Saturday, August 19, 2017

A European Utility Re-Envisioning Energy: An Opportunity for Visionary Leadership

When Eneco began a business called CrowdNett in which the company would sell large home-batteries to people having solar panels, the Dutch electric utility was on the way toward putting its electricity-production business out of business. The company would continue, though radically transformed. The strikingly different strategic-course correction was based on a rather unique vision of a novel social reality in which homes generate their own energy and then some. In the context of climate change and accumulating carbon dioxide in the atmosphere, Eneco’s CEO had an opportunity in 2017 to lead not only organizationally, but societally as well by promoting the radical social reality already envisioned.
Already by 2017, surplus power generated by houses with the solar panels could be stored in large batteries. Eneco could tap into “a portion of that storage to help balance the electricity grid. Customers [received] 450 euros, or $530, a year for allowing use of their batteries.”[1] The customers could also rent a meter called a Toon for €3.50 a month for an expected energy savings of 10 percent. However, to give customers an incentive to produce as much energy as possible beyond their consumption, Eneco should have agreed to pay per unit of energy sold to the company and given the Toon monitors away (or with a small initial fee). The incentives of the customers as producers would have been more closely aligned to Eneco's strategy. Even so, the value of the company's vision is unimpeachable.
It may seem odd in conventional terms that Eneco would encourage its customers to buy less electricity; such an approach to selling a commodity would under normal circumstances be quite bizarre, but the company’s management did not view the company as necessarily being in a commodity business for long. Moreover, the management questioned the very notion that large power plants are necessarily the default means of energy production in spite of the fact that they were at the time. The people at Eneco were utilizing their energy to transform not only the company, but also the entire energy sector, with implications far beyond the E.U.
How did the management get to that point? When the company was “locked in a profit-zapping battle with competitors, cutting prices for electric power and natural gas,” the management “decided that a radical change was necessary.”[2] Hans Valk, a former head of Eneco’s customer business, explained the thinking at the time as: “What we are trying to do is switch from selling a pure commodity to selling energy as a service.”[3] That is, Eneco would provide services to the people generating the energy. The company bought Jedlix, for instance, so to be able to get into the business of providing charging services for electric cars. Leveraging the information available from the home energy monitors, Eneco could enjoy a sustainable competitive advantage in solar-panel repairs.
In terms of the original energy-production end of the business, when “large volumes of wind and solar-generated electricity” undermined “the economics of traditional power plants,” Eneco could perceive “the outlines of a future in which conventional power plants on longer [would] supply the bulk of a home’s electricity.”[4] In a dramatic reversal, the home would be the generating site and Eneco would purchase the right to draw surplus energy in order to transfer it to homes in need of an infusion of energy. Eneco could thus potentially transition itself into being a transfer-conduit and balancer rather than a producer. The company would be juggling “a thousand points of light,” or sources thereof, and the light would be cleaner and thus in line with limiting climate change. This picture is tailor made for visionary leadership, not only organizationally, but for a societal and even global audience as well. 
In his 1989 inaugural address, U.S. President George H.W. Bush had envisioned a thousand points of light in terms of community service. He was attempting to call forth the dispersed energy of the American people. Similarly, Eneco’s CEO had an opportunity as early as 2010 to take up the mantel of visionary leadership to envision for the world a future wherein homes and businesses are the sites of energy production from wind and the sun. In parallel terms, the CEO could have extrapolated to home gardens and local farmers’ markets as potentially playing a much greater role in food production, hence reducing the carbon footprint in transporting foodstuffs. The coherence of such a vision would be amazing, such that the leadership could be quite effective in the promotion of the vision. It could be called, Radical Decentralization in a Globalized World. Such a vision is the stuff that leaders are made for. Even the radical strategic shift in buying energy-servicing companies pales by comparison. To be sure, strategic management and leadership differ; each has its own purview.[5] When the two are conflated, the bottom line usually sees to it that strategic considerations dwarf or compromise the more ethereal visionary leadership. Yet as the European energy utility demonstrates, strategic change need not be the whole story, and the combination of strategic redirection and a radical vision going even beyond the organization itself can be huge, with major dividends in the long term.

