In bennis's definition of leadership the word subordinate seems to

Less than a generation ago, the subject of leadership rarely arose in discussions about how to run a business or in books on busi- ness management. Leadership was widely assumed to apply only to military affairs or statecraft.

Today that situation is almost totally reversed. The business departments of the nation’s bookstores are well stocked with books on executive leadership, and the shelves are amply replenished with fresh titles each publishing season. Leadership courses, leadership workshops, leadership seminars, and even leadership wilderness retreats are offered to senior business execu- tives by a wide range of universities, colleges, and professional associations. The more advanced graduate schools of business are even beginning to include a few elective courses in leadership in their MBA curricula.

For all of leadership’s newfound popu- larity, however, the bulk of the contemporary literature on this topic still fails to come to grips with two issues essen- tial to a full understanding—and a competent exercise—of leadership.

The first issue is what I call leadership without portfolio—that is, the exercise of leadership by persons well below the senior executive ranks, usually with little formal authority, and often with no specific assign- ment. The second issue is power as a component of effective leadership. Only a small minority of today’s academic researchers seem to be facing the controver- sial issue of power, while the popular authors appear to be ignoring it almost totally. Any treatment of leadership that ignores either of these elusive elements is likely to leave business students unprepared for some of the most serious challenges and opportunities they are likely to encounter in the workplace.

The intent of this chapter, then, is twofold: first, to introduce the concept of leadership without portfolio into your prepa- ration as future business managers; second, to reawaken an appreciation of the impor- tance of power in the actual work that managers do.

L E A R N I N G L E A D E R S H I P Where It Is Taught and Where It Is Not

What the Business Schools Do Not Tell You about Leadership

Two decades ago the School of Business Administration at Northwestern University changed its name to the J. L. Kellogg School of Management. Kellogg graduates began receiving Master of Management degrees, and the old degree title, Master of Business Administration, was dropped.

That particular change in business school nomenclature, along with similar changes that followed at other institutions, acknowledged a simple but often ignored truth of organizational dynamics—admin- istrators do not manage; that is, they do not make policy. The most an administrator can do is take a policy made by a manager and, literally, administer it to subordinates who apply the policy in carrying out their work. An administrator is a sort of organi- zational bellhop, someone who totes ideas and policies from those who originated them to those who need to implement them. Administrators do not run businesses. Managers do.

About three quarters of a century elapsed between the emergence of manage- ment as a subject of scientific research and the adoption of the word “management” as an element in business school names. Even after management made the transition from

Chapter 1: Leaders and Leadership 17

Chapter 1

Leaders and Leadership How They Emerged from History and How They Emerge within Today’s Organizations

Harry J. Bruce CEO

Illinois Central Railroad

“I sit here all day trying to persuade people to do things they ought to have sense enough to do without my persuading them. . . . That’s all the powers of the presidency amount to.”

Harry Truman

a researcher’s curiosity to the core of the business school curriculum, it still took 50 years before institutional names began to reflect the change. As veteran management consultant, author, and teacher Peter F. Drucker points out,

Management as a discipline . . . was first dimly perceived around the time of the First World War. It did not emerge until the Second World War and then did so primarily in the United States. Since then it has been the fastest-growing new function, and the study of it the fastest- growing new discipline. No function in history has emerged as quickly as has management in the past 50 or 60 years, and surely none has had such worldwide sweep in such a short period.1

Ironically, now that the word “manage- ment” at long last is finding a place over the doors of the nation’s business schools, an even newer concept—leadership—is knocking on those same doors and asking for admission. Business school researchers say they are now learning how to identify and analyze business leadership, and the top business schools claim they are even beginning to teach it.

Will “leadership studies” become the next great advance in the way future busi- ness executives are trained for the decision-making role? Are we on the brink of understanding as much about leadership as we know—or claim we know—about management?

While exciting things are happening, some restraint is probably in order. One reason is that the vocabulary of leadership is still under discussion, with a multitude of academic and popular researchers still debating what exactly it is that leaders do and what those activities should be called. Leadership studies are still a long way from where managerial studies stood in 1916, when French industrialist and business writer Henri Fayol declared that the four functions of management are to plan, orga- nize, coordinate, and control.2 Fayol’s nomenclature was adopted widely in the world of business and in business schools. No such agreement on nomenclature cur- rently prevails in the study of leadership.

