Leadership: the why versus the what

Javier Roza. Professor. IE Business School

29 May 2008

Management comprises much more than simply exercising the authority that goes with the position. It is about gaining the respect of a business organization, and motivating employees by winning their trust.

Business management can be considered from different standpoints. Take the most superficial and egomaniacal form, for example, that of the autocratic, insecure director (not leader) who needs and uses the power given to him by his post. He or she sees the firm as his property and employees tend to be seen as inferior beings of lesser intelligence the lower their place on the organisation chart, or people who (by default) have bad intentions which range from inaction to sabotage. The assumptions on which this view is based come from the hobbian idea of man, typical in preindustrial society and still visible in many companies.

Of course, in order to survive a company must be capable of managing the resources that allow it to give its employees and shareholders fair pay, as well as having access to investment to keep its activity competitive, all this through the satisfaction of its customers, users and consumers.

But to achieve this in the 21st century, a time of the greatest intellectual capacity in the history of the human race, we can no longer apply models based on ignorance. Today, if we treat employees as inferior beings, we will only obtain disinterest and cynicism as a response. However, if we treat all employees as intelligent beings who know what they are doing in their job and we give them the information they need to be able to take the right decisions at their level, we shall obtain at the very least greater organisational efficiency since decision and subsequent action will be taken at all levels including the lowest possible, increasing speed and adaptation to the market. We will also see greater enthusiasm and commitment, both based on respect. People are loyal to people, not to abstract entities.

This peer-to-peer relation is strengthened when work becomes part of our life, an activity that not only provides us with income but also gives us personal satisfaction. We spend so much time at work that is essential to find a way of increasing our personal happiness while we are there. In the Maslow model, our society no longer merely exists, we are no longer happy just to eat. We want to feel that our life has meaning, also at work.

Of course, if we accept these premises, then we accept that as executives we need something more than economic know-how to be successful. We need value to assume that you have people under your responsibility who may be as intelligent as yourself and be able to judge you quite correctly. It also makes you be clear about what the enterprise wants. And transmit it with precision, enthusiasm and transparency.

What can we say, therefore, about the responsibility assumed by the new leader? Now we can speak about leaders, not directors. A director has the power given to him by his position. A leader obtains authority from the people who follow him, of their own free will. Enterprises no longer have human resources. Human beings are no longer resources that can be used how, when and as often as a company likes. They make the enterprise work, if they want to.

The leader´s function has less and less to do with determining strategy (the what). Even less to do with determining the how, in terms of processes and systems. The leader´s exclusive function, which determines his or her success, is stimulating the why. It is giving the organisation as a whole and its individual elements the reason for getting up every day and going to work with the positive intention of doing their job well.

Applying this style of leadership makes work a pleasurable inconvenience. It is what I call management by inspiration and, in my opinion, is the mark of a successful company today.

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