Leadership: Influence

Definition Leadership is the ability of an individual to influence, motivate, and enable others to contribute toward the effectiveness and success of the organizations of which they are members.

Leadership is different from Management  Management follows leadership, not vice-versa  Management maintains; leadership drives, inspires, energizes  Leadership sets vision; management implements it  Management tends toward mechanical, linear, & technical approaches; leadership tends toward creativity, flexibility & adaptiveness

WHAT CHALLENGES OUR LEADERSHIP? EFFECTIVENESS Achieving our goals; doing things well

KEY CHALLENGES IN LEADERSHIP ETHICS Doing things morally; doing good things

AVAILABILITY Willingness & readiness to lead; doing things with commitment

The complexity of context  Persistence of global problems: poverty, natural calamities, environment, terrorism, ethno-religious conflicts  Rapid changes: technology, knowledge & information, communications, media  Globalization vis-à-vis localization: business, livelihood, health, population

COMPLEXITY AT DIFFERENT LEVELS Leader’s CONTEXT AND ENVIRONMENT

Leader’s SELF

Leader’s RELATIONSHIP WITH FOLLOWERS

The complexity of context  Turbulence, chaos: magnitude of problems  More difficult to predict, control  Ambiguity & uncertainty  Tensions & contradictions  Plurality of meanings & interpretations of reality & truth  The “unconscious” in organizations

The complexity of leader’s self  The psychology of leaders: needs, motivations, drives, impulses, fears, emotions; conscious and unconscious  Leader’s “inner theater”/ backstage vis-à-vis outward / onstage behavior  Leader’s exposure to power and public attention

Traditional Issues in Leadership Power

Trust Managing Conflict

Trouble Shooting

Motivation

Traditional Issues in Leadership Setting goals Coaching Lone decision making

Dealing with external agencies Delayed decision making

Contemporary Issues Out of the box thinking

Changing group dynamics

Leading by example Setting Goals

Globalisation

Technology

Contemporary Issues Dealing with change & uncertainty

Quick decision making Mentoring Recruiting & retaining quality workers

Ethical Behaviour

A great personality: Guess who? • He bought a small farm at the age of 14 with savings from delivering newspapers. • He still lives in 3 bedroom house in mid-town Omaha that he bought after he got married 50 years ago. • He drives his own car and does not have a driver or security people around him. • He never travels in private jet although he owns the world’s largest private jet company.

• His company owns 63 companies. He writes only one letter in a year to his CEOs. • He has given only two rules to his CEOs: Rule no. 1 : Do not lose any of your share holder’s money. Rule no. 2 : Do not forget rule no. 1 * He does not socialize with high society crowd. His past time after he gets home is to make himself some pop corn & watch TV. • Bill gate is his devotee. • He has donated $31 billion to charity.

• His advice to young people: STAY AWAY FROM CREDIT CARDS AND INVEST IN YOURSELF. * He is Warren Buffet the second richest man in the world.

• What is your perception about Warren Buffet? • • • • • • • • •

He is ___________________________ He is ___________________________ He is ___________________________ He is ___________________________ He is ___________________________ He is ___________________________ He is ___________________________ He is ___________________________ He is ___________________________

Traits Theories of Leadership Theories

that

consider

personality,

social, physical, or intellectual traits to differentiate leaders from non leaders.

Leadership traits • • • • • • • •

Energy and drive A sense of cooperation Personality Intelligence Self confidence Tact and diplomacy Will power & flexibility Knowledge of human relations

• Appearance, presentability • Initiative • Judgment • Sociability • Courage and integrity • Emotional stability

Leadership & Management Leadership The ability to influence a group toward achievement of goals Management Use of authority inherent in designated formal rank to obtain compliance from organizational members.

Leadership •

Leadership (L) is a function of followers (f), goals (g), a measure of willingness on the part of subordinates (w) and a given situation (s) L = F (f,g,w,s).

•

Formal leadership is acquired by appointment or selection and authority is given to him to function as leader.

•

Informal leadership emerges when a person uses interpersonal influence in a group without designated authority or power. This type of leader emerges in certain situation because of his charm, knowledge, skills and other traits.

