Competitiveness is the name of the game for survival and prosperity in the 21st century. For most businesses, gone are the days of fat profit margins that masked internal inefficiencies.

As discussed in my post on the 6 guiding principles, management concepts have evolved and the culture of an enterprise, which is an outcome of its Leadership Style, has emerged as a major factor in gaining and retaining a competitive edge.

Has your leadership style evolved with these changing times?

Over the past 25 years, in my workshops around the world, I heard many managers share openly: “My management style was just out of habit. I was doing what the bosses were doing in the past. The 6 guiding principles, more particularly the notion that results come processes, and a serious reflection on my own Leadership Style opened my mind to new ways of looking at the issues I was facing both at the workplace as well as at home.”

Leadership Styles

As you know, leadership styles play a major role in how well employees perform and how well your enterprise utilizes their potential. The guiding principle – results come from processes – “when things go wrong, first ask what in the process broke down, not who did it?” – is having a profound impact on how leaders lead.

Let us reflect on two leadership styles – Autocratic and Participative – that are described below. Keep in mind that everyone is somewhere between these two extremes. Assess for yourself – what is your style? If being completely autocratic is 1, and being completely participative is 10, what is your score?

Autocratic

Some characteristics:

• Task oriented, not much system or process orientation
• Results-any-which-way mindset
• Opinion based decisions
• Concern for people limited to physiological and safety needs on Maslow’s hierarchy of needs
• Strong tendency to resort to fire-fighting for everything

Consequences of this style:

• Sometimes gets good results in the short term
• Silos are common; fear pervades the enterprise
• Fire-fighting, finger-pointing and recurrence of problems are normal
• Inhibits creative ideas, teamwork and continuous improvement
• Enhances the ego of the boss at the expense of self-esteem of subordinates
• Ruins enterprises over the long term

Participative

Some characteristics:

• Involves appropriate people in decision-making
• Encourages different perspectives; recognizes that difference of opinion is not disrespect
• Makes decisions after listening to other’s ideas
• Realizes that a leader is still responsible for making decisions and delivering results
• Avoids ego clashes by managing with facts, not opinions
• Recognizes that when decisions are data based, the margin of error decreases
• Demonstrates concern for results as well as people at the same time
• Concern for people goes beyond physiological and safety needs, and includes nurturing their self-esteem
• If a situation demands, the leader may adopt other styles for short durations

Consequences:

• Gets consistent results
• Creates team spirit
• Gets employee’s buy-in on solutions
• Builds self-esteem of others
• Creates a sustainable competitive advantage

Let us look at how much work one would perform under these styles, and of what quality.

Under autocratic style:

• Only as much output as is needed to avoid punishment
• Quality – only what is needed to get by

Under participative style:

• As much output as one is capable of producing
• Quality – something one is proud of

‘What one is capable of producing’ is significantly higher than ‘what is needed to avoid punishment’. The quality of something ‘one is proud of’ is significantly better than the quality ‘needed to get by’. When you take pride in doing something, you put in something extra – your spirit. That makes the difference between winning and losing in a highly competitive environment.

So, what is your leadership style?

As you reflect on your leadership style, keep in mind that the leadership styles are built on underlying assumptions about people – implicit as well as explicit – about the most effective way to manage people. Quite often, these beliefs are un-examined. You probably have not either.

Theory X and Theory Y

Years ago, McGregor described 2 sets of belief systems – Theory X and Theory Y.

The Theory X belief system assumes that the average human being has an inherent dislike of work and will avoid it if he can. Hence, people need to be coerced into working. The job of a manager is to extract work from an unwilling worker. Workers need to be controlled and directed and there needs to be a fear of punishment in order to get them to perform.

The Theory Y belief system assumes that the average human being does not inherently dislike work. Work is as natural as play. People want to do a good job and they take pride in what they do. Creativity and imagination in solving organizational problems is widely, not narrowly, distributed in the population. Work can satisfy self-esteem and self-actualization needs. Hence, the job of a manager is to provide employees with a clear direction, the tools and resources they need, guide and coach them, and involve them in decisions that affect them.

If you are like most managers, you might not have consciously reflected on these beliefs.

After a serious reflection, what are your beliefs?

As you reflect, let me share what I came across over the past 25 years during my workshops around the world.

I was surprised to hear from several managers that they had not consciously reflected on these concepts. I heard many managers share openly: “I never thought about it this way. I do believe that people want to do a good job, but I was acting like an autocratic taskmaster out of habit. The notion ‘when things go wrong, first ask what in the process broke down, not who did it’ and a serious reflection on my leadership style opened my mind to new ways of looking at the issues I was facing both at the workplace as well as at home.”

Move Toward The Participative Style

Life is a self-fulfilling prophecy. If you treat an energetic person as if he is lazy, you may succeed in making him so! If you treat a person as if he takes pride in what he does, and give him an opportunity to make a contribution, you may succeed in making him a winner!

So, if you are not already one, move toward a participative leadership style which brings out the best from people and helps develop win-win solutions. The Theory Y belief system is more conducive to the utilization of the untapped potential of a vast majority of employees. Undoubtedly there are some people who don’t want to work, who need to be coerced into working and who need to be punished for nonperformance and indiscipline.

In an organization, rules and regulations should be formulated to encourage and motivate the vast majority of normal people who want to do a good job. Special systems should be put in place to address the troublesome cases, and not the other way around. The special systems that we put in place should not hurt the vast majority of well performing individuals.

Admittedly, it is a cliché; nevertheless, it is important to remember that ‘none of us is as good as all of us combined’.

Transform Waste Into Cash

Keep in mind that unused and underutilized potential is a loss to the organization. It can make or break an enterprise.

If you and your organization already have these beliefs and behaviors, the task of transformation will be much less demanding. Your enterprise is well positioned to rapidly implement the new practices which I will describe later. If these beliefs and managerial styles are not already in place, you are not alone. The process of transformation would take a little bit longer, but it can be done as has been proved by my experience.

I welcome your comments.