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Leadership - a process and a phenomenon
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James McGregor Burns, observes: "Leadership is one of the most observed and least understood phenomena on earth".
What is a phenomenon then?
A phenomenon can be described as any state or process known through the senses rather than by intuition or reasoning. It is also described as a remarkable development.
Today experts are defining leadership as a process whereby an individual influences a group of individuals to achieve a common goal. Defining leadership as a process means that it is a transactional event that occurs between a leader and his followers.
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When defined this way it is available to everyone and is not restricted to only the formally designated leader in a group.
Process view of leadership
Leadership over the years has emerged as the most important element of business, which is highest in demand and yet scarcely available. More and more companies are responding to the crisis by designing their own leadership development programs to ensure an everlasting competitive advantage.
Organizations, taking advantage of the process view of leadership have tried to implement leadership as a structured mechanism of developing new leaders at all levels in the organization. Each company has its unique model for leadership development, which is an essential component of leadership process apart from influencing people positively for achievement of the overall objectives of the company. Yet there are several common elements in the leadership process of different companies like assessment programs (360 degrees feedback, leadership effectiveness surveys etc.), specifically designed training programs for leadership development, development through experience (providing opportunity to solve real time business problems, job rotations etc.) and succession planning.
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Leadership outcomes
If leadership is a process, what are the outcomes and how does one assess the effectiveness of the process? Objective measures of leadership include organizational performance and shareholders’ perception (the stock prices). But it is the subjective measures like organizational preparedness for future challenges, ratings of effectiveness from peers, subordinates and superiors, general satisfaction of people with leadership (captured through surveys, which reflect leaders standing among the people, leaders’ contribution to the motivational levels of the people and general psychological well being and development of people), which are more important and difficult to measure accurately. Some of the outcomes are immediate in nature like people’s perception of a leader, where as outcomes such as development of quality leaders at all levels and ability of the firm to anticipate and overcome strategic challenges are visible over a longer period of time.
Transformational effects of leadership transactions
The process of leadership has earlier been defined as transactional in nature and every leader has a different way of transacting with people and influences them in different ways. Leaders’ way of dealing with crisis, challenges, coaching, communicating anticipated change and actions thereof, encouraging people for accomplishing the mission of the organization and rewarding people for their achievements are some of the interactions which provide opportunities for leaders to influence the people and leave a distinct impression on them. These transactions can have transformational effect on the people and company when leaders are seen as strong role models for the values and beliefs that they advocate and want people to adopt. There is no written down rule or method of transacting with people, yet it is one of the important aspect of leadership process by which the followers are influenced and developed into potential leaders. It is this aspect of leadership that can more aptly be described as phenomenon rather than as a process as there is no copy book method of doing it and cannot be standardised like other processes.
Examples of phenomenal leadership
Leadership development process at GE can be termed as truly phenomenal. It was this system that created a phenomenal leader like Jack Welch, who inherited a company, whose earnings were growing at an average rate of 16 percent under Reg Jones. Welch did not wait for the numbers to deteriorate further until GE was in trouble, the challenge for him was to spot the trouble and provide GE the momentum to take it to the top. During his stint GE’s market capitalization had gone up from $14 billion to $490 billion roughly, making it the most valuable company in the world.
Jeff Immelt, GE’s present leader said that it is GE’s institutional appetite for change, for doing what's next, which made it a 124 year old company that's still the most valuable company in the world. A truly phenomenal process of leadership which ensured top class leaders time and again who ensured growth of the legendary company founded by Thomas Alva Edison.
In 1993 when Lou Gerstner took over IBM as CEO, it was not merely the future of IBM with its shares plummeting down from $43 in 1987 to $8, but it was the national pride of corporate America which was at stake. What transpired at IBM can at best be described as a phenomenal turnaround – a change in culture of the magnitude never witnessed before. By 2002 IBM shares had grown up by 9 times when compared to 1993 levels.
Leadership process is slow and tedious yet a structured leadership process can culminate in remarkable outcome - phenomenal growth or turnaround as exemplified above.
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