Another reason is that academic research into business leadership is still quite young, and formal instruction in leadership skills and behavior for MBA candidates is even younger, with only a few of the leading schools offering specific courses in leader- ship. Stanford University’s Graduate School of Business, which introduced the subject

of leadership into the MBA curriculum during the late 1980s with a series of lec- tures by author and retired executive John Gardner, has now begun offering a formal course, Learning to Lead. The new course is not required, however, and enrollment is restricted to those currently holding jobs while attending classes. The Harvard Business School offers one mandatory leadership course, Leadership and Organi- zational Behavior, in the first year of its MBA curriculum. Students with a strong interest in the subject may pursue it further in several elective courses.

At most business schools, however, the academic study of leadership receives only token representation in the curriculum, while practical training in leadership behav- ior, skills, and attitudes is usually absent altogether. Most MBA programs still deal with leadership in cursory fashion—usually in a brief, more or less obligatory chapter buried deep in a textbook, or in an occa- sional guest lecture by a visiting CEO. As a rule, U.S. business schools devote nowhere near as much attention to developing lead- ership skills as they do to teaching number crunching, marketing, or strategic planning. While students may be exposed to certain kinds of thinking and theorizing about lead- ership, they are not systemically trained to exercise leadership the same way they are taught to use other business school skills.

The gap between the teaching of leader- ship and the teaching of more commonly accepted business skills is not hypothetical. It has been documented by Indiana Univer- sity Professor Paul J. Gordon and St. John’s University Professor Larry W. Boone in an unpublished research paper presented to the International Academy of Management at its December 9, 1994, meeting in Philadelphia. In a nationwide survey of deans of collegiate schools of business, the two scholars asked, “Regarding each of the business programs offered by your school, what relative emphasis (expressed as a per- centage) is placed on each of the following 12 educational objectives?”

The responses to the lengthy question- naire were statistically significant and instructive. Core competencies, such as accounting, economics, finance, marketing, law, and management, received a number- 1 ranking in both undergraduate and grad- uate programs (38.7 percent and 36.0 percent, respectively).

When asked to rank the other 11 pos- sible objectives of a business school

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BEST-USE CORRELATIONS

Before you spend a single dollar, euro, or yen, your team must orga- nize itself and decide who will lead it. In Marketplace, as in the real world, a business cannot reach its maximum potential without good leadership. Thus the first chapter in this book, corresponding to your first quarter of simulation play, focuses on leadership and on taking the first steps in getting your start- up launched.

Cultivate the Characteristics of a Good Leader Chapter 1 provides a compelling review of what it takes to be a good leader. The Marketplace environment gives you plenty of room to put chapter principles and your own lead- ership skills to the test. Be advised leaders earn the willingness of others to follow by showing (1) concern for the task and (2) consideration for the people involved in the task.

Leadership without Portfolio Leadership without portfolio, a con- cept introduced in Chapter 1, is particularly relevant to Marketplace play because no one person on your team is given the authority to lead. In Marketplace, lack of formal authority to lead should not limit anyone’s ability to lead.

Rotate Leadership In Marketplace, natural breaks in the play of the game allow team mem- bers to rotate in and out of the leadership position. The first oppor- tunity to lead occurs during the startup phase of the business, Q1 through Q4; the second, during the preparation of the business plan and during negotiations with venture capitalists, Q5; the third, during the growth phase of the business, Q5 through Q8; the fourth, during the preparation and presentation of a report to the Board of Directors, which occurs at the end of simula- tion play.

education, the deans scored leadership skills ninth in undergraduate programs and sev- enth in graduate programs, with relative emphases of 4.1 percent and 5.8 percent, respectively.3

Interestingly, when the deans were queried about the course material included in nondegree programs, such as advanced management courses for senior executives, leadership rose to third place in the total 12-factor analysis. This appears to confirm the widespread existence of a misguided belief that leadership studies are best saved for the latter stages of a managerial career.

The late William Oncken, Jr., sharpened the focus of this ongoing debate in 1984 when he wrote:

Textbooks in organizational development consistently declare that managerial lead- ership begins at the top, but they just as consistently don’t specify where the top is. The impression is therefore conveyed, whether intentionally or not, that effec- tive managerial leadership is not possible at lower organizational levels if it is not already being practiced at the higher levels.4

Oncken gives additional illumination with a humorous medical metaphor: Pic- ture yourself on an operating table about to have your appendix removed under a local anesthetic. Just before the doctor has opened your abdomen, the electricity goes off, and the room is plunged into darkness. You hear the doctor saying through the gloom to the nurse, “Well, that does it! If top management doesn’t do its job, we can’t do ours. Guess we’ll just have to leave the patient as is while we sit it out in the coffee shop until the lights come on. Let’s go.” Before they could leave, you would be screaming, “Is there a pro in the house?”

