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The Essence of Leadership: Heart, Inspiration, and Human Connection


Leadership is not merely about techniques and methods; it is about opening the heart and inspiring both oneself and others. Great leadership is about human experiences, not processes. It is a human activity that emanates from the heart and considers the hearts of others. Leadership is not a formula or a program; it is an attitude, not a routine.


More than anything else today, followers often feel like they are part of a system or process that lacks heart. To connect with followers on a human or even spiritual level, leaders must engage fully with them, share experiences and emotions, and set aside the rote processes of leadership. This profound insight into the nature of leadership was highlighted by Lance Secretan in Industry Week on October 12, 1998, and it remains relevant today.


Misconceptions About Leadership


Many people wrongly assume leadership is something you are born with, confuse it with administrative excellence, or dismiss it as a fuzzy, academic notion in today's bottom-line world. The presence of numerous ineffective leaders in leadership positions fuels these misconceptions. However, leadership is perhaps the single quality common among high-growth, high-profit, 21st-century businesses.


Defining Leadership


Leadership can be quickly defined as motivating others to accomplish goals, taking charge, directing activities, and creating compelling visions while being willing to compromise. More specifically, it is about creating energy in others by instilling purpose in what they do. Leadership is also the ability to regard inevitable changes as opportunities for progress and growth, not as something to fear. It is about taking any situation and making it better.


As Professor John P. Kotter noted in his landmark 1990 Harvard Business Review article, leading an organization to constructive change begins by setting a direction—developing a vision of the future along with strategies for producing the changes needed to achieve that vision. The next step is for leaders to "align people" through coalition building, and finally, "motivate and inspire" people to overcome obstacles by appealing to basic, often untapped, human needs, values, and emotions. These include a sense of achievement, belonging, recognition, self-esteem, control over one's life, and the ability to live up to one's ideals.


Developing Leadership


Leadership is not something embedded in one's genes. While some people may be more predisposed to it than others, leadership is largely a developed behavior that improves with opportunity, discipline, and practice. Those in leadership positions who fail to lead properly usually suffer from cowardice, apathy, or ignorance.


Surprisingly to many, leadership means developing others—fully empowering those who follow you. Leaders must show their followers they are included, promote their participation, and provide them with virtually unrestricted access to important information and other members of the organization. The key to leadership is each of the people being led and their view of the leader's integrity. Integrity breeds loyalty, which is the superglue of any relationship, business, or personal. Loyalty creates positive energy and grows out of openness, fairness, and fostering the development of those you lead.


Creating Energy in Others


Leadership means creating energy in others. A leader's actions will either start their engines or turn them off. Destructive actions such as abuse, betrayal, deceit, control, humiliation, and oppression can kill this energy. In contrast, qualities that create positive energy, or "energizers," include freedom, authority, confidence, trust, courage, generosity, passion, praise, and decisiveness.


Organizations today no longer believe the future can be precisely determined in advance, no matter how carefully a strategy is constructed. Instead, the future emerges from the complex and hard-to-predict interactions of leaders, followers, and the corporate setting. This shift takes us from the simple dictum that "organization follows strategy" to a leadership model where organizational design, the quality of team interactions, and the distribution of energy in the firm may be far more important determinants of success than the soundness of any specific strategy.


Encouraging Innovation


Leaders in all sorts of organizations desperately want to encourage creative, innovative individuals. Innovation is a form of change, and while our culture generally welcomes change, people proposing it often encounter barriers. As society has become more complex, important segments have grown larger, more structured, more bureaucratic, less nimble, and less hospitable to unusual individuals. Leaders can resist this hardening of the organizational arteries. They can help unusual people produce innovations, even if not out of thin air. Leading creative people in this age of diverse work arrangements and electronic relationships requires leaders themselves to be thoughtfully innovative. The secret lies in how individual leaders make room for people with unusual and creative gifts and temporarily become followers themselves.


Key Leadership Challenges


Major leadership challenges for the 21st century can be grouped into three categories: market forces, people issues, and leadership competencies.


Market Forces


Market forces will continue to drive change in organizations at a macroeconomic level, demanding more from our organizations and leaders. Market forces can be viewed as the cumulative effects of the behaviors and wants of those in the market either demanding or supplying goods or services. These forces include increasing globalization and the creation of massive multinational organizations through mergers and takeovers. With increases in scale and a global footprint come greater diversity in the workforce and deeper requirements for specific technical expertise.


