Why Leaders Must Evolve

The management model is being challenged. The weakening economy, an escalating credit crisis and the rising price of oil have led to market jitters and the departures of CEOs of major financial institutions like CitiCorp and Merrill Lynch. With those events as the backdrop, New York Times reporter Nelson D Schwartz wondered in an article last month if we would see the rise of the CEO 3.0.

Version 1.0 featured the celebrity CEO — executives like Roberto Goizueta and Jack Welch who strode the corporate universe like titans. Version 2.0 saw the rise of the "Fix-it Men," chieftains like Ed Breen of Tyco and Richard Parsons of Time Warner, who took over organizations in distress and turned them around. Version 3.0 is typified as a collaborative leader in the mold of Art Lafley of P&G and Jim McNerney of Boeing.

More collaboration

Schwartz's concept has been postulated in the management and financial press. Gary Hamel has a new book about the topic, The Future of Management. In an interview with The McKinsey Quarterly, he said: "The outlines of the 21st century model are already clear. Decision-making will be more peer based; the tools of creativity will be widely distributed in organizations. Ideas will compete on an equal footing. Strategies will be built from the bottom up. Power will be a function of competence rather than of position."

And so it is that the new model of management is evolving with less emphasis on hierarchy and more encouragement of team in order to stimulate creativity and front-line decision making. For leaders, however, this is nothing new. Paul Hersey, leadership thinker and creator of Situational Leadership, posited this theory more than a generation ago.

Managers are responsible for systems and detail; leaders are responsible for people and direction. While we intertwine the concepts regularly, the functions are distinct. Managers get the right things done; leaders get things done right, with an emphasis on doing it with and for people and in the best interest of the organization. Within that construct, leaders play multiple roles — visionaries, guides, servants, coaches, cheerleaders, team players and sometimes followers. Their role is, as Hersey believes, situational. In short, leaders need to do what needs doing. Toward that end, here are some roles to consider:

Leader as collaborator. Anne Mulcahy, whom Schwartz cites in his article, is the model of collaboration. Taking over as CEO when Xerox was in real trouble, she turned around the company — not through the power of her personality but by working collaboratively with employees of every level. She had to make tough decisions about cuts and layoffs, but she believed that if Xerox was ever to succeed again, it would need the commitment of everyone in the company — not just the senior leaders. Her town hall meetings stimulated thought and got people focused on what needed to be done. Their tactics, as shaped by corporate strategy, were essential to the turnaround.

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