Leadership in Organizational Change | Part 1 | Leadership
Organizational Purpose
Every organization aims at creating *value *for the outside world to capture. Business, and any organizational endeavor, is a *cooperative *game of value creation and capturing (http://pages.stern.nyu.edu/~hstuart/VBBS.pdf), as Brandenburger and Stuart postulate in their 1996 paper titled "Value Based Business Strategy". Cooperative game theory provides a framework for depicting how value is delivered and appropriated by organizations and their networks of suppliers, partners, buyers, competitors. The concept of *value *is often confused and lacks a proper agreed-upon definition in the business environment. As a matter of fact, the meaning of value can vary based on the context in which it is brought up, as well as individual mental models. To explore the definition of value in an organizational context provided by scientific literature, we need to begin from Michael Porter (1980), inventor of the "5 Forces Model of Industry Analysis", and the "Competitive Positioning framework" of strategic management. According to Porter, value is created by the vertical chain of players as a whole (suppliers, firms, buyers). Each player provides and captures monetary and non-monetary value in the process of carrying out their activities. To understand further how value is divided among the players of the chain, Brandenburger and Stuart developed and put forth the concept of "added value". "This is defined as the value created by all the players in the vertical chain minus the value created by all the players except the one in question." (Brandenburger & Stuart, 1996).
Organizations, at their core, are made, run, composed of people. To create and maximize value added, organizations need appropriate structures and human connections that keep a balanced approach to doing business while remaining aware of how their activity impacts the surrounding environment and people. As James Carse points out in his book "Finite and Infinite Games", organizations can adopt an infinite mindset, in which long-term thinking is at the center of everything the business does, and the way it acts. An infinite mindset corresponds to being aware that there is abundance in the game of business, as opposed to scarcity. According to this line of thought, infinite-minded organizations are interested in cooperation, relationships, and look at the long term effects of their actions, as opposed to being stuck in aggressive competition in the present.
Those who play the *infinite game *place value on the people component of every organization. They are aware that building *trusting teams *and creating a culture where the human being is considered pivotal are crucial aspects in order to *win *over the long term. To create a humanistic environment, these organizations are conscious of the relevance of authentic leadership; leadership which provides a meaningful direction. However, in order for leadership to be meaningful, there is the need of appropriate and effective leaders. The domain of leadership is a widely studied one, and its development has been exponential over the last two decades, when a call for emotionally-intelligent leadership (Daniel Goleman, Emotional Intelligence) has started to become widespread and agreed upon in the organizational and business environment. Although many leadership theories and frameworks have been developed over the decades, there seem to be some common behavioral and psychological patterns which can be identified in great leaders.
Defining Leadership
As W.C.H Prentice asserts in his 1961 article "Understanding Leadership", leadership is "the accomplishment of a goal through the direction of human assistants." And this definition is one of the reasons for which Prentice calls for a democratic approach to leadership, in which the individual and their personal characteristics are taken into account thoroughly. It is only by implementing a style which is based on authentic human relationships that "the accomplishment of a goal through the direction of human assistants" can be achieved. Besides the key relevance which is given to human assistance in Prentice's definition of leadership, there is also a heavy focus on the accomplishment of a goal. This provides us with an additional insight into the role of establishing a clear direction in leadership. The work of Prentice is ahead of its time, and lays the foundations for the more recent developments of leadership from authors such as Daniel Goleman and Abraham Zaleznik.
Donnelly, Gibson and Ivacevich (1992, p. 407) give such a definition of leadership: “leadership is the ability to persuade others to seek defined objectives enthusiastically”. We can notice how the people factor is always present in leadership. Leadership exists only with the consensus of followers. There is no leader without a greater vision that is shared by a group of individuals aiming at the same direction. And the leader is the individual providing the direction to a group or organization. In order to provide a direction to the group, a leader needs, therefore, to communicate clear values, intentions, and a vision. For this reason, leadership has an impact on people's lives, whether directly or indirectly (Bennis, 2007).
These are characteristics that can be developed over time, especially as people experience challenges and difficult events in their lives. It's what Bennis and Thomas call *crucibles, *in their article "Crucibles of Leadership" (2002). Crucibles are severe, intense, often traumatic life tests or trials most of us face during our existence. And in the authors' point of view, it is exactly crucibles that shape leaders. "Everyone is tested by life, but only a few extract strength and wisdom from their most trying experiences. They're the ones we call leaders" (Bennis & Thomas, 2002). For this reason, following this view, leaders possess the unique characteristic of "adaptive capacity": the ability to emerge stronger than before from adversity.
Although the main definition of leadership has not varied significantly over time since its inception, there has been a wide evolution of the concept, approaches, styles, qualities related to leadership. One of the first definitions of leadership can be traced back to The Art of War (500 B.C), the must-read book by Sun Tzu for every military leader in China (Grint, 2011):