BUS 250 week 5 assignment (DO NOT CHANGE THE PRICE) IF YOU DO I WILL NOT SEND A HANDSHAKE.

10 Leadership Challenges and Opportunities R-diger Wittmann/iStock/Thinkstock Learning Objectives After reading this chapter, you should be able to:1. Identify how the concept of leadership has changed o ver time.

2. Summarize the challenges reg arding sustainability and CSR that future leaders face.

3. Describe the charact eristics of next-generation leaders as they relate to sustainability and CSR.

2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.1 Changing Concepts of Leadership Pretest Questions 1. The concept and meaning of leadership has remained relatively constant over time. T/F 2. T rait theories of leadership opened the door for leadership training. T/F 3.

W aste reduction and social equity have always been the concerns of corporate leaders.

T/F Answers can be found at the end of the chapter. Introduction Every generation defines and redefines the concept of leadership as it faces the challenges of its era. Certainly, some time periods provide more material and opportunity for reflection than others. For example, in 1862, as the fractured United States fought the Civil War, Presi - dent Abraham Lincoln said, “The dogmas of the quiet past are inadequate to the stormy pres- ent. The occasion is piled high with difficulty and we must rise with the occasion. As our case is new, so we must think anew and act anew” (as cited in Woolley & Peters, 2015).

Part of Lincoln’s legacy stemmed from his ability to “think and act anew.” While the issues facing our globalized world significantly differ compared to the 1800s, some themes remain the same: When it comes to issues like CSR and sustainability, it seems necessary for brave people to think and act anew. This chapter examines how the next generation of leaders can begin this process. If society is to face new problems in a novel way, completing such tasks is not easy, but it is essential.

The first nine chapters of this text illustrated the difficult and specific problems of build- ing socially responsible and sustainable organizations. The opportunity to make the future dramatically different from the past—and the present—presents unique leadership chal- lenges that we address in this chapter. After reviewing the history of leadership, we describe CSR-relevant conditions facing leaders. Finally, we describe skills that leaders must mas- ter if they are to effectively lead in a global, environmentally stressed, and economically fluctuating world. 10.1 Changing Concepts of Leadership This text has discussed critical concepts of sustainability and stewardship. Both are important terms closely related to leadership. However, the concept of leadership and our expectations for it have evolved over time, as all concepts do. In this section, we describe how concepts of leadership have changed. Students should note that this helps us appreciate history and lays the foundation for a deeper understanding of how leaders can be successful when they are held accountable for corporate social responsibility. \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.1 Changing Concepts of Leadership Leadership as Monarchy and Divine Right Western cultural norms about leadership have strong roots in a patriarchal and monarchical social structure—a male-dominated social order in which royal families prevailed. In this property- and lineage-based mind-set, the fundamental assumption was that kings and queens (or other monarchs) were entitled to the positions they held (in some cases such posi - tions were considered to be appointed, or at least approved, by a deity). Typically, in monar- chies positions of power are transferred based on lineage. The average person has little access to the monarchs; rather, he or she has to contribute significantly to the well-being of more powerful people. In monarchies, leadership historically came from “an outside source, the power of the original source of delegation or control—divine, delegated, hereditary, or raw force” (Miller, 2004, p.110). In other words, leadership came as a divine right but was often maintained by brute force. In a world dominated by divine right, lead- ership was completely self-justified. It was more about authority and control and less about collaboration and information. A king, queen, emperor, sultan, or shogun each had authority over the local world, and most sought to expand access to resources in competition against other kingdoms or principalities. In other words, it was the role of the monarch to obtain as many resources as possible and protect his or her people from other monarchs who also wanted to acquire more resources. This changed as leadership theory evolved and moved toward a CSR mind-set and generated an expectation of sustainability.

Great Man Theory As a result of the historical dominance of certain families and monarchies, it is not surprising that the first management theories about leadership were called “great man theories.” These assume that a leader is both born in the right place and developed to protect against the chaos of nature and malevolent others. Also, despite exceptions such as Joan of Arc or Queen Eliza- beth, as a cultural by-product of the times, it was typically assumed that all leaders would be men. In terms of how this relates to CSR, such thinking suggests that dominance and compe- tition define and characterize leaders. While leadership thinking has changed and matured, such a mind-set may still characterize lingering attitudes about nature and larger society.

Monarchies gave way to forms of democracy and capitalism, but conceptualizations of lead- ership did not really change at first. Great man theories of leadership replaced the idea that leaders were simply leaders by birthright, though they continued to imply that leaders were special people, and usually men, who developed leadership traits. Stefan Wermuth/AP Despite sharing more leadership and power, Queen Elizabeth II and her family are an exam- ple of a monarchy.

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.1 Changing Concepts of Leadership Scottish writer Thomas Carlyle (1840) popularized the great man theory in the 1840s, add- ing the belief that heroes influenced history through personal attributes and divine inspira- tion. This idea eventually gave way to other, less deterministic conceptualizations of leader- ship that are different from modern-day CSR and sustainability concerns. Still, many people tend to wait for someone powerful to emerge and lead the charge to a more socially and envi- ronmentally friendly future. When people groom themselves to stand out or wait for others to dominate, they echo the Western thinking that dominated the 19th century.

Trait Theories Research on the trait theory of leadership began in the early part of the 20th century. Trait theory describes personality traits and attributes of effective leaders. It stemmed from the hope that if one could understand what made great people great, one could screen, select, and even train others to have those traits. Some trait theories go so far as to suggest that good leaders have certain physical attributes, including male gender. In the trait theory of leader- ship, scholars sought to understand the physical and personal characteristics of leaders, but they were biased by the samples offered by the early 20th century’s social order—at the time almost all leaders were White males with access to property and sources of wealth.

