Business Management - Chap 15.pdf

PAR T 5 CH 15 The Nature of Leadership From Management to Leadership Contemporary Leadership Level 5 Leadership Servant Leadership Authentic Leadership Interactive Leadership Leadership Traits Behavioral and Contingency Approaches Behavioral: Task Versus People Contingency: The Situational Model...

PAR T 5 CH 15 The Nature of Leadership From Management to Leadership Contemporary Leadership Level 5 Leadership Servant Leadership Authentic Leadership Interactive Leadership Leadership Traits Behavioral and Contingency Approaches Behavioral: Task Versus People Contingency: The Situational Model of Leadership Contingency: Fiedler’s Contingency Theory Contingency: Situational Substitutes for Leadership Charismatic and Transformational Leadership Charismatic Leadership Transformational Versus Transactional Leadership LEARNING OBJECTIVES CHAPTER OUTLINE Leadership After studying this chapter, you should be able to: 1. Define leadership and explain the differences between formal and informal leaders. 2. Explain the differences between management and leadership and why organizations need both types of skills. 3. Describe the leadership trends emerging in today’s organizations, including Level 5 leadership, servant leadership, authentic leadership, and interactive leadership. 4. Compare and contrast the personal traits associated with great leaders and those associated with ineffective leaders. 5. Explain the categories of task-oriented behavior and peopleoriented behavior and how they are related to leader effectiveness in different situations and settings. 6. Describe transformational leadership and when it should be used. 7. Explain how different types of followership are related to effective leadership. 8. Identify sources of leader power and the tactics that leaders use to influence others. Followership Power and Influence Hard Position Power Personal Soft Power Other Sources of Power Interpersonal Influence Tactics Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. __________ __________ 2. I focus more on execution than on being pleasant with people. __________ __________ 3. I go out of my way to help others. __________ __________ 4. I personally hold people accountable for their performance. __________ __________ 5. I work hard to maintain a friendly atmosphere on the team. __________ __________ 6. I clearly tell people what I expect of them. __________ __________ 7. I think a lot about people’s personal welfare. __________ __________ 8. I check up on people to know how they are doing. __________ __________ 9. I am concerned more with relationships than with results. __________ __________ 10. I assign people to specific roles and tasks. __________ __________ 11. I focus more on being pleasant with people than on execution of tasks. __________ __________ 12. I am concerned more with results than with people’s feelings. __________ __________ SCORING AND INTERPRETATION: Give yourself 2 points for each item marked “Mostly True” and 1 point for each marked “Mostly False.” People Orientation: Sum your points for the odd-numbered questions: __________ Task Orientation: Sum your points for the even-numbered questions: __________ Your People Orientation score reveals your orientation toward people and relationships, which will be described in the chapter. A score of 10 or higher suggests that you may be “high” on people behavior. A score of 9 or lower suggests that you may be “low” on people orientation. Your Task Orientation score reveals your orientation toward tasks and outcomes. A score of 10 or higher suggests that you may be “high” on task-oriented behavior. A score of 9 or lower suggests that you may be “low” on task orientation. What is your primary leadership orientation? Which of the following best represents your leadership style? Look at Exhibit 15.6 on page 544 to see the quadrant in which you fit. __________ Low task, low people 5 Delegating style __________ Low task, high people 5 Participating style __________ High task, low people 5 Telling style __________ High task, high people 5 Selling style Does your quadrant seem correct based on your experience? Compare your scores to the scores of other students and discuss how the differences may relate to your personal leader styles. Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. ENVIRONMENT 1. I intentionally try to make people’s work on the job more pleasant. 3 PLANNING Mostly False 4 ORGANIZING Organizing Mostly True 2 5 LEADING INSTRUCTIONS: Responding to the statements below can help you diagnose your approach to dealing with others when you are in a leadership role. If you have been a leader at work with people reporting to you, think back to that experience. Alternatively, you can think about how you usually behave as a formal or informal leader in a group to get an assignment completed. Please answer honestly about how frequently you display each behavior. 6 CONTROLLING Task Versus People Orientation INTRODUCTION 1 530 PART 5 LEADING S Hans Pennink/Shutterstock.com OT PSH NA O n April 7, 2020, nearly 800 people in New York City died from COVID-19. As he had done every day since early March, New York Governor Andrew Cuomo shared the grim news in his daily coronavirus briefing. Sitting at the epicenter of the COVID-19 pandemic in the United States, Cuomo lamented the loss of life, expressed sadness for the families, and praised the health care workers who were fighting to beat back the deadly virus and prevent more deaths. Getting up every day and giving a report about people who die is something no leader wants to do, but Cuomo rose to the challenge. During his daily briefings, the governor methodically laid out the facts and statistics, presenting the bad news with a thoughtful, unvarnished approach; then, he would share his personal thoughts and opinions, which he carefully labeled as such. He explained what he was trying to do to address the needs of health care workers and patients and told people what they needed to do to help slow the spread of the virus. He admitted when he didn’t know something and deferred to the experts. Cuomo’s ability to engage people’s trust helped them feel safer in a decidedly unsafe time. At his final daily coronavirus briefing in June, Cuomo praised the people of New York for their handling of what he called “111 days of hell,” saying “I’m so incredibly proud of what we all did together, and as a community.”1 Although Andrew Cuomo had perhaps not previously been considered an especially gifted or inspiring leader, his ability to express empathy