The Changing Composition Of Leadership.

Intuition Creativity Trust Power-sharing Consensus This is business?

Widespread economic and technological changes in recent years have delivered a series of sharp shocks to the traditional corporate structure. In the process, virtually every abiding truism of business has been called into question.

Add together globalization, mergers, acquisitions, partnership alliances, information technology, the Internet and e-commerce, the rise of the entrepreneur, a diverse customer base and workforce, a tight labor market, and what have you got?

According to people on the fore-front of management research, these elements have combined to create a need to make decisions across all time zones concurrently, to sustain corporate growth and to recruit and retain talented employees. Companies must also be able to cope with the loss of centralized control over what employees and competitors know -- and be able to tolerate the break-neck pace of business and the overall flattening of the corporate structure. And they need the guts to take big professional risks.

A new leadership ethic has formed itself around these fundamental changes -- one that values innovation, creativity and the ability to think in very different ways about what it means to lead.

"Today's leaders need to be adept at making decision-makers, not making decisions," says Stephen Yearout, a partner at PricewaterhouseCoopers. "With the e-economy has come the need to operate and make decisions in every aspect of your business at e-speed. That alone brings with it this driving need for leaders at all levels. The best leaders have given up the traditional management-control dimension in favor of seeking to build and develop more trust throughout the organization, because you can't have a large leadership pool unless you have trust in your people."

Bruce Pasternack, senior vice president/managing partner at Booz, Allen & Hamilton, agrees. "Too much is being written about the CEO as the great leader and not enough about organizations that demonstrate leadership capacity throughout the organization," he says. "Really good leaders take their skills and abilities and build into their organizations the capacity for leadership all the way down the line."

Paradoxically, achieving this goal requires a strong and confident person at the helm. Relinquishing power doesn't come naturally to most top-level executives, particularly those trained in the traditional military, command-and control style. Sharing information with an entire organization, particularly when the company is in a sensitive situation, may run painfully against the grain. But according to many, it's the most effective way to achieve the organization's bottom-line objectives.

Walking the Walk

In 1996, Veritas Software in Mountain View, Calif., was at a crossroads. Under the leadership of Mark Leslie, its chairman and CEO, an open, egalitarian culture was thriving. The company had grown quickly, but was still small enough to allow information to flow freely. Then Veritas began to consider merging with another company. About six weeks before the merger was to be announced, Leslie called some 35 people into his office and discussed the proposed deal -- a highly risky move, for obvious reasons. He told them everything he knew about it, and why he thought it was a good idea.

"And then came the hard part," recalls Leslie, "because I'm an ambitious person and I always want to climb the next mountain. But I said, 'Look, this is your company, and if you don't want to do this, we're not going to do it.' That was really tough, because I wanted to do the merger. But [communicating] it that way paid big dividends later on, because the pain of the merger process was more manageable with everyone on board. I believe that the more power you give away, the more power you have -- if you truly give it away."

Alan Weiss, Ph.D., president of the Summit Consulting Group, sees Leslie's approach to the merger process as emblematic of the new leadership paradigm. "A leader is responsible not for investing a half-million dollars to make sure the organization has a coherent strategy, but for investing time and volition to make sure that people are aligned behind its leaders," says Weiss, who specializes in organizational and individual performance improvement. "Power used to be unquestioned. It came with the title. Now it's about referent leadership -- people are more willing to follow those in whom they believe,"

And with a young, restless workforce accustomed to instant gratification, one would be wise to take those words to heart. What can you as a leader do to actively encourage and develop leaders within the company and get people behind your agenda?

The Vision Thing

The prevailing view is that you must first decide what you stand for as an organization. "Vision is having some sense of how you want the world to be," says William W. Sternbergh of the Center for Creative Leadership. "Why are you sitting in that chair, and what's your organization's purpose ?"

Bill Farrow, senior vice president of treasury management systems at Bank One Corporation, believes that vision is possibility based in reality. "It's also about being able to tap into the energy or the spirit of the place, the character of the organization, and being able to rally that energy to realize the vision."

Great leaders also need the ability to communicate their vision. Sternbergh believes that "the best leaders are good at giving their vision words and context and pictures so other people can see it. It's a kind of storytelling, and it enables others to identify with the picture as we see it."

Finally, in the new marketplace, it's vital to prioritize recruitment and incentive. Create an overall human resources strategy that's specific. Who do you want bring in? How will you develop them? How will you compensate them? How will you measure their success or the lack of it? Then, build into your organization a mechanism for developing the next generation of leaders.

