Charismatic Leadership

In my quest of different types of leadership I came across BusinessDictionary.com’s definition of ‘charismatic leader’:

“The guidance provided to an organization by one or more individuals seen as heroic or inspiring and who have therefore been granted the organizational power to make dramatic changes and extract extraordinary performance levels from its staff. For example, a business manager imbued with charismatic leadership could be enlisted to orchestrate a turnaround or launch a new product line.”

Well, my first dilemma within this definition is how one can mix up two different roles, namely business management and leadership (see: Leader vs. manager). Although both are needed in an organization they are not interchangeable. Next, in post “Leadership and Charisma” I wrote that  it is not about the definition of a bad/good leader, it is about how he or she should behave and what she or he should aim for to be the successful one. Therefore, the question is not about charisma but rather about what kind of personality has a good leader?

Resistance to change

To change . . . Why bother?

Heraclitus said: “Change is the only constant in life.” Accordingly, people like to change things or other people but are usually not so willing to change themselves.

Why do people resist to the change? Is it because they mistake inertia or no-change for safety and predictability? Logically, the fear of the unknown frightens us. Leaving a comfort zone and facing uncertainty creates a lot of anxiety thusly paralyzing any activity for a change even if the current situation or process is not functioning well. It is much more difficult to accept the change when we lack confidence. Mostly, we all tend to postpone the difficult or uncomfortable things that need to be changed. Postponing them until the very last minute (known as a “student syndrome”), until something generates an impulse of urgency. Why we believe that there is always enough time to think about a change tomorrow I have already described in Cause and consequence / Urgent and important.

Education, tools and leadership

There are numerous programs, schools and methodologies helping to understand and learn how to manage business and people:  different master of business administration (MBA) schools with their own programs and almost abundant methodologies and tools they teach their students.  Unfortunately no one ever learns whatsoever about e.g.: ecology at an MBA or in their programs. Unethical business and environmental practices of some MBA students are uncovered consistently.

Responsibility across the broadest spectrum of society is vitally important to the future of the global economy. Having said that the key question in today's business environment still remains: do all those programs, methodologies and tools really come out the way we need them to?

The biggest issue to introduce all of the different programs every couple of years or so is mostly based on the matter that companies are entirely dismissing experience if you do not have a degree. This is short sighted and even negligent but attractive  to those that want higher salary, better career opportunities or better consolidated business network. The second matter is that different methodologies and tools get sold to C-level as a silver bullet that is going to fix all of their issues, problems and will bring out the solutions.

But to probe even deeper - it is not the methodologies or the tools that bring solutions or break problems. They are good and they work when they are just frameworks to organize efforts. The important and mostly overlooked aspect of application of methodologies and tools is: they need to be based on the business needs, culture of organization and should be properly trimmed to benefit from using them.

Leadership dilemma

What made Apple so successful and a very good place to work? ”The lack” of bureaucracy within projects, engineer-focused corporate culture, emphasis on passionate and loyal employees, the huge company has maintained the corporate culture from the start-up days, said Bianca Males in ‘8 Management Lessons I Learned Working at Apple.’ Is that all?

John Harvey-Jones claims: “If a company is successful, it is due to the effort of everyone, but if it fails, it is because of the failure of the board. If the board fails, it is the responsibility of the chairman, notwithstanding the collective responsibility of everyone.” This is a better, but still not an all-encompassing answer.

Least of effort in leadership

The Mandarin Chinese word wú wéi could be described: ‘by inaction nothing is left undone.’ It may well be also translated as ‘non-acting makes all action possible.’ Lǎo Zǐ, a philosopher of ancient China and the author of the Dào Dé Jīng, in stanza 38 ‘About Dé of the Dào’ described it as:
High virtue by obliging not acquires moral force.

Low virtue obliges always and thus lacks moral force.

High virtue neither strives nor acts for its own ends.

Low virtue does not strive but acts for its own ends.