For more on visionary leadership and management, see The Essence of Leadership: A Cross-Cultural Foundation, available in print and as an ebook at Amazon. 

1 Stanley Reed, “Dutch Utility Bets Its Future on an Unusual Strategy: Selling Less Power,” The New York Times, August 18, 2017.
2. Ibid.
3. Ibid.
4. Ibid.
5. Skip Worden, The Essence of Leadership: A Cross-Cultural Foundation (Seattle, WA: Amazon Books, 2017).

Wednesday, August 16, 2017

From Visionary Leadership to Management: Taking a Bite Out of Apple

Founders and otherwise visionary leaders in business can be distinguished from managers, even though a manager may be running a company. For one thing, managers may resent leaders for being able to take in a larger view while relegating—even dismissing the petty, which can be so alluring to the managerial mentality. Leaders in turn may view the implementation of a vision as nugatory at best. More abstractly, change as paradigmatic (i.e., shifting from one broad framework to another) has its fans (i.e., visionary leaders), while the status quo has its own defenders (i.e., managers). Vision and big ideas are typically associated with a company’s founder or visionary leader, whereas bureaucracy tends to go with the implementation-focus of managers (including executives). In short, to suppose that leadership and management are the same is to ignore a lot that separates them. In the case of Apple, the shift from leadership to management that occurred with the passing of Steve Jobs may be at least partially responsible for the subsequent decline in the company’s stock price. In this essay, I explore the change at Apple to demonstrate why management should not be conflated with leadership.

Material from this essay has been incorporated into The Essence of Leadership, which is available at Amazon in print and as an ebook.

The Essence of Leadership

In The Essence of Leadership, leadership itself is reformulated in such a way that what emerges—the essence of leadership—is distinct from related phenomena, including management, presiding, and mentoring. This is not to say, however, that leadership bears no relation to strategy—hence the complex concept of strategic leadership, which is not without risks. Leadership itself contains risks, which a focus on the essence of leadership, rather than, for instance, taking leadership as simply about having influence, can arguably minimize. Such risks include the cult of the leader, to which charisma and attributions of heroism are especially susceptible, and the distorting impact of ideology, such as in Burns’ version of transformational leadership. Shaking out the risks and distinguishing leadership as a unique phenomenon are ways of pointing back to the essence of leadership, which applies in virtually any culture. That is, the essence is cross-cultural. Taking comparative religion as a stand-in for cultures, I demonstrate that the essence of leadership can be informed by Taoist, Buddhist, and Judeo-Christian principles.

 The Essence of Leadership  is available at Amazon in print and as an ebook.

Saturday, August 5, 2017

Charismatic Leadership: Between Fact and Fiction

A Guest Post by Edith Luc, Ph.D.

A remark I often hear about leadership is that true leaders are inevitably charismatic. I am often bewildered such remarks, because they insinuate two misconceptions: first of all, that leadership is limited to extraordinary people, and that the group leader is entirely responsible for mobilizing his/her group around a common vision.

In an era where organizations depend more on collective intelligence than solely on the chief’s charisma, it is risky, almost utopist to wait on manifestations of a charismatic leader believed to be of unique and exceptional nature, and able to mobilize everybody at the same time. What we really need is the combination of every worker’s leadership. Can it be then, that the definition of charismatic leadership is not the same for everyone? This brings us to ask the question: What is charismatic leadership?

Charisma: A gift, an exceptional influence that a person exercises on others.

According to fundamental writings on the subject (those of Max Weber, of Holl, 1985; Sohm, 1982; see Ouedraogo, 1993), there are five fundamental characteristics that define charisma:

1.       It is a relational phenomenon;

2.      where a person exercises a strong influence on others;

3.      by means of exceptional strength or natural charm;

4.      This charisma is recognized by followers, or disciples;

5.   Finally, the charismatic leader and his/her followers share an experience that is both emotional and enthusiastic.

Charisma: A phenomenon that depends on recognition, which is what creates followers, or “disciples”.