In 1948 one of the first trait theorists, Ralph Stogdill, published an article in the Journal of Psychology titled “Personal Factors Associated With Leadership.” Stogdill’s research showed that leaders’ characteristics included capacity, achievement, responsibility, participation, and status. Other trait theories, whether based on research or not, argued that leaders must have subjective characteristics like charisma, be smart in specific ways, and generally be male.

Trait theory maintained that leaders are born but also suggested that leaders must develop certain traits to leverage their birth advantages into effective leadership. Trait theories led to the suggestion that leaders demonstrate consistent behaviors and tendencies in certain situa- tions and popularized the idea that people can enhance their natural skills and abilities. Trait theories also opened the door to the democratization of talent and leadership. Scholars and philosophers began to argue that leadership traits could be learned and replicated by differ - ent people, perhaps even those who are different from the majority.

Behavioral Theories As leadership behaviors were identified as a key factor of a firm’s success, behavioral theory began to emerge in the 1950s as a way to promote corporate success. Rather than focusing on traits intrinsic to an individual, behavioral theories look outside the leader and focus on actions or behaviors. One behavioral theorist, Douglas McGregor (1960), offered a research- based concept called theory X and theory Y. Theory X leaders behave as if the workers they lead are cogs in a machine. They assume workers are lazy and need motivation from a power - ful and influential leader. In contrast, theory Y leaders see workers as wanting to do a good job and as creative and innovative. McGregor (1960) emphasized that a leader’s behavior would vary depending on which view he or she adopted.

In 1967 Fieldler’s contingency theory separated the behaviors of leaders into either a task or a relational orientation. Fielder argued that some leaders emphasized “getting things done,” (task orientation) while others emphasized “having strong relationships” (relational \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.1 Changing Concepts of Leadership orientation). Later, in the 1970s Hersey and Blanchard proposed situational leadership, argu- ing that leaders employed either task or relational behaviors as the situation required. While helpful, these concepts of leadership are limited to individual behavior and not systems and sustainability.

As the field of leadership scholarship matured, academics and practitioners moved away from these male-dominated, trait-dominated, and command-and-control orientations toward process theories of leadership, which bring workplaces closer to the concept of sustainability and CSR.

Process Theory The next leadership theory to emerge employed concepts related to sustainability. In 1991 scholar Margaret Wheatley wrote Leadership and the New Science. The book is a primer for systems theory and complexity theory in leadership, and it emphasizes a process theory of leadership. This theory posits that leadership cannot simply be observed (think of traits or behaviors), nor does it flow in one direction, from leader to follower. Rather, leadership occurs when leaders apply knowledge and skills to their interactions with others. Impor- tantly, process theories view leadership as bidirectional, where learning flows between leader and follower; in fact, the very construct of “leader” and “follower” are less useful and thus downplayed in process theories. Wheatley (2006) postulates that leadership should be viewed through the lens of chaos theory to best understand how organizations really work— the result of using such a lens is that leaders will take a systems view of the organization and seek to involve as many stakeholders as possible in decision-making processes. Prior to Wheatley, other relationship-based mind-sets, including those put forth by scholars who discuss servant leadership (Greenleaf, 1977) or theory Z leadership (Ouchi, 1981), argued for a more holistic view of what leadership is and could be, which brings us closer to a sustain- ability and pro-CSR model.

A process theory of leadership remains central to those who embrace the concept of sustain- ability. It encompasses the idea of traits, in that all leaders must have certain traits or capaci- ties that match the challenges they face. But process theory also encompasses a contingency theory of leadership because certain traits match certain environments, and no single trait ensures success in all environments. The process theory of leadership puts managers beyond the “win–lose” traditions of older theories and toward a more holistic approach that pays attention to important social and environmental relationships.

For example, research from author Jim Collins argues for what he calls level 5 leadership. In his best-selling book Good to Great, Collins (2001) shows why some companies remain simply functional and “good,” as opposed to becoming “great,” which tends to mean highly profitable and composed of engaged and loyal employees. Collins claims that level 5 leadership reflects a general concern for a leader’s character and motivation and for all involved in the process.

He proposes that everyone should be involved in the process of leadership, including share- holders, employees, suppliers, customers, and people in the community.

Process theories of leadership are potentially more compatible with the challenges of the future, which are likely to be entirely different from challenges of the past. The next sections address those challenges and discuss how leaders can prepare to face them with confidence.

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.2 Challenges Facing Future Leaders 10.2 Challenges Facing Future Leaders The previous section described concepts of leadership developed in and for previous genera- tions. These notions of leadership were adopted before people could fully see the importance of creating socially responsible and sustainable corporations that can improve gender and racial equality and other socially responsible behaviors. These older models of leadership, while exceptionally helpful, were also very limited. For example, they tended to be simplistic and linear and did not embrace complexity and systems. They tended to be oriented toward men and privileged classes and did not take into account the particular characteristics of women or other socioeconomic groups. The older models assumed the ever-present need for an organizational hierarchy and did not imagine new kinds of organic organizations that would be less hierarchical and perhaps less permanent. Despite these significant drawbacks, theories from previous generations still have some validity. Vestiges of previous thinking also continue to dominate corporate and educational culture. However, older theories of leader- ship do not point society in the direction of embracing key contemporary ideas such as waste reduction, social equality, and environmental responsibility, all of which matter to many mod- ern corporate leaders.

Waste Reduction The rise of the corporation began about 250 years ago, when social interests led to the cre- ation of hospitals, and political–business interests such as those of the British East India Com - pany (Rao, 2011) or the Hudson’s Bay Company became tools for economic conquest. Accord- ing to Rao, globalization created the corporation because large-scale enterprise was needed to dominate in a world where competition remained unchecked. In such corporate environ- ments, leaders were expected to compete and dominate. Moderation, social responsibility, and waste reduction were not visible or important to governing boards or investors.