and compassion while maintaining a calm, focused, and strategic approach to the COVID-19 crisis illustrated the hallmarks of effective leadership.2 Cuomo’s job-performance rating soared in the midst of the pandemic to its highest level ever, with 85 percent of voters surveyed from every region of the country saying they approved of how he was handling the crisis. “Leaders emerge from a crisis or they drown from a crisis,” said Mitchell Moss, a professor of urban policy and planning at New York University.3 No leader wants to have his or her leadership tested in a dire situation like that faced by Andrew Cuomo, but leaders in all walks of life face tough challenges. Leadership can be very difficult. Consider that during just one week in 2019, the CEOs of eBay, Volkswagen, and WeWork all resigned under pressure from board members over missteps in their leadership. Organizational leaders face tremendous pressure to deliver strong performance, motivate and inspire employees, keep their organizations ethical and socially responsible, and satisfy multiple stakeholders. As illustrated by Governor Cuomo’s handling of the COVID-19 pandemic, a humble approach to leadership that puts followers and the organization ahead of one’s own ego and self-interest is highly effective in today’s chaotic environment. Yet there are as many variations among leaders as there are among other people, and many styles of leadership can be effective. In the previous chapter, we explored differences in personality, perception, and emotions that affect behavior. Some of the most important personality differences for the organization’s success are those of its leaders, because leader behaviors play a critical role in shaping employee performance. In this chapter, we define leadership and explore how managers develop leadership qualities. We examine various leadership theories, look at some important leadership approaches for contemporary organizations, and explore the role of followership. Chapters 16 through 18 will look in detail at many of the functions of leadership, including employee motivation, communication, and encouraging teamwork. 15-1 The Nature of Leadership What does it mean to be a leader? Among all the ideas and writings about leadership, three aspects stand out—people, influence, and goals. Leadership occurs among people, involves the use of influence, and is used to attain desired goals and outcomes.4 Influence means that Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 15 Leadership S Shoptalk Be a Leader, Not a Boss 5 XM Collection/Alamy Stock Photo C onventional management wisdom states that organizations need to be highly ordered, with welldefined roles, rules, and regulations, and led by a strong boss. This has always been the standard in the U.S. military. However, what if allowing followers to self-manage gives rise to an effective order far more powerful than what traditional management might bring? Recognizing that leaders must give away authority to followers, General Stanley A. McChrystal, who retired from the U.S. Army as a four-star general after more than 34 years of service, says one of the most important lessons is that leaders must challenge the hierarchical, command-and-control approach to organizational management. McChrystal believes that CONTINUED Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. LEADING MANAGER’S PSH NA OT the relationship among people is not passive. Moreover, influence is designed to achieve some end or goal. Thus, leadership, as defined here, is the ability to influence people toward the attainment of goals. This definition captures the idea that leaders are involved with other people in the pursuit of specific outcomes. Leaders inspire and motivate people to accomplish desirable goals.5 Governor Andrew Cuomo is a leader, as is the CEO of Apple, the instructor for the management course you are taking, and the general manager at a local hardware store. But not every leader has a title or a formal position.6 Formal leaders are assigned to be leaders as part of their role in a group or organization and have leadership authority based on their position, such as the governor of New York or the CEO of Apple. Informal leaders are people who do not have formal authority to direct the group but whom people choose to follow because of their personal qualities. Informal leaders get their authority based on qualities such as having a mission, being able to inspire others, and demonstrating ­passion. ­Consider environmental activist Greta Thunberg. The 16-year-old started skipping school on F ­ ridays in September 2018 so she could protest government inaction on climate change at Sweden’s Parliament in Stockholm. By March 15, the one-person sit-in had turned into more than 1,700 “climate strikes” under Thunberg’s “Fridays for Future” banner. The mass protest attracted the attention and support of formal leaders and got Thunberg nominated for the Nobel Peace Prize.7 Informal leaders often emerge in ambiguous and unstructured situations such as the environmental activism movement and other social causes. They also emerge in business organizations when there is ambiguity and a lack of strong formal leadership, such as in the various organizations that are experimenting with bosslessness. Every cause, committee, team, and organization needs leadership to thrive. The lack of a formal, assigned leader does not inevitably mean an absence of leadership. In fact, a comparative analysis of the difference between formal and informal leaders on six leadership competencies—shared vision, communication, relationships, community, guidance, and character—found that informal leaders scored higher in every area.8 As described in the “Manager’s Shoptalk” feature, being a “leader” can be more powerful than being a “boss.” 531 532 PART 5 LEADING good leadership, whether in the military or in today’s businesses, schools, and government organizations, comes from committing to and investing in followers, who are doing the hard work on the front lines. General McChrystal was top commander in both the Iraq and Afghanistan wars. His well-honed leadership philosophy includes the following elements: •• Be empathic. To be a great leader, McChrystal says, you must “put yourself in their shoes.” McChrystal says his greatest fear was “not fear of getting shot at, or worrying that you’re going to crash the airplane, or something like that,” but rather the fear of failing his soldiers. “I think of the young private on a checkpoint in Baghdad . . . who has almost no control [over what