© 2010 David Burkus. All Rights Reserved. No part of this book may be reproduced, stored in retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission. This ebook had a limited print run under ISBN 978-0-578-06596-0

The Portable Guide to Leading Organizations

a brief introduction to theory

David Burkus

LDRLB

PROLOGUE

airport bookstores

are crowded with business books. Each volume in this copious genre seems to promote a “lack.” They’ll begin with phrases like “The most pressing issue in organizations is that leaders lack integrity…or empathy…or strategy…or even humor.” These books continue by laying out the author’s simple framework for developing the perfect leader. On and on the dialogue goes until we reach the point of confusion, where the 21 Unassailable Edicts of Leadership are different than the Seven Routines of Really Efficient Leaders. It would be a poor move to add to this confusion. With this in mind, the “lack” in this book is not intended to be the most pressing issue in organizations, just the easiest to fix. Leaders lack an understanding of organizational theory. These airport leadership books provide decent advice that is easily digestible. And because it is easily digestible, leaders continue to gorge themselves on it until there is very little room left for real, solid theory. Most see theory as complex and hard to digest. When leaders think about leadership or management theory, they think back to the 400+ page textbook they had to buy in business school. “Seems like quite an undertaking,” leaders think. So they cheerfully hand their money to the cashier and board the plane with the latest, pocket-sized “leadership” book. Leaders lack an understanding of organizational theory because it isn’t presented in pocket-sized form. But organizational theory isn’t some kind of rocket surgery (a fictional discipline exponentially harder than rocket science). Attaining a true understanding of theory isn’t difficult, if it’s presented right. This book presents the major organizational theories. The intent is to present them in the same easily digestible, pocket-sized form as the airport bestsellers.

why theory?

During WWII, Allied bomber losses were high, so high that the British Air Ministry undertook a rigorous analysis in hopes of finding a solution. Their engineers set out to eyeball every bomber they could, gathering data on each bullet hole. After analyzing the results, engineers decided to reinforce the areas that had the highest concentrations of holes with armor plating. It didn’t work. Perplexed, the engineers assumed that the extra plating had made the planes too heavy, and that the difficulty in handling the planes was offsetting the protection of the armor plating. Enter Abraham Wald. Wald, a mathematician, suggested that they simply put extra armor plating where the bullet holes weren’t. The idea was simple: if the planes are returning with bullet holes, obviously those areas can be struck without causing the planes to crash. The planes that weren’t returning, Wald theorized, are the ones that are getting hit in different areas. The engineers’ error was so significant, statisticians decided to name it: survivorship bias (the tendency to include only successes in statistical analysis). Any time you only examine just the successes, you will skew the results. If we return to the airport bookstore in our minds, we see the shelves littered with survivorship bias. We love reading about successes. That’s why books by celebrity CEOs and leadership gurus are among the best sellers of any list. We’d much rather read about the brilliant company leader who started working out of his garage and ended up dominating the industry. However, when this is all we consume about leadership, we succumb to survivorship bias. While a celebrity CEO may reveal the secrets he used to climb to the top, how are we to know they work in every situation? This is where theory comes in. Organizational theories are constructed and tested by examining not just the successes but also the failures. Good and bad leaders, successful and failing change efforts, all get included in the analysis and the resulting theories spare us from our survivorship bias. If we want to grow into outstanding leaders, we must know how and when to utilize the knowledge provided by the existing body of leadership research. Good leaders focus on where the bullet holes are; great leaders consider where they aren’t.

a word on theory

Two actually: useful lies. All theories are useful lies. Theories are attempts to simplify what is happening in a set of observations. They are attempts to describe reality that typically fall short (otherwise they wouldn’t be so simple). Consider the opposing theories of the earth’s shape: flat or round. At first, mankind thought the earth of flat. Then, at a highly debatable point in time, it was decided that the world was a sphere. Shipbuilders didn’t need to make any adjustments in designing boats with this new information, so the old theory worked. Ship captains, however, needed to adjust and use a sohere-earth theory if they were going to properly navigate the globe. Today, both theories are still being used, even though both are incorrect (the earth is actually slightly pear-shaped). All theories have elements of both truth and uncertainty. What makes a certain leadership theory more useful than others is the same as what makes a certain earth-shape theory more useful than others: situation. The theory that will be most useful is the theory that works best with the situation. This is why leaders and aspiring leaders both need to become students of organizational theories: in order to know which one the situation calls for. Study theory. Learn models of organizations. Learn them all. Otherwise, you may find yourself without a clue regarding what the situation calls for.

LEADERSHIP

trait theory

The search for the characteristics or traits of leaders has existed for centuries. History’s greatest philosophical writings from Plato’s Republic to Plutarch’s Lives have explored the question of “What qualities distinguish an individual as a leader?” Underlying this search was the early recognition of the importance of leadership and the assumption that leadership is rooted in the characteristics that certain individuals possess. So it is natural that the first systematic attempt to study leadership researched the traits of leaders. These Trait Theories were also dubbed “Great Man” theories since early research focused on the innate qualities of historical leaders such as Lincoln, Napoleon and Ghandi. Every trait researcher ultimately had the same aim, do develop a definitive list of the traits of leaders. However, each researcher inevitably arrived at a different list. There are at least five major trait theories, each listing different traits necessary to leadership. Some of the traits that commonly appear on this list are: Intelligence: general intellectual ability Self-Confidence: certainty of one’s skills and competencies Determination: desire to achieve a certain end Integrity: honesty and trustworthiness Sociability: ability to create pleasant interactions with others Trait theory argues that effective leadership isn’t contingent on the situation or the followers, but rather the level to which leaders have certain characteristics. Not surprisingly trait theory has given birth to a host of trait assessments and selection criteria used by organizations to identify those who demonstrate the potential to become leaders. The trait approach is not only supported by our intuitive visualization of what make a leader, it is also supported by a century of research and analysis. Using an inventory of traits, aspiring leaders can objectively assess their capability to lead. However, trait theory has also been criticized for its relative uselessness in developing leaders. Recent research also suggests that followers may need different behaviors from leaders at different times. To both of these criticisms, trait theorists would respond: you either have it or you don’t.

skills theory

The Skills Theories grew from the obvious flaw in the trait approach: traits are relatively fixed. This meant that trait theory was not particularly useful for developing new leaders who lack those traits. Skills theorists sought to discover the skills and abilities that made leaders effective. Similar to trait theory, skills theories are leader-centric, focused on what characteristics about leaders make them effective. The two primary theories to develop from a skills approach were Katz’s three-skill approach and Mumford’s skills model of leadership. The three-skill approach argued that effective leadership required three skills: technical, human and conceptual skills. Technical skill refers to proficiency in a specific activity or type of work. Human skill refers to being able to work with people and conceptual skill refers to the ability to work with broad concepts and ideas. The three-skill approach asserted that, while all skills were important for leaders, their level of importance varies depending on the organizational level of leaders. As leaders move through the levels of the organization (from lower to upper), skill importance moves from technical to human to conceptual. More complex than the three-skill approach, the skills model of leadership outlined five components of effective leadership: competencies, individual attributes, leadership outcomes, career experiences and environmental influences. Effective leadership is dependent on how leader competencies are affected by the leader’s attributes, experiences and the environment. Perhaps the most useful strength of skill theory is that it places the issue of effective leadership performance on learned (and learnable) skills rather than on traits. In this way, leadership is available to everyone. However, while it is not a trait approach outright, certain innate abilities (motivation and cognitive ability, for example) are still included in the model. Skills theories are also weak in their predictive ability, failing to explain how a person’s competencies lead to effective leadership. Finally, the majority of data used to construct the skills model was taken from the military, meaning its applicability to general organizations is questionable.