Larger organizations in most industries gain economies of scale by distributing overhead expenses across more units of production, leading to greater profits and stock valuation. Offering products or services in a variety of countries and cultures increases the size of the market to be served. Technological advances have greatly reduced the costs of reaching geographically dispersed markets. However, the drive to increase size and go global does not necessarily lead to organizational survival. Of the companies in the Fortune 500 in 1970, fully one-third had ceased to exist by the early 1980s. During the 1980s, a total of 230 companies—46 percent—disappeared from the Fortune 500. Clearly, neither size nor reputation guarantees continued success or survival.


Key Factors Leading to Company Failures


1.Technological Disruption


The rapid pace of technological advancement can render existing products and services obsolete. Companies that fail to innovate and adapt to new technologies often struggle to maintain their market positions. For instance, traditional retail stores have faced immense pressure from e-commerce giants like Amazon, leading to the closure of many brick-and-mortar stores.


2. Economic Downturns


Economic recessions and downturns can have a devastating impact on businesses. The global financial crisis of 2008 and subsequent economic challenges caused many companies to downsize or shut down entirely. Companies heavily reliant on consumer spending or those with significant debt were particularly vulnerable.


3. Poor Management and Strategic Decisions


Ineffective leadership and poor strategic choices can lead to a company's downfall. Mismanagement of resources, failure to recognize market trends, and strategic blunders often result in financial distress. For example, companies that expanded too quickly without sustainable revenue streams faced difficulties.


4. Increased Competition


New entrants in the market and intensified competition can erode a company's market share. Companies that were once market leaders can find themselves struggling to compete with more agile and innovative competitors. This is particularly evident in the technology sector, where startups can disrupt established players.


5. Shifts in Consumer Preferences


Changes in consumer behavior and preferences can significantly impact companies. Businesses that fail to understand and respond to these shifts may see declining sales and relevance. For instance, the rise of digital media has challenged traditional print media companies.


Examples of Notable Companies That Have Disappeared


1. Blockbuster


Blockbuster was once a dominant player in the video rental industry with thousands of stores worldwide. However, the rise of digital streaming services like Netflix led to its rapid decline. Blockbuster failed to adapt to the changing landscape of media consumption, leading to its eventual bankruptcy in 2010.


2. Toys "R" Us


Toys "R" Us was a leading toy retailer with a significant presence in the global market. However, increased competition from online retailers, high debt levels, and changing consumer preferences contributed to its bankruptcy in 2017. The company struggled to compete with the convenience and pricing of online shopping.


3. Kodak


Kodak was a pioneer in photography and imaging but failed to transition successfully to digital technology. Despite inventing the first digital camera, Kodak's management was slow to embrace the digital revolution, leading to its bankruptcy in 2012. The company's focus on traditional film products left it vulnerable to technological disruption.


4. Borders


Borders was a major bookstore chain that fell victim to the rise of e-books and online retailers like Amazon. The company filed for bankruptcy in 2011 after struggling with declining sales and an inability to compete with digital alternatives. Borders' failure to innovate and embrace digital trends contributed to its downfall.


5. Sears


Sears, once a retail giant, faced years of declining sales and mounting debt before filing for bankruptcy in 2018. The rise of e-commerce, changing consumer habits, and mismanagement played significant roles in Sears' decline. The company's inability to modernize its operations and compete with online retailers led to its demise.


Lessons Learned from These Failures


1. Embrace Innovation


Companies must continually innovate to stay relevant in a rapidly changing market. Embracing new technologies and adapting to industry trends are crucial for long-term success.


2. Adapt to Consumer Preferences


Understanding and responding to shifts in consumer behavior can help companies stay competitive. Businesses should invest in market research and be flexible in adjusting their strategies to meet evolving customer needs.


3. Effective Leadership


Strong and visionary leadership is essential for navigating challenges and making strategic decisions. Effective management can help companies anticipate market changes and respond proactively.


4. Financial Prudence


Maintaining a healthy balance sheet and avoiding excessive debt can provide companies with the resilience needed to weather economic downturns. Financial prudence is key to sustaining operations during challenging times.