For example, the Hudson’s Bay Company, one of the oldest corporations in the world, was charted by the British to trade with North American natives and secure a steady supply of fur. It was also used to politically and economically dominate North America, at one time claiming more than 15% of the continent as its “territory.” But as hunting grounds in the east were depleted and fur became scarce, the trappers and traders working for the corporation moved west to find new territories. There was no leadership or discussion of topics such as conservation, waste reduction, care for the environment, or even care for the native people who supplied the fur (Carlos & Lewis, 1993). The Hudson’s Bay Company was essentially an instrument of political and social dominance in a political rivalry first between British and French factions and later between British and American factions. It represents an early and dominant influence on subsequent market behaviors of many American businesses.

Social Equality Social equity was also not typically part of corporate values in early years. Corporations practiced protectionist policies that guarded equity owners at the expense of many groups, including Black and other Americans who were enslaved, as well as women and laborers. \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.3 Next-Generation Leaders Many US corporations (and some universities) still in business today benefited from support- ing the slave trade. For example, Aetna Insurance has acknowledged paying life insurance to slave owners when a slave died. Like many responsible companies involved in behaviors now deemed atrocious, Aetna acknowledged its role and apologized. Still, this illustrates how corporations throughout history have often taken the wrong side on moral issues (“15 Major Corporations,” 2013).

While some might think the issue of slavery is a part of deep history, the issue remains alive today as corporations, particularly in global environments, grapple with how people, even children, are compelled to work. The question of social equity and work participation is a permanent challenge for corporations.

Similarly, labor relations and workers’ rights are permanent leadership challenges. Corpora- tions have a long and deep history of challenging what is now regarded as workers’ right to organize in a labor union. In 1894 presidential candidate Eugene Debs worked to unionize the Pullman railroad car company in Chicago. The local workers were convinced to strike, and other rail workers’ unions also went on strike in support of their colleagues in Chicago. By summer, more than 125,000 workers were on strike, shutting down the ever-important rail system in the United States. There were riots, clashes, and an eventual resolution, but more than 60 people died and more than $80 million in damages was caused in an effort to deny workers the right to organize (Papke, 1999).

Gender inequity is another permanent leadership challenge. One hundred years ago, women did not generally participate as corporate employees. In World War II many women took over factory positions held by men who were called into combat. By the 1950s women were not just on the floor of the factories but in their boardrooms. By the 1970s the wage equity debate was raging, and it continues today. Achieving gender equity and creating appropriate work environments for people of all gender identities are an ongoing challenge for corporate leaders.

Research has found that corporate leaders rate CSR and sustainability as important leader- ship concerns (Bonini & Gorner, 2011). However, it is extremely complex to manage each of these and also maintain the corporation’s many financial, social, and environmental issues.

The leadership challenge is large, but newer models of leadership share the responsibility. 10.3 Next-Generation Leaders Each student of CSR and sustainability should ask themselves: What kind of leader will I be?

What kind of leader will I work with? What kind of leader is ideal for the world I would like to live in? The following sections articulate a vision of a next-generation leader who builds and enhances a socially responsible and sustainable corporation. We argue that such a leader displays specific aspects of leadership; each one is essential to building responsible and sus- tainable organizations of any size. Table 10.1 compares how a next-generation leader differs from older standards of leadership. Note that our model focuses on leadership actions, rather than on a leader’s characteristics or traits. \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.3 Next-Generation Leaders Table 10.1: The evolution of a next-generation leader Old Leadership Style New Leadership Style Leader as: Head, director Top of the hierarchy Colleague, collaborator Systems thinker Scale: Loyal to local Zoom in Global citizen Zoom out Critical skills: Expert Impose Emotionally intelligent Empathy Lead by: Control Sole problem solver Collaboration Problem clarifier; joint problem solver Communication: Top down Dialectic Transparent Dialogic Ethics: Bigger is better Leaner is better Environment: Exploit Polluter Explore Steward Organize by: Hierarchy Geography Information flow Virtual proximity Learning is: A prerequisite A luxury A cost An ongoing process A necessity An investment Source: Hammond, S. and Christensen, L. (2016). “The New Generation Leader [unpublished paper].” Reprinted with permission.

Systems Thinker This entire text emphasizes the value of systems thinking. Here, we specifically emphasize that next-generation leaders cannot skip developing this mind-set. For decades, the opposite of systems thinking—a mind-set called scientific reductionism—was considered the way lead- ers could solve most problems. Reductionism was based on the philosophy of René Descartes and Isaac Newton. It was popularized by other scientists as they explored an ever-smaller universe looking for miniscule molecules, atoms, or quarks to explain physics and life experi- ences. Scientific reductionism requires the searcher to zoom in; to take a detailed and particu- lar look at the physical world’s building blocks and events—or in business, a closer look at the building blocks of organizational successes or failures.

A systems thinking mind-set (as introduced in Chapter 2) offers a contrary view of the physical world. In systems thinking, the only way to understand a problem is to see its relationship to the whole. A systems thinker understands the interactions and linkages between the various elements that make up an entire system. In other words, if one is trying to understand what happens in an ecosystem, it does not make sense to zoom in on the microbiology of a single species; rather, one should look at all the elements in that system and their relationships to each another. In a physical ecosystem, one who takes a systems view looks at each species:

the geography, the wetlands, and the interactions that occur between those elements. In an organizational system, one who takes a systems view looks at each department, along with \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.3 Next-Generation Leaders customers, suppliers, partners, and potential partners. The difficulty with systems thinking usually relates to clarifying the boundaries of the system and how deep to investigate, inspect, and verify the connections.

