Leadership & Organizational Effectiveness
Leadership is about influencing people. Leaders are visionary thinkers who inspire, motivate, and serve as role models to achieve organizational goals. Leaders steer organizations toward making their vision a reality. At its most basic, leadership is about working with and through other people. Organizational effectiveness is the measure of how well the leader does his job.
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History
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Douglas McGregor in his seminal work, "The Human Side of Enterprise," talks about two leadership or management styles which he called Theory X and Theory Y. Theory X managers lead their organizations by threats, rules, coercion, and financial rewards. Theory X managers believe that people are not inherently motivated to work and therefore must be coerced into helping achieve organizational effectiveness.
Theory Y leaders believe that people will work toward objectives they understand, believe in, and that help them become more capable employees. McGregor's paradigm was expanded in the 1990s to include Theory Z managers and leaders. Organizations that operate within a Theory Z model tend to be consensus driven, to focus on empowerment, and to show greater concern for their employees. Theory Z leadership concepts are partially derived from the Japanese management style that was succeeding in competition with U.S. companies in the 1980s.
Although theories X, Y, and Z are intuitively appealing constructs of different leadership styles, there has been little formal research to assess their differential effect on organizations.
Significance
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To appreciate the importance of leadership to organizational effectiveness, it is helpful to reflect on the impact of leaders that had a vision of a different world and made it happen and those leaders who so improved organizational effectiveness that they turned failing organizations into successful ones. Consider the importance to the digital age of Bill Gates, Steve Jobs, and Jeff Bezos. Or leaders such as Jonathan Ornstein at Virgin Airlines or Carly Fiorina at Hewlett Packard who moved their established companies from the brink of failure to successful competitors.
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Function
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Leaders communicate to employees a vision of the organization's future. That may include increasing market share, creating or producing innovative products, achieving performance goals, or changing the status quo. Leaders make a difference in how people see their organization's place in the world and their own future as part of that organization. Effective leaders define organizational effectiveness and they model the behaviors necessary to be or become part of an effective organization.
Identification
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Effectiveness, although difficult to measure directly, can be inferred from organizational characteristics. Effective organizations are trusted. They have the reputation of delivering on their promises. Their customers are satisfied. They attract and keep talented employees. The productivity of employees in effective organizations exceeds their competitors. They are agile and able to adapt to change. They measure their performance and use that information to improve processes and products. Effective organizations are profitable.
Expert Insight
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Mike Mears, founder of the CIA's Leadership Academy, describes how future organizations can improve organization effectiveness in his book, "Leadership Elements." Mears believes that leaders improve organizational effectiveness through incremental process improvements, customer focus, leveraging knowledge throughout the organization, and frequent communication. He believes that leadership is based on trust and that effective leaders empower employees, remove performance barriers and make decisions based on facts.
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