The Myth of Leadership

HR Magazine, Sept, 2004 by Leigh Rivenbark

The Myth of Leadership

By Jeffrey S. Nielsen, Davies-Black Publishing, 2004, 187 pages List price: $25.95, ISBN: 0-89106-199-1

Retail giant Sears nearly got it right, Jeffrey S. Nielsen says: After a rank-conscious "salute-and-obey" culture helped put the company into a nearly $4 billion hole, a new CEO tried an employee-centered approach that improved job satisfaction and notably increased sales, too. But when times toughened again, top leaders imposed changes from the top instead of working with employees as the CEO envisioned. The result? Stock prices dropped, and trouble loomed again, Nielsen says.

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In The Myth of Leadership, Nielsen advocates an end to what he terms "rank-based" organizations in favor of "peer-based" ones where the core belief is that everyone is equal when it comes to information-sharing and decision-making. That doesn't mean that employees are interchangeable or that chaos should rule; work still must be organized, performance monitored, tasks assigned. But the people who do the work also organize and monitor it.

While rank-based organizations see employees as fundamentally lazy and in need of motivation, peer-based organizations assume that employees are self-motivated. Rank-based thinking sees employees as selfish thinkers who must be kept in line, while peer-based thinking views them as cooperative and caring. And while rank-based organizations portray leaders as heroic figures able to predict the best course, peer-based organizations believe that leaders need employee input to reach decisions and assume that the people who perform work know the most about that work.

Rank-based organizations "squander so much of the competencies and skills of their people" by curtailing their ability to make decisions independently, according to Nielsen.

The book outlines how rank-based organizations develop. A single, charismatic leader who initially runs all aspects of a company creates management structures as the company grows. Those structures, created with good intentions of better management, can harden into a hierarchy where employees have no role in decisions, believe the company "owes them," and are cynical and burned out.

Nielsen identifies three management vehicles you need to start a peer-based organization:

* Peer-based leadership councils make major decisions with input from all ranks and departments; councils have authority over hiring, training, project teams and business units.

* Task forces, which cross departmental lines, make specific task and process decisions and get the work done.

* Senior executives, the organization's former top ranks, become internal advisers to the councils and task forces, and spread the gospel of peer-based organizing.