As discussed in Chapter 2, systems thinkers view a business enterprise or corporation as part of a complex and dynamic whole. In a dynamic system, corporate actors interact with govern - ment, the environment, individuals, the community, and other entities under the principles of complex systems. Energy and materials flow into a complex system. These are processed and flow out of the system through boundaries that define the system. However, those boundaries are always problematic. For example, it can be challenging for an employee to know the exact boundary between work and social life. For a company, it can be difficult to know the bound- ary between the corporation and the community. The truth is that our social lives are tied up at work and are part of a community. In other words, every system is part of a larger one, and it is often difficult to distinguish the boundaries between the two. Helping define, protect, and clarify boundaries may be one job for future leaders who support colleagues in creating a socially responsible and sustainable world.

Features of systems thinking that next-generation leaders will need to consider include the following:

• Systems function with lots of information. In business, raw materials are useless unless one knows how to turn the raw product into something more valuable. Accord- ingly, systems thinkers spend considerable time talking about learning organizations.

New knowledge is essential to keep a system alive (Senge, 1990).

• Systems also seek equilibrium. Certain patterns are visible in the behavior of any system, but patterns are subject to interpretation and are often unclear. Also, some amount of randomness or chaos influences the behavior of every system. This makes challenges of leadership particularly difficult, because while the leader is trying to bring equilibrium to the system, he or she cannot fully take into account the patterns that influence it; nor can he or she or account for random events.

• Systems are composed of many parts. A leader who adopts a systems theory per- spective understands that the system has many parts that interact through rela- tionships. Corporate systems are nested inside other systems with which they overlap. Over time, systems change, as do inputs, processes, and the ability to provide a value-added output. Some of those changes are out of the leader’s control (Skyttner, 2006).

How does being a systems thinker make a next-generation leader different from the leaders of the past? Good advice has emerged from Colonel George E. Reed, the director of Command and Leadership Studies at the U.S. Army War College. When contemplating how tomorrow’s leaders can adopt and apply systems thinking, he suggests the following: Focus on the purpose of the system.

Identify patterns and use feedback loops to understand the dynamics of systems.

Consider the whole rather than the components.

Consider the present, but don’t focus too much on short-term achievements. Think of long-term goals (Reed, 2006).

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.3 Next-Generation Leaders Apply Your Knowledge: Systems Thinking Tools This exercise can be done individually or in a group, in abbreviated form, or over a long period of time for greater insight. The objective is to see important relationships and processes and to identify how an organization adds value and relates to a larger community.

Step 1: Choose an organization to research. List all stakeholders in the company, in- cluding owners, employees, customers, suppliers, and so forth. Put the name of each on a 3-by-5-inch index card. For example: John Gross and Sons.

Step 2: Sort each type of stakeholder into a category. For example, John Doe and Sons— Supplier.

Step 3: List all of the corporation’s essential processes. These are generally areas where the corporation performs a service or adds value. For example, a hospital performs surgery (among other things).

Step 4: Create a way to visually represent the corporate system that could be shown to any of its stakeholders. Your map should show the following:

The types of key stakeholders.

The relationship between key stakeholders.

The relationship between key stakeholders and critical processes.

Critical process in the form of inputs, processes, and outputs.

The system’s relationship with the broader environment.

Step 5: List all critical relationships and processes. Ask: How can the corporation’s leader better manage key relationships?

How can critical processes improve?

How is the corporation impacting the environment? Global Citizen Becoming an active and effective systems thinker means considering factors beyond one’s own neighborhood, corporation, or immediate work environment. One has to look at the broader communities and ecosystems in which these elements reside. For most, this means becoming a global citizen. Doing so does not mean giving up citizenship in one’s own local community, nor does it mean abandoning any kind of nationalist or patriotic spirit. Being a global citizen means taking responsibility for problems that require local and potentially global solutions. A global citizen understands the needs of the whole and considers those when making personal decisions and directing groups, teams, and organizations.

This sometimes means considering linkages between problems far away and behaviors at home. A classic example comes from the apparel industry. Consider the deadliest garment factory disaster in history, which occurred in Bangladesh in 2013. More than 1,000 work - ers died and 2,500 were injured when owners pressured workers to assemble garments in a decrepit building that collapsed during peak hours (Butler, 2013). A global citizen takes the time to consider the connection between wealthy, developed countries creating demand for new and inexpensive apparel and the pressures placed on low-income garment factory \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.3 Next-Generation Leaders workers who cannot relocate for better jobs. A global citizen and CSR-focused leader would also act once he or she realizes the connection. After the tragedy in Bangladesh, British retail- ers associated with the facility all signed a legally binding safety agreement backed by the international trade union (named IndustriALL) and the Bangladeshi government. The deal requires certain brands to contribute up to $500,000 per year toward safety inspections and fire safety measures (Butler, 2013).

The UN defined what it means to be a global citizen by authoring and publishing the Dec- laration of Emerging Human Rights . Being a global citizen means taking both a critical and transformative perspective regarding corporations, society, and the environment. The docu- ment argues that a global citizen has both rights and responsibilities. Advocates of the Dec - laration of Human Rights elaborated on it, extending its reach to create a more harmonious world motivated by citizens unafraid of oppression and willing to adopt innovative thinking (O’Sullivan, 2008).

Authors Graham Pike and David Selby offer leaders a slight twist on the concept of global citi- zenship. They have developed the concept of world-mindedness, which involves understand- ing the world as one unified system. Global citizens have a responsibility to advocate not only for their own interests, but for the interests of the whole planet. This holistic understanding attends to a broader set of human values and beliefs and encourages people to appreciate broader global systems and issues and to have better cross-cultural understandings (Pike & Selby, 2000).

