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Leadership and management systems
Leadership and other
Leadership is one of the most praised, but least explained concepts.
We will look at some of the explanations:
David Ogilvy said that all the greatest leaders he met were incredibly complicated persons.
Warren Bennis postulates four capabilities which the leader must develop:
– to create a vision, a bridge towards the future
– to give the meaning of the vision through the communication
– to create the trust, „lubricant which enables the functioning of the organization “
– to look for self-recognition and self-esteem
Leadership is quite different from management.
Bruce Henderson gives a way to distinguish these two. He said that the management does what the organization should do, and the leadership does the motivation of the organization to do what it should do.
Niccolo Machiavelli explored what a prince must do to survive and prosper, surrounded by the inevitable human evil. Those ideas are represented in the three styles of leading: depriving the middle management of decision-making, applying of „divide et impere“ principle, and the constant intimidation of the subordinates. None of these we would recommend or practice today. The end does not justify the means.
The concept of business excellence, through a balancing of the expectations of stakeholders/ interested parties, gives to the leader the possibility to apply the positive approach in determining his/her relation to the organization.
Today we have the initiatives to shift the purpose of the business entity: from making a profit, to deliver the value to all stakeholders. The value is not the same for everyone – more common expectation can be: “good”.
The positive approach is often used but usually just self-understanding. According to Henderson, it is also the tool for the actions of the leader. For sure, both the “value” and the “positive approach” are connected to the idea of the „good“. Therefore, it can be useful for a leader to understand what is “good”.
Positivism gives the belief in the existence of „good“, as well as the conscience of the possibility that the person through his/her action could contribute to the general good. Is it the opposite of “evil” or something definable?
Hegel considers that the good is the embodiment of the absolute spirit, namely “the basic determination which involves the necessary human relations“ 2
Adorno, with his characteristic perspicuity, states that „the private relations between people models like industry bottleneck. Even in the smallest of communities, the level is adjusted to the most subaltern“. And also: …“The oath to the good in the practice is the force that pulls down.“(!) 3
Here we must say that this need not be true. Yes, when the good for one stakeholder is bad for others. When a manager decides that the employee will not get the bonus to maximize the profit and his bonus, that is an example of the good for the manager, but bad for the employee. But it is not a “real” good. Real good is tightly connected to the adding value and therefore doing good is only so when it is not at the expense of the other(s). There is probably no “absolute” good, but the relative good, for a person, or a company, surely exists. As we will see shortly, the oath to the good may pull us up!
As Chekhov said, “Only entropy comes easy!”. Good can be understood as a process to lower the entropy while at the same time increasing the abilities of that system and not at the expense of other systems. Good is about the creating, less often about destroying. „Good“ is the relative deceleration of the system (both physical and information/human) entropy while increasing the amount of information, energy, and abilities of that particular system. Not to go into details about the relation of physical (thermodynamics) and information kinds on entropies, but it is hard to lower the entropy and raise the energy simultaneously. The will and the power are to be engaged, plus a significant quantity of work. Therefore all – leaders and managers, together with employees, have their roles in doing good. For the context of business, this definition would mean that with doing good, a company will be delivering proportionate value to each stakeholder and capable of delivering more value in the future.
So, both the leader and the managers should understand what “good” is and consider it when defining the company mission, vision, values, principles, and management system(s). In the context of management, now the relations: company – customer, company – supplier, leader – management, employees – manager, and any other, can be considered with the use of the positive approach and this definition of “good”. Through balancing of the positive in any relations we can in every single case establish the ideal point of the distribution – „pan metron ariston“, which may be the “holy grail” of the management.
On one side we have a leader, which must act with a will, in the way of inspiring, motivating, and with a positive approach. Not all leaders can define and communicate management system concept requirements. On the other side, we have the organization which functions in, most often, non-optimal conditions, with management and management systems set up and oriented towards the goals and KPI´s. These two worlds are often separated, distanced, and loosely connected, which can result in the dichotomy and suboptimal functioning of a company (classic Leadership-Management gap).
Connected employees are the key factor for a successful company, so, any concept of connecting the leader and the management should consider its effect on the employees. How to connect the concepts and models of the leader with the management system and employees? Here are some of the possible ways for the leaders and managers who are acting with the purpose.