Dào is usually translated as way, road, channel, path, doctrine, or line and by Chinese opinion cannot be obtained as virtue cannot be approached. The legendary Chinese sovereign and cultural hero Yellow Emperor (reigned from 2.696–2.598 BE) said that once Dào is lost, virtue arises; once virtue is lost, humaneness arises; once humaneness is lost, righteousness arises; once righteousness is lost, formalism arises. But formalism is the flowery representation of Dào and the beginning of disorder.

Management practices and tools that just “don’t work”

From the management’s perspective managers perform tasks, manage people and do business. Accordingly, there are numerous methodologies and tools helping to manage business and people:

(1) In Japan at Toyota Motor Company, Taichii Ohno and Shigeo Shingo incorporated Ford’s type of production and some other techniques into an approach named the Toyota Production System or Just In Time Production (JIT). The inventory strategy strives to improve a business return on investment by simultaneously reducing in-process inventory and associated costs.
(2) The core idea of a Lean organization is to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with less resource.

(3) Iwao Kobayashi’s 20 keys is a longer list that can be used in manufacturing audits. It reads very much like a “who’s who” of manufacturing innovations and hence makes a very useful checklist.

(4) Six Sigma (6б) is a business management strategy originally developed by Motorola in 1981. It was initially aimed at quantifying the defects that occurred during manufacturing process first and then at reducing those defects to a very small level.

(5) Business Process Reengineering (BPR) is a top-down approach in which organizations become more efficient and modernized. Reengineering is a fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, speed and service.

(6) The Self Directed Work Team (SDWT) is perhaps the most powerful organizational concept that motivates, coordinates, solves problems and also makes better decision than an individual could. But this performance comes at a price: decisions are slow, work teams require extensive training and months to mature.

(7) Total Quality Management (TQM) is a set of management practices throughout the organization geared to continuously improve the business processes in order to ensure that the organization consistently meets or exceeds in satisfying a customer or a supplier.

(8) … others.

Mission and vision

Is the mission in a company a driving force for actions? Does a mission provide overall goal, a path, and is it a guide for decision-making?

And a vision? Is it an aspiration for a company? Does it focus on the potential essentials in the company's mid-term or long-term future, or what company intends to be?

Most of mission and vision statements are generic, therefore awfully deficient. A result of long-drawn meetings where in the end everyone is so tired and approves any nonsense just to bring it to the conclusion. They are full of phrases like ‘market-leader’, ‘best-in-region’,  ‘most successful’, ‘best customer/owner value’, ‘leading in this and that'. Fluffy words that mean nothing. They just repulse a reader and make skip the text!

Organizational change

Organizational change is, or should be, just one of the processes within the strategy’s frame and company vision. Why then companies have to “struggle” when introducing changes? Why do they need to change? Ever changing environment, markets, products are just pushing the limits of a current stability of the companies and provoke never ending chain of changes.

In his blog Bernard Marr says “a good mission statement articulates the purpose of the company, basically why it exists, what it does and for whom. It should serve as an ongoing guide that spells out what the company is all about. The mission should focus on the here and now.” And where do we see a necessity for a change that a company should follow? In “a vision statement where the goals and aspirations for the future are outlined. It creates a mental picture of a specific medium-term target and should serve as a source of inspiration.”

But are these definitions enough to smoothly drive a change? Company’s organizational culture, as described in the previous blog: “Organizational culture and martial arts,” is the sum of values and rituals defined by rules. It is also a part of a “bigger picture” that surrounds an organization and each of us, as I explained in my TedxTalk. And these substances present difficulties or even block a change. Employees of a company, as others, are perceiving stability as security therefore opposing changes. Consequently, a permanent conflict prevents a peaceful process of change.

Leadership catch: Adjustment and listening

Imagine walking through the woods. You carefully move and step slowly on the uneven ground where even the exposed tree roots are all covered by leaves. We adapt to environment. Although trees might seem static and unmovable they are still flexible and adaptive. They adjust to the surrounding environment and therefore become even more stable. They do not consume extra energy to rise straight up. It is natural for them to adapt to the floor declination when they grow.