Previous chapters described the elements of cross-cultural difference. What we term the “next-generation leader” will navigate cultural complexity, with all its nuances and difficul - ties. It would be inaccurate to assume there is a unified culture anywhere. Many cultures are individualist, while others are collectivist. Some are universalist, while some remain particu- larist (see Chapter 4.3). Next-generation leaders will have to navigate these differences and find a “third way” or viable path that can blend the virtues and vices of multiple cultures. The third way is one that does not violate any one cultural perspective. It is a cocreated option where people with unified intentions but different cultural values come together to make progress despite cultural differences. The ability to search for and find a third way remains the ultimate task of a global citizen.

Emotional Intelligence Older concepts of leadership regarded intelligence as having expertise in math, language, or an organizationally specific technical skill. People of older mind-sets often assumed that the smartest person in the room would make the best leader. Author and scholar Daniel Goleman (Goleman, Boyatzis, & McKee, 2003; Goleman, 2004) provides a different perspective, specifi - cally regarding the concept of emotional intelligence, which he says is an essential character - istic of effective leaders.

According to Goleman’s research, emotional intelligence primarily involves being self- aware, which is different from being globally aware (Goleman et al., 2003). That means having social skills that involve empathy and considering others’ feelings when making leadership decisions. It also means, on a personal level, that the leader has self-awareness and under - stands his or her own emotions, strengths, weaknesses, and motivations. Goleman (2004) \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.3 Next-Generation Leaders argues that the ability to control and redirect disruptive impulses and moods is among a leader’s most significant skills. Consider an angry CEO who kicks a trash can in front of his employees. He is relieved of his leadership position within a week—not because his actions physically harmed employees, but because his lack of emotional regulation indicated he was not in control of himself. Goleman (2004) tells us that our ability to control emotion and understand how it impacts others is critical. This also involves understanding what motivates us—and what might motivate others. Most emotionally intelligent leaders relish achievement for its own sake, but this goes beyond personal achievement; it involves the achievement of others and sustaining the corporation and a broader system.

Goleman advocates that the ability to empathize and understand people’s emotional makeup is another essential characteristic of an effective leader (Goleman et al., 2003). This implies it is critical to be able to work in different cultures with people who have different emotional drivers. It follows that the next generation of leaders will need to have social skills in addition to intellectual skills (Goleman, 2004).

Collaborative Skills Collaborative skills may be among a leader’s most critical as he or she works to create a sus- tainable corporation. Leaders must be able to seek, hear, and integrate the expertise of oth- ers to find optimal solutions to problems. In doing so, they often face task ambiguity, which describes situations that are constantly changing. Leaders often do not know which prob- lems demand time, the significance of these problems, or how to get past them to focus on more important matters. Sometimes the best way to emerge from such ambiguity requires collaboration.

Research by Gratton and Erickson (2007) found that collaboration improves when individu- als’ and team members’ roles are clearly defined and well understood. In other words, col- laboration improves when leaders create an environment where others’ expertise is known and valued. Without role clarity, team members are likely to waste time negotiating roles and protecting turf rather than focusing on the problems at hand. Gratton and Erickson (2007) also found that team members are more likely to want to collaborate in environments where there is some degree of ambiguity. In such situations, leaders do not define the problem and simply tell others to tackle known solutions. Instead, ambiguous situations feature team members helping after leaders describe priorities. Through dialogue, the team creates solu- tions together. In this way, collaboration enables problem solving (Gratton & Erickson, 2007).

Historic models of leadership favored individuals who acted unilaterally, insider groups with little or no diversity, and leaders who adopted similar approaches to many problems. This explains why corporations of the past tended to gauge success by the single measure of pleas- ing shareholders with financial returns, rather than the complex measure of being socially responsible and building a sustainable organization that can both please shareholders and restore the environment.

Chapter 4 addressed global citizenship and the importance of including people from all cul - tures in corporate society. Not only will next-generation leaders need to be global citizens, they will need to welcome others into the complex corporate system and hear and value every - one’s contributions. They will need to collaborate with stakeholders, including government \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.3 Next-Generation Leaders regulators. Chapter 6.3 discussed government regulation and noted the increased role of regulators in corporate affairs. Next-generation leaders will need to establish productive and hopeful relationships with regulators and establish common ground via collaboration.

Next-generation leaders will also extensively use dialogue to solve complex problems. A com- plex problem is one that is more complicated than any one person can solve alone. Most prob- lems that leaders face today require multiple experts to solve. In addition to finding such experts, a leader must also motivate people to implement solutions. Research shows that people are more likely to embrace and successfully implement solutions when they are part of defining the problem and finding its solution (Hammond, Cissna, & Anderson, 2003).

Transparent Communication Working with others requires strong communication skills, and both parties must be open, honest, and transparent about their incentives, biases, and motivations. Corporations of the future face increased public scrutiny and government regulation, which requires greater transparency from the organization and all of its representatives. Transparency will also be an issue within corporations, in terms of how employees relate to each other and employee rights (discussed in Chapter 3)—particularly in corporations over which employees have some ownership. Partial owners expect to know more about how and why decisions are made; this trend will likely continue in the future. Relatedly, as discussed in Chapter 6, leaders have strong obligations to act as fiduciaries. When issues of equity (see Chapter 7) add to the complexities of fiduciary relationships, next-generation leaders face the additional challenge of balancing relationships with transparency while maintaining competitive standing in the marketplace.

Interestingly, people are conscious of what others are watching; transparency allows others to see and be seen making choices. For next-generation leaders it will be difficult but essential to create an environment that fosters values and practices transparency—and the best way to encourage such behavior is to personally model it.

