Full assignment paper: Is there a leadership crisis in today’s organization?

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  1.      Introduction……………………………………………………………………………………………… 2
  2. “A Crisis in Leadership – Professor Angelo Mastrangelo”………………………………. 3
  3. Literature Review on leadership crisis………………………………………………………….. 5
  4. Essay Position: Is there a leadership crisis in today’s organization?………………… 11

Future leadership practices to improve effectiveness…………………………………………… 11

  1. Conclusion……………………………………………………………………………………………… 15

Bibliography………………………………………………………………………………………………….. 17

Appendix……………………………………………………………………………………………………… 19

1.        Introduction

 

I start this essay with a well said quote from the expert of leadership Warren G. Bennis, which is: “There are two ways of being creative. One can sing and dance. Or one can create an environment in which singers and dancers can flourish.”

In today’s world, leadership is a discussion which has received great emphasis and dedication by researchers and everyone else alike. This is a word which revolves around not only the corporate circles, but politics, families, police, social circles, non-profit organizations, and everywhere else where there is a need for a group of people coming together (Bennis and Nanus, 2003).

In recent decades, researchers have suggested that there is a significant difference between what leadership is and what is referred to as management. From the words of the guru of leadership studies, Drucker (1996) has suggested that while managers deal in achieving efficiency for the organization; true leaders aim to achieve effectiveness in the overall functioning of their domains. Furthermore, Hickman (1990) was of opinion that while managers remain content and satisfied when things run smoothly in their organization; leaders on the other hand express dissatisfaction when things do not evolve for achieving continuous improvement. This, however, does not signify that good leaders cannot become good managers per se. But it does suggest that an efficient manager may not necessarily be an effective leader. Therefore, research has placed separate emphasis on leadership skills.

So who or what defines leadership? The understanding of leadership has been subject to decades of academic analysis and as per Bennis and Nanus (2003), there exists more than 850 definitions of leadership. Thousands of articles, books and scholarly papers have been written about diverse range of leaders from Moses, Jesus Christ to Mao Tse-tung, Martin Luther King Jr., Winston Churchill, etc. Yet no one has been able to firmly establish the code which distinguishes leaders from non-leaders and more importantly effective leaders from ineffective leaders. For all that matters, one of the most recent definitions of Leadership by an HR Director Sharma (2010) is the process of “providing direction and coordination to a person, team or organization for the purpose of attaining his or her goal”.

In this essay, the objective of ours is to analyze and evaluate whether there exists a leadership crisis in modern organizations today. This stems from the article by Professor Angelo Mastrangelo (Ange) of Binghamton University in New York, “A crisis in leadership”. By leadership crisis, we mean that there exists no clear authority or even if an authority exists, he/she is unable to lead, direct and guide others for achieving intended objectives and goals. Before stating my position on whether there exists a leadership crisis, it is warranted to do some review and analyses on this subject. Therefore following this introduction, I will first present a brief analysis of Professor Agne’s article and what he meant by claiming there exists leadership crisis in today’s world. Following that, further literature would be analyzed and reported here to understand whether there are consensus amongst academia regarding the issue of leadership crisis. Like any useful essay, I will also give some recommendations and suggestions on how could future leadership practices be improved to enhance organizational effectiveness. Finally, a conclusion to our essay on leadership crisis will be presented.

 

2.         “A Crisis in Leadership – Professor Angelo Mastrangelo”

 

It was James McGregor Burns (1978) who had first introduced the concept of leadership crisis in his book on leadership. Recently, in 2008, Professor Ange attempted to revive this concern with his article which received sharp criticism from an expert editor who was of opinion that this topic is ‘old hat’ and thoroughly discussed. In his defence, Prof. Ange points out to difficult problems with leaders in countries such as Pakistan, China, North Korea, and other countries in Middle East and Africa. He talks about scandals and gross violations in recent times in several business, religious, government and even sports organizations. He also specifically points out macroeconomic issues such as rising global oil prices, ballooning US national debt, falling US dollar exchange rate, etc and he attributes all these problems to a crisis of bad leadership.

It was originally Burns (1978) who had suggested this phrase that “if a Martian came to earth and asked an earthling to take him to his leader, the earthling would not know where to take him”. Ange (2008) just reiterates that even though it has been three decades since Burns provided this hypothetical situation, things haven’t changed much and leadership problems still persist. He also gives reference of Bennis who had said that he is aware of at least 860 definitions of leadership and so Ange is of view that we don’t even have a proper definition of leadership.