The first way – Soft facts
By applying the concept of balancing the expectations of the interested parties, the leader can opt for the almost complete transparency of the decision-making processes and communication about the aspects of the expectations. The lowering of entropy must be focused on those joints in the system which are most exposed to the friction. The process-oriented management system rarely uses one of the greatest opportunities: introduce soft facts.
A one-dimensional approach of fulfilling the request for the parametrization of the processes and PDCA loop leads to an aliened and impoverished management system that works with the hard facts. Such systems rarely talk about the future and sustainability. One of the most important benefits of using soft facts is not just the legality and efficiency, but also the legitimacy and the effectiveness of the organization. Many of the disasters of the companies in the past – Enron, Lehman Brothers, to mention just a few, would surely be avoided if the management used some of the important soft facts, like the level of the legitimacy or the ratio between business strategy and existential risks.
We should use the soft facts which are based on all three components of the corporative credibility – core competencies, trustworthiness, and likeability. Management systems mostly use only the first component. For a leader, it is essential that his/her vision is not just mechanically transmitted through the organization, but that the organization lives his/her vision, with the common understanding of “good”.
The use of soft facts will only gain importance as the sophistication raises as the competitive factor. This usage can be extremely demanding for implementing into companies and management systems, but the right implementation can lead to an extraordinary strong entity.
The second way –Internal marketing
Internal marketing is alive when everyone in the organization understands and applies the company’s marketing concepts and targets, and each employee is caring about customer experience (in earlier times, we were caring about the satisfaction, which is changing, the experience is permanent). The prerequisite for the second way is that the company lives the marketing concept.
One of the many advantages of this way is the flexibility. In marketing, one could reach the target in many ways. The customer can buy the product because of the need, lust, prestige, brand, for no reason, availability, … The mechanisms of the understanding and managing customer decisions are the same which we now apply to our internal customers – the employees.
The leader can use the proven techniques: identification and segmentation, positioning, one by one approach, benchmarking… Segments of the employees must be specifically addressed due to different education, experience, culture, circumstances, and characteristics, the same as it goes with the customers.
Individual responsibility is far greater in this way. Out of many cases when the owners pinned their managers as responsible for signing the suspicious or illegal contracts, we can conclude that the biggest responsibility for the company stays with the leader. Therefore, the value system – the aggregation of ideas that propels the organization, is the most precious know-how of an organization.
By internal marketing, we use the management system as a transmission mechanism. All the aspects of the system relation and vision we propagate through internal communication channels and contacts. Marketing is used by all employees. Marketing performed in marketing departments has only a part in the total marketing ability of the organization. Total marketing ability is by far the result of the implemented concepts and ideas of the leader throughout the organization.
Leaders today can use any or all of the seven leadership styles: trust, inspiriting, connecting, aggression (on the market), humanity, commanding, and killing (of unproductive and useless here – Lean) which Alexander the Great used a long time ago. 3
Important here is the style of aggression, because by it we may cure the Adorno’s supposed weakness of the positive approach through changing the direction of the force towards new areas and not on to holding the existing.
Besides those two ways proposed, there are many other ways for connecting the leader with the management system. They may be used separately or simultaneously. Machiavelli was right about one thing – the result speaks about the way.
Leaders in the practice
Through the long experience in business practice, auditing of management systems, and training of business leaders, I found out that the leaders have some common marks. Charisma is certainly one of them. The quantity of the energy they emit is mostly net positive. The attitude is optimistic. The leaders will always more gladly speak about the future than about the past. The empathy level is high, as well as EQ.
Towards the management systems, leaders have ambivalent position: they support it as a way of increasing efficiency and capacity, but they also fear that the system will erode the creativeness, flexibility, their magic formula for success, or Mojo.
The leaders have the request for the pragmatism of the management systems: business has a purpose, and the success is the measure of fulfilling the purpose.
The summary
The leader must not allow the management system to stays disconnected from his/her world. The way of connecting can be one of the two here proposed, or original, based on the leader’s style and culture. A saying dated on the times of Caesar is that “every soldier has the right on the competent commander”. Understanding “good” connect leaders, managers, and employees.
The right tie between the leader and the management system facilitates that the vision of the company becomes the reality. By doing good, the company may not just fulfill the goals, but also be healthy, resilient, responsible, and sustainable – all in all, trouble-free!
References:
1) „Propaedeutics of Philosophy”, Georg Wilhelm Friedrich Hegel