style theory

Style Theory differs drastically from trait or skill theories. Instead of focusing on who leaders are, style theories consider what leaders do. At the core of all style theories is the idea that leaders engage in two distinct types of behavior: task behaviors and relationship behaviors. How leaders combine these two behaviors determines their leadership effectiveness. Style theory refers to three main theories or lines of research: the Ohio State University studies, the Michigan University studies and the Blake and Mouton Managerial Grid. Both the Ohio State and Michigan studies sought to identify the best combination of the leadership behaviors (although each used differing terms). Their research lead to a myriad of research attempting to define leadership behaviors that worked in every situation. However, the results of this research are inconclusive, suggesting that there is not one best style of effective leadership. Blake and Mouton ran with this idea, developing a model for training leaders that describes leadership behaviors as plots on a grid with two axes: concern for results (task behaviors) and concern for people (relationship behavior). The model outlines five main plots on the managerial grid: authority-compliance (9,1), country club management (1,9), impoverished management (1,1), middle-of-the-road management (5,5) and team management (9,9). While style theory represents a step forward in understanding leadership, there are some strengths and weaknesses. In addition to enhancing our understanding of leadership, style theory is supported by a large body of research. Style theory also works to identify two main behaviors, task and relationship, which can be learned and cultivated. However, style theorists have yet to come to consensus on an optimal style of leadership. The theory implies that a high task, high relationship style will yield the best results, but this implication has yet to be supported by research.

contingency theory

Maybe leadership isn’t about who you are, what skills you have or how you act. Maybe what defines effective leadership is about more than just you. This inquisitive contemplation brought forth the idea of Contingency Theory, and moved the field of leadership theory forward by another drastic step. Developed by Fielder, contingency theory examines the leader in conjunction with the situation the leader is in. In essence, it argues that effective leadership is contingent upon a match between the leaders style and the work situation. Leadership style is assessed using a measure called the Least Preferred Coworker (LPC) scale. This scale divides leaders into task motivated (low LPC), socio-independent (middle LPC) and relationship-motivated styles. Three different variables provide a means for situational measurement: leader-member relations, task structure (defined or undefined tasks) and position power (how much power does the leader have). When considered together, these variables suggest a style of leadership that has the best chance of success. Generally, low LPCs are found effective in extreme combinations with high LPCs effective in moderate situations. Contingency theory is easily measurable, and as a result has a considerable amount of research supporting it. As mentioned, it represents the first theory to consider more than just leaders’ attributes, but also the situation leaders find themselves in. While it is supported by substantial research, an adequate explanation of why it works has yet to be discovered. Lastly, contingency theory is merely predictive. It can predict which leaders will be effective in what situations but cannot be used to make leaders in unfavorable situations more effective.

situational leadership theory

If you haven’t noticed it yet, most leadership theories build on the previous one. In the same manner, Situational Leadership Theory builds upon contingency theory. Where contingency theory asserts that certain leaders work best in certain environments because of their leadership style, situational leadership theory argues that any leader can work best in any environment by changing their style accordingly. Situational leadership defines four leadership styles: S1 (high-directive but low-supportive), S2 (high-directive and high-supportive), S3 (low-directive but high supportive) and S4 (low-directive and low-supportive). Developed by Paul Hersey & Ken Blanchard, the theory’s model, called Situational Leadership II or SLII, promotes a particular leadership style depending upon the development level of the follower: D1 (low-competence but high-commitment), D2 (moderate-competence but low-commitment), D3 (moderate-competence but no commitment) and D4 (high-competence and high-commitment). Effective leadership is a matter of assessing the development level of a follower and acting in the correlating leadership style to elicit the best response from followers (D1s respond to S1, D2s respond to S2, and so on). In the time since its inception, situational leadership II has become a standard model for use in training managers and leaders. The situational approach is effective and provides a prescription for leadership success rather than merely describing why certain leaders work in certain situations. In this way, situational leadership theory further eroded the notion of “one best way” of leadership. Despite a broad base of support from trainers and consultants, situational leadership theory lacks a significant body of research-based support. While situational leadership considers the followers in determining leadership style, it does so on a one-on-one basis and does not provide guidelines on how to use the model when leading groups.

path-goal theory

Path-Goal Theory is half-leadership, half-motivational theory. It was developed to explain how leaders motivate their followers toward a determined end. It is derived from expectancy theory, which argued that employees will be motivated if they believe that a) putting in more effort will yield better job performance b) better job performance will lead to rewards, such as an increase in salary or benefits and c) these rewards are valued by the employee in question. According to path-goal theory, leaders help followers by selecting a style of leadership (directive, supportive, participative or achievement-oriented) that motivates followers and helps them move toward the desired reward. In essence, followers are on a path toward a goal, and leaders are there to help followers reach that goal through guidance, coaching and direction. Path-goal theory is a type of contingency theory, in that it predicts how a leader’s style will interact with follower needs and the nature of the task. It argues directive leadership for ambiguous tasks, supportive leadership for repetitive tasks, participative leadership for unclear, autonomous task and achievement-oriented leadership for challenging tasks. Path-goal theory provides leaders with a practical yet theoretical foundation for discerning which leadership style to select. It also builds on a motivational theory as its foundation. However, path-goal theory is difficult to apply to organizations because it utilizes so many interconnected assumptions. Despite building upon a motivational theory, path-goal theory does not fully explain how leadership styles affect follower motivation, which is one of many reasons why it lacks a strong research supporting its claims.

leader-member exchange theory

Originally referred to as the “vertical dyad linkage theory,” Leader-Member Exchange (LMX) Theory has been the subject of much research (and an upgraded name). LMX focuses on the interactions between leaders and an individual follower. The leaders relationship to the follower unit as a whole is viewed a series of these individual relationships. These relationships are referred to as vertical dyads. Leadership’s focus, then, should be on developing these dyads. LMX separates these relationships into two groups: the in-group and the out-group. Researchers have found that those classified as part of the leaders in-group are often more productive. They are given more trust and take on extra roles within the organization. In contrast, out-group members receive the standard job benefits and respond by performing up to the standard job description. More recent research has identified three phases that each leader-follower dyad goes through as one moves from out-group to in-group: stranger, acquaintance and partner. As the relationship moves from stranger to partner, mutual trust, respect and obligation toward each other develops. LMX is widely researched and accurately depicts leader-member relationships. It explains why leaders often develop “go-to” people and utilize their skills more than others. LMX was also the first theory to focus its study on the leader-member relationship, rather than just the leaders attributes or behavior. However, LMX is merely a descriptive theory. While it explains that mutual trust and respect develop as dyads progress, it fails to explain how or why this occurs. Likewise, it accurately explains leader-member interactions but it does not prescribe any method or model for developing in-group relationships.