Doing What Comes Unnaturally

An outstanding example of a corporation that has institutionalized its leadership development is Shell International. In 1996, Shell had a cash mountain in the bank -- about $4 billion -- but analysts were saying the company had run out of ideas. For 15 or 20 years it had been delivering an annual return of about 25% with price appreciation and dividends. But its CEO was impatient and disappointed that in all of the years of good performance, Shell had never hit its own targets.

There were other deeply rooted problems. Many of Shell's processes were slow and bureaucratic. The company was perceived as biased toward debate rather than action, which made it difficult to recruit top talent -- Shell was not the most exciting proposition for a bright young person who wanted an exciting career.

"It had worked wonderfully during the '50's and '60's, the golden years of the oil boom," says Gary Steel, Shell's director of leadership and performance operations. "People were sent off with their manual to the other side of the world and told, 'We'll see you in a couple of years.'"

In addition, deregulation had created intense competition, and the company had suffered some notable public relations disasters. So the CEO brought in an independent consultant who sowed the seeds for a corporate entity designed to accelerate the process of strategic change and improve business performance.

Under Steel's stewardship, Shell has created a global team that encompasses all the requisites for the new leadership model. "First of all, leaders have to be visible," says Steel. "You have to have some way of touching people and motivating them and making them feel part of whatever it is you're doing. If you sit behind a mahogany desk and try to run the business, you're probably going to look behind you at some point and find that there are very few people following."

Within Shell, the notion of leadership is inclusive; everyone in the organization is a potential leader. The belief is that with his or her own knowledge base and skill expertise, everyone at Shell can help make it a better company and improve the bottom-line result.

"In our group, we pursue leadership through business-related action learning projects. We have a team of 'change agents' who operate as catalysts within their operating units to drive bottom-line improvement," says Steel.

At the same time, Shell's 50 change agents are charged with accelerating the growth of individual leaders and coalitions. "We believe there's a competitive advantage if we can get everybody demonstrating their own leadership," says Steel. "Our bumper-sticker description of the program is, 'If I take away your job title, will other people follow you?'"

By the end of 1999, 40,000 Shell employees had gone through training customized from a menu of six individual programs, depending on the specific business needs of their operating units. Steel's unit operates on a cost-recovery basis, rather than as an overhead department within the corporation. The concepts and programs have to be bought into by Shell's operating units, who obviously won't do so if the product doesn't work. But it does.

For example, Shell's Middle East operation used what was learned in the program to build a business plan with a coalition of 1,500 people. "Simple logic tells you that if you build a business plan with 1,500 people, there's a hugely greater chance that it will actually be delivered on," says Steel. "And it's hard to argue that new ways of thinking about leadership are not important if they're manifestly delivering dollars and cents to the bottom line."

The Zen of Leadership

The coda to the Veritas Software merger story provides another interesting example of the almost Zen-like logic of the new leadership ethic. The company Veritas merged with was a traditional, hierarchical command-and-control organization with, in Leslie's words, "a 'we're in charge here,' macho mentality." Leslie was CEO, with a second-in-command from the other company poised to take over should he falter.

It was a tense, uncomfortable and uncertain situation. Employees of the software company began appearing in his office warning him that the sharks were circling. He was told, "You're our spiritual leader. These guys are setting you up, and you don't even know it."

Leslie asked them what they thought he should do. "We'd like you to tell them to behave the right way," Leslie remembers. "So I asked them, 'If I tell them to behave the right way and they do, don't we then have implanted in the company their command-and-control system? In trying to make them become us, don't we become them?'"

Instead, Leslie told his defenders to lead by example, conduct themselves with integrity, share information and get the new people involved in decision-making. "By being open and embracing leaders, we can win their hearts and minds, and that in fact is what we did. The former sharks are now the staunchest defenders of the whole system," Leslie says.

"People learn by watching and feeling and being naturally themselves," says Bank One's Farrow. "Leadership is not long division. We over-analyze, and we deny things like intuition. Intuition's real, and it's important.

"We have to trust the intangible aspects of what we perceive. When I look at a set of facts, an idea or a plan, it may not exactly add up on paper, but somehow I know it's right. Those are the things you have to trust yourself with, and that's what leaders do."

Sharon O'Shea is a freelance business writer in Hastings-on-Hudson, N.Y.