5. Competitive Agility


Companies should remain agile and responsive to competitive pressures. Being able to pivot and innovate quickly can help businesses stay ahead of new entrants and industry disruptors.


Disappearing Companies


The disappearance of companies that once thrived serves as a reminder of the dynamic nature of the business world. Technological disruption, economic challenges, poor management, increased competition, and shifts in consumer preferences are some of the key factors contributing to their downfall. By learning from these examples, businesses can better position themselves to navigate the complexities of the modern market and ensure their long-term success.


In contrast to demand-based market forces, the supply of human capital is undergoing a pervasive and powerful shift. The supply of labor is more diverse, and individual workers must possess a greater degree of technical expertise to be successful. At a minimum, companies must accommodate diversity; the most successful companies will leverage their diversity to create new ideas and better match these differences to work demands. As organizations struggle with increasing deregulation (open and free markets), they will also contend with an older workforce that will find it difficult to stay abreast of change. Reinvent oneself or perish will continue to be the clarion call. Yet successful businesses will not forsake their own strong histories and foundations, nor undervalue their past learning and the ability to think metaphorically. In these post-modern times, what is old can rapidly become what is new, even as what is new today is nothing like what was new yesterday.


People Issues


In the minds of many managers, people issues involve relationships with the staff of an organization. These issues are traditionally housed under human resources away from the core business and are seen as nice to attend to but not critical. However, with the advent of the 21st century, these people issues are increasingly establishing themselves at center stage. Less than half of the workforce in the industrial world will hold conventional full-time jobs in organizations by the beginning of the 21st century. Every year, more and more people will be self-employed, temporary, or part-time.


What may not be apparent to tomorrow's managers is that tomorrow's staff will have very different expectations of, and demands on, their organizations. Importantly, the employee-employer relationship in the best organizations of tomorrow will look very different than it did in the 20th century. With their increased complexity and globalization, organizations demand skills and abilities from their leaders that are only beginning to be understood, never mind mastered. One of the most important of these is the ability to balance employee needs (globally) and customer wants (globally and locally). This balance will become harder to strike, and to strike profitably and efficiently, in the coming years. 


Diversity will become a strategic differentiator, not merely a desired demographic profile. Tomorrow's managers are growing up in a world where diversity is a productive, exciting, and enjoyable reality, not a target achieved by setting quotas. Today's most promising youth have known nothing but the post-modern world, where many traditional taxonomies, structures, and borders (including those of race, ethnicity, and other age-old social dividers) have not only been called into question but have also been subverted or simply ignored.


As the workforce continues to grow more diverse, those able to accept individual differences in the workplace and see them as a source of creative energy and productivity will have access to a larger and more talented workforce. Typical of post-modernity’s general questioning of the idea of objectivity, there will increasingly be many right ways of doing most things—not just one right way as articulated in the employee policy book or previous norms of behavior. The work itself will increasingly demand the use of interdependent teams, as few individuals will be capable of knowing and doing it all. All of this may sound like chaos—and it will be. However, it will be an organized chaos with great opportunity and potential for managers adept, flexible, and intelligent enough to seize it and make it their own, rather than being owned by it.


In a quickly changing world, talented human capital will be a prime ingredient of business success. Businesses will have to accommodate the shift of power from owners and senior management to knowledge workers. Professionals will become less concerned with the traditional concept of a career and more interested in self-fulfillment. Organizations will invest increasing percentages of their revenues in attracting, developing, and retaining competent professionals. This arena will grow to be the most significant competitive battleground. The social contracts that organizations make with their people will be as important as


 the value propositions they convey to the marketplace and their customers. Truly superb organizations will have a seamless union of external and internal value propositions.


Leadership Competencies


A new critical portfolio of leadership competencies will make the situation more complex. Strategic focus and vision, coupled with a practical sense of when to be flexible and adaptable, will be most critical for survival. An ability to manage multiple points of view simultaneously will differentiate the best managers: keeping high-level goals in sight while managing and tracking day-to-day success; understanding the points of view and needs of the customer and the organization; empathizing with all stakeholders to develop people, foster productive change, and keep the spirit of the enterprise vital.


The evolving nature of business conducted by global organizations calls for a fundamentally different kind of leader. Gone are the days of top-down, hard-nosed direction. Tomorrow's leaders will demonstrate flexibility and empathy while remaining true to the organization's core values and finding ways to circumvent unpredictable impediments. These leaders will be inspirational, technologically savvy, entrepreneurial, devoted to service, and inclusive rather than independent or autocratic.