transformational leadership theory

Transformational Leadership is a relatively new approach to leadership that focuses on how leaders can create valuable and positive change in their followers. James MacGregor Burns first introduced the concept of transformational leadership when studying political leaders, but this term is now used when studying organizations as well. Burns described two leadership styles: transactional and transformational. Transactional leaders focus on gaining compliance by giving and withholding rewards and benefits. Transformational leaders focus on "transforming" others to support each other and the organization as a whole. Followers of a transformational leader respond by feeling trust, admiration, loyalty and respect for the leader are more willing to work harder than originally expected. Another researcher, Bernard M. Bass, added to the work of Burns by explaining the psychological mechanisms that underlie transformational and transactional leadership. Bass’ work established that transformational leaders demonstrate four factors: individual consideration, intellectual stimulation, inspirational motivation (charismatic leadership) and idealized influence. Transformational leadership theory is supported by nearly 30 years of research correlating transformational leadership to positive performance outcomes including individual, group and organizational level variables. It was also the first developed and validated theory to emphasis morals and values in leadership. However, research on the theory is primarily based on the multifactor leadership questionnaire, which has produced inconsistent results. Research has also focused heavily on senior-level leaders. Transformational leadership also has the potential to be used negatively by leaders “faking it.” Regardless, transformational leadership theory is a valuable and widely used approach to studying and teaching leadership.

servant leadership theory

The magnum opus of Robert Greenleaf, Servant Leadership Theory is a recent theory of leadership that argues that the most effective leaders are servants of their people. Servant leaders get results for their organization through whole-hearted attention to their followers and followers’ needs. Unlike many approaches to leadership, which offer suggestions on how top-level leaders can influence and motivate those further down the hierarchy, servant leadership puts its emphasis on collaboration, trust, empathy and ethics. The leader should be a servant first, leading from a desire to better serve others and not to attain more power. The assumption is that if leaders focus on the needs and desires of followers, the followers will reciprocate through increased teamwork, deeper engagement and better performance. Greenleaf first presented the theory in a 1970 essay, “The Servant as Leader.” However, numerous others theorists have contributed to our understanding of servant leadership. One theorist, Larry Spears, outlined ten characteristics of servant leaders by analyzing the writings of Greenleaf. These ten characteristics are listening, empathy, healing, awareness, persuasion, conceptualization, foresight, stewardship, commitment to the growth of others, and building community. Servant leadership is one of the more popular theories of leadership, especially among Christian leaders who vigorously cite Jesus as the ultimate example of servant leadership. However, its effectiveness in organizations is still being debated. Many researchers and theorists argue that servant leaders can become so focused on the needs of their followers, that the needs of the organization suffer as a result. In any case, servant leadership theory has a place within the spectrum of leadership theory, as it represents the strongest emphasis on followers of any theory.

strengths-based leadership theory

Strengths-Based Leadership Theory (also known as Strengths-Based Organizational Management or SBOM) is a method of maximizing the efficiency, productivity, and success of an organization by focusing on and continuously developing the strengths of organizational resources, such as computer systems, tools, and people. At the core of the strengths-based leadership is the underlying belief that people have several times more potential for growth building on their strengths rather than fixing their weaknesses. A strength is defined as the ability to exhibit near-perfect performance consistently in a given activity. Strengths-based organizations don’t ignore weaknesses, but rather, focuses on building talents and minimizing the negative effects of weaknesses. Strengths-based leaders are always investing in their strengths and the strengths of individuals on their team. Tom Rath and Barry Conchie put forth three tenants of strengths-based leadership: (1) effective leaders invest in their followers’ strengths, (2) effective leaders build well-rounded teams out of followers who are not and (3) effective leaders understand the needs of followers. Strengths-based leadership theory is supported by over 30 years of research from the Gallup Organization and others. In addition, its core beliefs overlap a variety of other developing theories in personal and organizational psychology including positive psychology and appreciative inquiry. However, many have criticized the fundamental assessment tool of the Gallup Organization, StrengthsFinder 2.0, as unreliable. Recent research has found that when leading teams, strengths-based leadership causes individual team member efficacy to increase, but collective team efficacy to decrease, suggesting that it is not an optimal method for leading teams where cohesion is necessary.

MANAGEMENT

evidence-based management

I once had a conversation with a cardiologist about a brand new drug. This drug had been released literally days before and this physician told me he was already using it. Despite my background in pharmaceuticals (or maybe because of it) I was taken aback. I asked him what experiences he had that led him to begin to prescribe it. “I don’t need any. The data is there.” The physician was trained to respect evidence-based medicine. Indeed the majority of physicians now practicing are trained to consider the results of scientific studies and give that evidence more weight than their own, limited experience. Evidence-based medicine is serious business with doctors. Why is business any different? In the organizational world, we tend to believe that managers get better by being managers. As you gain years of experience, we believe, you become better and better at managing. Surely, there is something to be said for experience. However, managers must realize that their experience is anecdotal. Just because it worked once with a certain team in a certain organization doesn’t mean it will work again in a different arena. In medical history, placing too much emphasis on individual experience led to doctors drilling holes in patients’ brains to cure headaches and draining life-giving blood from sick patients. In management, it leads to poorly managed, burnt-out teams. But there’s hope. Medicine has progressed because of centuries of scientific studies. Likewise in management, there is nearly a century of scientific study and analysis of organizations and management. This series of posts is designed to serve as a mini-medical school or managers, giving a summary of the various management research and theories that these studies have produce. Learning these theories is the first step to practicing evidence-based management.

scientific management

Scientific management (or Taylorism) is the first major theory of management. This theory analyzes and synthesizes workflows, with the objective of improving labor productivity. The core ideas of the theory were developed by Frederick Winslow Taylor in the 1880s and 1890s, and were first published in his monographs, Shop Management and The Principles of Scientific Management. While he served as a foreman at Midvale Steele Company in 1875, Taylor was seeking a way for workers to increase their efficiency. Taylor believed that decisions based upon tradition and rules of thumb should be replaced by precise procedures developed after careful study of an individual at work. Its application is contingent on a high level of managerial control over employee work practices. Taylor conducted the now famous time motion studies. Taylor would break the actions of a worker into a series of movements and then, using a stopwatch, time the most efficient worker going through the motions. The goal was to discover a “one best way” for workers to operate in order to achieve maximum productivity. In management literature today, Taylorism is most often discussed in contrast to a new, improved ways of managing. However, Taylor’s effect on management thinking is undeniable. Peter Drucker saw Frederick Taylor as the creator of knowledge management, as the aim of scientific management is to produce knowledge about how to improve work processes. With his work on scientific management, Taylor essentially founded the management theory movement.

bureaucracy

Bureaucracy is used so often in such negative terms, most who use it forget its roots. Bureaucracy in its ideal sense, according to its most influential thought leader Max Weber, can be a positive term. At the time, the ideal bureaucracy was a more rational and efficient form of organization than the available alternatives. According to Weber, the attributes of modern bureaucracy include its impersonality, concentration of the means of administration, a leveling effect on social and economic differences and implementation of a system of authority that is practically indestructible. Weber set down seven principles with which to govern a bureaucratic organization: 1. Business conducted on a continuously. 2. Business conducted with strict accordance to the following rules:

Officials must do certain types of work. Official must have the authority to perform their assigned functions Officials’ means of coercion must strictly defined and limited.

