By: Chuck Frey
A recent article in the journal Academy of Management Perspectives provides insight into senior leadership traits that are necessary to inspire the people in a business and support a creativity and growth-oriented culture, key ingredients for expanding a firm’s innovation capabilities.
Innovation exists on a spectrum from incremental to transformational. Ultimately, it is the CEO who must decide where the organization is going to focus its efforts along this spectrum.
A recent article in the journal Academy of Management Perspectives titled, “Leadership and Neuroscience: Can We Revolutionize the Way That Inspirational Leaders Are Identified and Developed?” discussed research into different leadership types. This literature provides insight into senior leadership traits that are necessary to inspire the people in a business and support a creativity and growth-oriented culture, key ingredients for expanding a firm’s innovation capabilities.
Businesses are organized to operate, not to create. Most of the people inside a business are employed to make the organization operate as efficiently as possible. A small number of people are selected to lead the people who are operators. An even smaller number of people are selected to lead an entire business function, and one person to lead the organization itself. Organizational leaders are selected for their ability to make the business run efficiently and to use capital effectively.
As part of their effort to grow, however, businesses also need to increase customer value consistently over time. The skills needed to create new customer value are decidedly different than making a business operationally efficient.
Many business leaders are given increasing operational authority and responsibility, and some end up in a position where they are supposed to be driving creativity and inspiring the organization, yet their entire careers have been engaged in the directly opposite activities.
According to the article, there are three main leadership theories including transformational, charismatic and visionary types. The various theories share the view that outstanding leaders go beyond basic performance/reward transactions and can be a major force in realizing new visions and change.
The article discusses how “good” leadership can be less about inspiring followers and more about mutual leader/follower responsibilities. It expresses how effective leaders should emphasize shared power and hiring people who tell the truth. It states that, because of their visionary communication skills, effective leaders can improve performance at the individual, group and organizational levels by articulating a vision that is due to their own strongly held ideological values. This allows people to be energized by and to identify with the leader’s vision.
What really seems to separate leaders is whether they possess a socialized vision or a personalized vision. Socialized vision includes altruism and social responsibility and the inclusion of empowered followers, whereas a personalized vision is narcissistic in nature. A personalized vision is based on self-interest, over-emphasis on the leader themselves, and an obsession with authority and dominating the competition.
Previous leadership research indicates that a personalized vision appeals only to followers with low self-concepts. When one looks back on recent events leading to the global economic meltdown over the past several years, leaders of the companies that brought the global economy to its knees we decidedly NOT socialized visionaries.
It would be interesting to know when a reader analyzes their own organization’s leadership, which camp do they feel their leaders fall into, and why do they stay engaged with that organization? Business leadership, strategy development and innovation implementation are all driven by making trade-offs. Trade-offs include what the company will and will not become involved with, such as capabilities to develop, assignment of resources and capital, markets to compete within, products and services to create, and which types of customers to serve.
Writing from a U.S.-centric viewpoint, American businesses are now at an inflection point. Being driven by big personalities, unethical behavior, greed, and manipulation is no way to create a positive innovation culture or economy. U.S. business leaders need to look at Chinese, Indian, Russian and South American markets in a more enlightened way to discover unmet human needs and adapt offerings to better serve those markets.
At the same time, company boards of directors need to select leaders that will inspire their firms to growth, not try to beat their employees into submission. At the end of the day, which type of business leader do you want to spend your life’s effort supporting?
Reference: Academy of Management Perspective. “Leadership and Neuroscience: Can We Revolutionize the Way That Inspirational Leaders Are Identified and Developed?” Waldman, Balthazard, Peterson. February 2011. Vol. 25, No. 1, pg 60-74.