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 / Fourth Quarter 2001 / Issue 25(originally published by Booz & Company)


Best Business Books: Leadership

Failure to Adapt
It is now well established that all corporations go through an aging process as they progressively fail to adapt to new circumstances. Sadly, in our business, we have seen many bastions of the Fortune 500 show symptoms of rigor mortis … and then vanish from the list. In Leadership without Easy Answers (1994), Ronald A. Heifetz describes three forms of such failures to adapt: when organizations misperceive threats; when they see threats, but don’t have the resources and/or capabilities to do anything about them; and when they feel that it is too painful to adapt.

Heifetz argues that the role of leaders is to encourage their people to face up to such challenges — to adjust their values and beliefs, to change perspectives, and to develop new habits of behavior. In Heifetz’s framework, the task of adaptive leaders is to let followers “feel the external pressure for change” and to maintain their disciplined attention to the problem at hand. Leaders are “responsible for direction, orientation, managing conflict and shaping norms.” But they delegate the work itself to followers because “it does no good to be swept up in the field of action.”

In our experience, the toughest part of leadership to master is that very ability to stand back and not be swept up in the field of action. As O’Toole, Ghoshal, Bartlett, and Heifetz all show, the greatest leaders are fundamentally teachers who spend their time building leadership bench strength in their organizations, creating a cadre of other leaders willing to assume the responsibility for getting directly into the fray.

The acknowledged master at building such leadership capacity is Jack Welch. His approach to developing others to create organizational adaptability is chronicled by Noel M. Tichy in The Leadership Engine: How Winning Companies Build Leaders at Every Level (1997). Perhaps the most important leadership lesson to be learned from Welch (and from the likes of Roger Enrico of PepsiCo and Andy Grove of Intel) is that true leaders are not just teachers — they also have teachable points of view. That is, they help the leaders they mentor to see the world more clearly, to articulate vision and values simply, and to motivate their own followers to confront reality and make tough decisions. Thus, the most important concept in Tichy’s book is that the difference between a winning organization and a losing organization is that the former has a leader who creates other leaders at all levels.

Everyone Can Lead
For my money, the most inspirational recent leadership book is Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People (2000), by Charles A. O’Reilly III and Jeffrey Pfeffer. The authors’ willingness to take issue with the conventional wisdom that companies need to win the war for talent is particularly on target.

We’ve heard that old refrain before: Our schools would be better if only we had better teachers, and government would be better if only there were more competent civil servants. In fact, such conventional wisdom is more often than not a rationalization for poor leadership. Because the top 10 percent of any group is a finite number, it is incumbent on leaders to create conditions that produce extraordinary results from ordinary people. From that perspective, a company that creates talent and uses it well is better led than one that expends all its energy on the futile task of hiring only great people. The authors illustrate that point with examples from AES, Southwest Airlines, NUMMI, and the SAS Institute, which show that leaders who create the environment in which all their people can do their best are those whose organizations are most successful.

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