Behavioral Theories While traits theories suggest what leaders “are”, Behavioral Theories of leadership suggest what people “do”. Theories proposing that specific behaviors differentiate leaders from non-leaders. Leadership effectiveness is determined in terms of leader-subordinate interaction and outcome. • Trait theory: Leaders are born, not made. • Behavioral theory: Leadership traits can be taught.

Ohio State Studies The study highlights two factors which affect leadership dimension: Consideration The extent to which a leader is likely to have job relationships characterized by mutual trust, respect for subordinates’ ideas, and regard for their feelings Initiating Structure The extent to which a leader is likely to define and structure his role and those of sub-ordinates, assign tasks to them and push for realization of organizational goals.

• An important discovery in the Ohio study indicates that it is not necessary that a leader to be rated high both on consideration as well as structure element. He could be high in one and low in other to lead group successfully.

• The managers who exhibit high levels of both consideration

and

initiating

structure

generate

higher levels of subordinate performances and satisfaction.

Tata Steel • The Chairman of Tata steel, of late, has become apprehensive that Mittal Group may take over the Company. As a strategy he is thinking of acquiring “Corus” a global giant in steel industry to become too enormous in size to be taken over by Mittal Group. • Scene 1 : He has called a meeting of his vice presidents and directed “ I want to take over “Corus” within 3 months. This is your task and you will have to meet the deadline. I think it is clear to you and you don’t have any question. So jump on it.”

Tata Steel • Scene 2 : The Chairman has called a meeting of his vice presidents and said “ To check Mittal group we should take over “Corus” as quick as possible. Question is how best we can complete the deal. Think over all the pros and cons and come out with your suggestions. I hope a week time will be sufficient. So let us meet again on next Friday here itself. • Scene 3 : He has called a meeting of his vice presidents and said “ To check Mittal group we should become as big as them . For the purpose we will have to take over a suitable company. You are all my best people and I trust you. Do the needful as quick as possible.”

Leadership styles • Autocratic or dictatorial leadership : The leader keeps the decision making authority and control in own hands and assumes full responsibility for all actions. • Subordinates are to implement instructions without questioning. • This style ranges from tough and highly dictatorial to paternalistic.

Autocratic leadership – advantages: 3. 4. 5.

It is useful when subordinates are new on job and have no prior experience in decision making or performing without supervision. It is useful in crisis situation and when quicker results are required. It is useful when chain of command and division of work is clear and understood by all.

Dis-advantages: 9. 10. 11.

One way communication without feedback leads to misunderstanding. It can lead to worker resentment and may affect employee morale. It is unsuitable when the workforce is knowledgeable about their jobs and job calls for teamwork.

Participative or democratic leadership • •

In this type of leadership, subordinates are consulted and feedback is taken in decision making process. Group members are encouraged by leader to demonstrate initiative and creativity in setting plans and policies and decision making.

•

Advantages: -

6.

Active participation by employees raises morale and satisfaction. Employees develop a greater sense of self esteem due to importance given to their opinions. Employees get more motivation in work.

7. 8.

Participative or democratic leadership •

Dis advantages: -

3.

This method is more time consuming and toom many opinions may make decision making process complicated.

4.

Managers may not like erosion of their power base.

5.

Some employees may feel dis-satisfied if their ideas are not taken.

6.

Application of the method requires certain conditions, such as employees should be educated and organized.

Laissez- faire or Free-reign Leadership •

In this type of leadership, the leader is just a figure-head and does not give any direction but delegates authority to subordinates so that they must plan, motivate, control and otherwise be responsible for their own actions.

•

Subordinates develop their own techniques for accomplishing goals within overall organizational policies and objectives.

•

This type of leadership is highly effective when the group members are highly knowledgeable, skilled and motivated.

•

This type of leadership is mostly effective in research laboratories and academic institutions.

A case •

Neptune Steel is going through a bad phase. One reputed consultant has suggested restructuring of the Company which may involve retrenchment of 150 employees.

•

Mr. Barua, the MD has called a meeting of the Board. One of the Board members suggested to remove the employees immediately and implement the restructuring process.

•

Mr. Singh, another member suggests that no we can not overlook the human aspect of the issue. First we will have to rehabilitate these persons and then go for restructuring.