3. Officials’ responsibilities and authority are part of a vertical hierarchy of authority, with respective rights of supervision and appeal. 4. Officials are accountable for their use of the resources needed to perform, but do not own these resources. 5. Official and private business and income must be separated strictly. 6. Offices cannot be appropriated by their incumbents. 7. Business is conducted on the basis of written documents. Each of these seven principles must be present for a bureaucracy to function efficiently. Max Weber himself remarked that ideal bureaucracy is difficult to attain. Most often, the degradation of bureaucracy can lead to overspecialization, groupthink and even organizational inertia. With both strengths and weaknesses, the principles of bureaucracy laid a foundation still in use in modern organizations.

hawthorne studies

The Hawthorne Studies were conducted from 1927 to 1932 at the Hawthorne Works plant outside of Chicago. Elton Mayo, a scientific management researcher, wanted to examine the impact of work conditions on employee productivity. Mayo first examined the physical and environmental influences of the workplace and eventually moved into the psychological aspects and their impact on employee motivation as it applies to productivity. Mayo began by searching for the right formula for productivity. Instead, he found the “Hawthorne Effect.” In essence, the Hawthorne Effect, as it applies to the workplace, argues that “Employees are more productive because the employees know they are being studied.” Mayo's experiments showed an increase in worker productivity was produced by the psychological stimulus of being singled out, involved or made to feel important. Additionally, the act of measurement itself impacts the results of the measurement. Mayo’s findings challenged many assumptions of scientific management. The Hawthorne studies found that the workplace was a social system. Workers’ attitudes and effectiveness are conditioned by social demands from both inside and outside the work plant. Informal groups within the work plant exercise strong social controls over the work habits and attitudes of the individual worker. Additionally, the need for recognition, security and sense of belonging is more important in determining workers' morale and productivity than the physical conditions under which they work. These new ideas would lay the foundation for a whole new way of thinking about management.

x&y

Theory X and Theory Y are theories of human motivation created and developed by Douglas McGregor at the MIT Sloan School of Management in the 1960s. The theories describe two very different attitudes toward workforce motivation. McGregor felt that companies followed either one or the other approach. In Theory X, management assumes employees are inherently lazy, dislike work and will avoid it if they can. Management believes that workers need to be closely supervised and comprehensive systems of controls developed. A hierarchical structure is needed with narrow span of control at each and every level. According to this theory, employees will show little ambition without enticing incentive programs and will avoid responsibility whenever they can. These ideas have been proven counter-effective in most modern practice. In Theory Y, management assumes employees may be ambitious and self-motivated and exercise self-control. It is believed that employees enjoy their mental and physical work duties. They possess the ability for creative problem solving, but their talents are underused in most organizations. Given the proper conditions, theory Y managers believe that employees will learn to seek out and accept responsibility and to exercise self-control and self-direction in accomplishing objectives to which they are committed. For McGregor, Theory X and Y are not different sides of the same coin. Rather they are two different coins all together. If managers felt the need to apply Theory X principles, that does not preclude them from being a part of Theory Y. McGregor incorporated Maslow’s hierarchy of needs into his theories. He grouped Maslow's hierarchy into "lower order" (Theory X) needs and "higher order" (Theory Y) needs. As the influence of McGregor and Maslow’s writings spread, management theorists soon realized the possibility of connecting higher level needs to worker motivation.

the grid

The concepts behind Theory Y laid the foundation for much of modern management thinking. One such idea that built upon Theory Y was the Blake Mouton Managerial Grid. This model originally identified five different leadership styles based on the concern for people and the concern for production. The optimal management style in this model is based on Theory Y. The model is represented as a grid with concern for production as the X-axis and concern for people as the Y-axis; each axis ranges from 1 (Low) to 9 (High). The resulting management styles are as follows: The impoverished style (1,1). In this style, managers have low concern for both people and production. Managers use this style to preserve job security and job seniority, protecting themselves by avoiding getting into trouble.

The country club style (1,9). This style has a high concern for people and a low concern for production. Managers using this style pay attention to the security and comfort of the employees, hoping that this will increase their performance. The produce or perish style (9,1). With a high concern for production and a low concern for people, managers using this style find employee needs unimportant; they provide their employees with money and expect performance in return. Managers using this style also pressure their employees through rules and punishments to achieve the company goals. The middle-of-the-road style (5,5). Managers using this style try to find balance between company goals and workers' needs. The team style (9,9). In this style, high concern is paid both to people and production. As suggested by Theory Y, managers choosing to use this style encourage teamwork and commitment among employees. Blake and Mouton’s grid took a unique approach to managerial thinking. Rather than prescribe a “one best way” to manage, it is suggested that managers continuously adopt their style as the situation and people change.

objectives

Management by Objectives is the flagship concept of management legend Peter Drucker. The method is a process where supervisors and employees discuss their role, the organizations needs and agree upon objectives that the employee will achieve. This idea leverages the motivational force of goal setting to manage and improve performance. Management by objectives provides employees with clarity about the roles and responsibilities, both of which are often murky in the world of knowledge work. Employees know what is expected of them and how it will contribute to the success of the organization. The process of setting these objectives is only the first step. These objectives are regularly reviewed and assessed to discern whether they were demanding enough or too difficult to achieve. Often bonuses, rewards or other external motivators are tied to the achievement of objectives. The method is not without criticism. Some argue that it over-emphasizes the accomplishment of objectives without giving concern to the methods used to achieve them, which can lead to counterproductive or unethical behavior in order to achieve individual objectives. Likewise, management by objectives focuses on production targets, often without considering the systemic hindrances to realizing those targets. Nonetheless, management by objectives remains a presence in management literature and in practice through performance evaluations and performance management systems.

constraints Theory of Constraints (TOC) is an overall management philosophy introduced by Dr. Eliyahu M. Goldratt that is geared towarding help organizations continually achieve their goals. The theory contends that any manageable system is limited in achieving more of its goal by a very small number of constraints and that there is always at least one constraint. A constraint is anything that prevents the system from achieving more of its goal. The underlying assumption of TOC is that organizations can be controlled by variations on three measures: throughput, operating expense, and inventory. Throughput is money generated through sales. Inventory is money the system invests in order to sell its goods and services. Operating expense is all the money the system spends in order to turn inventory into throughput. The TOC process seeks to identify the constraint and restructure the rest of the organization around it, through the use of the Five Focusing Steps: 1. Identify the constraint. 2. Decide how to exploit the constraint. 3. Subordinate all other processes to above decision. 4. Elevate the constraint 5. If the constraint has moved, return to Step 1. The five focusing steps aim to ensure ongoing improvement efforts are centered around the organization's constraints. Though Goldratt is still the main driving force behind the development and practice of TOC (sometimes labeled “constraint management”), there is a network of individuals and small companies loosely coupled as practitioners around the world. TOC has a large body of knowledge with a strong guiding philosophy of growth.