happens] and lots of time on his hands to think,” McChrystal says. “When I look at courage, I look at the 18-year-old kid . . . standing out there doing that. . . . That’s pretty humbling.” •• Give small groups autonomy to innovate. “You have got to allow subordinates not only to execute things, but to make decisions on how and when to execute things,” says McChrystal. In the middle of the Iraq war, he built a network that combined decentralized decision making with transparent communication. The number of raids in Iraq increased from 18 to 300 each month. McChrystal credits that increase to sharing responsibility and information across the entire organization. He says the smartest response for business leaders operating in fast-moving industries is to “give small groups the freedom to experiment” and to share what they learn across the entire organization. •• Speak the truth. The truth is critical. The leader must, “first and foremost, be absolutely straightforward with all the people there, to tell them the truth,” McChrystal says, even though the truth may change from day to day. Candor is essential so people know they are getting the best information available from the leader. When Britain was about to lose the war in 1940, Winston Churchill did not say they were winning—he said that they would never surrender. •• Talk about goals often. A team is more than a group working for the same boss. A team includes the people necessary to achieve the organization’s mission. It is the leader’s duty to provide necessary information so each individual has a stake in the organization’s goal. For example, if you are an educator, that goal focuses on educating students. Leaders must repeatedly refocus team members on the overall goal. Sources: General Stanley McChrystal, as told to Kris Frieswick, “How I Deal with My Biggest Fear,” Inc. (July–August 2015): 90–91; “4 Thoughts on Leadership from Gen. Stanley McChrystal, Becker’s Hospital Review (May 18, 2015), www.beckershospitalreview.com/hospital-managementadministration/4-thoughts-on-leadership-from-gen-stanley-mcchrystal. html (accessed August 1, 2020); and “Retired 4-Star General Stanley McChrystal Tells a Story About a Battalion Commander in a Backward T-Shirt to Illustrate His Top 2 Pieces of Leadership Advice,” Business Insider (December 28, 2018), www.businessinsider.com/gen-stanleymcchrystal-best-leadership-advice-2018-12 (accessed August 1, 2020). Concept Connection Source: Inc. Magazine Chris Zane, founder and owner of Zane’s Cycles in ­ ranford, Connecticut, is an expert at turning first-time cusB tomers into lifetime customers. In fact, he wrote the book on it—Reinventing the Wheel. The book reflects Zane’s enduring goal of providing the ultimate shopping experience that makes customers feel great about his products and services. Zane started his business at age 16 with a $23,000 loan from his grandfather. Under his leadership, Zane’s Cycles has become one of the largest independent bicycle distributors in the United States. Re m e m b e r T h i s •• The attitudes and behaviors of leaders shape the conditions that determine how well employees can do their jobs; thus, leaders play a tremendous role in the organization’s success. •• Leadership is the ability to inspire and influence people toward the attainment of organizational goals. •• Formal leaders are assigned to be leaders and are given leadership authority based on their position, whereas CONTINUED Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 15 Leadership informal leaders are people who do not have formal authority to direct the group but whom people choose to follow because of personal qualities such as mission, inspiration, and passion. 533 •• Informal leaders emerge in ambiguous, unstructured situations, including bossless organizations. •• Greta Thunberg emerged as an informal leader in the worldwide environmental movement. •• Andrew Cuomo, the governor of New York, is an example of a formal leader. 15-2 From Management to Leadership Hundreds of books and articles have been written about the differences between management and leadership. Good management is essential in organizations, yet managers must be leaders, too, because distinctive qualities are associated with management and leadership that provide different strengths for the organization. A good way to think of the distinction between management and leadership is that management organizes the production and supply of fish to people, whereas leadership teaches and motivates people to fish themselves.9 Leaders focus on people, while managers focus on systems and production. Michel Feaster, co-founder and CEO of Usermind, a customer-engagement software company, encapsulates this distinction by stating that leadership “is the commitment to unlock the employee” so that people can understand and express their strengths while being aware of their weaknesses so that they can perform at their best.10 Organizations need both management and leadership. As shown in Exhibit 15.1, management and leadership reflect two different sets of qualities and skills that frequently overlap within a single individual. A person might have more of one set of qualities than the other, but ideally a manager will develop a balance of both manager and leader qualities.11 A primary distinction between management and leadership is that management promotes stability and order within the existing organizational structure and systems, thereby ensuring that suppliers are paid, customers invoiced, products and services produced on time, and so forth. In contrast, leadership promotes vision and change. Leadership means questioning EXHIBIT 15.1 Leader and Manager Qualities Manager Qualities Leader Qualities LEADING 5 Focus on the Organization Focus on People Rational Maintains stability Assigns tasks Organizes Analyzes Position power Visionary Promotes change Defines purpose Empowers Innovates Personal power SOURCES: Based on “What Is the Difference Between Management and Leadership?”, The Wall Street Journal Online, http://guides.wsj.com/management/developing-a-leadership-style/what-is-the-difference-betweenmanagement-and-leadership (accessed June 28, 2009); and Genevieve Capowski, “Anatomy of a Leader: Where Are the Leaders of Tomorrow?”, Management Review (March 1994): 12. Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 534 PART 5 LEADING S OT PSH NA the status quo and being willing to take reasonable risks so that outdated, unproductive, or socially irresponsible norms can be replaced to meet new challenges. For example, when Google’s founders needed more-structured management at their small and rapidly growing company, they hired Eric Schmidt as CEO to provide operational expertise and oversight. More importantly, Schmidt had leadership qualities that fit well with Google’s need for innovation and change to keep the company thriving. Schmidt would make a list of his best employees so that he could interact with them personally, encourage them to implement their innovative ideas, and protect them from unwanted interference by other managers. He made employees the owners of their work by giving them a great deal of latitude in how they accomplished goals. He believed in structure, but he also allowed people to work outside the company hierarchy when necessary to solve problems and be creative.12 Schmidt used a combination of skillful management and good leadership to take Google to the next stage of growth. Leadership cannot replace management, but rather should complement management. Good management is needed to help the organization meet its current commitments, while good leadership is needed to move the organization into the future. Leadership’s power arises from the foundation of a well-managed organization. Re m e m b e r T h i s •• Leadership and management reflect two different sets of qualities and skills that provide different benefits for the organization. •• Management promotes stability and efficient organizing to meet current commitments, whereas leadership inspires engagement and organizational change to meet new conditions. 15-3 •• Both leadership and management are important to organizations, and people can learn to be good leaders as well as good managers. •• When he was CEO of Google, Eric Schmidt applied both skilled management and good leadership to take the start-up to the next stage of growth. Contemporary Leadership The concept of leadership evolves as the needs of organizations change. That is, the environmental context in which leadership is practiced influences which approach might be most effective, as well as what kinds of leaders are most admired by society. The technology, economic conditions, labor conditions, and social and cultural mores of the times all play a role. A significant influence on leadership styles in recent years has been the turbulence and uncertainty of the environment. Ethical and economic difficulties, corporate governance concerns, globalization, changes in technology, new ways of working, shifting employee expectations, and significant social transitions have all contributed to a shift in how we think about and practice leadership. Four approaches that are in tune with leadership for today’s turbulent times are Level 5 leadership, servant leadership, authentic leadership, and interactive leadership; the last has been associated with women’s style of leading. 15-3A LEVEL 5 LEADERSHIP A study conducted by Jim Collins and his research associates identified the critical importance of what Collins calls Level 5 leadership in transforming companies from merely good to truly great organizations.13 As described in his book Good to Great: Why Some Companies Make the Leap . . . and Others Don’t, Level 5 leadership refers to the highest level in a hierarchy of manager capabilities, as illustrated in Exhibit 15.2. Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 15 Leadership EXHIBIT 15.2 535 Level 5 Hierarchy Level 5 Builds excellence through dedication and humility Effective Competent Level 4 – Leader Contributes talent, skills, knowledge Contributes individually; works well in group Level 3 – Manager Level I – Individual Capable Level 2 – Team Member Contributing Manages team members and assets to reach set objectives Level 5 – Executive Stimulates high standards; champions dedication to vision SOURCE: Based on Jim Collins, Good to Great: Why Some Companies Make the Leap . . . and Others Don’t (New York: HarperCollins, 2001), p. 20. Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 5 LEADING S PSH NA OT As reflected in Exhibit 15.2, a key characteristic of Level 5 leaders is an almost complete lack of ego (humility) coupled with a fierce resolve to do what is best for the organization (will). Humility means being unpretentious and modest rather than arrogant and prideful. In contrast to the view of great leaders as larger-than-life personalities with strong egos and big ambitions, Level 5 leaders often seem shy and self-effacing. Although they accept full responsibility for mistakes, poor results, or failures, Level 5 leaders give credit for successes to other people. Such leaders build organizations based on solid values that go far beyond just making money, with an unwavering resolve to do whatever is needed to make the company successful over the long term.14 An example of a leader who demonstrates Level 5 leadership qualities is Satya Nadella, CEO of Microsoft. Many people were surprised when the quiet, relatively unknown Nadella, who had joined Microsoft in 1992 at the age of 25, was picked to lead the giant technology company in 2014. Top executives inside the company were even more surprised when one of Nadella’s first acts was to ask them to read Marshall Rosenberg’s Nonviolent Communication, a book about empathic collaboration. It was the beginning of Nadella’s efforts to transform Microsoft from a “know-it-all” to a “learn-itall” mindset. Within four years, Nadella had reinvigorated the company’s workforce and achieved astonishing results, generating more than $250 billion in market value—more value growth than Uber, Airbnb, Netflix, and Snapchat combined. He accomplished it with a calm, steady, and team-oriented approach. “I’m wired to be fairly confident in myself and to let others shine,” Nadella says in talking about his willingness to delegate and give credit to others for company successes. At the weekly senior leadership team (SLT) meetings, Nadella does little of the talking, reserving his comments mostly for soliciting opinions and offering feedback. “CEOs can only do what they do if they have an amazing team,” he says. “I’m blessed to have that.”15 Level 5 leaders like Satya Nadella are extremely ambitious for their companies rather than for themselves. This attitude becomes highly evident in the area of succession planning. Level 5 leaders develop a solid corps of leaders throughout the organization so that when they leave, the company can continue to thrive and grow even stronger. Egocentric leaders, by contrast, often set their successors up for failure, thinking that it will be a testament to 536 PART 5 LEADING their own greatness if the company doesn’t perform well without them. Rather than building an organization around “a genius with a thousand helpers,” Level 5 leaders want everyone to develop to their fullest potential. 