The charismatic individual is gifted with an extraordinary power stimulated by the support of his/her immediate followers. A so-called “emotional community” is created   between the leader and his/her followers, that is , a sharing of emotions; a communal, emotionally-charged experience highlighted by admiration and enthusiasm; a quasi-invisible trust and a feeling of power.

The recognition of others:

In other words, charisma is an attribute that requires recognition in order to be manifested. This recognition is what creates a group of individuals who will obey to the call and vision of the charismatic leader. A recognition that depends on the individuals, on their emotional connection in the presence of this leader, and on the faith they have in this person. It is also important to note that the leader’s influence is not universal. That is, not everybody feels the same enthusiasm towards the individual in question.

Hitler then, was charismatic for some but not for others. In the same way, Obama is charismatic for some, but not for all. Let us take the case of Dominique Strauss Khann. Before May 14th 2011, many (but not all) described him as a charismatic leader, ready to follow him in his presidential aspirations. However, since this fatal date, Khann’s charismatic leadership has significantly evaporated due to a lack of social recognition, a lack of faith in his person and in the exemplarity of his presumed actions. This is so even though the individual’s “exceptional” talent remains the same. What has changed is the admiration manifested by his initial admirers. Therefore, there is no charisma without the eyes of admirers, of followers. Charismatic leadership then, is a volatile and impermanent attribute.

Does one need a quality similar to charisma to practice leadership? Must one have a certain influence on others?

First of all, let us remember that leadership is an influential process between individuals mobilized by a common objective. It is not at all necessary to have an exceptional gift such as charisma to exercise influence at the heart of a group. What is more, the exercise of leadership belongs to all those who want to and are able to influence the development of a situation or the resolution of a problem.

However, some specific elements are needed in order to encourage the desired impact on the group, among others:

1.       The conviction that the objective is worth the time and efforts to reach it. This conviction can bring timid people to get out of their usual path.

2.      Credibility. It comes from experience, expertise and reputation. This credibility needs to be constantly developed in relation to one’s domain of activity. It encourages the attention and interest of collaborators, while at the same time reinforces one’s personal sense of worth.

3.      Trust. Not only in yourself, but also in your decision and actions. It is the opposite of doubt and incertitude, which are sometimes necessary for self-improvement, but are harmful to leadership when chronic or unjustified.

4.      Verbal and non-verbal transmissions. These are necessary for successful communication of convictions, credibility, self-confidence, enthusiasm, as well as the belief in the chances for the objective to be achieved. Whether verbal, non-verbal, written or oral, all facets of communication are useful in the practice of leadership.

5.      The ability to valorize competencies (interests, motivations, aspirations, supports and abilities) of your collaborators, clients, suppliers and collectivities. The practice of leadership is not undergone in a closed atmosphere; rather it needs to be done in a social environment. A true leader is someone who achieves the expected results, while at the same time adapts a collaborative environment around him/herself. To achieve profit goals by alienating oneself is a characteristic of greed, not of leadership.

To conclude, one of the misconceptions of leadership is that only a few people, gifted with unique charismatic abilities, can influence and mobilize others. In reality, leadership needs to be shared and practiced everywhere and by everyone in organizations and societies. These days, enterprise executives look to be surrounded by partners that will help them solve problems and that will be able to put forward innovative solutions that go out of the beaten path.

© 2011, Edith Luc. All Rights Reserved.

Charismatic Leadership: A Reply

I am particularly taken by the following passage from Edith Luc’s essay on charismatic leadership: “(I)t is risky, almost utopist to wait on manifestations of a charismatic leader believed to be of unique and exceptional nature, and able to mobilize everybody at the same time.” I am reminded of the emphasis that American corporations place on the CEO position and the U.S. Government places on the U.S. President. The focus on one person, rather than a council, presumes that certain individuals are so unique and exceptional that perhaps even human nature itself is surmounted. In other words, the theory behind charismatic leadership may imply such extraordinary differences within human nature that some people are essentially super-human, and thus subject to hero-worship.