Researchers Schnackenberg and Tomlinson (2014) suggest there are three kinds of impor - tant transparency: information disclosure, clarity, and accuracy. Information disclosure means that people within a system must have access to all other information generated by that sys- tem. Clarity refers to information that is clear, understandable, and usable. Accuracy means that information generated by the system is correct enough for consumers to make sound and informed decisions. While many corporations are concerned about keeping trade secrets and protecting intellectual property, some stakeholders encourage leaders and others to practice radical transparency. This is a leadership practice whereby the majority of decision making is public. In other words, documents, arguments in support or against a proposal, and final decisions are public and remain publicly archived (Schnackenberg & Tomlinson, 2014).

In a 2012 article published in the Harvard Business Review , Smith and Tabibnia claim that radical transparency could be good for business. As evidence, they cite the private research firm Qualtrics, whose leaders make performance appraisal data on every employee available to everyone else in the company. By removing what is traditionally “secret,” Qualtrics hopes to absolve the distractions and fears typically associated with performance appraisal. The entire workforce has access to information made available on the quarterly objectives and \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.3 Next-Generation Leaders results that each employee has achieved, including customer satisfaction targets. Weekly employee goals and up-to-the-minute performance reviews and bonuses are posted. Doing so has increased retention and employee satisfaction (Smith & Tabibnia, 2012).

Transparency proactively allows a system’s outsiders to see what is going on inside. Dialogue lets more people participate in multiple conversations, including those around corporate governance. Chapter 2.3 discussed the role and process of using dialogue to involve others in strategic planning, scenario planning, process mapping, continuous improvement, and other critical management functions. These principles hold and define the skill sets of next- gener ation leaders.

Ethical Behavior There is a relationship between lean management principles and management ethics. While the overall stated goal of lean management is to create a more efficient company, the Six Sigma system and the Shingo model described in Chapter 1 articulate important principles that also reflect deep ethical values about how people should treat each other.

Michael Ballé (2015), executive coach, author, and cofounder of Institut Lean France, identi- fies 10 practical choices that “lean” leaders often make. Each has an ethical or socially respon- sible principle at its core and an organization’s long-term sustainability as its goal.

The first practical choice of lean leadership is to put customer satisfaction over company interests. Always acting in the company’s self-interest instead of putting customers first can lead to unethical or socially irresponsible behaviors. Attending to the customers’ needs in the short term helps build a long-term relationship, which in turn ensures satisfaction and can lead to greater sustainability when firms gain customer loyalty.

The second practical choice in lean leadership is that facts are preferred to data. Data are sub- ject to interpretation, while facts are imbued with context and are thus capable of directing action. Employees are more likely to give input when they know they will be protected by a corporate culture that relies on facts rather than on the interpretation of data.

The third practical choice of lean leaders is to see problems as learning opportunities, rather than occasions for blame. Lean organizations place a high value on learning. When failure occurs, it is not necessarily the fault of the person closest to it, as it could be a signal or symp- tom of a system-wide problem. Using a problem or failure to improve the system turns a negative into a positive. The resulting benefits can help workers, suppliers, customers, and coworkers learn from problems rather than equating them with conflict and blame.

The fourth practical choice of lean leaders is to prefer shorter lead times, or the time it takes to provide a product or service to the customer. This is efficient because shorter lead times reduce waste and pollution and make companies more eco-friendly. This choice also relates to the first practical choice of lean leaders, as it makes reacting to customer demands central to how business managers pace production and fulfillment.

The fifth practical choice is that leaders should value team effort over individual performance.

Many organizations perform individual performance evaluations, yet most workers know \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.3 Next-Generation Leaders that individual performance is usually based on the kind of team to which they belong. Ballé (2015) claims that acknowledging teams’ contributions is more important than focusing on contributions from individual members.

The sixth practical choice is to fix problems when they occur and avoid succumbing to a cycle where people work first and fix later. This allows employees and leaders to take responsibility for their part of the system. They need to understand how they are part of the system (sys- tems theory) and how each part impacts other parts. Failing to fix problems immediately can amplify an issue.

The seventh principle involves seeking continuous improvement instead of focusing on pro- cedural stability. Managers should acknowledge that ongoing improvement is essential for a sustainable and socially responsible company.

Ballé’s (2015) eighth practical choice is that leaders should understand work details, instead of having a mere general overview. A detailed understanding of work acknowledges that a leader needs and values others’ expertise. It also acknowledges that all workers contribute important understanding to work processes. Leaders are more likely to handle ethical issues successfully when they are close to the work and to employees.

The ninth practical decision is to value instruction and improvement over command and con- trol behaviors. Lean management systems value nonhierarchical organizational structures rather than the command and control often created by a hierarchy.

The tenth decision involves leaders focusing on value-adding employees rather than finan- cial aspects. Ballé (2015) acknowledges that ideas from value-adding employees constitute an important asset of any corporation. This leads to treating employees more ethically and humanely and acknowledges their contribution. It may also lead to fairer compensation, including allowing them to share in the risk of venture. It essentially suggests that investing in individuals makes more sense than investing in big ideas without knowing who or how they help.

Ballé (2015) discusses the difficulty of imposing such ethics on any organization. He acknowl- edges that some employees and managers simply do not want to work in ways that adhere to these ideals. However, these choices suggest how management principles such as Six Sigma can guide the creation and manufacture of products, as well as leaders’ humane and ethical behavior (Ballé, 2015).

Steward for the Environment Treating others with respect, leading with humility, reducing pollution and waste, and pro- tecting the environment by minimizing impact make a business more efficient—but they also make it more ethical in terms of humans and the environment. Implementing these strategies as well as lean management principles indicates that one is oriented toward ethical behavior and focused on being a steward.