Ange further stipulates the fact that there are tons of articles, books, papers and other scholarly publications published on the topic of leadership every year but things are not changing. Therefore, he is convinced that there is a lack of useful and effective theory and models on fundamentals and basics of leadership which can bring change in the leadership. He then shared comments from the editor who suggested that Ange’s evaluation of leadership being in crisis is naive and the reason behind this suggestion being the tons of articles and MBA programs already in place preaching and teaching leadership skills.

Ange proposes a leadership model called the Leadership 101 which he claims has been practiced successfully for many years and he states that he has prepared it based on 35 years of successful leadership observation and research of very effective leaders. In this process, he also has studied works of the experts in the subject of leadership for e.g. Burns, Barnard, McGregor, McCovey, Bennis, etc.

Therefore, in a nutshell, Ange is convinced that there exists a leadership crisis in the world organizations today and to counter it, everyone must tackle the basic fundamentals of leadership. The basics include methods of earning people’s cooperation towards their leaders in order to get their utmost contribution of efforts. Ange also suggests the need for an agreed basis or framework for evaluating leadership so that distinction can be made between good leadership from a bad or ineffective leadership.

Now before going towards analyzing other literature, I would like to make a few points regarding Professor Ange’s article. The article is broadly looking at leadership at all levels in life including politics, religion, not for profit organizations, etc and is not restricted to corporate leadership alone. However, could an error of judgement on part of any leader be actually considered a crisis of leadership? After all, leaders are humans who are prone to mistakes and therefore, errors created on part of leaders in position of responsibility cannot be labelled to be crisis. And then again, if one argues decisions taken at high profile cases for example Enron were not errors but grave violations, could one-off examples be taken to generalize that the world is facing a leadership crisis? What about successful cases of turnaround at Novell Inc, Apple Inc, Air Asia Berhad, Microsoft’s growing dominance, etc? Do these organizations face leadership crisis?

What could be agreed so far with Professor Angelo’s comments is that problems do lie and there are no common evaluation frameworks or principles of leadership. There are case by case situations which differ in context to each other and do not give generalised conclusions on effective leadership. We will now analyze other literature to examine whether there is a leadership crisis issue currently in world organizations.

 

3.        Literature Review on leadership crisis

 

According to Sharma (2010), leadership crisis is a pressing issue which needs immediate attention for any organization facing the problem since lack of leadership or bad leadership has disastrous affects for both internal and external functioning of the organization. She explains that leaders are like super glue which keeps the whole organization coordinated and focused. If this glue gets loose, the organization will start losing focus and coordination and fall into pieces. She further mentions that ineffective leadership or lack of it, at both macro and microeconomic level hampers growth and productivity rate that could have possibly been achieved under full potential of the organization or country.

So does literature contain warning of impending leadership crisis in today’s organizations? According to Smith and Peters (1998), the answer is an overwhelming yes. Smith and Peters (1998) state that there are widespread symptoms of lack of effective leadership in the corporate circles of US and its increasingly becoming a common cry amongst stakeholders in organizations that there is a lack of leadership in place. Similarly, a book ‘Leader of the Future’, edited by Hasselbein et al (1996) provides scholarly articles from more than 30 expert scholars on the subject of leadership and there is a unanimous portrayal by the writers that the current leadership of the world lacks the charismatic appeal which was found in the leaders amongst the baby boomer population. Meanwhile, Bolt (1996) goes further and suggests that there is a severe shortage of qualified people who are capable of leading organizations today into the challenging next century. He also is of view that the demise of leadership is visible across the society in present times.

Horne (2003) provides some statistics from the situations in US organizations to back up the claims of leadership writers that there is a leadership crisis being faced by organizations today. Horne suggests that there is an alarming widening of gap between the supply and demand of leadership talent facing US organizations. His estimates claim that as many as 20% of top management positions and 25% of middle management positions are expected to fall vacant with no suitable replacement in the coming decade. The primary cause of this is mentioned to be the exit of baby boomer workforce as they move towards retirement and lack of replacement by equally enthusiastic and capable leadership talent from the present generations. It is further claimed that the end of the first decade of 21st century shall witness a 15% reduction in the number of 35 to 44 year olds in the US and this age group essentially represents the potential people expected to take top and middle management positions in various types of organizations. At the same time, with the rapidly increasing business activities and organizational expansions on global levels, the demand for quality leadership is increasing and this is being met by shortage in supply of capable leaders. No wonder the corporate compensation packages for the top executives in the US are sky rocketing high. This change in market supply and demand of quality leaders will have an impact on all industries and all organizations.