•

Mrs Parekh opined “Ok” let us take a time bound programme of rehabilitating the employees through alternative employees / business opportunities within three months and then go for the restructuring.

•

What are the leadership styles of these individuals?

The Managerial Grid (Blake and Mouton)

Contingency theory of leadership •

This theory says that an analysis of leadership involves not only the individual traits and behavior but also a focus on the “SITUATION”.

•

Effectiveness of leader behavior is contingent upon the demands imposed by the situation.

•

The focus is on the situation in which leadership is exercised and not upon the leader.

•

According to Szilagyi and Wallace, there are four contingency variables that influence a leader’s behavior:

•

1. Leadership characteristics

•

2. Subordinate characteristics

•

3. Group characteristics

•

4. Organizational structure characteristics

Fred Fiedler’s Contingency Theory • According to Fred Fiedler three situational variables influence group performance:• 1. Leader- member relationship – Existence of mutual trust, open communication or otherwise. • 2. Task structure – Involves clarity of goals, clearly established and defined steps required to complete task, less ambiguity in roles, rules and regulations etc.

Fred Fiedler’s Contingency Theory • 3. Position power - Legitimate power inherent in leader’s organizational position. It refers to the degree to which a leader can make decisions about allocation of resources, rewards and sanctions. • The leader is most effective when leader’s group relations are positive, task is highly structured and the leader has substantial power and authority to exert influence on the subordinates.

Fiedler’s Least Preferred Co-worker •

The leadership model proposed by Fiedler measures leadership orientation and effectiveness with a differential type of attitude scale that measures the leader’s esteem for the “Least preferred coworker (LPC)” i.e. whether, the person the leader least likes to work with, is viewed in a positive or negative way.

•

As example, if a leader describes his LPC in a favourable way with such factors as friendliness, warmth, helpfulness and so on then he will be considered high on LPC scale.

Fiedler’s Least Preferred Co-worker • Generally a high LPC score leader is more relationship oriented and a low LPC score leader is more task oriented.

• A particular leadership style may be effective in one situation and totally ineffective in another situation. And since a leadership is difficult to change, situation is to be changed to suit the leadership style.

A situation • Sumita has joined recently as a finance officer in Jupiter Capital ltd at Mumbai. • On the very first day her boss, Mr. Singh the VP (Finance) has given her a number of files containing details of HNI (high net worth) clients of the company and has asked her to go through the same. After three days, Mr. Singh called Sumita and advised her manage wealth of top ten clients and then left for Delhi to attend a meeting. Sumita, all through the day wondered how to manage the wealth applying her theoretical concept of portfolio management. • Sumita returned home with high level of stress. • Please analyze the leadership style of Mr. Singh

Path- Goal Theory • The theory of House and Mitchell proposes that effectiveness of leaders can be measured from their impact on their subordinates’ motivation, their ability to perform effectively and their satisfaction with their tasks. • This model emphasizes that leader’s behavior be such as to compliment the group work setting and aspirations so that it increases subordinate’s “goal” achievement level and clarifies the “path” to these goals. • The theory is basically based on the “Expectancy theory” i.e. the path – goal approach of motivation.

• According to the Path-Goal theory, to motivate employees, leader should:• 1. Recognize subordinate needs for outcome over which, leader has some control. • 2. Arrange for appropriate rewards to his subordinates for goal achievement. • 3. Help subordinates in clearly establishing their expectations. • 4. Demolish, as far as possible, barriers in their path of goal achievement. • 5. Increase opportunities for personal satisfaction which are contingent upon satisfactory performance.

• Path-goal theory supports the following types of leadership depending upon the situation:• 1. Directive • 2. Supportive • 3. Achievement-oriented • 4. Participative

Nevertheless specific leadership that is most effective is also contingent upon :• 1. Characteristics of subordinates • 2. Environmental factors

The Path-Goal Theory

Cognitive Resource Theory In a modification of his own theory, Fiedler along with Garcia focused on role of stress as a situational unfavorableness

in leadership. According to them ,

stress is an enemy to rationality and effectiveness of leader’s intelligence and experience differ in low and high stress situations.

Research Support: • Less intelligent individuals perform better in leadership roles under high stress than do more intelligent individuals. • Less experienced people perform better in leadership roles under low stress than do more experienced people.

