Force For Change

How Leadership Differs from Management

John P. Kotter

• Publisher: Free Press
• Year: 2008
• eBook ISBN: 9781439135990
• Topic: Business
• Subtopic: Management
• Index: Business

The critics who despair of the coming of imaginative, charismatic leaders to replace the so-called manipulative caretakers of American corporations don't tell us much about what leadership actually is, or, for that matter, what management is either. Now, John P. Kotter, who focused on why we have a leadership crisis in The Leadership Factor shows here, with compelling evidence, what leadership really means today, why it is rarely associated with larger-than-life charismatics, precisely how it is different from management, and yet why both good leadership and management are essential for business success, especially for complex organizations operating in changing environments.Leadership, Kotter clearly demonstrates, is for the most part not a god-like figure transforming subordinates into superhumans, but is in fact a process that creates change -- a process which often involves hundreds or even thousands of "little acts of leadership" orchestrated by people who have the profound insight to realize this. Building on his landmark study of 15 successful general managers, Kotter presents detailed accounts of how senior and middle managers in major corporations, in close concert with colleagues and subordinates, were able to create a leadership process that put into action hundreds of commonsense ideas and procedures that, in combination with competent management, produced extraordinary results.This leadership turned NCR from a loser to a big winner in automated teller machines, despite intense competition from IBM. The same process at American Express and SAS helped businesses grow dramatically despite the fact that they were "mature" and "commodity-like." Kotter also shows how leadership turned around operations at P&G and Kodak; produced huge business successes at PepsiCo, ARCO, and ConAgra; and made the impossible occasionally happen at Digital.Thousands of companies today are overmanaged and underled, John Kotter concludes, not because managers lack charisma, but because far too few executives have a clear understanding of what leadership is and what it can accomplish. Without such a vision, even the most capable people have great difficulty trying to lead effectively and to create the cultures which will help others to lead.

PART

I

Introduction

1

Management and Leadership

The word leadership is used in two very different ways in every day conversation. Sometimes it refers to a process that helps direct and mobilize people and/or their ideas; we say, for example, that Fred is providing leadership on the such and such project. At other times it refers to a group of people in formal positions where leadership, in the first sense of the word, is expected; we say that the leadership of the firm is made up of ten people, including George, Alice, etc.

In this book, I will use the word almost exclusively in the first sense. The second usage contributes greatly to the confusion surrounding this subject because it subtly suggests that everyone in a leadership position actually provides leadership.¹ This is obviously not true; some such people lead well, some lead poorly, and some do not lead at all. Since most of the people who are in positions of leadership today are called managers, the second usage also suggests that leadership and management are the same thing, or at least closely related. They are not.

Leadership is an ageless topic. That which we call management is largely the product of the last 100 years,² a response to one of the most significant developments of the twentieth century: the emergence of large numbers of complex organizations.³ Modern management was invented, in a sense, to help the new railroads, steel mills, and auto companies achieve what legendary entrepreneurs created them for. Without such management, these complex enterprises tended to become chaotic in ways that threatened their very existence. Good management brought a degree of order and consistency to key dimensions like the quality and profitability of products.

In the past century, literally thousands of managers, consultants, and management educators have developed and refined the processes which make up the core of modern management. These processes, summarized briefly, involve:⁴

1. Planning and budgeting—setting targets or goals for the future, typically for the next month or year; establishing detailed steps for achieving those targets, steps that might include timetables and guidelines; and then allocating resources to accomplish those plans

2. Organizing and staffing—establishing an organizational structure and set of jobs for accomplishing plan requirements, staffing the jobs with qualified individuals, communicating the plan to those people, delegating responsibility for carrying out the plan, and establishing systems to monitor implementation

3. Controlling and problem solving—monitoring results versus plan in some detail, both formally and informally, by means of reports, meetings, etc.; identifying deviations, which are usually called “problems”; and then planning and organizing to solve the problems

These processes produce a degree of consistency and order. Unfortunately, as we have witnessed all too frequently in the last half century, they can produce order on dimensions as meaningless as the size of the typeface on executive memoranda. But that was never the intent of the pioneers who invented modern management. They were trying to produce consistent results on key dimensions expected by customers, stockholders, employees, and other organizational constituencies, despite the complexity caused by large size, modern technologies, and geographic dispersion. They created management to help keep a complex organization on time and on budget. That has been, and still is, its primary function.⁵

Leadership is very different. It does not produce consistency and order, as the word itself implies; it produces movement. Throughout the ages, individuals who have been seen as leaders have created change, sometimes for the better and sometimes not.^{6 7} They have done so in a variety of ways, though their actions often seem to boil down to establishing where a group of people should go, getting them lined up in that direction and committed to movement, and then energizing them to overcome the inevitable obstacles they will encounter along the way.

What constitutes good leadership has been a subject of debate for centuries. In general, we usually label leadership “good” or “effective” when it moves people to a place in which both they and those who depend upon them are genuinely better off, and when it does so without trampling on the rights of others.⁸ The function implicit in this belief is constructive or adaptive change.

Leadership within a complex organization achieves this function through three subprocesses which, as we will see in further detail later on in this book, can briefly be described as such:⁹

1. Establishing direction—developing a vision of the future, often the distant future, along with strategies for producing the changes needed to achieve that vision

2. Aligning people—communicating the direction to those whose cooperation may be needed so as to create coalitions that understand the vision and that are committed to its achievement

3. Motivating and inspiring—keeping people moving in the right direction despite major political, bureaucratic, and resource barriers to change by appealing to very basic, but often untapped, human needs, values, and emotions

Exhibit 1.1 compares these summaries of both management and leadership within complex organizations.¹⁰

Management and leadership, so defined, are clearly in some ways similar. They both involve deciding what needs to be done, creating networks of people and relationships that can accomplish an agenda, and then trying to ensure that those people actually get the job done. They are both, in this sense, complete action systems; neither is simply one aspect of the other. People who think of management as being only the implementation part of leadership ignore the fact that leadership has its own implementation processes: aligning people to new directions and then inspiring them to make it happen. Similarly, people who think of leadership as only part of the implementation aspect of management (the motivational part) ignore the direction-setting aspect of leadership.

