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Best Business Books 2001: Leadership

Dreamers with Deadlines

(originally published by Booz & Company)

The last time I checked, there were 393 current books with the words leader or leadership in their titles. Although that’s evidence of an almost insatiable appetite for information on the subject, it doesn’t tell us what, if anything, can be gained from reading about leadership.

Indeed, a scan of the hundreds of leadership titles listed on the Internet is more amusing than edifying: Some are laughably over-prescriptive (The 21 Irrefutable Laws of Leadership) and many promise the world (How You Can Create Growth and High Performance in Your Company). When one peeks between the covers of such texts, disappointment soon sets in. The sad fact is that leadership manuals deliver mainly truisms, pap, and gross generalizations. There are exceptions, of course, and the reader’s challenge is to find the few grains of true sustenance among the tons of dispensable roughage. But where to start?

Several years ago, when my colleagues and I at Booz Allen Hamilton formed the firm’s Organization and Strategic Leadership Competency Center, we began by reviewing the extensive literature on leadership — both current books and classics. Being practical sorts, we wanted to know if there was data that explained why some leaders succeed and others fail; why some leaders move successfully between organizations and others don’t; and why a few organizations enjoy a seamless succession of great leaders, in contrast to the majority of companies, where selection and succession processes are uneven at best.

Over a two-year period, my partners and I read and discussed hundreds of cases, articles, and books on leadership. Putting each to the test of experience, we asked, “Does the theory advanced square with what we observe in real organizations?” Only a smattering of the books we reviewed withstood the tough-minded scrutiny of the few hundred professionals who spend their careers observing and counseling leaders in business and government. The few books that resonated with our collective experience also improved our understanding of why some leaders we observed were more effective than others. We distilled these lessons into a practical framework that we have shared with global leaders at the last two World Economic Forum meetings in Davos, Switzerland, as well as readers of strategy+business (see “Beyond the Cult of the CEO: Building Institutional Leadership,” by Bruce A. Pasternack, Thomas D. Willams, and Paul F. Anderson, s+b, First Quarter 2001).

Here’s what we learned from all our reading and analysis: Organizational performance is the result of individual actions and behaviors. That is, in successful companies, people up and down the line do the “right things.” Those companies have effective leaders who create conditions under which their people have the information, authority, and incentives to make the right decisions. When leadership is effective, behavior at all levels of the organization is both aligned and adaptable, and, thus, the organization performs to its potential. We call this an institutional capacity for leadership.

What Leaders Do
Obviously, the trick is for leaders to learn to create the conditions under which this behavior can occur. In our extensive survey of the leadership literature, we found a few good books that helped to define precisely what leaders do to create those conditions. Here are some of my favorites from Booz Allen Hamilton’s list of useful books on leadership, together with a few of the important lessons we’ve taken from each.

Many leadership books focus on the characteristics of individual leaders, and to my mind the best in this category is Warren Bennis’s On Becoming a Leader (1989). Bennis writes that leaders “dream with a deadline.” By focusing on what’s important, they help their followers to realize goals that they couldn’t achieve on their own. In the process, leaders and followers become “intimate allies.” In Bennis’s view, leaders have a guiding vision, a passion that allows them to communicate a sense of hope to followers. The key to this communication is not charisma (as many experts have maintained); what is required is integrity. Leaders with integrity have a heightened sense of self-awareness and an unshakable understanding of what they believe in and what they stand for. According to Bennis, leaders with integrity are palpably at ease with themselves, and this self-confidence, sensed by their followers, forms the basis of a bond of trust between them.

In The Leadership Challenge: How to Keep Getting Extraordinary Things Done in Organizations (1987), James M. Kouzes and Barry Z. Posner also conclude that trustworthiness is the key to leadership. Using a database of more than 60,000 leaders, they conclude that the most important individual trait of leaders is honesty. They identify five fundamentals of leadership: challenging the status quo, inspiring a shared vision, enabling others to act, modeling through personal example, and “encouraging the hearts” of followers. Leaders, they say, live their lives backward by imagining a future state and then creating the path to get there. Their followers then adopt both that goal and the process for achieving it because they trust the leader’s motivations.

The insights of Bennis, Kouzes, and Posner resonate with our experience at Booz Allen. We have witnessed the unraveling of promising leaders when they have betrayed the trust of followers. These aspirant leaders had many flaws, but almost always the path to ruin was the betrayal of trust. This betrayal took several forms, such as telling their followers one thing and then doing another; putting their personal agendas ahead of those of their organizations; and failing to hold themselves — and their followers — accountable for promises made. Invariably, the result of this duplicity was that leaders became unable to enlist followers in the activities needed for organizational success. We have seen leaders succeed against overwhelming odds, however, when they have put aside their egos and understood that the purpose of leadership is to enable others to achieve their goals and the goals of their organizations. Thus, the most successful leaders we have observed are dedicated to creating other leaders. That is why even the best books that deal with the “character” of the individual at the top fail to tell the whole story of leadership.

An Institution’s Capacity for Leadership
On this score, James O’Toole, in Leadership A to Z: A Guide for the Appropriately Ambitious (1999), draws a useful distinction between who leaders are and what leaders do. Through case studies and historical vignettes, he demonstrates that leadership is, in the end, an institutional capacity. O’Toole doesn’t ignore the obvious fact that the character of individual leaders is important, but he shows that great leaders throughout history have also inspired others to lead.

These leaders achieved more than anyone thought possible at the time because they didn’t try to do it all themselves. Instead, they were able to transcend their individual limitations by sharing the power and responsibility of leadership.

O’Toole’s argument that an organization’s capacity for leadership can be both measured and enhanced through conscious effort meshes so closely with our experience that it has come to inform our entire approach to leadership. Instead of trying to change the basic styles and personalities of individuals, we have concluded it is almost invariably more fruitful to help companies create systems and practices that enhance their overall leadership capabilities.

Sumantra Ghoshal and Christopher A. Bartlett, in The Individualized Corporation: A Fundamentally New Approach to Management (1997), focus on how to build that leadership capacity. They argue that corporations need to move from a philosophy of “contract, compliance, control, and constraint” to one of “stretch, support, discipline, and trust.” Ghoshal and Bartlett argue that even a casual observer can tell the difference between organizations by the “smell” of the place. The poorly led organization reeks like Calcutta on a steamy summer day; the well-led company smells like springtime in the forest of Fontainebleau! When organizations are “fresh,” they are more likely to adapt successfully to a fast-changing environment. The authors contend that as companies are transformed from “foul” to “fresh,” they engender learning, initiative, commitment, collaboration, confidence, and successful execution.

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.

And so we come full circle with leadership books. As Tolstoy wrote, “Happy families are all alike; every unhappy family is unhappy in its own way.” Clearly, there are numerous ways leaders can cause companies to fail, but all effective leaders must create the conditions under which the efforts of their people are aligned and under which each follower can become a leader. The latter dynamic is essential because successful organizational adaptation occurs only when every person in the organization is attuned to meeting the challenges of an ever-changing competitive arena.

In the final analysis, not many books can teach you to be a great leader. But it would be foolish to ignore the wisdom contained in this selection.

Bruce A. Pasternack,
Bruce A. Pasternack is a senior vice president with Booz Allen Hamilton in San Francisco. He is the coauthor, with Albert J. Viscio, of The Centerless Corporation: A New Model for Transforming Your Organization for Growth and Profit (Simon & Shuster, 1998).
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