A situation • Mr. Anil Kapoor has recently taken over charge of General Manager of Neptune Cement near Katni. The company incurred loss last year. • After a detailed study he classified his 430 employees as under:• 20% employees are absolutely incapable as well as unwilling to put their best in work • 35% employees are willing but not competent enough • 28% employees are willing and at the same time are competent. • Remaining 17% are unwilling but capable in their work. And they have more inclination towards trade unions • Mr. Kapoor has engaged your company as a consultant to suggest suitable measures to turn around. • What type of leadership style would you suggest for Mr. Kapoor ?

Hersey & Blanchard’s Situational Leadership Theory (SLT) also known as Life Cycle Theory

• According to this theory, which has been widely accepted in leadership development programmes all over the world, leadership style is contingent on the level of follower’s readiness. • In SLT, leader –follower relationship is analogous to parentchild relationship. And as parents are required relinquish control as a child becomes more mature and responsible, leader should also do the same depending upon maturity of followers. • This implies that effective leadership behavior depends on ability and motivation of followers.

Leadership styles and maturity levels have the following four combinations:• 1. Telling – When follower is unable and unwilling to do a task i.e. is having a low level of maturity, the leader needs to give a clear and specific directions. • 2. Selling – If follower is unable but willing i.e. is having a moderate level of maturity, leader needs to give a clear and specific direction i.e. display high task orientation to compensate for follower’s lack of ability and at the same time should display high relationship orientation to get the follower to buy into the leader’s desires.

• 3. Participating – When the follower is able but unwilling, the leader needs to use a supportive and participative role. • 4. Delegating – When follower is both able and willing i.e. is highly matured, he requires little guidance. Leader can delegate in this situation

Leadership Styles and Follower Readiness (Hersey and Blanchard) Follower Readiness Able

Unwilling

Supportive Participative

Willing

Monitoring

Leadership Styles

Unable

Directive

High Task and Relationship Orientations

Leader–Member Exchange Theory (LMX) Because of time constraint, leaders establish a special relationship with a small group of followers who belong to the in-group because of similarities in personality traits and attitudes or a higher level of competence than others. The others are in out-groups. Leaders create in-groups and out-groups, and subordinates with in-group status will have higher performance ratings, less turnover, and greater job satisfaction.

Leader-Member Exchange Theory

Charismatic Leaders •

Charm and grace are all that is needed to create followers.

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Self-belief is a fundamental need of leaders.

•

People follow others that they personally admire.

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The Charismatic Leader gathers followers through dint of personality and charm, rather than any form of external power or authority.

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Charismatic Leaders use a wide range of methods to manage their image and, if they are not naturally charismatic, may practice assiduously at developing their skills. They may bring trust through visible self-sacrifice and taking personal risks in the name of their beliefs. They will show great confidence in their followers. They are very persuasive and make very effective use of body language as well as verbal language.

Key Characteristics of Charismatic Leaders •

Personal risk. Willing to take on high personal risk, incur high costs and engage in self-sacrifice to achieve the vision.

•

Environmental

sensitivity.

Able

to

make

realistic

assessments of the environmental constraints and resources needed to bring about change.

•

Sensitivity to follower needs. Perceptive of others’ abilities and responsive to their needs and feelings.

•

Vision and articulation. Has a vision—expressed as an idealized goal—that proposes a future better than the status quo and is able to clarify the importance of the vision in terms that are understandable to others.

•

Unconventional behavior. Engages in behaviors that are perceived as novel and counter to norms.

Inspirational Approaches to Leadership Charismatic Leadership Theory Followers make attributions of heroic or extraordinary leadership abilities when they observe certain behaviors. Charismatics Influence Followers By: 2. Articulating the vision 3. Setting high performance expectations 4. Conveying a new set of values 5. Making personal sacrifices

Transactional Leadership • People are motivated by reward and punishment. • Social systems work best with a clear chain of command. • When people have agreed to do a job, a part of the deal is that they cede all authority to their manager. • The prime purpose of a subordinate is to do what their manager tells them to do.

Characteristics of Transactional Leaders Contingent Reward: Contracts exchange of rewards for effort, promises rewards for good performance, recognizes accomplishments.