A more recent study by Tierney (2006) on behalf of the Bridgespan Group also extensively investigated roles and requirements of leadership for the non-profit organizations. This study also uncovered several statistics which point towards an impending leadership crisis specifically in non-profit making organizations dealing with environment, social services, arts and economic development. The study suggested that over the next ten years, the not for profit organizations would need to develop and attract as many as 640,000 new senior managers to fill up positions of responsibility. This number of new senior managers required is 2.4 times higher than the number of senior managers who are currently employed. Furthermore, year 2016 onwards, this cluster of organizations would require as many as 80,000 new senior managers every year reflecting on the growing not for profit organizations industry.

So what are the causes of this leadership crisis being faced by today’s organizations? Abruzzo (2009) gives some suggestions for the reasons behind this trend. First and foremost factor has been categorized as the changing demographics structures in the developed countries of the world. It is all too commonly being observed that the baby boomer group of leaders who steered their various organizations to glory and success are getting old and retiring from their positions of responsibility. These talented senior leaders are not being replaced by similar capable leaders from the present young generation of people. The next cause identified is the changing market demand and supply factors; there is in an increasing demand for capable good leaders as industries and organization continue to expand but the increase in supply is not matched by similar numbers. There are two key reasons given for the lack of push in the increase in the supply of good quality leaders. Firstly, there is a widespread view amongst the younger generation of employees that senior management positions represent more stress, worry, depression leading to less leisure time and leaving the individual prone to more illnesses. The levels of responsibility also enlarge and many of the employees are not ambitious and do not wish to take up these positions. Therefore, contentment and preference for more spare time to spend with family becomes a criterion for not seeking further advancements at workplace. On the flip side, for ambitious and willing individuals seeking to take up positions of responsibility, there is a severe lack of proper leadership training and succession planning initiated by current senior managers which creates a vacuum in the availability of talented leadership. Horne (2003) explains this point of lack of succession planning further and in detail.

Horne (2003) claims that most companies are simply unprepared to counter the impending leadership crisis. He reveals some statistics for US organizations to back his claim. He mentions that as many as 50% of the US organizations with annual turnover of more than 500 million USD have no meaningful processes in place for training and grooming potential chief executives to replace retiring cohorts in their companies. One in four Fortune 500 companies have not placed succession management as a top priority and more than two-thirds of these organizations themselves rate their approaches towards leadership development as either low or very low.

So what is succession management or planning? Horne (2003) also explains this feature of management which deals with forecasting and planning for future senior staffing needs. Some of the basic questions required to be address in this management include whether the company has sufficient number of qualified people to fill in key positions of responsibility. This outlook should be done on a medium term basis for the coming next 3 to 5 years. Furthermore, a long-term vision should also be set to ensure there is a sufficient pool of qualified and trained middle management personnel who are in place to take over senior management positions over the coming 5 to 10 years time horizon. Programs and measures also need to be prepared and put in place to identify how could high-potential employees be retained in the organization with the competitive industry environment where poaching of employees by rivals is becoming an increasing trend. Other issues also include level of diversity and capabilities and other grooming for leadership skills, etc.

The entire idea for succession management is to ensure steady and uninterrupted supply of effective leaders in the organization. An organization without leaders could face massive coordination and direction problems leading to inefficiencies in the day to day operations. It is simply unthinkable of an organization without a leader at helm taking charge of affairs and issuing directives. Thus, succession management planning is highly emphasized to ensure that the pools of human resources in an organization are well groomed and taken care of to produce quality leaders of the future for the organization. Yet, as statistics showed earlier, this issue is not taken seriously by organizations specifically in the US and thus comes the problem of leadership crisis.

McAndrews and Kunreuther (2008) also offer some reasons for the arrival of leadership crisis in today’s organizations. Like others they mention the exit of Baby Boom leaders from the workforce due to aging and retirements. They suggest that there has to be a replacement theory proposed just like there are replacement theories for populations overall. Therefore, the number of leaders exiting the industry should be countered with training and grooming new leaders to take their place. Interestingly, they mention a new perspective coming from the newer generations that the problem lies not with the baby boomers leaving; rather that they baby boomers are NOT leaving. This argument states that with the baby boomer generation living longer, healthier and earning better compensation packages as well as equally wishing to earn reputation and creating a difference; there is a lack of sufficient vacancies at the top level which would allow the newer generations to take control of affairs and provide their inputs. Therefore, it is alleged that these baby boomers do not wish to give up their positions of responsibility and respect for material and non-material reasons alike and therefore, the reason for the lack of newer generation being tuned and professionally trained is due to lack of on the job experience of senior level responsibility positions occupied by the baby boomers. It is also alleged that the baby boomers consider the young generation second to them and thus their views are not always taken seriously with regards to the future course of actions for the organizations.