systems thinking Systems thinking is the understanding of how various things influence one another within a whole. In nature, systems examples include ecosystems in which various elements and creatures work together to survive or perish. In organizations, systems consist of people, structures and processes that work together to make an organization healthy or unhealthy. Systems thinking is one way to approach problem solving. Rather than reacting to a specific problem or event, systems thinkers view the problem as part of a larger, overall whole. Systems thinking is not one thing, but a set of habits or practices within a framework based on the belief that the component parts of a system are best understood by their relationships with each other and with other systems, rather than in isolation. Systems thinking shuns linear cause and effect relationships, viewing these systems as cyclical. Systems thinking concerns an understanding of a system by examining the linkages and interactions between the elements that compose the entirety of the system. Acknowledging that an improvement in one area of a system can adversely affect another area of the system, it promotes organizational communication at all levels in order to avoid the silo effect. Systems thinking techniques may be used to study any kind of system — natural, scientific, engineered, human, or conceptual. The major proponent of systems thinking in organizations is Peter Senge, who views systems thinking as a vital component of a learning organization.

deming’s fourteen W Edwards Deming was an American statistician, considered the father of the modern quality movement. In 1982, Edwards Deming published “Out of the Crisis” identifying 14 points for management which if applied would enable Japanese manufacturing efficiencies to be realized. Deming’s 14 Points: 1. Create constancy of purpose and continual improvement where long-term planning replaces short-term reaction. 2. Adopt this new philosophy by management and workers alike. 3. Do not depend on quality inspection; rather build quality into the product and process. 4. Choose quality suppliers over low cost suppliers in order to minimize variation in raw materials and supply. 5. Improve constantly in order to reduce variation in all aspects. 6. Train on the job (both workers and management) in order to reduce variation in how job is done. 7. Lead, don’t supervise in order to get people to do a better job, not just meet targets. 8. liminate fear and encourage two-way communication. 9. Break down internal barriers by departments to view each other as “internal customers.” 10. Assert that processes make mistakes not people. Management harassment of workers will create bad relations if no is effort made to improve processes. 11. Eliminate numerical targets. Management by objectives encourages low quality in order to meet quantity. 12. Remove barriers to worker satisfaction. 13. Encourage self-improvement and education for all. 14. Assert that everyone is responsible for continual improvement in quality and productivity. W. Edwards Deming’s ideas strongly influenced the Japanese auto industry after World War II. Additionally, his quality management systems influence other models such as Statistical Process Control (SPC) and Total Quality Management (TQM).

MOTIVATION

elusive

Motivation is elusive. We struggle with the challenge of motivating ourselves to get out of bed and find a job. If and when we’ve found one, we try to remain motivated by something other than the weekend. Sure, there are a lucky few who are motivated just by the very nature of their work. But we more often write those people off as workaholics… or just plain nuts. Those of us who are normal (or so we believe) figure that it’s the role of “management” to motivate us to work. That shifts the job of improving performance from the contributor to the supervisor, but it doesn’t make motivation any less complex. Management hires silver-tongued speakers, hangs pretty posters and designs complicated “incentive compensation” bonus plans. Yet still something is missing. Few people rise, shower and drive to work because their utmost desire is to look at a picture of an eagle and read its pithy caption. What is motivation? How do we motivate others? These are the questions researchers have sought to answer for some time. They’ve made some great strides. They’ve created useful theories and models to explain motivation and improve performance. Management just needs to find the motivation to learn them.

the hierarchy

Maslow’s Hierarchy of Needs is perhaps the most frequently cited psychological model of all time. Most often, one encounters Maslow’s pyramid in freshman year of college while taking Psychology 101 and never quite escapes it. Maslow first proposed his idea in 1943, but further developed and fully expressed it with the 1954 publication of Motivation and Personality. Maslow developed his ideas by studying the lives of exemplary people such as Albert Einstein, Eleanor Roosevelt and Fredrick Douglass (perhaps a precursor to the new field of positive psychology). Maslow presents a five-level hierarchy of human needs and the assertion that human are motivated to fulfill those needs. The first four levels of needs he refers to as “deficiency needs.” These levels are: physiological, safety, love/belonging and esteem. The top level of the hierarchy, self-actualization, is a need pursued only after the others have been met. Physiological needs represent obvious survival needs: air, food, water, shelter and reproduction. The second level, safety needs, takes precedence once the physiological needs are met. These are needs like personal security, financial security, health and protection from harm. The next level, love and belonging needs, covers humans’ desire to be in emotionally based relationships. These are needs like friendship, family and intimacy. Esteem, the second highest level, presents that humans have a need to be accepted and valued by others. Humans engage themselves in behaviors which they can gain recognition and feel a sense of contribution from. Self-actualization, the pinnacle of the hierarchy, pertains to humans’ desire to reach their full potential. Maslow describes this as a desire to become more of who one is and everything one is capable of being. Whether or not self-actualization is possible is still being debated. Indeed, whether this hierarchy is accurate is also up for debate. What is agreed on, however, is that Maslow laid a powerful foundation for studying human motivation.

expect Expectancy theory attempts to explain the mental processes of choice or choosing. In doing so, it seeks to present a framework for how to use incentives to motivate people. The theory itself was first proposed by Victor Vroom, who served as a professor at Yale School of Management. Expectancy theory’s basic premise is that employees in an organization will be motivated to perform when they hold three beliefs: 1. More effort will yield better results. 2. Better results will lead to rewards. 3. These rewards are of value. Vroom’s theory also assumes that humans are rationale and make conscious choices among alternatives in order to maximize pleasure and minimize pain. In order to leverage this conscious choice, Vroom presented three elements within expectancy theory that explain the thought process employees use in choosing to perform (motivation). These elements are valence, instrumentality and expectancy. Valence represents the strength of a person’s preference for an outcome (“do I value the reward?”). Instrumentality represents the belief of a person that effort will yield the outcome (“can I achieve better results?”). Expectancy represents a person’s belief that the outcome will be rewarded (“will the company reward me for better results?”). When these elements are considered as variables in an equation, the product is motivation. In order to motivate employees, organizations ought to tie reward systems closely to performance. They must also be ready to provide training if necessary in order to increase instrumentality. Expectancy theory presents a formula for motivation. However, Vroom himself suggested that perhaps human beings aren’t simple enough to be explained in a simple formula. Nonetheless, expectancy gives us a framework to understand and evaluate motivational efforts such as incentive compensation structures.

