicates high performance expectations”, “the CEO articulates a compelling vision of the future”, and “the CEO transmits a sense of mission”. They then surveyed 605 middle managers of these same companies in terms of their commitment to the firm and their intention to leave. And the results clearly showed that middle managers who worked for a company whose CEO seemed more determined and better at communicating and articulating a sense of mission and vision, were more committed to their companies. Hence, the image that a CEO managed to exhibit of his leadership and control had a significant impact on the motivation of his middle managers.
Then Ping Ping and colleagues did something interesting. Using an innovative survey technique (called the Q-sort method) they managed to construct a measure of the CEOs’ values. Particularly, they measured CEOs’ self-transcendence values (the transcendence of self interests, enhancement of others’ happiness, and the acceptance of others as equals) and self-enhancement values (which emphasize the pursuit of one’s own happiness, success, and dominance over others) and, surprisingly, the findings described above were only true for CEOs with a healthy dose of self-transcendence values. By contrast, if the CEO secretly harbored some pretty selfish values (i.e. was high on self-enhancement), middle managers were not much motivated and committed to the firm whatever the CEO said or did.
‘What is surprising about that?’ you might think. Well, it may not be surprising that employees prefer their CEOs to have selfless instead of selfish values – I guess we all prefer our bosses to be selfless – but it is a lot more surprising that they are able to detect these values. Because what this study really shows is that, if you had multiple CEOs behaving in the exact same way – expressing a clear vision, showing determination, setting expectations, and what have you – only some of them would succeed in motivating their employees, where others would hopelessly fail. Because what sets the effective and ineffective leaders apart are the values they harbor, in terms of having their own or others’ interests at heart.
Apparently middle managers see right through you. If you, as a CEO, display all sorts of motivating, leadership type behavior, but secretly harbor some pretty selfish values, it simply ain’t going to work. You can shout and dance and do whatever you like, but this motivational stuff only renders the desired effect if you really mean it.