We all have to adjust to our environment, or in martial arts to opponent, and to the mistakes you make during the fight. You can do this only by being flexible. In everyday life there is an abundance of events and issues that require our adaptation. But are we able to adapt quickly? How do we know what to do? When someone trips and is just about to fall, his brain starts to function at high speed. When we are very young or very drunk, we just let it go and fall down. Kids roll with it or just fall loosely, and because of this reaction, they are not severely injured most of the time. What about the rest of us? Our first reaction is violent; we start to gesticulate wildly with our hands. We start to contradict the obvious that happens all the same. Most of the time, instead of bending our knees, we stop our fall with our arms and quite a lot of times break our wrists. We forget how to fall and do not know how to adjust to this event that has happened to us many times before in our lives. We react in panic.

Steering and leadership

In live situations, and similarly in martial arts, we learn by repetition and mileage, repeating the task again and again. Try to recall how difficult the first attempt to ride a bicycle was. 

More than a decade ago I was introduced to Tai Chi. How difficult it was to understand the concepts that are so far away from our (Western) ones. On top of it my body coordination ability was proving difficult, remembering the sequences was even harder. Grasping the idea took some time, and so on. But, just like the process of learning to drive a car, where at the beginning simultaneously completing the tasks seems so difficult, patience is the key. The improvement is gradual and within time the steps are deeply ingrained in you. With no effort you drive a car, ride a bike or perform Tai Chi with calm and relaxed mind.

The beginner of one of five major styles of Tai Chi, the Yang style, was Yang Lu Chan (end of the 18th century - 1872). In his youth he had learned another Tai Chi style still in use today from the Chen family. At those times, the knowledge of the art was kept in the families not to be revealed to others and carefully transferred only within family. Yang was an outside apprentice, for which he was treated unfairly. But, being persistent he stayed and persevered in his practice. A story tells that one night, he was awakened by the sounds of hen and ha in the distance. He got up and traced the sound to an ancient house. Peeking through the broken wall, he saw his master Chen teaching the techniques of grasp, control, and emitting jīng to his sons in coordination with the sounds hen and ha. This knowledge gave young Yang a new perspective to control and to steer the opponent with great success.

Corporate governance in multicultural organization

Corporate governance refers to the issues associated with the way corporations are structured, managed and operated. The use of the term “corporate governance”, the evolution of the concept and what it entails has started in the early 1980’s.

 Among the first was the Cadbury Committee. They defined the purpose of corporate governance in 1992 namely, as a set of processes, customs and policies that frame the business of the company and help manage the subsidiaries. This is then operationalized in a uniform method through administered or controlled directives.

The most quoted and referred to document in this field is the OECD principles corporate governance. OECD defines it as a set of relationships between a company’s management, its board, its shareholders, and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set. The means of attaining those objectives and performance monitoring are determined. So, the main recommended principles are stated as rights and equitable treatment of shareholders, interests of other stakeholders, role and responsibilities of the board, integrity and ethical behavior, disclosure and transparency.

Knowledge - the main driving factor of productiveness

In modern economy, an insight, based on explicit and tacit knowledge and the wisdom are the main driving factors for value-added creation and sustainable growth. With appropriate understanding and the allocation of resources Violeta Bulc (innovator, entrepreneur and founder of Vibacom Ltd.) describes how the creation of added value in a company can be defined as a progression of different evolutionary stages in the business environment.

In the book “Rhythms of business evolution, systems, tools and experience for brainstorming” Bulc bases her ideas on four phases. The first one begins with the most fundamental “working environment”. At this stage companies are mostly focused on production and activities. Machines (equipment) are very important; the labor force can be relatively easily replaced, so they should be obedient and diligent in maximizing the output at the lowest costs possible.

The second phase is a “learning environment”. The productivity becomes a factor of input. New resources and knowledge start to play a major role as quality is introduced. Knowledgeable workers become of core importance. Those who have knowledge - employees, leaders, managers - create the conditions for further growth and differentiation on the market.

Internet games and Leadership

Most people argue that games are just for fun and to kill time. How would you consider gaming experience in person’s curriculum vitae asking for a leadership position vacancy? An asset?

