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Right leadership mix can transform organizations
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What CEO or board member doesn鈥檛 dream of transforming their company?
Of course the nuts and bolts of changing an organization from top to bottom are more than daunting. But it makes a huge difference whether the rank and file executives in an organization are inspired, resistant or are out right against change.
A leader鈥檚 job is to make the people in an organization realize that change is for the greater good and charisma can go a long way to making that happen. But it isn鈥檛 enough.
There are a number of facets that combine to make leadership powerful enough to affect change inside a given organization.
Inspiring employees to perform beyond expectations is of the utmost importance, and this is called transformational leadership.
But we also know that in organizations tough decisions need to be made. Therefore leaders must also use instrumental leadership, which includes things like the ability to properly allocate resources and budget as well as make HR decisions consistent with an organization鈥檚 vision for the future.
Early management thinking focused on the carrot and stick approach of using incentives to get results.
Researchers from the fields of sociology and political science introduced the idea of transformational leadership, or the idea that leaders and followers need to be aligned on motivation and values to get the best results. Leadership researchers built upon the earlier work and broke transformational leadership down into components called the four I鈥檚.
Idealized Influence. The first I is what we would call charisma, and thankfully, contrary to what some might believe, research has shown that this can be learned.
Inspirational motivation. This area is where people draw meaning and value from their work.
Intellectual stimulation. The third I is the source of creativity in organizations.
Individualized consideration. This entails paying attention to the individual needs of co-workers.
These are the competencies and skills which make followers feel that their leaders really care about them, that their needs are taken into consideration and that they feel that in some way they help their company contribute to society.
Today meaning and purpose as part of one鈥檚 work are more important than ever, both for human resources and employee retention, but also for companies to earn a tacit license to operate in societies.
Transformational leadership has been a major contribution to leaders everywhere but it alone cannot transform an organization. It lacks one important part: instrumental leadership.
Leaders must simultaneously form an emotional connection with their employees, stimulate their creativity and relate their strategic vision to organizational decisions which will help them achieve their objectives. So leaders also have to make tough practical decisions that align with a business鈥檚 core interests and this doesn鈥檛 necessarily involve inspiration or charisma.
Robert Hooijberg is professor of Organizational Behavior at IMD. Nancy Lane is a Research Associate at IMD.
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