What is a pro? A doctor who knows what to do if and when the lights go out— no matter whose job it was to see that they didn’t. In management you often do not find out who the pros are until the lights go out. Leadership, at your level, begins with you.5

Leadership Can Be Learned

The omission of leadership studies from the business school curricula is puzzling. We know something about what leadership is, and we know some ways to teach it—at least to those who have shown some basic aptitude for it. The U.S. armed services con- tinually conduct research into the nature of leadership, and they regularly recycle both

their academic research results and the bat- tlefield experience of their personnel into the training of future officers and noncoms. Courses in leadership theory and programs offering practical training in leadership behavior are a standard part of the curricu- lum, not only at the three service academies but also in the Officer Candidate Schools (OCS) and Reserve Officer Training Corps (ROTC) programs. The military would not consider a future officer’s preparation complete if the candidate had acquired pro- ficiency only in such technical specialties as gunnery, engineering, aeronautics, or navi- gation. The ability to lead is considered essential, and all future officers are specifi- cally trained to fill leadership roles.

Yet MBAs, who typically enter their first jobs with two years more college credit than the military officer, still join the business world with virtually no formal leadership training or experience. Instead, they are expected to pick up their leadership tech- niques and develop their leadership abilities as best they can on the job.

Can leadership be taught and learned as a discipline, or is it simply an innate talent that will manifest itself inevitably in those who have it and will never appear in those who do not, no matter how intensely they are trained? Yes, leadership is a talent, and as such it will be distributed unevenly among the population. But there is no rea- son to believe that leadership potential will inevitably ripen into full leadership with- out some sort of formal education and training. The curriculum of the military academies is premised on that assumption. It is also premised on the idea that those who select themselves for leadership devel- opment and who are screened for leadership potential will benefit the most and experience the greatest development of that potential once they get appropriate training and discipline.

All of which is to say the obvious: Lead- ership can be taught, but only to those who have the innate ability and desire to learn it.

There is a less obvious corollary to this statement, however: Leadership not only can be taught to certain people but also needs to be taught. If not properly cultivat- ed and restrained, leadership ability— particularly when coupled with strong ambition—can run out of control, destroy- ing careers, institutions, and reputations. We will see a sobering example of untrained and unrestrained business leadership at the end of this chapter.

How the Service Academies Teach Leadership

What makes it possible for the U.S. mili- tary to teach leadership to people in their teens and early twenties? Students enrolled in the nation’s service academies do not just pick up leadership by observing and mod- eling the behavior of their superiors on the parade ground or the gunnery range; they study it—formally and rigorously, in theory and practice—in each of the four years of undergraduate work leading up to commis- sioning. Cadets or midshipmen entering a service academy today can expect to: • Study theories of leadership in textbooks

and training manuals and discuss leader- ship concepts in class.

• Read, analyze, and discuss biographies of well-known leaders.

• Undergo repeated psychological testing to identify leadership potential and track its development.

• Undergo practical training designed to develop leadership attitudes and skills, including teamwork, communications, self-reflection and self-correction, and both giving and receiving counseling.

For more than a decade, the Depart- ment of Defense as well as the individual armed services have funded research at some of the nation’s top universities in an effort to better understand the dynamics of leadership and to improve the leadership training of future officers. In addition to exploiting the latest breakthroughs in for- mal behavioral studies, the academies have opened their classrooms to the burgeoning collection of popular leadership literature.6

Col. George B. Forsythe, the director of undergraduate studies in the Department of Behavioral Sciences and Leadership Studies at West Point, says that academic research, popular self-help literature, and biographies of great military, political, and business leaders all seem to point in the same direction: Leadership development begins with self-development, including introspection, reflection, self-monitoring, and self-correction through the develop- ment of sound habits. These personal attitudes and behaviors, once they are refined and developed through repeated practice, enable the student to build out- ward from an understanding of self to an understanding of others. The resulting feel for how one’s own attitudes and behavior influence others can be parlayed into pow- erful leadership. The ability to develop

Chapter 1: Leaders and Leadership 19

oneself through self-observation—and then move on to observing and developing oth- ers—can now be taught as a skill. “A lot of the work being done today in adult devel- opment suggests that how well you do in problem solving has to do with how well you take perspective on yourself and your situation in the world,” Col. Forsythe says.7

The armed forces now train their future officers to do exactly that.

Forsythe’s counterpart in leadership studies at the U.S. Naval Academy, Marine Corps Col. Paul Roush, agrees with this approach. “The first thing a leader has to know is himself,” he says. “You have to understand yourself and become personally effective before you can begin learning to understand others and become organiza- tionally effective.”8

Because the Academy’s midshipmen, who carry a full schedule of tough engineer- ing courses and sleep only about five hours a night, do not have the time to learn about themselves through conventional forms of introspection, the Academy’s leadership curriculum accelerates their acquisition of self-knowledge with some tools that have emerged from several decades of research.