15-3B S JHVEPhoto/Shutterstock.com OT PSH NA SERVANT LEADERSHIP Jack Welch spent 20 years as chairman and CEO of General Electric (GE), and during his tenure with GE, the company’s value increased 4,000 percent. Known for his forceful personality, Welch was also known to tell his managers that he loved them. When Welch spoke to MBA students, he reminded them that “anytime you are managing people, your job is not about you, it’s about them. It starts out about you as . . . an individual in a company,” Welch pointed out. “But once you get a leadership job, it moves very quickly to being about them.”16 This “other-oriented” approach, based on the assumption that work exists for the development of the worker as much as the worker exists to do the work, is known as servant ­leadership. A servant leader transcends self-interest to serve others, the organization, and society. This leader recognizes a moral responsibility to the well-being and success of followers as well as to the organization and all stakeholders.17 The concept of servant leadership, first described by Robert Greenleaf in 1970, has gained renewed interest in recent years as companies recover from ethical scandals and compete to attract and retain the best human talent. Marilyn Carlson Nelson, former chairperson and CEO of the Carlson Companies, says being a true leader means that you “have to subordinate your own emotions, your own desires, even make decisions on behalf of the whole that might conflict with what you would do on an individual basis.”18 A stunning example of this occurred when a U.S.-flagged cargo ship, the Maersk Alabama, was seized and raided by Somali pirates. Captain Richard Phillips ordered crew members of the unarmed ship not to fight and gave himself up as a hostage to free the ship and crew. The story of the captain’s dilemma and rescue is told in a 2013 movie, Captain Phillips, starring Tom Hanks.19 In organizations, servant leaders operate on two levels: for the fulfillment of their subordinates’ goals and needs and for the realization of the larger purpose or mission of their organization. Servant leaders give things away—power, ideas, information, recognition, credit for accomplishments, even money. They often work in the nonprofit world because it offers a natural way to apply their leadership drive and skills to serve others. But servant leaders can also succeed in for-profit businesses. An example is Cheryl Bachelder, CEO of Popeyes. When she took over as CEO, Popeyes was performing poorly and needed a turnaround. Bachelder met with her senior leadership team and made a conscious decision to put the interests of franchisees above every other consideration. She implemented updated processes for new-product launches and other initiatives that increased the success rate for franchisees. A pivotal moment came when leaders asked franchisees to increase the percentage of sales each contributed for advertising from 3 to 4 percent so that the company could create a national advertising campaign. After debating the idea, the franchisees agreed—but only if the company would invest $6 million to increase the number of weeks of advertising. It was “a big ask,” Bachelder says, but she pushed for the $6 million commitment, and the national advertising campaign was a critical step in the turnaround for the chain. Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 15 Leadership 15-3C S PSH NA OT Market share for Popeye’s grew from the teens to the mid-twenties. The company has had eight years of success and steady growth, now opening more than 200 global locations a year. Bachelder’s philosophy is: “Leadership is an act of stewardship, not a practice that is solely for your personal benefit. The test of our leadership is simple: Are the people entrusted to our care better off?”20 537 AUTHENTIC LEADERSHIP Another popular concept in leadership today is the idea of authentic leadership. Authentic leadership is an approach that draws on the leader’s self-awareness, self-regulation, and alignment of words and actions toward followers. Authentic leaders inspire trust because they say what they think and do what they say.21 They know and understand themselves, espouse and act consistently with positive values, and empower and inspire others with their openness and authenticity. To be authentic means being real, staying true to one’s values and beliefs, and acting based on one’s true self rather than emulating what others do. Exhibit 15.3 outlines the key characteristics of authentic leaders, and each is discussed next.22 •• Authentic leaders pursue their purpose with passion. When leaders demonstrate a high level of passion and commitment to a purpose, they inspire commitment from followers. Leaders who lead without a purpose can fall prey to greed and the desires of the ego. •• Authentic leaders practice solid values. Authentic leaders have values that are shaped by their personal beliefs, and they stay true to those values even under pressure. People come to know what the leader stands for, which inspires trust. •• Authentic leaders lead with their hearts as well as their heads. All leaders sometimes must make tough choices, but authentic leaders maintain a compassion for others as well as the courage to make difficult decisions. •• Authentic leaders establish connected relationships. Authentic leaders build positive and enduring relationships, which makes followers want to do their best. In addition, authentic leaders surround themselves with good people and work to help others grow and develop. 15.3 Components of Authentic Leadership Pursues purpose with passion Leads with the heart as well as the head Practices solid values The Authentic Leader 5 LEADING EXHIBIT Connects with others Demonstrates self-discipline SOURCE: Based on Bill George, Authentic Leadership: Rediscovering the Secrets to Lasting Value (San Francisco: Jossey-Bass, 2003). Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 538 PART 5 LEADING •• Authentic leaders demonstrate self-discipline. A high degree of self-control and self- discipline keeps leaders from taking excessive or unethical risks that could harm others and the organization. When authentic leaders make mistakes, they openly admit them. S OT PSH NA An authentic leader places high value on personal relationships, supporting followers, being courageous, and standing up for what one believes. Thus, this type of leader is much more likely to make decisions that may not always be popular but that he or she believes are right. People can grow into authentic leadership and make a conscious choice to enhance their self-awareness, build positive relationships, demonstrate self-regulation, and lead with courage and compassion. For example, Gerry Anderson, executive chairman and former CEO of DTE Energy, used to be a hard-nosed, old-style, command-and-control leader with little concern for people or for DTE’s employee engagement scores, which were the lowest in the industry. Over time, Anderson began rethinking his approach and transformed himself into a leader who took a more holistic view that employees are not “simply factors of production.” He began working to build trust with employees and find ways to harness more of their involvement and energy. When the 2008 recession hit, causing the company’s revenue to decline by $175 million, Anderson faced the biggest challenge of his career in deciding whether to lay off a large number of employees in an effort to save the company. He went to the workforce with a truly authentic message: a commitment to not lay off anyone except as a truly last resort. He asked employees to bring their best energy and focus to get through the crisis. He was asking his people to lead by developing new initiatives to offset the tremendous loss in revenue. The employees responded with an outpouring and implementation of ideas that kept DTE within its radically lowered budgets month after month until the crisis passed. Anderson asked employees to save the company—and they did it. “Gerry looks for opportunities to positively impact people’s lives and community well-being,” said Steve Grigorian, CEO of the Detroit Economic Club.23 15-3D INTERACTIVE LEADERSHIP Some of the general characteristics associated with Level 5 leaders and authentic leaders are also hallmarks of interactive leadership, which has been found to be associated with female leaders. Interactive leadership means that the leader favors a consensual and collaborative process, and his or her influence derives from relationships rather than from position power and formal authority.24 Although both men and women can practice interactive leadership, research indicates that women’s style of leadership typically differs from that of most men and is particularly well suited to today’s organizations.25 Using data from actual “The boss drives people; performance evaluations, one study found that when rated by peers, subordinates, and bosses, female managers scored significantly higher than men on abilities such the leader coaches as motivating others, fostering communication, and listening.26 Another study of them. The boss depends leaders and their followers in businesses, universities, and government agencies found that women were rated higher on social and emotional skills, which are on authority; the leader crucial for interactive leadership.27 Indeed, studies by leadership development firm Zenger Folkman have found that women outshine men in almost every leadership on goodwill. The boss dimension measured, even some considered typically masculine qualities, such as inspires fear; the leader driving for results.28 Exhibit 15.4 shows results for 6 of the 16 dimensions measured by the Zenger Folkman studies. inspires enthusiasm.” An interesting finding related to interactive leadership comes from a study —H. Gordon Selfridge, of death rates from COVID-19 for 21 countries around the world. Countries FOUNDER OF SELFRIDGE’S led by men experienced an average of 214 COVID-related deaths per million Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 15 Leadership EXHIBIT 15.4 Leadership Ability Gender Differences in Leadership Behaviors Who Does It Best? Developing others (Women rated higher) Driving for results (Women rated higher) Inspiring and motivating others (Women rated higher) Solving problems Building relationships Analyzing issues 539 (Women and men rated about equally) (Women rated higher) (Women and men rated about equally) SOURCE: Data from Zenger Folkman, Inc., reported in Tony Schwartz, “Overcoming the Confidence Gap in Women,” The New York Times (June 12, 2015), www.nytimes.com/2015/06/13/business/dealbook/overcomingthe-confidence-gap-for-women.html?_r=0 (accessed April 25, 2016). Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 5 LEADING S PSH NA OT inhabitants, whereas countries led by women suffered only one-fifth as many deaths, 36 COVID-related deaths per million inhabitants. “New Zealand, Denmark, Finland, Germany, Iceland, [and] Norway have done so well perhaps due to the leadership and management styles attributed to their female leaders,” said UCLA epidemiologist Anne W. Rimoin. Ezekiel Emanuel, Vice Provost for Global Initiatives and chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania, suggests that the old joke about men drivers never asking for directions might apply. “I actually think there’s something to that in terms of women’s leadership, in terms of recognizing expertise and asking experts for advice, and men sort of barreling ahead like they got it,” Emanuel says. The leaders who handled the COVID-19 pandemic most effectively were those who willingly consulted public health experts and acted quickly. Many of them were women because these behaviors are in line with the low-key, inclusive, and interactive style that many women leaders favor.29 Of course, not all women are interactive leaders, and men can certainly be interactive leaders as well. The characteristics associated with interactive leadership are emerging as valuable qualities for all leaders in today’s workplace. John Gerzema, author of The Athena Doctrine and a fellow with the Athena Center for Leadership at Barnard College, asked 32,000 people to classify 125 traits as masculine, feminine, or neutral, and another 32,000 people to rate the importance of those traits in effective leadership. The results showed that traits considered feminine and often associated with interactive leadership, such as empathy, personal humility, inclusiveness, vulnerability, generosity, patience, and flexibility, topped the list of qualities most desirable for leaders.30 540 PART 5 LEADING Concept Connection Xinhua/Alamy Stock Photo Jacinda Ardern scores high marks as an ­interactive leader. As the humble and empathetic prime minister of New Zealand, she guided the country through the worst terrorist attack in its history after 50 people were murdered in two mosques. Stressing the theme “We