two factors

The two-factor theory (also known as Herzberg's motivation-hygiene theory) was developed by Frederick Herzberg. The theory states that there are certain factors in the workplace that cause job satisfaction, while a separate set of factors cause dissatisfaction. Two-factor theory distinguishes between motivators (e.g., challenging work, recognition, responsibility) which give workers satisfaction, arising from intrinsic conditions of the job itself, such as recognition, achievement, or personal growth and hygiene factors (e.g. status, job security, salary and fringe benefits) which do not give workers satisfaction, but their absence can create dissatisfaction. These are extrinsic to the work itself, and include aspects such as company policies, supervisory practices or wages/salary. The theory prescribes that, if management wants to increase satisfaction on the job, it should focus on the opportunities work presents for gaining status, assuming responsibility, and for achieving self-realization. If, on the other hand, management wants to reduce dissatisfaction, then it must focus on the job environment, working conditions and policies. Unlike Maslow, who offered little data to support his ideas, Herzberg and others have presented considerable empirical evidence to confirm the motivation-hygiene theory. Their work has been criticized on methodological grounds. Nevertheless, Herzberg and his associates have rendered a valuable service to science and to management through their efforts to apply scientific methods to understanding complex motivational problems at work and have stimulated others to continue the search.

equity

Equity theory is less of a full theory of motivation and more of a warning to organizations. The theory itself attempts to explain employee satisfaction through exploring employees’ perceptions of fair distribution of rewards. The theory was first developed and presented by John Stacy Adams in 1963. Adams asserted that employees desire to maintain equity between their inputs and the organization’s outputs. Inputs are the contributions that employees make. They can include time, effort, loyalty hard work and many others. Outputs are positive or negative consequences that individuals perceive have been given in response to inputs. These can include job security, esteem, salary, benefits and more. Based on the mental equation in their head, employees evaluate whether their input/output equation is fair by comparing it to others. Individuals believe they’re being treated fairly when their ration of inputs to outputs matches those around them. If individuals believe they’re over- or under-paid, they will experience distress and a decrease in performance will result. Equity theory presents organizations with a warning about over-compensation or lowering expectations of certain individuals. Over-compensated employees may respond by working harder, or they may alter their perceptions about the worth of their contribution and reduce their contribution. Likewise, employees may perceive others as over-compensated and respond by reducing their effort. While many argue that equity theory offers an overly simple means of explaining employee behavior, most still heed the warnings it offers.

goal setting

One of the most popular theories in organizational psychology, Goal-setting theory states that humans are motivated by setting goals. (“Thank you very much. I’ll be here all week. Try the veal.”) It is a little more complicated than that. Researchers such as Edwin Locke have been examining the process and results of goal setting for thirty years. They’ve discovered that setting goals alters behavior in four ways: choice, effort, persistence and cognition. Choice refers to how goals narrow individuals’ attention and focus it on goal-relevant activities. Effort refers to goals ability to draw more effort from individuals. Persistence refers to individuals’ tendency to work through setbacks to pursue a goal. Cognition refers to individuals’ development of cognitive strategies to change their behavior if needed to achieve a goal. Goal-setting theory also offers various moderators to the relationship between goals and performance. Goal commitment is an especially influential moderator; if people are not committed to a goal, then it has no effect on performance. Attainability can affect effort toward achieving a goal; if it is too hard, then it is not worth trying. Likewise, self-efficacy affects whether or not people will try to achieve a goal based on whether they believe they can do it. The theory also highlights the importance of feedback. If individuals cannot check their status toward achieving a goal, they may cease working toward it. Goal setting theory also offers a warning to organizations. Individuals need to be involved in the goal-setting process, but their goals must also be aligned with the goals of the organization.

self-determination

People have an inherent tendency toward growth. That is the main concern of self-determination theory, which examines the motivation behind the choices people make without external interference and influence. The theory developed as Edward Deci and Richard Ryan began to study why individuals engage in activities for their own sake without seeking to obtain a goal or reward. In doing so, Deci and Ryan distinguished between intrinsic and extrinsic motivation. Intrinsic motivation is the inherent drive to seek out challenges and new possibilities associated with personal growth. Extrinsic motivation is motivation that comes from an external source, such as a goal or reward. Deci and Ryan argued that intrinsic motivation is driven primarily by innate needs: competence, relatedness and autonomy. Self-determination theory contains three essential elements. The first that humans are proactive by nature and seek to develop their potential. The second that humans desire to grow and develop themselves and their capabilities. The last that this development doesn’t happen automatically, it must be worked toward. In order to work toward this development, individuals need nurturing from the social environment. The role of organizations, then, is not to develop complex incentive compensation schemes to manipulate performance. Rather, organizations should design the optimal environment for individuals to pursue their growth and development through working toward organizational objectives. Self-determination theory is a radical departure from the formulas and models first developed by motivational theorists. Yet, in some ways, the theory brings the field full circle by expanding on the ideas of self-actualization first proposed by Maslow.

CHANGE

meet the clown

Most people view organizational change the same way they view a clown walking toward them on the street. It may be a positive experience, but we’d rather it be someone else’s positive experience. Despite our best efforts, the world continues to change and grow. In order to remain competitive, organizations need change alongside their environment. Changing certain parts of an organization are easy, but changing people is hard. Most people try to avoid the clown. For over fifty years, organizations have looked for help in leading people through change. They relied on thought leaders and researchers for help making sense of the mental processes people use to understand and cope with their changing roles. These models can help people become more willing and able to embrace change. At any level in the organization, leaders will be involved in leading change. So leaders must meet the clown.

three-stage Change is a complex process, but many organizational changes follow a common process. The idea to develop a model around this process was first pursued by sociologist Kurt Lewin. Lewin uses the image of an ice cube to explain how to change an organization: unfreeze-change-refreeze. Unfreeze. Before any change can occur, people must be change ready. Lewin calls unfreezing the process where people begin to realize the need for change and prepare accordingly. Impulsive leaders wrongly believe they must begin by casting a new vision of the changed community. However, these visions will not be received until the frozen followers have thawed to the idea of change. Change. After people are change-ready, the real work of change begins. This stage of the model does not happen immediately; it can take a long time. People are staring down an uncertain road, and need to be reminded how following this road will ultimately benefit them and the organization. Leaders must communicate frequently and give people time to let that communication internalize. Freeze. Often after a change effort, it’s tempting to stop there and declare victory. However, Lewin argued that in order to make any change permanent, it must be made part of the organization’s culture. The refreezing stage allows people to plant roots and grow accustomed to the way things will be. Leaders can promote refreezing by helping followers see the connection between new behaviors and new success and by celebrating the people who helped bring about that success. Lewin’s model is a simple approach to a complex issue, and as such is bound to be lacking certain details. However, Lewin laid a foundation for future change management theories and this foundation is apparent in the writings of more modern theorists.

intervention Many times change requires more than the conscious decision of organizational members. Companies, like people, typically need help changing. They need an intervention. Behavioral scholar Chris Argyris studied this need for intervention, eventually publishing his findings in the late 1960s as Intervention Theory. Argyris first defined intervention. To intervene is to enter into ongoing system or come between people, groups or objects to provide assistance. An intervener helps the system become better at problem solving, decision-making and implementation so that the system can continue to be effective. With a defiition in place, Argyris moved on to outline three basic requirements, or primary tasks, for intervention. First, intervention must generate useful and accurate information to describe the factors that lead to the organization’s ineffectiveness. Second, the intervener must allow the system or organization to make an informed, free choice to become more effective. Third, the organization must gain internal commitment to implement the changes required to become more effective. Argyris’ theory is not a model, but a series of vital recommendations for leading change. Argyris built on classic organizational behavior theories such as Theory X and Theory Y to create a series of recommendation and requirements that create a sort of oath of office for organizational consultants.

adkar Change is a gemstone that must be viewed from multiple angles. The ADKAR model provides another perspective of the change process. Rather than describe what is happening, or prescribe what actions must be taken, the ADKAR model predicts that organization change only happens individuals change. Developed by Jeff Hiatt, the ADKAR model focus on the five outcomes individuals must experience before organizations can change:

Awareness of the need for change. Desire to support and participate in the change. Knowledge of how to change. Ability to implement the change. Reinforcement to sustain change.