Additional key leadership competencies will include the ability to develop and articulate a value proposition, maintain it in a dynamic market, and energize others to buy into it. Leaders must invest in a business model that guides employee decision-making at all levels and commit to a culture that values mentorship and learning while aligning individual and corporate goals. Recognizing what it means to develop and manage truly transformational knowledge systems will be crucial. The common characteristics of these new leaders are all related to issues more focused on the intangible aspects of an organization. Over time, leaders unwilling or unable to demonstrate these behaviors will find themselves with few followers.


Can Leaders Be Trained?


Leadership ranks second behind quality as the most popular training area. If the millions of dollars spent annually on leadership training programs are any guide, the answer to the question, "Can We Really Train Leadership?" should be an unqualified "yes." But is it?


Skeptics should take note: Leadership programs can work well if they use a multi-tiered approach. Effective training depends on the combined use of four teaching methods: personal growth, skill building, feedback, and conceptual awareness. Programs must provide opportunities for participants to practice what they have learned back at the office, and top management must demonstrate a commitment to the process. It is not enough to send 20 employees to training; the CEO must also be willing to participate.


Personal Growth


Personal growth involves empowering individuals to become more risk-oriented, whether with personal feelings or life and limb, and to take responsibility for their lives through a clear vision. Effective leaders are deeply in touch with their personal dreams and confident enough to realize them. They are unafraid of risks and dilemmas. Most of us ignore these "inner callings." The logic follows that if we can put more managers in touch with their passions and power, we will create more leaders.




Skill-building turns leadership into a practical, teachable reality. Program designers identify key leadership behaviors that can be taught, such as inspirational-speaking skills. Participants devise talks that inspire their staff in current work situations, employing specific practices. They then deliver their talks and receive feedback on their leadership skills.




Feedback programs start with the correct assumption that most of us cannot fully see ourselves and are only partly aware of our leadership styles. Feedback helps us see our strengths and weaknesses, allowing us to act with confidence in our strengths and seek ways to overcome our weaknesses.


Conceptual Awareness


The analytical approach to training, common in MBA and executive programs, uses traditional tools of conceptual learning, such as case studies, lectures, films, and discussions. These programs often contrast leadership with management, helping participants understand the important behaviors that distinguish leaders from managers.


Effective Leadership Training


Effective leadership training involves a multi-faceted approach:


1. Bring Together All Four Approaches: Conceptual learning, skill-building, feedback, and personal growth must be integrated to provide a comprehensive training experience.

2. Support from the Top: Senior management must be committed to the process and visibly practice the techniques being taught.

3. Beyond the "One Shot" Program: Leadership training should involve numerous initiatives over the long term, not just one-time courses.

4. Critical Mass: Involving many managers in leadership training creates a mindset throughout the company about what leadership is, forming a broad-based support system.

5. Patience: Leadership development is a long-term investment, and organizations must be patient and persistent.


Nurturing a Leadership Culture


Successful leadership in a networked, knowledge-based world requires communication with co-workers, setting clear rules, and learning from staff. Strong communication is based on humaneness—compassion, sensitivity, benevolence, and kindness. A successful leader recognizes the specialized talents of different people and includes their networks and interdependencies in the social fabric of the company. Integrating and communicating effectively is crucial in a networked enterprise.


Social Competence


Social competence involves motivating, understanding different points of view, and managing various character types and emotions. It is the foundation of teamwork and balance within a successful organization. Social competence can be learned through formal programs or volunteering, providing experiences that help handle different social situations later in professional life.


Broad Education


A business education that embraces non-economic contexts provides social competence and encourages humane leadership. Managers schooled in a broader educational background are better trained to think long-term and understand the local consequences of their actions. Effective leaders never stop learning, adapting their management techniques to suit different times and conditions.


Vision and Adaptability


CEOs must provide a vision for the future of the enterprise, fine-tuning tasks to meet changing business needs, defining core competencies, and articulating the company's strengths. Vision statements must be flexible to adapt to change, and leaders must have the courage to admit mistakes and correct them.