are one,” Ardern opened speeches with Arabic greetings and worked closely with legislators to ban the type of weapons used in the attack. Likewise, during the COVID-19 pandemic, she was able to pull the country together with informal Facebook Live chats and more formal daily briefings to support the goal of no new cases. Re m e m b e r T h i s •• A significant influence on leadership styles in recent years has been the turbulence and uncertainty of the environment. •• One effective approach in today’s environment is Level 5 inspire trust because they say what they think and do what they say. •• Women leaders typically score higher than men on leadership, which is characterized by an almost complete lack of ego (humility), coupled with a fierce resolve to do what is best for the organization (will). abilities such as motivating others, building relationships, and developing others—skills that are based on humility and authenticity and are particularly well suited to today’s organizations. •• Humility means being unpretentious and modest rather •• Interactive leadership is a leadership style characterized than arrogant and prideful. •• Satya Nadella, CEO of Microsoft, illustrates humility by delegating and letting his executives take credit for accomplishments, saying, “CEOs can only do what they do if they have an amazing team.” •• A servant leader is a leader who serves others by working to fulfill followers’ needs and goals, as well as to achieve the organization’s larger mission. •• Authentic leadership is an approach that draws on the leader’s self-awareness, self-regulation, and alignment of words and actions toward followers. Authentic leaders 15-4 by values such as inclusion, collaboration, relationship building, and caring. •• An analysis found that countries led by men experienced an average of 214 COVID-related deaths per million inhabitants, whereas countries led by women suffered only 36 COVID-related deaths per million inhabitants; one reason for this difference may be that women leaders are more willing to admit uncertainty and seek advice from experts. •• Although interactive leadership is often associated with women’s style of leading, both men and women can be effective interactive leaders. Leadership Traits Early efforts to understand leadership success focused on the leader’s traits. Traits are the distinguishing personal characteristics of a leader, such as intelligence, honesty, selfconfidence, and even appearance. The early research looked at leaders who had achieved a level of greatness and hence was referred to as the “Great Man” approach. The idea was relatively simple: Find out what made these people great, and select future leaders who Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 15 Leadership 541 already exhibited the same traits or could learn to develop them. Generally, early research found little to support the idea that the traits of “great men” could serve “Never promote as a predictor of other people’s leadership success.31 people into In recent years, interest in examining leadership traits has reemerged. In addition to personality traits, physical, social, and work-related characteristics of leaders leadership positions have been studied.32 The appropriateness of a trait or set of traits often depends on the leadership situation, but some traits are valuable for all leaders. A leader’s who believe they can knowledge and work ethic, as well as characteristics such as honesty, self-confidence, do no wrong.” intelligence, humility, and interpersonal skills, contribute to effective leadership. —Peter Drucker (1909–2005), Exhibit 15.5 shows the ten most common traits of people considered “bad managMANAGEMENT SCHOLAR AND AUTHOR ers” compared to the ten most common traits of those considered “great managers,” based on a survey of nearly 5,000 of people in the United States.33 People want leaders who work hard, are honest and self-confident, and maintain a positive attitude. Review the other characteristics in Exhibit 15.5 and see where you think your characteristics might fit. Effective leaders typically possess varied traits, and no single leader can have a complete set of characteristics that is appropriate for handling any problem, challenge, or opportunity 15.5 Traits of Bad Versus Great Organizational Leaders The 10 most common traits among bad managers The 10 most common traits among great managers Doesn’t communicate clear expectations 58% Has a strong work ethic Plays favorites Is honest 82% 57% Doesn’t show concern for my career and personal development 55% Bad-mouths people behind their backs 54% Isn’t open or interested in feedback 54% 80% Has a sense of humor 79% Is confident 79% Has a positive attitude 79% 52% Isn’t self-aware 5 Makes good decisions Wants to prove himself/herself right 78% Recognizes me when I do good work 76% 51% Is passionate about his/her job Betrays trust 75% 51% Is highly knowledgeable in the area he/she manages Doesn’t listen 50% Puts his/her needs first 48% 75% Has a good grasp of the entire business 75% SOURCE: The Predictive Index People Management Study, June 2018 online survey of 4,273 respondents in 22 industries, www.predictiveindex.com/management-survey-2018/ (accessed July 17, 2020). Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. LEADING EXHIBIT 542 PART 5 LEADING S OT PSH NA that comes along. In addition, traits that are typically considered positive can sometimes have negative consequences, and traits sometimes considered negative can have positive consequences. For example, optimism is a highly desirable trait for a leader. Indeed, studies have shown that optimism is the single most common characteristic among top executives.34 Leaders need to be able to see possibilities where others see problems and to instill in others a sense of hope for a better future. However, optimism can also lull leaders into laziness and overconfidence, causing them to miss danger signals and underestimate risks. As an example, former Boeing CEO Dennis Muilenburg’s overly optimistic projections for the quick return of the 737 MAX to flying after the jet was involved in two fatal crashes misled the U.S. Congress, the airlines, and the public and led to his replacement.35 Optimism, it is clear, must be paired with “reality testing” and conscientiousness.36 Rather than just understanding their traits, the best leaders recognize and hone their strengths.37 Strengths are natural talents and abilities that have been supported and reinforced with learned knowledge and skills and provide individuals with their best