We have been discussing one of the founding principles of the modern leadership movement: the threefold idea that leadership is distinct from and superior to management, and that management is essentially a static activity inherently incapable of foresight or the provision of direction and purpose. Hence, the sophism that managers know how to do things, but leaders know what to do.
We’ve already considered the likelihood that management and leadership are not separate activities, but rather are intermingled features of a single one. The presumption here is that one does not merely partake of the other, but that each flows from the other. Indeed, they are one function that is expressed by the same individual(s) in various ways as the occasion warrants.
But we’ve also noted that some of the key leadership functions belong to owners. These are the ones related to strategic aim and vision. Those certainly are key, because without them there is no purpose for a purposeful organization. I don’t know if that makes them superior, though, since in the absence of competent management there would be no enduring expression of them, either.
What’s more, the other so-called leadership functions – from planning, communication, relationship-building, and the like to innovation, creativity, and even inspiration – can be argued to actually be management functions. They are things managers do to get things done in a collaborative environment. So, they seem to offer little support to the hugely successful proposition that leadership is distinct and separate from management.
That leaves us with the leadership functions reserved to owners. These are preconditions to the existence of a purposeful organization. Moreover, anytime you hyphenate “strategic” onto something, you’re going to attract awed attention, despite the fact that most strategic activities, as important as they certainly are, are also quite mundane.
So, perhaps the suggestion that leadership and management are separate is an unthinking reflection of the distinction between activities rightfully reserved to owners and those that can be delegated to executives. This might be both more understandable and relevant a consideration if we also note that most businesses are family-owned enterprises.
But the problem is that it is not in this context that the subject is discussed. The modern leadership movement makes the case that leadership is a sort of activity that transcends such pedestrian considerations or settings, and that transforms any reality on which it is brought to bear.
This is not exaggeration. Rhetoric built on such remarkable assumptions is regularly used to describe concepts of individual leadership in modern organizations, concepts which have attained wide currency.
And it is a real and quite serious problem. In dismissing putatively trivial considerations like the rights of owners and the responsibilities of their employees, it makes a real fiduciary mess of the whole situation.
The news has plenty of evidence to support that concern. For our part, we will return to another aspect of the problem: If we can neither define leadership nor specify the location and nature of its putative boundary with management, how can we teach it? We will pick that up next, and hope you will join in.
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Today’s tips: Speaking of confusing ownership, leadership, rights, and modern fiduciary duties, please see this WSJ opinion piece arguing that CEOs should follow the late Paul Newman‘s example by giving more corporate money to philanthropic interests. While you read it, please bear in mind that Paul Newman’s generosity was expressed in his capacity as the owner – not as a hired CEO – of his companies. That is, it was his money – not his boss’s. It is this unthinking conflation of the “CEO” with the very identity of the “company” that is behind a good bit of the wide range of difficulties we have faced in the past decades and continue to confront today.
And speaking of confusion about fiduciary duty and today’s financial crisis, please see this essay by Carl Icahn, from his site The Icahn Report, detailing his view that any bailout plan should include provisions to restore the proper center of gravity in corporate governance in owners, rather than management.
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