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13 - Leadership as Envisioning and Interacting

The nature of leadership has changed from an individual who is able to persuade others of the value of his idea for accomplishing a goal to one who is able to encourage others to contribute their own ideas to the effort. But leadership does not end with merely talking about what ought to be done, but to coordinate the effort of actually getting it done. The authors refer to this as a "shift" between envisioning and interacting.

Case Study: Billy Beane

Billy Beane was a promising young baseball player who failed as a player in the major leagues, but succeeded by unconventional means to become a highly successful general manager.

He had the humility to take an objective look at himself and other players, and as a result discovered that the qualities that were most valued, and most highly sought by talent scouts in the major leagues, did not agree with the qualities that made a player successful: a player's running speed and strength did not correlate to their ability to score runs, and the battering-average statistic was rigged to favor players who swung for the fences every time. "What looked good on the field did not win games."

This recognition enabled him to assemble a team of players that nobody else wanted, "fat guys that don't make outs" but who reliably make it to first base, batting singles or getting walked, and who were not at the peak of their career but could be coached to improve. He used statisticians to analyze the performance of players over longer periods to time and pointedly avoided recruiting players by watching games, as he didn't want the drama and emotion of a single performance (when the player knew he was being watched by scouts) to distract him from the more meaningful metrics of their long-term performance.

The team did not rocket to stardom under his leaderships - they made the playoffs four years running but never took the pennant. But in terms of financial measures, the team was an amazing success, paying one-sixth as much per win.

Case Study: Arsene Wenger

Another case study involves Arsene Wenger, a manager of a British soccer team - specifically, one of the first continental managers to come into the English league, bringing a different approach to team management.

Leadership in British soccer tended to focus on one star player (the field capital) with a great deal of drama. The captain inspires his team through his personal passion and energy, but very often fails to build cohesion and coordination as a unit and, as a result, failing to win.

As with Beane, Wenger did not have a successful career as a player, and had never been in the role of a charismatic figure. As such, he doubted the value of this approach, remarking that he does not believe in leadership, but instead feels that a team needs to "five or six" leaders who can take initiative from various positions on the field. He had refused the initial overture to lead the team, holding out until he was assured the team's sponsors and supporters were willing to support his approach to leadership.

Some of the qualities that were noted in Wenger, and shared by Alex Ferguson (another stellar soccer manager in Britain):

• Recognizing the importance of scouting to help keep new talent flowing through their clubs
• The confidence to promote younger players
• A long and deep history of the game
• A clear sense of team strategy and situational tactics, teaching players to understand what is expected of them and giving them latitude within clear limits
• Broad involvement in their teams, not only on the field but also in the business nad planning meetings

Case Study: Bill Campbell

Bill Campbell, a former university coach, is credited with quietly "shaping the future of Silicon Valley." Campbell keeps a low profile, working behind the scenes, and does not have a technical background, but has been influential with firms such as Google, Apple, YouTube, and Netscape. In particular, he is credited with helping them to make the transition from the garage to the office building.

There are some basic principles by which Cambpell does this:

1. Ensure that engineering remains at the heart of a technology firm, and engineers "have the freedom to create, free of marketing dictates."
2. Marketing must be the link to the outside world, that demonstrates the value that the engineers have created
3. The CEO should maintain a careful balance between knowing what is going on inside their firm and interacting with significant stakeholders - to neglect either is to fail
4. Organizations should be as flat as possible to ensure efficient and unadulterated communication between the top executives and the middle managers. A legion of vice presidents and C-level offers smothers a firm
5. The CEO must have the humility to accept criticism and encourage frank and open communication
6. Leadership must keep its gaze fixed on the long-term future of the firm, and avoid compromising it for short-term financial perfoance

Four key measures for the health of an organization are:

• On-the-job performance (meeting quantitative goals)
• Relationships among peers
• Management that supports those who create value
• Encouraging continuous innovation

Case Study: Saatchi & Saatchi

Some background is given on Saatchi & Saatchi, the biggest and best-known advertising agency in the world in 1980, which crumbled to a skeleton staff by 1995 and had to rent out offices in their building to make income. A critical issue was the stuffy and formal way in which the firm managed its employees and clients, and smaller creative shops that were more nibble and service-oriented had nibbled away its clientele.

When Richard Huntington was appointed as director of strategy, he recognized there was much to be done: not only had advertising switched from "creative genius" to a more analytical approach to consumer behavior, but the style of interaction with clients had also changed toward less formality and greater collaboration. The internal culture and stakeholder relationship philosophy of the organization needed a serious overhaul.

• He broke down the symbolic distance between management and staff, walking around the office and interacting casually with people (unlike the former manager, who insisted they stand when he entered a room, and spoke to people through formal channels)
• He ensured that criticism was constructive and focused on speaking about the work, not publicly deriding the person who produced it - he also recognized that "creativity isn't something you can order up like a ham sandwich"
• He also ensure that not all criticism was negative - recognizing what is right is as valuable, if not more valuable, for developing the judgment of creative workers
• He personally exuded enthusiasm, both in general in specific, and often won accounts "by seeming to be more enthusiastic about their business than the clients themselves."
• He makes a distinction between managers and leaders: managers coordinate and provide functional support, whereas leaders guide and inspire
• He continued to do hands-on work on a few major accounts. Especially when managing creative people, they show greater respect for a leader who is also a competent practitioner

While Huntington only recently took on the task, there are already signs that the agency's reinvention seems to be working: there have been intimations in the industry press that the agency "is back," the firm has been lauded for successful campaigns, and employee morale has significantly improved.

From Strategic Leadership to Strategic Organization

Leading from the middle is a practice that is undertaken to achieve specific results, and when successful it has the potential to spread within the organization, spawning innovation and entrepreneurship throughout an organization. However, it must be conceded that this dows not always work - "many creative strategies are not sustainable or renewable."

The authors turn again to Thomas Edison, who was lauded as a great innovator and entrepreneur, but who was an individual achiever rather than a leader of others, and "is regarded by many as the least effective GM in General Electric's history."