Besides leveraging the power of acronyms, this model has made an impact in change management because of its softer, individual focus. There is nothing new in the ADKAR model, except how its unique perspective allows for unique application. Not unlike the five stages of grief, its easy for individuals and leaders in a changing organization to understand and diagnosis their own stage and develop a plan of action accordingly.

lead change

There is perhaps no modern change model more cited than John Kotter’s eight-stage change process. Kotter’s work has been repacked and resold by countless “change consultants.” Considering what is said about imitation, the Harvard Business School professor must be the most flattered guru in management. Kotter first presented this model in his 1995 book Leading Change. Kotter outlined an eight-stage process that leaders should take their organizations through when implementing change: 1. Create a sense of urgency. Identify potential threats and start honest discussions about the need for change.

2. Form a powerful coalition. Identify true leaders and ask for emotional commitment.

3. Create a vision for change. Develop a short vision with the coalition and practice communicating it.

4. Communicate the vision. Talk openly about the change vision and apply it to all aspects of operation.

5. Remove obstacles. Take action to identify change leaders and remove their barriers.

6. Create short-term wins. Look for sure-fire projects and highlight their success.

7. Build on the change. Set goals to continue building on the momentum created.

8. Anchor the changes in culture. Talk about the progress at every opportunity and ensure that people tie future success to the change effort.

Kotter’s work is heavily relied on because of its prescriptive nature. Some have even theorized that Kotter’s eight-stages build upon the three-stages developed by Lewin by providing instructions for leaders to follow while unfreezing, changing and refreezing. Lewin would be flattered.

STRATEGY

going to school

The very mention of the word strategy brings with it connotations of planning and images of executives sitting around large tables at off-site meeting facilities. These executives pour over data regarding what products are profitable and unprofitable. They decide on where to position their products. They examine estimates about what opportunities the future of the market holds for their current and imagined products. Finally, they emerge from their off-site cave with a step-by-step plan to implement. This view of strategy is commonly held, but represents a very narrow perspective on what it means to be strategic. In reality, there are numerous schools of thought surrounding strategy, each one with an infinite number of perspectives on how to implement the ideas of that school. There are ten main schools of thought surrounding strategy. What follows is a summary of each school and the key thought leaders to seek out for a deeper perspective. By the end, we’ll have strategically tackled strategy.

design school

Strategy is an informal process of conception. In the 1960s, the design school presented a framework for prescriptive strategy. Other schools would build their claims on this similar focus on strategy formation as a process of conception or informal design. This school’s most famous tool is the SWOT analysis, which examines the organizations strengths and weaknesses in consideration of its environmental opportunities and threats. Like the SWOT analysis itself, the primary goal of design school strategy is to find a match: a match between the external environment and its possibilities and the internal abilities of the organization. In essence, it seeks to find what future opportunities the present organization could leverage. Once this match is found, typically by the senior management of an organization, it is communicated down the organization so that everyone can proceed to turn the organization into the designed ideal. This view of strategy was prominent well into the 1970s, and in many ways, elements of this view on strategy are still being taught and practiced today.

planning school

Strategy is a formal process. The planning school developed parallel to the design school. It rose to awareness in a flurry of publications in the 1960s and was regularly in practice in organizations in the 1970s. The planning school opposed most of the tenets of the design school, with the exception of its formality. The planning school saw strategy as a systematic and detached process, a formal planning process. The planning school relies heavily on data from tools such as SWOT, but takes SWOT and breaks it down into formal, delineated steps. These steps get further broken down into checklists and techniques, each assigned to an individual or department and given a deadline and budget. In many ways, the strategic planning process is taken away from senior managers, as the real work of this process is done by staff planners. Many organizations even create strategic planning department, in charge of a regular strategic planning process. The result is typically a neatly delineated plan, with little trace of uncertainty, that may or may not be fully implemented once in the hands of those charged with taking action.

positioning school

Strategy is an analytical process. The positioning school is most closely associated with its undisputed champion, Harvard professor Michael Porter. In the 1980s, the positioning school somewhat displaced the planning school. The positioning school favored a focus on the actual content of the strategy, rather then the formal process of developing it. The school draws its name from its emphasis that only a few key strategic positions within the marketplace were worth pursuing. While this school did argue that a formal planning process was needed, it was only viewed as worthwhile after the preferred strategy was selected by senior managers. This school of strategy is promoted heavily by consultants and academics, who have been able to build lucrative careers creating literature on and promoting the practice of market analysis. In this way, strategy is not creative; it is simply a matter of analysis. Perhaps because of this, the positioning school remains a clear presence in teaching and in practice.

entrepreneurial school

Strategy is a visionary process. At this point, we depart from the schools that are aligned with a larger prescriptive “university” of strategy. Rather, these schools seek to describe what is happening when strategy is made. The entrepreneurial school was the first of this mindset to develop. It sees strategy as an entrepreneurial process, centered on the chief executive of the organization. The entrepreneurial schools focus on leaders’ intuition, and the hidden process leaders use to decide where to steer the organization. This idea changes how strategy is made. Gone are the formal processes and precise designs. In its place is a vision, communicated by leaders and put into action by followers. In the place of quantitative data are qualitative statements about what the future will look like once the organization makes its impact on it. While not often taught or promoted, this idea is in practice in many organizations, especially start-ups and organizations in need of a “turn-around.”

cognitive school

Strategy is a mental process. If the entrepreneurial school introduced the idea that strategy is a mental process that leaders engage in, the cognitive school began the study of that mental process. The cognitive school investigates the process of strategy formulation through the lens of cognitive psychology. This school is fairly small, yet large enough to house two differing camps. The first treats strategy’s processing and structuring of knowledge as an effort to create an objective view of the world. The second sees any mental process as subjective; therefore strategy is inherently biased. The cognitive school doesn’t house many consultants or other promoters. It is not concerned with preaching to leaders what information is needed to develop a strategy. Rather, it seeks to get inside those leaders minds and discover what information strategists are using and how they are using it.