Binding Values and Culture


Continuity in management is crucial for company growth, but executive churn means that values and goals must be integral to the enterprise. Humane leadership focuses on the hearts and minds of employees, encompassing staff, executives, suppliers, dealers, service providers, and other business partners. A strong corporate culture is characterized by justice, fairness, and independence.


Open Communication


Effective communication is critical for managing change. Fast decisions are better when relevant information is readily available. Open communication helps cope with adversity and maintains trust. Even when complete honesty is not possible, maintaining a culture of transparency and face-to-face discussions is vital for reducing internal dissonance.


The Seven Steps


1. Clear Values: Entrepreneurial action must be based on a clear system of values, creating loyalty and continuity.

2. Model Consistency: Leaders must be consistent in their thinking and actions, promoting followers.

3. Customer Orientation: A culture of customer orientation must start with the CEO and permeate the organization.

4. Invest in People: Companies must invest in people, supporting personal and professional growth.

5. Openness: Successful management requires openness, helping employees understand and drive change.

6. Creativity and Freedom: Managers must grant employees freedom for creativity and originality.

7. Perception and Promotion: Organizations must reevaluate employees as bearers of knowledge, sources of creativity, and drivers of change.


Institutional Leadership


While personalized leadership has its advantages, institutional leadership is more stable and efficient in the long run. High-LQ organizations institutionalize leadership through systems, practices, and cultures. Key tasks and responsibilities are embedded in the organization, promoting owner-like responsibility and initiative among employees.


The Twelve Enabling Systems


1. Vision/Strategy: Reflect corporate strategy in goals and behaviors.

2. Goal-setting/Planning: Use challenging goals to drive performance.

3. Capital Allocation: Ensure objective and systematic capital allocation decisions.

4. Group Measurement: Measure performance against established goals.

5. Risk Management: Measure and mitigate risk effectively.

6. Recruiting: Tap the best talent available.

7. Professional Development: Challenge and develop employees.

8. Performance Appraisal: Use appraisals to improve performance.

9. Incentives/Compensation: Use financial incentives to drive desired behaviors.

10. Decision-making: Delegate decision-making authority to appropriate levels.

11. Communication: Communicate the big picture effectively.

12. Knowledge Transfer: Gather, organize, and disseminate necessary information.


Leadership and Change


As Charles Darwin noted, "It's not the strongest species that survive, nor the most intelligent, but the most responsive to change." Leaders must guide their organizations through the four stages of change: comfortable oblivion, mild contemplation, preparation, and action. Effective communication from the CEO and management team is crucial for changing the culture and bringing about new ways of doing business.


Rules for Leadership in Turbulent Times


1. Deliver Results: Leaders must deliver on their promises.

2. Understand Relationships: Leaders must value the power of relationships.

3. Multitask: Leaders must manage multiple tasks effectively.

4. Improvise: Leaders must adapt to changing times.

5. Work with Leaders: Leaders must enjoy collaborating with other leaders.

6. Create Leaders: Leaders must focus on creating more leaders, not just followers.

7. Embrace Technology: Leaders must love and leverage technology.

8. Avoid Success Traps: Leaders must not fall prey to their own success.

9. Show Passion: Leaders must wear their passion on their sleeves.

10. Generate Energy: Leaders must know that energy begets energy.

11. Give Respect: Leaders must show respect to everyone.

12. Show Up: Leaders must be present and engaged.

13. Provide a Cause: Leaders must give everyone a cause to rally around.

14. Focus on People: Leaders must prioritize the soft aspects of leadership—people.

15. Make a Difference: Leaders must know they can make a difference.

16. Listen: Leaders must listen intently to others.

17. Surround with Talent: Leaders must revel in surrounding themselves with people smarter than themselves.

18. Keep Learning: Leaders must continuously learn.

19. Know When to Leave: Leaders must know when it is time to step down.


The Future of Leadership


The challenges for leadership in the 21st century are significant, but organizations proactively addressing these challenges will be well-positioned to succeed. Developing successful managers and leaders requires rethinking business education and professional development, focusing on building differentiated and self-regenerating professionals. Balancing stakeholder interests and maintaining a company's values and mission are crucial for long-term success.


Leadership is a dynamic and evolving field that requires heart, inspiration, and a deep connection with people. By embracing these principles and continuously adapting to change, leaders can guide their organizations to success in the 21st century and beyond.

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