But despite some similarities, differences exist which make management and leadership very distinct. The planning and budgeting processes of management tend to focus on time frames ranging from a few months to a few years, on details, on eliminating risks, and on instrumental rationality. By contrast, as shown in the chapters that follow, that part of the leadership process which establishes a direction often focuses on longer time frames, the big picture, strategies that take calculated risks, and people’s values. In a similar way, organizing and staffing tend to focus on specialization, getting the right person into or trained for the right job, and compliance; while aligning people tends to focus on integration, getting the whole group lined up in the right direction, and commitment. Controlling and problem solving usually focus on containment, control, and predictability; while motivating and inspiring focus on empowerment, expansion, and creating that occasional surprise that energizes people.

Exhibit 1.1 Comparing Management and Leadership

	Management	Leadership
Creating an agenda	Planning and Budgeting—establishing detailed steps and timetables for achieving needed results, and then allocating the resources necessary to make that happen	Establishing Direction—developing a vision of the future, often the distant future, and strategies for producing the changes needed to achieve that vision
Developing a human network for achieving the agenda	Organizing and Staffing—establishing some structure for accomplishing plan requirements, staffing that structure with individuals, delegating responsibility and authority for carrying out the plan, providing policies and procedures to help guide people, and creating methods or systems to monitor implementation	Aligning People—communicating the direction by words and deeds to all those whose cooperation may be needed so as to influence the creation of teams and coalitions that understand the vision and strategies, and accept their validity
Execution	Controlling and Problem Solving—monitoring results vs. plan in some detail, identifying deviations, and then planning and organizing to solve these problems	Motivating and Inspiring—energizing people to overcome major political, bureaucratic, and resource barriers to change by satisfying very basic, but often unfulfilled, human needs
Outcomes	Produces a degree of predictability and order, and has the potential of consistently producing key results expected by various stakeholders (e.g., for customers, always being on time; for stockholders, being on budget)	Produces change, often to a dramatic degree, and has the potential of producing extremely useful change (e.g., new products that customers want, new approaches to labor relations that help make a firm more competitive)

But even more fundamentally, leadership and management differ in terms of their primary function. The first can produce useful change, the second can create orderly results which keep something working efficiently. This does not mean that management is never associated with change; in tandem with effective leadership, it can help produce a more orderly change process. Nor does this mean that leadership is never associated with order; to the contrary, in tandem with effective management, an effective leadership process can help produce the changes necessary to bring a chaotic situation under control. But leadership by itself never keeps an operation on time and on budget year after year. And management by itself never creates significant useful change.

Taken together, all of these differences in function and form create the potential for conflict. Strong leadership, for example, can disrupt an orderly planning system and undermine the management hierarchy, while strong management can discourage the risk taking and enthusiasm needed for leadership. Examples of such conflict have been reported many times over the years, usually between individuals who personify only one of the two sets of processes: “pure managers” fighting it out with “pure leaders.”¹¹

But despite this potential for conflict, the only logical conclusion one can draw from an analysis of the processes summarized in Exhibit 1.1 is that they are both needed if organizations are to prosper. To be successful, organizations not only must consistently meet their current commitments to customers, stockholders, employees, and others, they must also identify and adapt to the changing needs of these key constituencies over time. To do so, they must not only plan, budget, organize, staff, control, and problem solve in a competent, systematic, and rational manner so as to achieve the results expected on a daily basis, they also must establish, and reestablish, when necessary, an appropriate direction for the future, align people to it, and motivate employees to create change even when painful sacrifices are required.

Indeed, any combination other than strong management and strong leadership has the potential for producing highly unsatisfactory results. When both are weak or nonexistent, it is like a rudderless ship with a hole in the hull. But adding just one of the two does not necessarily make the situation much better. Strong management without much leadership can turn bureaucratic and stifling, producing order for order’s sake. Strong leadership without much management can become messianic and cult-like, producing change for change’s sake—even if movement is in a totally insane direction. The latter is more often found in political movements than in corporations,¹² although it does occur sometimes in relatively small, entrepreneurial businesses.¹³ The former, however, is all too often seen in corporations today, especially in large and mature ones.

With more than enough management but insufficient leadership, one would logically expect to see the following: 1) a strong emphasis on shorter time frames, details, and eliminating risks, with relatively little focus on the long term, the big picture, and strategies that take calculated risks; 2) a strong focus on specialization, fitting people to jobs, and compliance to rules, without much focus on integration, alignment, and commitment; 3) a strong focus on containment, control, and predictability, with insufficient emphasis on expansion, empowerment, and inspiration. Taken together, it is logical to expect this to produce a firm that is somewhat rigid, not very innovative, and thus incapable of dealing with important changes in its market, competitive, or technological environment. Under these circumstances, one would predict that performance would deteriorate over time, although slowly if the firm is large and has a strong market position. Customers would be served less well because innovative products and lower ...

Table of contents

• Cover
• Preface
• Part I: Introduction
• Part II: The Process of Leadership
• Part III: The Structure of Leadership
• Part IV: The Origins of Leadership
• Postscript
• Appendix: The Research
• Notes
• Endnotes
• Bibliography
• Index
• Copyright