In Chapter 1.4 we discussed reducing waste, which led us to the more in-depth discussion in Chapter 5.1 about environmental concerns and possible solutions. In Chapter 6.2 we went \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.3 Next-Generation Leaders into detail about LCAs and how responsible corporations use environmental management systems to reduce impact on the natural environment. These topics tie together to illustrate both best practices and actions that people can champion and even demand for the future.

Next-generation leaders will need to understand the importance of such practices and apply lean management techniques; they will also need to implement continuous improvement to reduce risk, lower costs, improve quality, raise employee morale, and reduce operations’ envi- ronmental footprint.

Nonhierarchical Leadership In traditional and older views of leadership, a person was a leader if he or she was at the top of a hierarchy (a categorization of people ordered by power and privilege, with lower status at the bottom and higher status at the top). In such a framework, if other people worked for you, reported to you, or even desired to talk to you, you were considered a leader. Leaders were given a corresponding title. However, newer notions of leadership suggest that anyone from any part of the organizational hierarchy can be a leader if he or she acts on behalf of the organization and if he or she forwards the causes that matter to the majority within the orga- nization. Under such a paradigm, the new leader could be you.

In this new model of leadership, leaders are not simply clustered at the top of the organiza- tion— they are dispersed throughout it. Communication flows not just through a hierarchy but is based on need. Older models of leadership reinforced hierarchies that controlled and distributed information. For the most part, old models of leadership depended on singular individuals framed as heroes and saviors. Margaret Wheatley and Deborah Frieze (2011) dis- cuss this issue in their article titled “Leadership in the Age of Complexity: From Hero to Host.” They argue that next-generation leaders who advocate for sustainable systems will more likely be hosts (people who gather others) rather than heroes (people who work in relative isolation). Wheatley and Frieze suggest that humans build hierarchies and organizations that are top heavy in order to glorify people above and pass responsibility on to them. The authors suggest that, in contrast to such a top-leaning bias, corporate responsibility is distributed among all stakeholders—no one should wait for a heroic leader to stand out. People should convene others or initiate change themselves.

Like many leadership scholars, Wheatley and Frieze (2011) see that the complexity of prob- lems requires leadership at all levels of an organization. But it may also require fewer levels in each organization. No longer can we completely trust in the multilayered hierarchies built in the past. Hierarchies may block the appropriate flow of information and disconnect people who have solutions from the corresponding problems. Thus, people who want to encourage more sustainability and social responsibility can work to promote collaboration and integra- tion and can eschew hierarchies in which people wait for permission to act.

Continuous Learning In addition to reduced reliance on hierarchy, we argue that next-generation leaders will be scholars, habitual learners, and those who are always experimenting with new ideas—such leaders will also encourage learning organizations (Ancona, Malone, Orlikowski, & Senge, \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 10.3 Next-Generation Leaders 2007; Senge, 1990). Continuous learning is consistent with systems theory, because any sustainable system must constantly have new information to adapt to an ever-changing environment. Information tends to flow into the organization to and through leaders in the form of learning. Regarding the value of and interest in corporate-sponsored education, Training magazine reports that U.S. corporations now spend more than $60 billion per year on training (“2014 Training Industry Report,” 2014). This number has steadily grown for decades. In addition, the number of hours that employees spend in corporate-sponsored learning is also increasing. The average employee now spends more than 1 week per year in company-sponsored training (“2014 Training Industry Report,” 2014). Next-generation leaders will likely continue to emphasize continuous learning for themselves and those they influence.

Leadership scholar J. B. Ritchie (Ritchie & Hammond, 2005) discusses the differences between students and scholars in the article “We (Still) Need a World of Scholar–Leaders.” He notes that many teaching practices use the downloading metaphor from computer science to describe the relationship between professor and student (Ritchie & Hammond, 2005). Interestingly, the downloading metaphor follows the outdated great man model of leadership, with the assumption that an employee takes direction from the leader and the leader expects employ- ees to implement directions.

As an alternative, Ritchie and Hammond (2005) suggest that both managers and employees adopt the purview of scholar by asking questions in anticipation of learning how to handle future problems. A scholar acts as if he or she owns the future and assumes responsibility for it (Ritchie & Hammond, 2005). This observation implies that the world needs more lead- ers who are scholars—versus leaders who want someone else’s approval. Followers who are students are abundant, but leaders who assume responsibility for the behavior of the whole system, who ask the right questions, and who explore the key issues—they are rare and precious.

Which one will you be?

The answer matters greatly to our joint futures, because we cannot create a more sustainable and socially responsible future if we behave exactly as we have in the past. Thus, older leader- ship paradigms may not serve humanity. Some thought leaders suggest that people can lead from anywhere in the organization. This means that employees no longer need wait until they achieve positional power to begin moving firms toward socially responsible and sustainable actions.

The story of Patagonia and former CEO Yvon Chouinard shows how some leaders can move past old paradigms of leadership and old habits of ignoring environmental issues. The story paves the way for next-generation leaders (Chouinard, 2005). \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Chapter Summary CSR and Sustainability in Action: Patagonia In the 1970s CEO Yvon Chouinard founded Patagonia, an outdoor clothing manufacturing company. Long before becoming a B corporation (Chapter 7), the company was one of the earliest examples of pioneering CSR and sustainability. Such a focus was important because clothing manufacturing creates air and water pollution and generates human health concerns for workers. To learn about the extent of the problem at Patagonia, Chouinard commissioned LCAs (see Chapter 8) on 150 of its most popular products, which represent 80% of Patagonia’s sales (Chouinard & Stanley, 2012). For example, manufacturing a Patagonia polo shirt emits 21 pounds of carbon dioxide, which is emitted when product materials travel from a farm to a warehouse (Chouinard & Stanley, 2012).