Another viewpoint offered by McAndrews and Kunreuther (2008) is that this lack of recognition by senior managers of fresh young blood who are talented enough to be future leaders is causing unnecessary leadership crisis issues. The older leaders and boards of directors are orthodox in their opinions and thus fail to recognize potentiality amongst the junior young subordinates. Thus, time and money is wasted on initiating recruitment drives for searching leaders externally while the solution to such could be found internally. If the company has proper processes to identify and train internal talent that is willing and ambitious to learn new skills and take over roles of responsibility, a lot of costs and time could be saved which are lost on external recruitment drives and also help generate greater productivity in the organization through motivated and secure employees.

Finally, a developing country perspective on the issue of leadership crisis will be presented from Aparna Sharma (2010) who is an HR director for Union Chimique Belge (UCB) India. She speaks about some of the common problems which lead to leadership crisis in organizations. In her opinion, the ineffectiveness or bad leadership on part of the newer generation of employees could be attributable to the complexities of doing business in the modern day environment. She explains that the modern day organizations operate in a very dynamic environment with fast pace globalization, rapidly evolving technologies, increasing and intense competition and more and more legal issues to ponder on which make it very difficult for the younger generation to gasp all these skills at a relatively short time span. As a result, there are fewer world leaders from the younger generation in today’s world. Furthermore, in multinational corporations, also arises the need to be globally knowledge-bearing to deal with diverse cultures and therefore a leader in charge of regions has to do lots of homework. This too makes it tough for more people to be able to get the right knowledge in order to be an effective leader of the organization.

 

 

 

4.        Essay Position: Is there a leadership crisis in today’s organization?

 

Based on the above literature review, there is overwhelming evidence in favour of an impending leadership crisis in today’s organizations. There are several reasons being given but predominantly, all factors point towards the fact that there is a growing shift in the quantity demanded (increasing) and quantity supplied (decreasing) of good leaders in the market. With such a shift, purely in terms of economics, the cost of employing a good effective leader is costing greater and greater which is further depressing effective quantity demanded levels. Using evidence from the above literature review, my position in this essay takes the stance that there does exist a leadership crisis in today’s organizations which will accelerate to larger extents in the next decade or two.

Now the essay would like to present some thoughts on how could future leadership practices be improved and how could the issue of leadership crisis be resolved effectively. Once again, reliance on academic literature will be made to give a useful and evidence supported answer to this question.

 

 

 

 

Future leadership practices to improve effectiveness

 

Browsing through various articles, it is all commonly observed about insistence by writers stating that more leadership is needed to overcome the crisis. The importance of leadership is well recognized since Handy (1994) correctly highlights that in today’s world its influence rather than authority which is considered the driving force. The influencer is more revered, feared, looked upon rather than the one in authority. So how can this leadership be displayed?

In the words of the guru on the subject of leadership, Peter Drucker (1996) states that leadership must be learned and it is possible to learn. In these similar views did Bolt (1996) claim that the leadership crisis is all attributable to the crisis and lack of leadership development programmes. However, it was Max DePree (1989) who cautioned that while leadership is an art and can be learned, it is not something which can be learned simply by reading books but is gradually acquired over time.

According to Smith (1996), a senior executive is a person trained and well versed with a lot of factors including organizational politics, culture, networking, ability of leading and influencing others, commanding cooperation, effectively managing time and presenting, having the creativity of developing and enforcing ideas rather than just coming up with them, etc. This senior leader has traits which go beyond the conventional know-how of technical knowledge and management concepts and the leader demonstrates wisdom and in making the right decisions while surviving the pressures of today’s organizations with intense competition and changing environments.

Porras and Collins (1994) further add that the leaders of the future are not going to be people in place purely for their positions of authority. Rather, they need to be able to sustain their positions of authority by being highly charismatic individuals who are able to lead subordinates and they also need to have creative thinking ‘out of the box’ skills which can help them face and forecast future challenges and changing environments in advance as well as be able to counter them to steer the organization towards the path of success.

Morrison (1992) also states an important point that effective leaders need to be able to identify internal sources of talent which could be groomed for being future replacement leaders for the organization. This point was stressed in the literature review where it was commonly complained that leaders fail to recognize potential talent within the existing workforce and waste time and money on external recruitment. Therefore, the existing diverse workforce should continually be monitored as a measure for identifying future leaders as part of succession management programs in the organization. This succession management program shall be discussed in detail later.