Nick Yee surveyed MMORPG players for the first time at the end of the previous millennium. Since then, he has surveyed over 35.000 MMORPG players of the most popular USA MMORPG games. Near 280 respondents wrote about their guild leadership experience. Yee’s findings about leadership can be described in the same terms as in the real world.

First, most novice guild leaders fall into the trap of trying to be everyone’s friend and making sure that everyone in the guild is happy. The most common lesson learned was that it’s simply impossible to please everyone. Second, in any situation where people have different needs and motivations, conflicts will arise. These conflicts tend to be particularly stressful because of the existing friendships and ties within the guild. Inevitably, the guild leader will be asked to become the mediator. Third, many respondents noted that laying down a firm hand was important and that sometimes you have to be tough and say no. Because many guilds start off as small, casual, and friendly guilds, guild leaders often feel conflicted when it comes to disciplining guild members. The next finding was the difficulty in picking the right people for the guild, as well as the difficulty in kicking people out of the guild. In the game and in the real life, the duality of being a leader is well perceived. It is not easy to be a friend and a leader at the same time. The guild leaders highlighted the importance of having ground rules, making people aware of them and being consistent with those rules, which is equal to real-life leadership.

Organizational culture and martial arts

Organizations are made for employees to work there and not opposite: employee should fit the organization. As the organization grows larger and more complex, management at the top lead and decide less by firsthand experience, but rather more and more on heavily processed data. From their standpoint they rarely see business flowing in the same way as do people down in production or on the sales floor. To understand huge amounts of data and information that is streaming toward them, after a throughout long training, they finally achieve to see the reality through the distorting glasses they've had to put on. Decisions they make and the responsibility they shoulder relies on tangible data. But these glasses somehow filter out emotions, feelings, sentiments, moods, and almost all the nuances of human situations that are part of everyday organizational culture consequently filtering or better losing all the tacit knowledge that drives business processes.

Organizational culture is the sum of values and rituals defined by rules. It is also a part of a “bigger picture” that surrounds an organization. This poses some problems if organization shock-wave through different cultures.

Four decades ago IBM tried to unify corporate culture in its subsidiaries all over the world. Geert Hofstede carried out a world-wide survey on employee values. The result was very informative and demonstrative. There were other researchers of the same topic too. A common conclusion of all those studies is that “we are definitely different”.

Leadership and stability

Old Chinese philosopher Zhuangzi quoted Confucius: ‘Men do not use running water as a mirror; they only use the still water.’ Only things that are still in themselves can still other things.”

Why the power of stability is so important? The ground on which we stand can hold up tall buildings, high trees, and us as well. Gravity pulls us to the center of our planet. The ground pushes back with precisely the same force, effortlessly in the opposite direction of gravity, and is therefore called the ground reaction force. No wonder grounding is considered so important in martial arts. It resists power and accepts energies. A stability lies within what one knows and how one lives his live each day.

Stability is not equal to rigidity. It is fundamental to all fighting techniques. The ability to control your movements, to develop, and to receive power originates in stability. Losing stability means losing control. Without control you cannot win.  A good fighter knows that during the battle, the sun should be in the eyes of your opponent and not facing yours. Secondly, stability is being able to float safely on each wave of change. Lower a fighter’s position is and the lowest his center of gravity is, the better stability he has. But, while increasing stability lowering a center of gravity lessens mobility. There are always trade-offs but you should balance them into win-win situation.

Control and Reward

“People work predominantly for a reward”. Many MBA students hear and then use in order to control workers’ performance.

Motivation is an enigmatic thing. In different types of organizations managers all around the world struggle to motivate employees to get the best out of them.  And this is a crucial activity on all levels of an organization.

Being a boss does not necessarily mean being a good leader or motivator. There are countless examples reporting intolerable task masters, or ultimate micro-manager, or even horrid manager thus creating a horrible work environment... and the list goes on and on. This kind of a boss is definitely not favored by employees and no motivation comes from him/her. Instead, workers are deeply demotivated by injustices, emptiness of demands, inconsistencies, lack of transparency, self-importance, arrogance, superiority, miss-communication, or even management incompetence. They just try to survive. Still, some of these bosses climb the current Forbes 400 list.