Management by Exception (active): Watches and searches for deviations from rules and standards, takes corrective action.

Management by Exception (passive): Intervenes only if standards are not met.

Transformational Leaders • People will follow a person who inspires them. • A person with vision and passion can achieve great things. • The way to get things done is by injecting enthusiasm and energy. • Working for a Transformational Leader can be a wonderful and uplifting experience. They put passion and energy into everything. They care about you and want you to succeed.

Characteristics of Transformational Leaders Idealized Influence: Provides vision and sense of mission, instills pride, gains respect and trust.

Inspiration: Communicates high expectations, uses symbols to focus efforts, expresses important purposes in simple ways.

Intellectual Stimulation: Promotes intelligence, rationality, and careful problem solving.

Individualized Consideration: Gives personal attention, treats each employee individually, coaches, advises.

Transactional and Transformational Leadership Transactional Leaders Leaders who guide or motivate their followers in the direction of established goals by clarifying role and task requirements. Transformational Leaders Leaders who provide individualized consideration and intellectual stimulation, and who possess

• Contingent Reward • Management by Exception (active) • Management by Exception (passive) • Laissez-Faire

• Idealized Influence • Inspiration Motivation • Intellectual Stimulation • Individual Consideration

Trust: The Foundation of Leadership Trust A positive expectation that another will not—through words, actions, or decisions —act opportunistically. Trust is a history-dependent process (familiarity) based on relevant but limited samples of experience (risk).

Ten Principles of Motivational Leadership • 1. Set goals • 2. Set an example • 3. Constantly improve • 4. Give yourself time to think • 5. Lead without pushing • 6. judge by results – Hire people with a good judgnment and you get good judgment

• 7. Build confidence • 8. Expect criticism – The trouble with most of us is that we may be ruined by praise rather saved by criticism. • 9. Think of future – He who does not look ahead remains behind • 10. Think like a winner

Great leaders •

One must have strategies to execute dreams.

•

The early years were more about learning than about acting. I had to carry on my father’s work, which was a big challenge.

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In our way of working, we attach a great deal of importance to humility and honesty; With respect for human values, we promise to serve our customers with integrity.

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We believe this combination of excellence in operations and strong execution of our strategy is critical to achieve our vision. We will continue to focus on both in future as well.

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One of the pre – requisites for children becoming proactive and responsible citizens is the availability of enough role models inside and outside the school.

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There are millions of children today who don’t attend school. However, education is the only way to get ahead in this country.

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I want our company to be among the top ten IT companies in the world.

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It is imperative that our schools and educational institutions create an environment in which the required intellectual, physical, social and moral attributes can be developed, cherished and nurtured. Schools must be viewed as places that have the potential to transform the future of child and the nation.

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Character is one factor that will guide all our actions and decisions. We invested in uncompromising integrity that helped us take difficult stands in some of the most difficult business situations.

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As an advisor, I can say what I want. If I were a politician, I would constantly have to compromise, and I’m incapable of doing that.

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We hire on requirement basis and not on anticipation.

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As you get bigger, you have to learn to delegate. It’s also an excellent way to get staff involved in the company’s operations.

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We need to stop looking at schools as factories churning out students equipped to merely memorize the text.

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What's important at the grocery store is just as important in engines or medical systems. If the customer isn't satisfied, if the stuff is getting stale, if the shelf isn't right, or if the offerings aren't right, it's the same thing.

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Before at GE, we generally used to tell people what to do. And they did exactly what they were told to do, and not one other thing. Now we are constantly amazed by how much people will do when they are not told to do by management. * The essence of competitiveness is liberated when we make people believe that what they think and do is important - and then get out of their way while they do it.

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I've learned that mistakes can often be as good a teacher as success.

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An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.

•

Change

before

you

have

to.

• If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it you almost don’t have to manage them. • Above all, good leaders are open. They go up, down, and around their organization to reach people. They don't stick to the established channels. They're informal. They're straight with people. They make a religion out of being accessible. They never get bored telling their story. • Giving people self-confidence is by far the most important thing that I can do. Because then they will act. • When I stop learning something new and start talking about the past versus the future, I will go.