At the moment, the point is emphasized again that leadership is learned by practice and Smith and Peters (1998) compare this art with the likes of riding a bicycle. A bicycle can only be learned by directly trying to ride it. So their conclusion is that the leadership development practice can only be improved through a process of learning by doing.

Sharma (2010) adds more into this argument that effective leaders need to be able to create an example for their followers by standing firm against all odds and displaying the ability to bounce back against periods of failure. They must be able to show trust and commitment with their colleagues and subordinates by making objectives and plans known to them in order to earn their trust, motivation and support towards intended objectives. Focus should also be placed on middle managers who are the key communication links towards the lower level employees and therefore their quality and communication delivery methods towards the lower level employees also needs to be monitored. And for all this, Sharma is of view that such effective leaders can be build by the HR departments of organizations.

Sharma suggests that the first step to identifying and building leadership in an organization is to do some homework internally in the organization. Questions such as leadership requirements of the future, contingency plans should the current leaders quit the organization, availability and identification of the range and diversity of skills present in the current workforce, etc should be answered. With answers to these questions, appropriate leadership development programs can be initiated to prepare for the leadership needs of the organization in future. This is what could be the start of developing an effective succession management programme. Such programmes will help organizations thwart of any leadership crisis likely to be faced by them since they are already preparing in advance to counter it.

However, Sharma reveals that a glaring reality in India and across other countries is that certain leaders feel threatened by grooming of junior subordinates and thus prevent any such activity from being carried out. They restrict any learning of their junior subordinates by not exposing them to senior management dealings and conditions in order to keep them away from getting trained for senior managerial positions. No amount of time and resources are also allocated for such training programmes and all this is to protect self interests rather than that of the organization.

Sharma proposes four factors which are essential for developing succession management programmes which may eliminate leadership crisis in organizations. First she states that this programme needs initiation and approval and willing support from the top management. Next, the Human Resources need to do active homework to predict future leadership needs and identify from the existing pool of employees potential leaders for the programme. Third, this programme needs to be broadly made known to employees across the organization to generate enthusiasm and motivation to be part of it and create hopes for promotions. Finally, a fair and equal opportunities environment needs to be provided to all employees to be able to take part in this programme.

In terms of the succession management programme itself, Smith and Peters (1998) provide several useful points. They suggest that an optimal leadership development programme should teach participants how to identify and implement organizational strategies with the view of achieving intended organizational objectives. It should train them to be able to get tasks completed on time and done while respecting the organization’s cultural and political norms. They need to be able to take quicker decisions in line with modern day’s intense business competition and environment. They should be polished to be creative in order to provide continual improvement ideas to existing processes and always seek better and new methods. They should be instilled with the desire to act ethically and avoid wrong doings in conditions of risk, complexity and tension. They should be given appropriate mentoring to develop critical insights to be able to indentify sources of problems and take appropriate actions to solve them. They should be conditioned to desire more sources of knowledge and seek technological advancement to ensure best practices are adopted and in place in the organization for the overall improvement of the organizations productivity and performance. They should be taught on methods of leveraging their own capabilities and those of others under their control and so use non-traditional new age transformational leadership styles to deal with people. This transformational leadership style should be instilled in them which go beyond the conventional transactional nature of leaders.

In the final comments to this section, I would like to present a summarized four point formula for exemplary leadership as presented by Warren Bennis (1999).

Source: Warren Bennis (1999)

 

5.        Conclusion

 

It is without doubt that leadership plays a very important role in the success and wellbeing of organizations. Leaders are the guiding commanders who can lead an organization to the path of great successes or to miserable ends. It is for this very reason that organizations have to be very careful in ensuring that good leaders are available at their helm to lead them to the path of successes.

In this essay, we made use of extensive academic literature which presents an alarming reality that there does exist a leadership crisis in organizations today.  Several reasons were also observed for this trend including changing complexities and environments of leading businesses in today’s world which makes it difficult to find great leaders; a lack of enthusiasm at the young generation level to take up top management responsibilities and growing exit of baby boomer top management personnel retiring; and more importantly, lack of succession management and leadership development programs in place to foster and create future leaders.

In the light of this, this essay identified and proposed methods for improving future leadership practices. The essay emphasized on what kind of qualities are expected from a leader in the current and future conditions and how could organizations prepare and train future leaders to meet their needs and avoid leadership crisis by tapping their internal sources of existing workforce. The essay also detailed why succession management programs are important and what could generally be expected out of these programs. Keys for successfully implementing these programs were also discussed.

 

 

Bibliography

 

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