Leadership and “happy” organization

Have you ever wondered what the ultimate goal of an organization is?

Today’s management will conclusively respond that organization strives to achieve only one ultimate goal: to become a profit oriented “machine”. That is why the key device of modern management is in lowering costs: pushing on suppliers’ side, on employees, on product development and production, to name just some. But is this “ceteris paribus” solution, focusing only on one parameter and all other things being equal or held constant, sustainable in long term? Or it spirally aims down and not up? Cost reduction – instead of cost optimizing in an economic system causes the only possible outcome – less money in circulation. The customers are also reducing and optimizing their costs according to their income.

How often have we heard that people are the biggest asset of a company? They, on the other hand, are costs. If they work, they produce cost, if they attain a training program it is again cost, if they visit a customer ... costs. How differently people are treated from tools that for us represent the investment. But the smallest football club in the league knows that buying a player is not a cost – it is an asset, an investment. And they treat him accordingly. Not so in many modern companies. By, among other things, ignoring this, leads us to risky situations far away from the business objectives. There is a Gallup-poll of a 1.5 million sampling, and the result is: 30% of employees are happy with their managers, 20% are not, and 50% have disengaged themselves in having any feelings at all.

To trust the Capital?

You will all remember the oil spill across the Gulf of Mexico back in April 2010?

The oil spills are a classical ‘low probability -- high-impact events’ as the one in Santa Barbara, California, in 1969, when more than eleven million gallons were dumped into coastal waters. From there on, we’ve seen more than our share of these kinds of accidents.

If there are lessons to be learned from those catastrophes, among the first ones are that “pre-disaster assumptions tend to be dramatically off base” and that “the worst-case scenarios were downplayed or ignored”.

We could argue whether this attitude is driving us against all the basic principles of Nature. Uncontrollably destroying the natural environment and exploitation of resources beyond recovery are just some of the profit-oriented results. Is such a conduct responsible behaviour to future generations?

Virtue – Morality – Ethics and leadership

The three: virtue, morality and ethics are not new philosophical terms. To Aristotle the good for human beings must essentially involve the entire proper function of human life as a whole. And this must be an activity of the soul so that expresses genuine virtue or excellence.

Virtue, in short, is a desire for honourable things. Aristotle defined the virtue as habits of acting or dispositions to act in certain ways. In China the term Dé is probably the closest modern English equivalent that means ‘virtue’ in the sense of ‘personal character,’ ‘inner strength,’ ‘virtuosity,’ or ‘integrity.’ Chinese character Dé, written as 德, is composed of the radical彳followed by the number ‘fourteen’ or shí sì (十四) over ‘one’ or yī (一) ‘heart / mind’ or xīn (心). The simple meaning is that one has to have a big heart for fourteen people.

The Economy and a ‘cultural noise in the background of our minds’

The word economy can be traced back to the Greek word oikonomos meaning ‘one who manages a household.’ The first recorded todays’ meaning of  economy was traced in the work, although could not be proven but was very likely  composed in the year of  1440, referring to ‘the management of economic affairs,’ in this case, of a monastery.

Very few would argue that a modern economy is customarily said to have begun with Adam Smith (1723–1790). Smith characterizes economy as three orders in society: those who live by the rent, by their labor, and by the profits. Therefore we could say that we have been caught under the Smith’s ‘invisible hand’, the economic paradigm, more than 250 hundred years ago. And it was modeled upon the prevailing ‘cultural background noise’ of that age. It was also very much ‘trapped’ by religion.

Joseph Schumpeter described economy also as three-folded namely, monetary, interests, and value theory within a natural-law perspective. And those two economists were not the only ones thinking it this way. It really looks like the economy is based on three main concepts. One does not need be an expert to deduct: a (free) market, which can by definition is something imaginary as a Holy Ghost; a (private) property, which equals to omnipotence - the God; and the third is labor, which can be linked to a sacrifice - Jesus Christ.