The Essence of Great Leadership
Why does your organization exist?
There are a number of pat answers to this question: "To make widgets," "To create shareholder value."
Why are you and your employees motivated to work?
The answers are often similarly glib: "You have to make money!" "Everybody's gotta work."
Good leaders create an organization with a purpose that rises above the bottom line; great leaders go a step further, finding ways to leverage the passion of each employee in order to create incentives that transcend financial rewards.
The greatest leaders rely on a simple, timeless idea in order to create passionate, purposeful workplaces: the highest purpose in life is growth. We're not talking about currently popular American notions of growth here - e.g. growth of your bank account, mortgage payment, or waistline. No, this notion of personal growth goes back to the ancient Greeks: growth in wisdom, in maturity, and in one's contribution to society.
There's a reason this notion of growth has stood the test of time: human beings naturally seek such growth. It's the reason we read books, take classes, coach the kids' baseball team, do volunteer work. For some of us, it's the reason we go to work.
The first step in creating a workplace that promotes personal growth is to determine your organization's purpose, or reason for existing. This purpose must go beyond financial concerns and speak to the ancient, growth-inspiring question of contribution to society. Some of the oldest, most successful companies in the world-e.g. Johnson & Johnson (founded 1886), GE (1892), Citicorp (1812)-owe their success to the relentless pursuit of a single, society-impacting purpose. The next step is to create the intrinsic incentives that motivate employees to work towards the organization's purpose; these incentives are based on passion.
You can't "make" employees passionate about work-passions cannot be imposed externally. Instead, great leaders create environments where employees embrace the corporate purpose, and have numerous opportunities to discover how their individual passions support it.
Attributes of such an environment include:
  • Clearly articulated organizational purpose - Leaders must communicate corporate purpose clearly to all employees, and must demonstrate the relationship between individual passion and corporate purpose. This requires leaders to interact directly with small groups of employees until they "get it;" to screen new employees for cultural fit; and to constantly keep the relevance of purpose and passion clear for all employees. Complimentary extrinsic and intrinsic rewards - While passion in pursuit of purpose must come from within, you can reinforce it with extrinsic rewards. These can range from adding a cultural component to performance reviews to tying financial compensation to purpose-related corporate goals.
  • Trust - Just as you can't dictate passion, you can't impose independence and responsibility; these must come from within each employee, and they can only arise when there is a pervasive environment of trust among employees. Extrinsic incentives and disincentives can promote independence and responsibility, but ultimately, trust begets trust. Most employees, empowered with independence and expected to take responsibility for their actions, will rise to the occasion. Those who don't will typically self-select out of the organization.
  • Leadership by example - Leaders must be passionate, mature, self-aware, and self-confident. They must promote passion, purpose, and growth to the same degree they promote financial objectives. They must not be threatened by the passions and aspirations of others, but instead they must have the integrity to resolve disagreements or power struggles through communication rather than confrontation.
Achieving this level of organizational maturity requires a pervasive "leadership mentality" throughout the company. Leadership, in its broadest sense, is the foundation of life, both in business and otherwise. Having a leadership mentality implies the conscious choice to live a life of meaning and to create an environment for all those around us to do the same.
Business is a unique and almost perfect environment for practicing these principles due to the constant pressures it exerts on us; not only due to quarterly financial pressures and their attendant issues, but also because of the unique demands of the interpersonal, cross-cultural, and personality challenges that we encounter. It is so much easier to see things from only one perspective: ours. But it is so much less fulfilling.