Using this information, Chouinard supported strategies to increase efficiency in the supply chain to reduce greenhouse gas emissions and landfill space. Today Patagonia’s actions to increase CSR and sustainability include the following: • Using cotton, down insulation, and wool that can be traced back to its original source • Promoting the idea that consumers should reuse and recycle Patagonia products by offering to repair used items • Offering a living wage and good working conditions for factory workers • Participating in fair trade growing and purchasing behaviors for raw materials (Patagonia, n.d.) Patagonia’s success illustrates how a leader can turn passion for the environment into business practices that defy current norms, exemplify systems thinking, and reflect modern-day leadership. Chapter Summary In this chapter we examined traditional views of leadership and contrasted them with more modern ideas about distributed leadership. We described how such early theories can be inadequate in helping leaders meet the challenge of building socially responsible and envi- ronmentally sustainable corporations. Society may need new ideas about leadership in order to creatively lead for a different future.

Next-generation leaders will face a world with more connection and public accountability for some choices, so men and women who participate in the workforce will face some of the challenges described in this chapter. This chapter specifically addressed characteristics that may help those who consider themselves as having leadership potential and opportunities address ongoing challenges. While these qualities and considerations are not comprehen- sive, they do underscore the importance of systems thinking, collaboration, ethical behavior through environmental responsibility, global citizenship, and continuous learning. It is not an accident that both this chapter and book end on an appeal for continuous learning. In an ever- changing world, the only way to keep up with that change is to constantly learn and respond in collaboration with others.

emphasized the r elationship between social responsibility and productivity b.

support ed environmental sustainability c.

ignor ed all but the privileged owner class d.

sa w leadership as the right of all 2.

T rait and behavioral theories of leadership changed many corporate cultures by .

suggesting that almost an yone can be trained to lead b.

gi ving opportunity to only those who have the right stuff c.

discriminating ag ainst certain classes d.

eliminating the moti vation to provide leadership training 3.

A s ystems thinker can .

see onl y the human side of the system and disregard other factors b.

r educe complexity to a single cause c.

zoom in on sing le variables d.

understand the vital link ages that make up the whole 4.

A ccording to Michael Ballé, the first practical choice of lean leadership is to .

put corpor ate needs above customer satisfaction b.

put cust omer satisfaction above corporate needs c.

put emplo yee needs above corporate needs d.

put corpor ate needs above employee needs 5.

Which of the f ollowing is NOT mentioned in the text as a type of problem that next- generation leaders will need to deal with?

w aste b.

social inequality c. s ystems thinking d.

the rising cost of land 6. The or ganization of the future is more likely to be .

a deep and pr ofound hierarchy b.

a nonhier archical organization in which everyone has a stake c.

a hier archical organization in which everyone has a stake d.

a nonhier archical organization in which no one has a stake Answers: 1(c); 2(a); 3(d); 4(b); 5(d); 6(b) \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Chapter Summary Critical-Thinking Questions 1. Wh y were so many people so comfortable with the divine right theory of leadership for so many years? What historical forces do you think led to the reexamination of leadership theory and the development of new theories?

Ar e we moving toward a definition of leadership that suggests everyone can be a leader? If so, is that bad? Explain your reasoning.

Think about a leader y ou know. What are his or her positive traits? Positive behav- iors? Is he or she a systems thinker?

In older theories of leadership, w hy were women excluded? How does including women change our definition of leadership?

Can y ou think of a leader who has exhibited emotional intelligence? What about one who has not?

What does a s ystems thinker leader see and do that is different from a leader who is not?

Wh y is continuous learning critical to leadership success?

T ransparency can be considered a good and bad thing. What are the advantages and disadvantages of transparency? Additional Resources Additional information on leadership theories can be found at: ht tp://w w w.referenceforbusiness.com/management/Int-Loc/Leadership-Theories-and- Studies.html Learn more about servant leadership here: ht tps://w w w.greenleaf.org/what-is-servant-leadership Learn more about emotional intelligence and effective leadership here: ht tp://w w w.danielgoleman.info/effective-leaders-know-the-science-behind-their-behavior/ Answers and Rejoinders to Chapter Pretest 1. F alse. The meaning of leadership has changed, as has the meaning of sustainabi\ lity.

T rue. Trait theories of leadership suggested that if a trait could be identified, it could be taught.

F alse. Many corporations were used as instruments of political and social dominance. Rejoinders to Posttest 1. The ear ly concepts of leadership saw it as a divine right reserved for privileged classes.

Both theories of leadership opened the door f or leadership training and opportunities for many individuals.

A s ystems thinker understands the interaction and linkages between the various ele- ments that make up an entire system. \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Chapter Summary 4. Ballé sa ys being ethical or socially responsible means putting customer satisfaction first.

The leaders of the futur e will be faced with many challenges, but the rising cost of land is not a major issue and was not addressed in the text.

The or ganization of the future will hold everyone within the organization responsible but will also likely provide ownership incentives. Key Terms behavioral theories Leadership theo- ries based on behaviors that can largely be learned.

collaborative skills Skills that allow one to work well with other people.

continuous learning A commitment to lifelong learning regardless of organizational position.

divine right The assumption that leaders are made by right of birth and chosen by God.

emotional intelligence A leadership trait involving self-awareness and empathy.

global citizen A leader who accounts for his or her global and local relationships.

great man theory A theory of leadership that assumes that some elite men are born to be leaders. lean management A continuous improve- ment management philosophy that focuses on waste reduction.

process theory A leadership theory that assumes the role of good leaders is to man- age the whole system.

systems thinker A leader who can see both large- and small-scale relationships and connections.

trait theory The theory of leadership that assumes individual traits can be nurtured into leadership abilities.

transparency The willingness to work in full view of all stakeholders or to provide all information to interested stakeholders.