What drives the economy drives the workforce, and that means leadership styles change, too
May 3, 2013 4:50 AM
Jim Sulley/Medialink WirePix
Jack Welch, former chairman and CEO of General Electric.
Franklin Delano Roosevelt
By Teresa F. Lindeman Pittsburgh Post-Gazette
Jack Welch's tenure at General Electric increased the value of the company and his hard-charging style drew admirers from across the business world, even if some of his perform-or-get-out practices could seem harsh.
"Twenty years ago, every middle manager in America wanted to be like Jack Welch," said Anthony J. Rucci, a professor of management at Ohio State University's Fisher College of Business.
Now the people in middle management might be enthralled by stories of leadership at businesses like Zappos, which has inspired consultants' reports on its practice of paying customer service recruits to quit if they don't love the job, or Google, which gives workers time to cook up their own innovations and incentives to involve others in their projects.
The qualities demanded of leaders can change depending on a business's product and its competitive situation, but they also shift with generational attitudes and realities. As Yahoo president and CEO Marissa Mayers, who recently decided employees should no longer work from home, can attest, a social media world gives the critics -- and employees -- an open platform to question decisions.
It's not just the technology that changes over time. The workforce does, too.
Structured leadership and close supervision effective in the 1950s and 1960s can be a turn-off for the employees born in the decades since then. "They want you to tell them what they're expected to accomplish and then leave them alone to do it," Mr. Rucci said.
"It's a very challenging time to be a leader," said Katherine J. Klein, a professor of management at the University of Pennsylvania's Wharton School.
In general, Ms. Klein said, there's a sense of disillusionment with leadership. Business executives are seen as culpable in the Great Recession, sports leaders have proven fallible and politicians haven't exactly shown themselves to be effective in working together to solve problems.
So does that call for a different type of leader? Don't worry, somebody is probably researching that question.
Universities and consultants all over the world study the myriad issues around leadership these days. They offer programs designed to help future leaders, and even current ones, understand the latest deeply analyzed theories on what works.
It wasn't always that way, Mr. Rucci said.
Before World War II, he said, leaders tended to be idealized as heros, meaning people might study someone they admired and conclude that person's traits were the key to prowess in leading. For example, Abraham Lincoln was known for his honesty, Mr. Rucci said, "So honesty must be a good characteristic of leaders."
The crucial roles of Britain's Winston Churchill and America's Franklin Delano Roosevelt in helping the Allies prevail in the second World War brought home the critical need for effective leadership and for ways to identify it.
In the 1940s and 1950s, researchers at Ohio State developed the "Leader Behavior Description Questionnaire," a survey that attempted to identify what made leaders good at what they do. The researchers asked participants to rate leaders on things such as whether they did personal favors for group members, were easy to understand, ruled with an iron hand or refused to explain their actions.
The researchers isolated two factors related to leadership effectiveness, Mr. Rucci said. Those were: "consideration," or acting in a friendly, supportive manner; and "initiating structure," or defining roles to accomplish goals.
"It ultimately boils down to balancing the pressure for results along with a consideration for people and the how of getting results," Mr. Rucci said.
The same factors remain key today, he said, but the pendulum seems to have swung on which is considered more important.
The post-war economy was more manufacturing and production driven. "That's all about standardization, that's all about efficiency, that's all about controlling the end product to ensure quality," said Mr. Rucci, who recalls his relatives who worked at steel mills in Youngstown and in Aliquippa complaining about treatment by their bosses.
In that environment, he said, the balance leaned toward the initiating structure side of the equation.
In the past two decades or so, the economic picture has changed. "It has been the organizations that have refused to be painted into a box of standardization," that have been successful, he said, offering examples such as Microsoft, Facebook and even Starbucks.
"The companies that have excelled are the ones who have actively promoted the idea of variability in the form of innovation."
If that is the goal, directive -- or even punitive -- leadership may be less effective, he said. "Fear as a motivator will not create innovative organizations. Autocratic management does not free up creativity."
Yet, leaders still have to lead. Even if they aren't using the "Plan. Organize. Motivate. Control." mantra of old, they have to set direction and herd a few cats (there's no lack of leadership cliches in American culture).
"We still want smart, thoughtful, bold leaders who listen and respond and adapt," Ms. Klein said, "but it's quite a tight rope: don't be too bold, too directional -- don't be too participatory."
In other words, leaders shouldn't be the teacher who lectures all the time but they also should avoid being the one trying to be everyone's friend, instead of creating a calm classroom where students can learn.
If some elements of leadership remain consistent across the decades, there are still variations applicable to particular moments in history.
Charismatic leaders, in the mold of Jack Welch or automotive executive Lee Iacocca, gained currency in the era of Ronald Reagan, Ms. Klein said. During the 1980s, the U.S. economy was taking a beating from Japanese companies and people were looking for help in turning around American businesses.
President Reagan was seen as a great communicator and charismatic leader who helped America get back on its feet after the various crises of the 1970s that ranged from oil to hostage to inflation to a presidential resignation. Reagan's perceived qualities seemed like they would work in business, too, Ms. Klein said. People decided, "Oh, wow, this is the answer," she said.
Another significant shift seemed to come after 9/11, which management experts believe influenced a generation of young people who had seen their parents dumped by longtime employers and frustrated by the need to spend long hours at work. The shocking attack on the twin towers of the World Trade Center showed that life is sweet and sometimes too short.
The generation of adults between 18 and 32 years old tend to want to work for an organization that serves a greater purpose in the world than just economic, Mr. Rucci said. That might mean starting their own companies or just finding meaningful work for a place that cares about more than the bottom line and punching a time clock.
Certainly businesses where leadership showed major ethical lapses have regularly proven less durable, Mr. Rucci said, offering examples such as Enron, WorldCom and Lehman Brothers. Maybe Honest Abe wasn't such a bad model.
A tolerance for casual attire and flexible hours also seems to fit current attitudes about focusing more on the work than the trappings. People who appreciate that kind of thing might respond well to this comment on a Google site describing the company's culture: "At Google, we firmly believe that you can be serious without a suit, and we don't take ourselves too seriously to begin with."
Still, it's not really the clothes or the hours or the office that define an effective leader. In the right situation, any of those can be tools in creating a productive culture.
Mr. Rucci offered this description of what really works: "Leaders create a clear vision for people and they involve people in that vision."