The Myers-Briggs Type Indicator, a widely used psychological assessment tool, helps midshipmen recognize the psycholog- ical type to which they belong and their preferred modes of mental functioning. At the beginning of the freshman year, they learn whether they are predominantly right-brain intuitives or left-brain analytical types, whether they are predominantly extroverted or introverted, and whether their interactions with others are primarily oriented toward thinking or feeling, judg- ing or perceiving.9 They learn that leadership ability is found among members of all the types, and they undergo leader- ship-development exercises that do the best job of developing their strengths and over- coming their weaknesses.

The latter is a particularly important benefit of armed services leadership train- ing. Lacking an explicit program of leadership development, many individuals with leadership potential will follow the path of least resistance, using and develop- ing the leadership skills in which they already feel confident while ignoring weak or underdeveloped areas. Leadership train- ing for military officers, by contrast, helps each future leader to identify his weak points so they can be overcome or at least offset or minimized.

As they progress through their four years of study, midshipmen retake the Myers-Briggs in a more complex and sophisticated format known as the Expand- ed Analysis. The results of this follow-up test deepen their self-knowledge and pro- vide senior midshipmen with insights that help them guide the younger midshipmen’s development. As midshipmen rise to upper-class ranks, they in turn become counselors to the classes following them. The entire experience—counseling and being counseled repeatedly using a rolling set of psychological test results—gives the midshipmen a priceless resource for devel- oping their abilities to lead others. Col. Roush explains:

Counseling is a critical part of what we do here. It’s organized so that the upper class works with the plebes to set up goals and develop systems of getting feedback. What it does is provide a way to take what you learn in a classroom and then do something with it. It might be a simple goal like wearing the uniform properly, or running a mile and a half in a specific time, or achieving a certain level of performance in an academic sub- ject. You and your senior-class counselor work out the goal together and then monitor your progress toward it.10

The armed services focus intensely on understanding the personal attitudes and behaviors required for leadership, and they work hard to devise classroom studies and training exercises that will develop 18-year- old plebes—freshmen Army and Air Force cadets and Navy midshipmen—into bud- ding leaders by the time they reach the age of 22.11

What would happen if future business managers were trained to become leaders as explicitly and purposefully as military offi- cers? Would the leadership-training exercises of the military travel well to academia?

One person who should know is Col. John Kirchenstein. He retired in 1978 after a 35-year career in the U.S. Army and joined the School of Business at the Univer- sity of Tennessee, Knoxville, where he is now assistant to the dean.

“My definition of leadership is to get someone to do something cheerfully that they really don’t want to do—such as charg- ing up a hill against a dug-in enemy,” says Col. Kirchenstein.12 Col. Kirchenstein insists that business situations call for lead- ership very similar to what works in the military and that the leadership-training programs used in the armed services are

sorely needed by the business schools. Col. Kirchenstein continues:

I would train the [MBA] students in group activities the way military officer candidates are [trained]. I would have them role-play as members of teams solv- ing various management problems and scenarios. I would have them assemble teams of, say, five people to solve a par- ticular business problem. And I’d rotate the leadership position on the team so everyone could have a chance to be the boss. Then I would grade the whole team—not the individual players—on its performance. The absence of this path in the business school curricula of today is detrimental to one’s aspiring to become a “master” of business.13

Leaving MBA Students Out of the Loop

What the MBA schools do not teach about leadership is disturbing. Even more disturb- ing, however, is what they do teach. Apparently, most MBA candidates in U.S. business schools are left with the impression that they will not even need to exercise leadership until they have reached the peak of the corporate pyramid. The business world itself has long been aware that leader- ship emerges and develops even at the lowest and most obscure levels of the cor- porate pyramid. My own career, like that of many others, contradicts the notion that leadership happens only “at the top.”

I was fortunate enough to receive leader- ship training during the early 1950s, when my superiors in the U.S. Army plucked me out of the ranks for aptitude testing, identi- fied me as having leadership potential, and sent me to Officer Candidate School.

When I left the Army and joined the United States Steel Corporation as a 28- year-old staff assistant, I put my leadership training to work immediately, much as would a second lieutenant in the Army, where leadership is expected from all offi- cers regardless of rank.