Charisma, which comes from charismata, literally means “gifts of the spirit”—implying that a person with charisma has something special bestowed by God. Hero-worship may thus be part and parcel of charismatic leadership. While such worship may be viewed as innocuous when Barak Obama is the beneficiary, Edith Luc reminds us that Hitler, too, was regarded as a charismatic leader. The film Triumph of the Will shows that he was worshiped by many Germans and even Hitler himself presumed his survival of assassination attempts was a sign that God approved of his mission 

In short, it can be dangerous to get carried away with one-person leadership manifested with charisma. The one-person approach itself may encourage or invite this danger wherein a suspension of critical belief accompanies an exaggerated focus on a particular leader’s person such that a charismatic leader can even get away with mass murder. Hence, it might be useful to re-evaluate the assumptions behind charismatic leadership and consider the viability of alternative types of leadership.

If human nature is not as wide-ranging from ordinary to exceptional as charismatic leadership theory requires or supposes, then even the emphasis on a single individual in an organization or government may be artificial and excessive. Implications from a more egalitarian approach to leadership include substituting councils for individual top leaders. In the U.S. Constitutional Convention, for example, delegates debated a presidential council as an alternative to a one-person office. With the revolutionary war not long in the past, the delegates decided for the latter because of the energy required of the commander in chief. In a world wherein the default for leadership is “one-person,” the shift to the council alternative can seem radical. This over-reaction to such a change may attest to the addictive properties involved in the recognition of charismatic leadership, rather than to any “radicalness.” Therefore, it might be useful to consider alternatives to charismatic leadership within the one-person approach.

Within the one-person leadership tradition, implications from begging off of charismatic leadership include re-evaluating the pay differential between the workers and the CEO of a given company and reducing the duration of the presidential election campaign (which is now almost two years—half of a term). In other words, if charismatic leadership tends to exaggerate the unique and exceptional characteristics of leaders of organizations and governments, then the rest of us should pay less attention (and money) to the individuals who rule our organizations and governments.

Even though the one-person leadership arrangement that supports charismatic leadership may be over-extended in modern society, the notion of a collective intelligence strikes me as anthropomorphic, as intelligence is a quality of a mind rather than an organization. Relatedly, treating a society or organization as an alternative to a charismatic leader may be faulty—meaning going too far in the other direction. Treating everyone as “participating” in leadership risks making leadership itself a tautology; everybody does it. Also, if everyone is simultaneously a leader and follower, the terms may lose their respective meanings on the way to a muddle. The recognition that is required for charismatic leadership does not in my view render the followers leaders; the leader’s leadership is not usurped and thus democratized to the whole. I am not suggesting that Edith Luc goes so far as to assert these claims, but someone could reach them from the notion of collective intelligence, which she does assert and I deny.

Perhaps the notion of collective intelligence comes from small group dynamics wherein a discussion gains momentum and results in a conclusion. I would argue that such a process is a function of exchanges of information between discrete intelligences (i.e., minds). With regard to charismatic leadership, I believe the recognition depends on the leader being of a sufficiently large organization (or government). At close range, such as in a group, a leader cannot seem “larger than life” and thus is not apt to seem unique and extraordinary. In other words, some distance is necessary for the illusion of a charismatic leader’s “superhuman” quality to be apparent. “No one is a prophet in his or her hometown” may be getting at this point. So I submit that charismatic leadership does not apply to the group or department level, but, rather, to upper echelon leadership in an organization or government (and even then, to a sufficiently large one).


Edith Luc, “Charismatic Leadership: Between Fact and Fiction

Related:  See The Essence of Leadership, which is available at Amazon in print and as an ebook.

Thursday, August 3, 2017

Bureaucratizing Leadership into Management

Fuqua/COLE surveyed 205 executives of public- and private-sector companies. Based on the results, I provide a critique that renders transparent some of the questionable assumptions that leadership-advisors and even business leaders themselves may have without realizing it. 

Material from this essay has been incorporated into The Essence of Leadership, which is available at Amazon in print and as an ebook.

For a critique of management, see, On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management, available at Amazon in print and as an ebook.