tools for accomplishment and satisfaction.38 Every manager has a limited capacity; those who become good leaders tap into their key strengths that can make a difference. Effective leadership isn’t about having the “right” traits, but rather about finding the strengths that one can best exemplify and apply as a leader. Nancy Dubec, CEO of Vice Media and previous CEO of A&E Networks, believes people have natural strengths that fall into the categories of “thinker, doer, or feeler.” The right balance, she says, is essential for any team or organization to perform well. Dubec realizes that her strengths place her in the doer category, so she is careful to make sure she has thinkers and feelers on her management team and to respect their strengths and leadership approaches.39 Re m e m b e r T h i s •• Traits are distinguishing personal characteristics, such as intelligence, self-confidence, energy, and independence. •• Based on a survey, the top five traits of great organizational leaders are a strong work ethic, honesty, a sense of humor, self-confidence, and a positive attitude. •• Strengths are natural talents and abilities that have been supported and reinforced with learned knowledge and skills. Behavioral and Contingency Approaches 15-5 The inability to define effective leadership based solely on traits led to an interest in looking at the behavior of leaders and how it might contribute to leadership success or failure. Two basic leadership behaviors identified as important for leadership are attention to tasks and attention to people. Researchers have also explored how the organizational situation influences which leadership style is more effective. These models, referred to as contingency approaches, include the situational model based on the work of Paul Hersey and Kenneth Blanchard, the leadership model developed by Fred Fiedler and his associates, and the substitutes-for-leadership concept. 15-5A BEHAVIORAL: TASK VERSUS PEOPLE Two types of behavior that have been identified as applicable to effective leadership in a variety of situations and time periods are task-oriented behavior and people-oriented behavior.40 Although they are not the only important leadership behaviors, concern for tasks and Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 15 Leadership 543 Supporting Clarifying Developing Planning Recognizing Monitoring operations Empowering Problem solving PSH NA OT Studies suggest that effective leaders may be high on consideration and low on initiating structure, or low on consideration and high on initiating structure, depending on the situation.43 Nick Saban, who has won five national championships as head coach of the University of Alabama football team, provides an example of a leader high on initiating structure. Over his years as a coach, Saban has developed a system for managing young players that is referred to as The Process. This methodical, efficient, task-focused approach aims to bring out the best performance from each player. Saban believes getting 18- to 22-year-olds to work even harder to get better after winning a national championship requires keeping people focused on tasks, analyzing what’s working and what’s not, solving problems, and aggressively embracing new approaches that help people improve. “There are no signs around here that say, ‘We want to win the national championship.’ There are signs that say, ‘We want you to be a champion’,” Saban says of the Alabama locker room.44 An example of a leader high on consideration is the U.S. Army sergeant major described by Augusto Giacoman, a partner at Strategy &, PricewaterhouseCooper’s strategy consulting business. Giacoman says when this sergeant major first came to their battalion, he gathered all the officers together for a leadership development session and played a video of the classic children’s story The Giving Tree, by Shel Silverstein. The story describes an enduring relationship of unconditional, self-sacrificing love between a tree and a little boy. “In the silence after the video ended,” Giacoman says, the sergeant major “uttered a simple command before dismissing us: ‘Be the Giving Tree for your soldiers.’ It was the most powerful leadership training I had ever received.” Giacoman continued, “As officers, my colleagues and I technically outranked him. But if he had told us to jump, we would not have hesitated to ask how high—and how soft we should land.”45 Research at the University of Michigan conducted at about the same time as the Ohio State studies also considered task- and people-oriented behaviors by comparing the behavior of effective and ineffective supervisors.46 The most effective supervisors were those who established high performance goals and displayed supportive behavior toward subordinates. Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 5 LEADING Initiating Structure S Consideration Icon Sportswire/Getty Images concern for people must be shown at some reasonable level. Thus, many approaches to understanding leadership use these metacategories, or broadly defined behavior categories, as a basis for study and comparison. Important early research programs on leadership were conducted at The Ohio State University and the University of Michigan.41 Ohio State researchers identified two major behaviors they called consideration and initiating structure. Consideration falls into the category of people-oriented behavior and is the extent to which the leader is mindful of subordinates, respects their ideas and feelings, and establishes mutual trust. Initiating structure is the degree of task behavior—that is, the extent to which the leader is task-oriented and directs subordinate work activities toward goal attainment. The following list identifies some specific behaviors associated with consideration and initiating structure42: 544 PART 5 LEADING They were referred to as employee-centered leaders. The less effective leaders were called jobcentered leaders; they tended to be less concerned with goal achievement and human needs in favor of meeting schedules, keeping costs low, and achieving production efficiency. CONTINGENCY: THE SITUATIONAL MODEL OF LEADERSHIP 15-5B The situational model of leadership, which originated with Hersey and Blanchard, focuses a great deal of attention on the characteristics of followers in determining appropriate leadership behavior. The point of the situational model is that followers vary in readiness, which is determined by the degree of willingness and ability that a subordinate demonstrates while performing a specific task. Willingnes