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Bill George

Harvard Business School Professor, former Medtronic CEO

The New Leaders: Collaborative, Not Commanding

Originally posted in the Wall Street Journal on March 19, 2010

A revolution is reshaping America’s best-led companies. Authentic leaders focused on customers are replacing the old guard of hierarchical leaders who concentrated on serving short-term shareholders. The old “command-and-control” style is being replaced with an empowering, collaborative style.

During the last half of the 20th century, business leadership became an elite profession, dominated by leaders who ruled their enterprises top down. Influenced by two World Wars and the Depression, organizational hierarchies were structured like military models.

Their leaders used multi-layered structures to establish control through rules and processes. People climbed hierarchies in search of power, status, money and perquisites. As stock holding periods dropped from eight years to six months, hierarchical leaders focused on generating short-term results, often to the exclusion of long- term growth.

In the past decade it all blew up, from the ethical scandals exposed by Enron and WorldCom to the Wall Street meltdown. As a result, people lost trust in business leaders to build sustainable institutions instead of serving themselves and short-term shareholders.

In my 1960s class at Harvard Business School our professor cited the Department of Defense and Catholic Church as the most iconic organizations. Business followed their lead, as General Electric, General Motors, AT&T and Sears became their role models.

By century’s end, the latter three were in long-term decline, while GE was revolutionized by Jack Welch. Hundreds of other organizations like KodakMotorola and Westinghouse followed similar patterns of self-destruction. The hierarchical model simply wasn’t working.

In retrospect, it seems obvious people weren’t responding to “top down” leadership. Why not?

  • The craftsman-apprentice model has been replaced by learning organizations, filled with workers with greater knowledge than their bosses.
  • Young people are unwilling to spend ten years waiting for their chance to lead; instead, they want opportunities now, or they move on.
  • People are looking for more than money, as few are willing to spend their lives in unfulfilling jobs, just for the compensation. Rather, they seek genuine satisfaction and meaning from their work.

To lead in this new century, we need authentic leaders who align people around mission and values, empower leaders at all levels, focus on serving customers, and collaborate throughout the organization, in order to achieve superior performance.

Aligning: The leader’s most difficult task is to align people around the organization’s mission and shared values. Gaining alignment takes regular engagement with employees at all levels. It is especially difficult in far-flung global organizations where local employees may be more loyal to native cultures than their employers, especially regarding business practices and customer relationships.

Global organizations thought they could solve this problem with rulebooks, training programs and compliance systems, and were shocked when people deviated. Aligned employees committed to the mission and values, and want to be part of something greater than themselves, form an enduring organization that is resilient through crises.

Empowering: Hierarchical leaders exert power over others and delegate limited amounts. These days that isn’t leadership at all. Authentic leaders recognize they need leaders at all levels, especially on the front lines, where people must lead effectively without direct reports.

The leader’s job is to empower people at all levels to step up and lead. Empowered leaders need sophisticated accountability systems with closed-loop management to ensure commitments are met.

Serving: Leaders’ first obligation is not to their shareholders, but rather to their customers. Any organization that does not provide its customers with superior value relative to competitors will find itself going out of business. Employees are much more motivated to provide customers with superior products and services than to increase stock prices.

Collaborating: The challenging problems businesses face these days are too complex to be solved by individuals or single organizations. Collaboration—within the organization and with customers, suppliers, and even competitors—is required to achieve lasting solutions. Leaders must foster this collaborative spirit by eliminating internal politics and parochialism and focusing on cooperation internally to be competitive externally.

The ultimate measure of 21st century leaders is superior results. In today’s business world, organizations filled with aligned, empowered and collaborative employees focused on serving customers will outperform a hierarchical organization every time. Top-down leaders may achieve near-term results, but only authentic leaders can galvanize the entire organization to sustain long-term performance.

Examples abound of organizations – Procter & GambleIBMNovartis, Cisco, Genentech, IntelGeneral MillsPepsiCo and Avon Products, to name a few – demonstrating that 21st century leadership creates lasting shareholder value. Authentic leaders like IBM’s Sam Palmisano, Cisco’s John Chambers, PepsiCo’s Indra Nooyi, General Mills’ Ken Powell and Avon’s Andrea Jungare the new role models for modern corporations.

We need them to rebuild the trust that has been lost and to validate that capitalism is still the best economic system.