Later in my career, acting as a senior executive, I made it a priority to identify leaders at the lower levels of the organiza- tion and to encourage them in developing their leadership abilities on behalf of the company. Most effective CEOs do the same. Leadership is not something senior managers reserve for themselves; if they are worth their salaries, they are identifying, promoting, training, and encouraging lead- ership among their subordinates at all levels of the organization. One of the ways they do this is by watching for those subordi-

20 Part 1: Before You Start in Business

nates who exercise what I call “leadership without portfolio.”

Open any textbook of case studies used in a typical MBA program and examine the cast of decision makers. Almost without exception, those who appear in the cases occupy positions at the highest level of the corporation—the office of the chairman and chief executive officer, the president, and the senior vice presidents. “Here and only here,” the case studies seem to say, “is where the leaders are found. Here and only here is where organizational leadership takes place.” All leadership is depicted as originating at the top and cascading down- ward through the organization. Viewers of the televised management course Taking the Lead are left with this impression when the narrator announces in the first episode:

Occupying the top rungs on the organi- zational ladder are the senior-level managers, the vice presidents, presidents, CEOs, in short, those charged with the responsibility not only of managing, but of leading, of charting the long-range course of the organization as a whole.14

No wonder MBA students get so little exposure to leadership training. The busi- ness schools assume it will be years before their graduates will be required to use it. This is precisely the point Bill Oncken was making in 1984.

Fortunately for the young MBA candi- date interested in developing as a leader, the local bookstore and the public library have a wide selection of self-help books on lead- ership and personal development. Warren Bennis and Burt Nanus’s Leaders: The Strategies for Taking Charge, Phillip Crosby’s Running Things, Stephen R. Covey’s best- selling The Seven Habits of Highly Effective People, and The Leadership Challenge by James M. Kouzes and Barry G. Posner rep- resent just a small sample of recent publications that offer real value to students who want to learn more about leadership and are seeking ways to develop their own leadership potential.

Even these books, however, are not addressed to MBA students; their authors seem to assume that only a senior manager would be interested in the subject of leader- ship, or that only a senior manager—or entrepreneur—would be in a position to benefit from leadership training and use it to improve his or her effectiveness on the job. The business schools appear to be sav- ing these texts for older executives who return to school for advanced studies. Per-

haps they assume that leadership studies and leadership training would only be wast- ed on MBA candidates.

Secret of “Leadership without Portfolio”

Contrary to what the case studies suggest, there is good news for the young MBA recipient heading out into the corporate world. If you have leadership ability, you can find a way to use it at any level of a business organization—even in your first job, even if you have no formal authority, even if you work in an organization that insists on a crisp distinction between the roles of manager and leader. Ronald A. Heifetz, a psychiatrist who directs the Lead- ership Education Project at Harvard University’s John F. Kennedy School of Government, writes:

Rather than define leadership either as a position of authority in a social structure or as a personal set of characteristics, we may find it a great deal more useful to define leadership as an activity. This allows for leadership from multiple posi- tions in a social structure. A president and a clerk can both lead.15

There are those leaders who have the authori- ty and responsibility to command. And then there are others who lead without this portfo- lio of formal authority. When a subordinate exercises leadership without portfolio success- fully, superiors take notice. “If this individual could accomplish this much without authori- ty,” they reason, “just think what he or she could do with a little authority.”

At this point the fledgling leader is awarded a promotion, a new title, and a measure of formal power to command some of the organization’s resources. By dispensing this kind of recognition, the organization signals it is now willing to share some of its authority with a person who has demonstrat- ed an ability to use it constructively and responsibly. Leadership without portfolio has earned its just reward: a portfolio.

How early in a person’s life can leader- ship activity emerge? Warren Bennis, who began studying the phenomenon of leader- ship at MIT in the 1950s and now is Distinguished Professor of Business at the University of Southern California, says his first encounter with leadership occurred in childhood, when he observed a critical dif- ference between his older twin brothers.

“When we were growing up, one of my brothers was the archetypal natural leader, able to talk his teenage peers into doing

things that parents never dreamed of, includ- ing ditching school for long periods of time,” Bennis writes. “My other brother was the exact opposite, an innate follower without power, or even voice, within the group.”16

What really piqued Bennis’s curiosity about that early experience was that his two brothers were identical twins, “alike in almost everything but their ability to lead.”17 His fascination with the difference in their personalities was one of the factors that drove him to make the study of leader- ship his life’s work.

I call this type of leadership leadership without portfolio because when it occurs in an organization, it can spring up at even the earliest stages of a career, with or without the blessing of higher authority, irrespective of title or formal position in the organ- ization, and usually without a formally prescribed job assignment or set of duties.18

The term is roughly analogous to the British expression “minister without portfolio,” defined by the dictionary as “a member of a ministry who is not appointed to any specific department in a government.”19