The Leadership Factor

Rating:
Summary: Helped my career in a big way
Review: As a young, aggressive manager, this book helped me make breakthrough improvements for my (former) employer, Eastman Kodak Company. As a result I got promotions, raises, etc. It is only 161 pages, made its points consisely and convincingly, and I profited immensely.

Rating:
Summary: Leadership to Expand the Flexibility of the Firm
Review: When this book was written, the winds of change for companies were just beginning to blow hard. Competition was getting tougher and coming from more places. Customers were becoming harder to please. Rapid changes in business environments created great dislocations. The enormous task of making enterprises more efficient was in its early stages. Many laggard companies were starting to show up.

The prior business concept had been to find a good way to deliver goods and services, gain market share, and make that concept ever more efficient. As business conditions became more turbulent, it became more important to adapt to the conditions than to make the existing concept more refined.

Professor Kotter quickly realized that leadership would be a much more important function in responding to such an environment. In this book, he focused on the new leadership tasks, better ways to get them accomplished, and how to strengthen and deepen leadership.

Although this is a conceptual book, its imaginings are solidly based in empirical research. 150 managers from 40 firms were interviewed about leadership subjects. Over 900 top-level executives reponded to a questionnaire about leadership, and how to make it more effective. Fifteen companies were studied for best practices. Five corporations were used as examples of how to improve in attracting, developing, and retaining leadership.

What does he mean by leadership? "For the purposes of this book, leadership is defined as the process of moving a group (or groups) in some direction through mostly noncoercive means."

What are the pressures that create the need for more leadership? Professor Kotter focuses on globalization of competition, deregulation, maturation of markets, increasing speed of technology changes, more rapid growth of firms, greater diversification in some companies, international expansion, and increased use of advanced technology.

He proposes the roles of effective leaders in complex organizations as being (1) creating an agenda for change that fits the circumstances and (2) building a strong implementation network (which will include having more leaders throughout the organization). He contrasts this with the classic role of the internal entrepreneur in that the effective leader reaches out to integrate with as many aspects of the internal and external environment as possible, while the internal entrepreneur seeks to be shut off from the rest of the organization. Lee Iacocca at Chrysler is used as an example of what he means about effective leadership.

Effective leaders need a lot of capabilities including: broad industry and organizational knowledge, solid relationships throughout the firm and industry, a superb reputation and track record in a variety of roles and activities, strong interpersonal skills, a keen mind, high integrity, and lots of self-motivation and energy. The importance of all these elements is conveyed through examples of those who do poorly because they lack some of these characteristics.

Seeing how difficult it is to acquire these characteristics, Professor Kotter quickly points out that these will mostly need to be developed. And he finds that the companies with the most effective leadership make that an important agenda item (with the CEO's active support) in attracting, developing, retaining, and motivating high potential leadership candidates. Although the book does not talk about G.E. in this regard, the process that G.E. put in under Jack Welch in the last 15 years certainly fits the Kotter concept.

He sees that a company needs a combination of a sophisticated recruiting effort, an attractive work environment, lots of challenging opportunities, early identification of top candidates and their development needs, and providing appropriate development opportunities as equal parts of a successful system.

Although the book is 12 years old, it lacks few elements for being fully up-to-date. The best thinking today would add the importance of aligning leadership candidates and the corporate values and vision. Advanced leaders today have great skills in raising capital inexpensively (which is not mentioned here). The best leaders of tomorrow will be very adept at creating an environment in which business models are constantly transformed into better ones. That too is missing here. I graded the book down for missing these elements.

But do be aware that, in the areas covered, this book is just as timely as when it first came out. Anyone who enjoyed Professor Kotter's book, Leading Change, will get solid benefit from The Leadership Factor, as well.

After you finish this book, I suggest that you consider what will be the critical leadership tasks of tomorrow that are mostly unrecognized today. By identifying those areas for your organization, you can begin to fill the gaps now. That will be an important way to create a continuous advantage for your organization over its competitors in the future. In that search, let me suggest that you think about ways to make leadership easier, because it is getting tougher. That suggests, perhaps, that other aspects of the organization need to take up the slack and do more. Consider the ideas in Zero Time to get you started in this thinking. I have also proposed using a company vision that does not require changes in the company business model. What else can be done? I'm sure you'll come up with even better and more relevant ideas to best fit your organization.