Manage-Wise

Why a company of leaders matters

Although the attractiveness of a workforce that behaves like leaders may seem obvious, it is worth considering the many reasons that creating a company of leaders is a competitive advantage. Indeed, in the business world of the twenty-first century, a company of leaders is arguably a necessity. In today’s marketplace, many products and services are becoming commodities. Where products and services offered by competitors are seen as interchangeable, the level of service and responsiveness distinguishes one company from another. And that means that what employees do and say matters more than ever before. Given their proximity to the customer, lower-level employees can often spot problems better than upper-level managers. They are the ones who endure the customer tirades resulting from a bad service policy and the ones who spot product defects as they go out the door. And they are the ones who can solve those problems if they have the power and willingness to act.

Need for innovation

Further, increasing competition, a global economy, and rapid technological change require organizations to innovate continually in order to survive. The kind of passive obedience that worked when it was sufficient to do the same thing over and over efficiently won’t take today’s organizations where they need to go. To be competitive in today’s fast-changing environment, organizations need the knowledge, ideas, energy, and creativity of every employee, from the front line to the executive suite. A successful organization requires the flexibility and innovation to respond to rapidly changing market and technological conditions. Like innovation, flexibility needs to be both a mindset and a lived reality throughout the organization.

The flattening of organizational structures creates another reason a company of leaders is essential in today’s business environment. With whole bands of middle managers removed in white collar downsizings, employees are expected to be more self-managing. More and more often, employees work in self-managing teams that make all the decisions pertinent to their work, including hiring, firing, and disciplining their members—behaviors that have long been the responsibility of leaders in the company. In a flat organizational structure, leaders are necessary at all levels of the organization.

For all these reasons, today’s challenge is to create an organizational culture in which all employees want to work to their full potential—to take initiative and act as an owner of the firm. Yet this challenge arises at the very moment when it may be harder than ever before to attract, develop, and retain people with the skills, motivation, and dedication to behave like leaders. Record low unemployment rates and a shortage of skilled workers has created a “war” for talent. High-potential employees are in extremely high demand, thus creating much competition among companies trying to attract them.

Hence, a company that can create a culture that attracts and keeps the best and the brightest would have an important competitive advantage. To be competitive, today’s organizations need to create a culture that supports, nurtures, and develops workers to be all that they can be. Employees want to know that they are valued and that the company is investing in them to help them be all that they can be. High-potential workers demand such a work setting, and they are reluctant to leave it once they experience it. They know they will be unsatisfied and unfulfilled in a more ordinary environment.

Creating leaders

Over the decades there have many attempts to describe how to create the innovative, responsible, dedicated workforce that every company should want. Veteran managers have lived through a number of “movements,” including employee involvement, participation, and quality of work life.

For much of the 1990s, the popular notion was “empowerment.” We believe that empowerment has come and gone, not because it lacked value, but because it was incompletely understood and, to say the least, imperfectly applied. We believe that embedded in the notion of empowerment are important kernels of truth about how to energize and unleash the power in people.

We aim to draw out those kernels of truth and translate them into the specific behaviors that enable executives and managers to create a setting in which employees at all levels display responsible leadership. We do this by drawing on over ten years of rigorous research on the notion of psychological empowerment in the workplace, as well as a decade of experience helping organizations unleash the power in their workforce. Our belief is that there is still no better way to encourage employees to act like leaders than through genuine empowerment. But so many misunderstandings—and disappointments—have accumulated around the word empowerment that we must first make clear what we mean by genuine empowerment. We begin by doing a “controlled burn” of current understandings of this much-maligned notion, with the aim of disengaging the baggage that has accumulated over the years.

Notion of empowerment

Over time, a forest accumulates a significant amount of debris made up of leaves, branches, and scrap trees. This debris sucks the life out of a healthy forest and can turn an ordinary forest. Many forestry ecologists believe that the way to prevent out of control fires is a process of regular controlled burns. A controlled burn is a premeditated fire or an unplanned fire from lightning that is allowed to burn off forest debris in a systematic manner. It is a quick burning fire that stays low to the ground. As a result, its flames do not reach the treetops, and tree roots remain undamaged. A controlled burn not only contributes to a healthy ecosystem but also creates something new: Some kinds of seeds can only be germinated when a fire breaks through their hard outer coating. So from the fire comes new life.

It is time to bring a controlled burn to the notion of empowerment. The idea of empowerment has become weighted down with significant baggage—or debris—that has sucked the life out of the construct. What happened to sour so many managers on the once-promising idea of empowerment?

The journey

Empowerment’s beginnings were in the civil and women’s rights movements of the turbulent 1960s. The initial idea was noble: to give people the power to control their own destiny. For business organizations, transferring real power or decision-making authority so employees could control their destiny was more than most managers could stomach, so empowerment got translated into limited delegation and participative decision making. The hope was to get greater productivity from employees often with less management. During the 1990s, empowerment took on almost fad proportions when Peter Block’s 1991 book The Empowered Manager became a management bestseller. Everyone wanted to say that they were “doing” empowerment.

As with many management fads, the core concept of empowerment was soon prostituted. Managers, consultants, and union members were implementing programs in the name of empowerment that had little to do with the genuine article. And when empowerment programs failed to work, people tended to conclude, “We have tried empowerment and it did not work.”

Excerpt from ‘A Company of Leaders’ by Gretchen M Spreitzer and Robert E Quinn. Published by Wiley India (P) Ltd. Price: Rs 329