learning school

Strategy is an emergent process. For proponents of the learning school, any attempt to reduce the complex world into clear positions and plans is futile. The world is far too vast and multifaceted to allow such reduction. Therefore strategy cannot be a formal planning process. Rather, strategies emerge as individuals and the organization learn about themselves and the situation around them, as well as their capability to respond to those situations. Thus, strategy is not a large plan full of delineated steps developed and assigned by senior management but a series of little actions and decisions made by everyone at every level of an organization. Like the prescriptive schools, the learning school emphasizes the need for information, both internal and external. But this information isn’t to be collected by the chief strategists, rather its circulated to all in the interest of pursuing the best ideas .

power school Strategy is a process of negotiation. The power school draws a lot from the learning school, especially the belief in multiple levels of engagement with the strategic process. However, it spins it a little differently. The power school focused on the processes of negotiation, bargaining, persuasion and confrontation that go on while strategy is being made. In essence, the strategy that gets implemented is a matter of power: micropower and macropower. Micropower refers to the small political processes that individuals engage in. Macropower refers to the larger power the organization holds over employees, partners, alliance and joint ventures. The strategies that develop and are implemented represent a “collective” strategy involved all interested parties, with the specifics about what tactics are highlighted determined once the dust has settled on the battlefield of negotiation.

cultural school

Strategy is a collective process. Contrasting the power school, which emphasizes negotiation and bargaining, the cultural school views strategy as an inevitable product of the culture of the organization. The process of developing strategy is collective and cooperative, but also heavily dependant upon the traditions and norms of the organization. If culture is about what differentiates an organization from other organizations, than culture’s influence will also be what makes the organization’s strategy unique. Strategy, in essence, represents the collective intentions of organizational members. Included in the development of strategy is not just information about strengths, weakness, opportunities and threats, but also cultural beliefs, values and traditions. In practice, strategy formation is a social process and as such is subject to the same cultural awareness as other social interactions.

environmental school

Strategy is a reactive process. The environmental school takes the burden of strategy formation off senior management and even the organization as a whole. Instead, strategy is merely a reaction to the environment, subject to the constraints and opportunities the environment provides. The initiative for strategy is the environment, not the organization. Environmental strategists seek first to understand the pressures imposed on the organization by its competitors, marketplace and industry. Many schools of strategy recognize the importance of the environment as a factor of strategy development, but the environmental school views it as THE factor. In practice, the strategy engaged in is merely a logical reaction to the dictates of the environment.

configuration school

Strategy is a fluid process. The configuration school is the jeet kune do of strategy: the way of no way. Proponents of this school don’t promote any new ideas about how to formulate or implement strategy, instead they investigate the other nine schools of strategy and determine what elements should be included and when. In this way it seeks to integrate the various schools into a fluid process of strategy. At certain stages of development, this school argues, different schools should be utilized. In the start-up and growth stages of an organization, entrepreneurial and learning schools hold insight into how to develop strategies. In stable organizations and environment, design and planning schools become more relevant to the strategy needs of the organization. The configuration school doesn’t see the other nine schools as conflicting, but complementary. In practice, most organizations borrow elements from all nine schools. Thus, we are all configuration scholars.

CODA

Organizational theory is ever-changing and ever-developing. It is tempting to assume that if each new theory builds and strengthens the theory before it, then the most recent research and theories are the most valid. Which theory is most applicable? Which is most correct? They all are. Remember the lesson of useful lies. All theories are useful in explaining some perspective on leadership but are lies because they don’t explain everything. Remember the lesson of the configuration school. All schools of strategy are useful at some point in the life of the organization. Review and learn all of the theories presented here. As you travel further on in leadership, your situation will change and the theory you need to draw from will, as well. There is no one best theory of leadership or organizations, but there is one best leader: The leader who knows all the theories.

further reading

This book is a primer. A mini-textbook. A crash course on leading organizations. The desire is that it enlightens readers, entertains them and instills in them a desire to learn more. If that is not the case, then these works won’t be enjoyable at all. leadership Galton, F. (1869). Hereditary Genius. Fiedler, F.E. (1967). A Theory of Leadership Effectiveness. Vroom, V. H. (1964). Work and motivation. New York: Wiley. Hersey, P. & Blanchard, K. H. (1977). Management of Organizational Behavior: Utilizing Human Resources. Burns, J. M. (1978). Leadership. Greenleaf, R.K. (1977). Servant Leadership. Buckingham, M. & Clifton, D. O. (2001). Now, Discover Your Strengths. Rath, T. & Conchie, B. (2009). Strengths-Based Leadership management Taylor, F. W. (1914). Principles of Scientific Management.

Mayo, E. (1949). Hawthorne and the Western Electric Company, The Social Problems of an Industrial Civilization. Weber, M. (1922). Economy and Society. McGregor, D. (1960). The Human Side of Enterprise. Herzberg, F. (1959), The Motivation to Work. Blake, R. & Mouton, J. (1964). The Managerial Grid: The Key to Leadership Excellence. Lewin, K. (1951). Field Theory in Social Science. Drucker, P. (1954). The Practice of Management. Cox, J. & Goldratt, E. M. (1986). The Goal: A Process of Ongoing Improvement. Senge, P. M. (1990), The Fifth Discipline. Deming, W. E. (1986). Out of the Crisis. motivation Maslow, A. (1954). Motivation and personality. Herzberg, F. (1968). One more time: how do you motivate employees? Harvard Business Review, 46(1), 53–62. Adams, J.S. (1965). Inequity in social exchange. In L. Berkowitz (Ed.), Advances in experimental social psychology (Vol. 2, pp. 267-299). New York: Academic Press. Locke, E.A. (1968). Toward a theory of task motivation and incentives. Organizational Behavior and Human Performance, 3(2), 157-189. Deci, E., & Ryan, R. (1985). Intrinsic motivation and self-determination in human behavior. change Lewin, K. (1951). Field theory in social science. Argyris, C. (1970). Intervention theory and method: A behavioral science view. Hiatt, J. (2006). ADKAR: A model for change in business, government and our community. Kotter, J. (1995). Leading change.

strategy Mintzberg, H., Lampel, J. & Ahlstrand. (1998). Strategy Safari: A Guided Tour Through the Wilds of Strategic Management. Porter, M (1980). Competitive Strategy. Porter, M. (1985). Competitive Advantage. Eden, C., Ackermann, F. (1998), Making Strategy: The Journey of Strategic Management.

ACKNOWLEDGEMENTS

The process of writing a book requires more than just the authors who get acknowledged on the front cover. Therefore the author would like to carve out some white space to recognize the following people:

My wife Janna for her continuous toleration of my crazy ideas. Professors and mentors Wendy Shirk, Brigitte Steinheider, Gary Oster and Steve Greene. Those who pushed me to continue writing, editing and publishing, Christine Franzeim, Linda Gray and Kay Meyers.

My editor Alison Foley who came back to life just to edit this manuscript. The fans and followers of and contributors to LDRLB, for making this possible.

ABOUT THE AUTHOR

David Burkus is a professor of management at Oral Roberts University and editor of LDRLB. He has written for numerous scholarly journals and practitioner magazines on leadership, strategy, management, creativity and innovation.

ABOUT LDRLB

LDRLB is an online think tank that shares insights from research on leadership, innovation, and strategy.