Bill George on the new 21st century leaders

Here is an excerpt from article written by Bill George for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

(Editor’s note: This post is part of a six-week blog series on how leadership might look in the future. The conversations generated by these posts will help shape the agenda of a symposium on the topic in June 2010, hosted by HBS’s Nitin Nohria, Rakesh Kharana, and Scott Snook.)

During the last half of the 20th century, business leadership became an elite profession, dominated by managers who ruled their enterprises from the top down. Influenced by two World Wars and the Depression, organizational hierarchies were structured along military lines, with multi-layered structures to establish control through rules and processes. People climbed the ranks in search of power, status, money and perquisites, as described in William H. Whyte’s 1956 classic, The Organization Man, and Sloan Wilson’s 1955 novel, The Man in the Gray Flannel Suit.

In the last quarter of the twentieth century the stock market became increasingly short-term, causing corporate leaders to concentrate on quarterly earnings, often to the exclusion of long-term growth. In the past decade it all blew up, from the ethical scandals exposed by Enron and WorldCom to the Wall Street meltdown. As a result, people lost trust in business leaders to build sustainable institutions instead of serving themselves and short-term shareholders.

What happened? The hierarchical model simply doesn’t work anymore. The craftsman-apprentice model has been replaced by learning organizations, filled with knowledge workers who don’t respond to “top down” leadership. Seeking opportunities to lead, young people are unwilling to spend ten years waiting in line. Most important, people are searching for genuine satisfaction and meaning from their work, not just money. For example, Medtronic’s 38,000 employees are motivated by the company’s mission of “restoring people to full life and health.”

In response to these changes, a new generation of leaders is reshaping the best-led global companies. Authentic leaders focused on customers are replacing hierarchical leaders that focus on serving short-term shareholders. Typical of these leaders is Unilever CEO Paul Polman, who recently told the Financial Times, “I don’t work for the shareholder. I work for consumers and my customers.”

In the 21st century the most successful leaders will focus on sustaining superior performance by aligning people around mission and values and empowering leaders at all levels, while concentrating on serving customers and collaborating throughout the organization.

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The ultimate measure of effectiveness for leaders is the ability to sustain superior results over an extended period of time. Organizations filled with aligned, empowered and collaborative employees focused on serving customers will outperform hierarchical organizations every time. Top-down leaders may achieve near-term results, but only authentic leaders can galvanize the entire organization to sustain long-term performance.

We need them to rebuild the trust that has been lost in capitalism.

Bill George is professor of management practice at Harvard Business School, the author of four best-selling books on leadership, including True North, and the former chair and CEO of Medtronic.

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(Editor’s note: This post is part of a six-week blog series on how leadership might look in the future. The conversations generated by these posts will help shape the agenda of a symposium on the topic in June 2010, hosted by HBS’s Nitin Nohria, Rakesh Kharana, and Scott Snook.)

Some of the ideas contained in this article appeared in Bill George’s March article on WSJ.com, The New Leaders: Collaborative, Not Commanding.

To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.