!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd"> Streamline Training & Documentation: Five Possible Approaches to Leadership

Tuesday, October 17, 2006

Five Possible Approaches to Leadership

About ten years ago, Charles Farkas, a director at Bain & Co., and Suzy Wetlaufer, a senior editor at the Harvard Business Review, conducted interviews with 160 chief executives around the world, and then analyzed what the interviews revealed concerning business leaders' attitudes, activities, and behaviors.

As summarized in their 1996 Harvard Business Review article, "The Ways Chief Executive Officers Lead," they concluded that CEOs can pursue five general approaches to leadership:

Strategy — primary attention on the future.

Farkas and Wetlaufer recommend using this approach when:
  • Your company or industry is technologically, geographically, or structurally complex.

  • The volume and pace of change in your industry creates instability.

  • You possess the best vantage point for deciding about capital allocations, resource management, or new products.
Focus on:
  • Gathering and testing information about markets, economic trends, customers’ purchasing patterns, and competitors’ capabilities.

  • Testing strategic scenarios.

  • Determining how your organization can best deliver on its strategy.

Managing individuals in your organization

Farkas and Wetlaufer recommend using this approach when:
  • Your company’s success depends on superior execution — the way people make decisions, interact with customers, roll out new offerings, and defeat rivals.

  • You want to develop bench strength by creating a universe of “satellite CEOs,” leaders at all levels who can act effectively without direct supervision.
Focus on:
  • Imparting desired values, behaviors, and attitudes face-to-face.

  • Traveling widely to recruit, conduct performance reviews, and assess the workforce’s commitment to company objectives.

  • Identifying and developing star performers.

Expertise — championing knowledge

Farkas and Wetlaufer recommend using this approach when:
  • Your company needs a carefully developed area of competence to gain and sustain competitive advantage.

  • You want to focus your organization on competencies required to win.
Focus on:
  • Creating programs that deepen your company’s unique competencies.

  • Monitoring hiring policies to ensure your company attracts the right expertise.

  • Rewarding people who share their expertise with colleagues.

Control — emphasis on financial or cultural rules

Farkas and Wetlaufer recommend using this approach when:
  • Your industry is highly regulated, demanding strict procedural and financial controls.

  • Safety is a major concern in your industry, and there is virtually no margin for error.
Focus on:
  • Creating explicit rules and rewards for acceptable behaviors and results.

  • Using audits to detect exceptions to controls, such as missed deadlines or below-target performance.


Farkas and Wetlaufer recommend using this approach when:
  • Your company must change in order to deliver consistently extraordinary results.

  • Deeply entrenched ways of doing business will cripple your company.

  • Your organization needs to embrace uncertainty and ambiguity to succeed.
Focus on:
  • Inspiring employees, customers, and
    suppliers to embrace change.

  • Hiring people with passion, energy, and openness to change.

  • Revamping reward systems to encourage risk taking and overhaul business practices.
As for the question of what characterizes effective leadership in general, Farkas and Wetlaufer argue for the importance of consistency. The choice of a particular approach from the five outlined above depends on what best matches the organization's needs and the demands of the situation in which it finds itself (as opposed to simply proceeding with whatever approach best matches the leader's personality).