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What Leaders Really Do: Purpose and Impact in Organizations
Principles of Management · Chapter 9: Leadership Styles and Sources of InfluenceSection 9.1 · lesson 45 of 11712 min · free with a free account
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In this lesson
Purpose and impact in organizations, stated honestly.
- Define leadership and what sets it apart from other influence
- Describe 5 things leaders contribute to an organization
- Explain the follower's side, and formal and informal leadership
- Explain the limits of leadership's effect on outcomes
Transcript
Everything said in the video, section by section (1,603 words). Read along, or search it.
Leadership Styles and Sources of Influence
What Leaders Really Do
Popular culture tells a simple story about leaders. A great one arrives, and everything changes. This section offers a more careful account. We'll define leadership precisely, and separate it from authority and from manipulation. We'll look at the five things leaders actually contribute, and at the followers who make leadership possible. And we'll be honest about how large leadership's effect really is, which is smaller than the story suggests. Along the way, we'll meet sense-making, an underrated function most people never name. We'll ask what can substitute for a leader altogether. And we'll see why people so readily overcredit leaders, for good results and bad ones.
Leadership Defined
A Process of Influence Toward a Shared Goal
Leadership is a process of influence toward a shared goal. That sounds simple, but each element of the definition carries weight. First, leadership is a process. It isn't a fixed trait that someone either has or lacks. It's enacted continuously, through specific behavior. It's not a permanent quality, settled once and carried forever after. Second, leadership is influence, rather than authority. It works by genuinely changing what someone else believes, or wants to do. It doesn't work merely by invoking a formal right to direct them. That's the authority distinction from Subchapters two point two and two point three, and we build on it here. Third, the goal must be shared. A goal simply imposed on a follower from outside doesn't qualify. It must be held in common, not merely announced.
Drawing the Lines
Not Authority, Not Management, Not Manipulation
Leadership is distinct from three things it's often confused with. First, authority, the formal right to direct. A person can hold authority with no genuine influence at all. And a person with no formal authority whatsoever can lead effectively, through influence alone. Second, management. That distinction was developed in Subchapter two point three, so we won't restate it. Third, manipulation. And here the line needs care. It turns on one question. Are the influenced party's interests genuinely served? Influence that leaves the follower better positioned, better informed, or more capable is leadership. Influence that serves the influencer at the follower's genuine expense crosses into manipulation. That's especially true where it depends on concealment or deception to work. This section only names the distinction. Subchapter ten point four develops it fully.
What Leaders Contribute
5 Things an Organization Doesn't Generate on Its Own
Leaders contribute five things that an organization doesn't reliably generate on its own. The first is direction under ambiguity, a chosen path when the correct path is genuinely unclear. That's exactly when direction is most valuable, and least available from any other source. The second is alignment of effort. Separately capable people actually pull toward the same outcome. Without it, each person optimizes a locally sensible version of the work, and the whole is uncoordinated. The third is motivation and commitment. Leaders raise what people are willing to give, beyond the minimum an exchange or a rule could compel. The fourth is sense-making, a shared interpretation of confusing events. We'll look at it closely next. The fifth is the modeling of behavior. Others get a concrete, observed example of the conduct that's actually expected. That communicates far more reliably than a stated policy on its own.
Sense-Making
The Underrated Function
Sense-making deserves particular attention, because it's so easy to underweight. Picture a genuinely confusing situation, where the facts themselves don't settle what they mean. In that situation, the leader's interpretation frequently becomes the organization's interpretation. Why? Because someone has to supply a working account before the organization can act at all. And the leader is usually positioned to supply it first, and most visibly. This function operates quietly. The people experiencing it rarely name it, or even notice it. Yet it shapes what an entire organization believes happened, and why. That influence is far greater than any single decision the same leader makes. So when you assess a leader, don't only look at the decisions. Look at the story she told about events.
Table 9.1.1
Each Contribution, and What Can Replace It
Table nine point one point one sets each contribution beside what it produces, and the condition that can replace it. Direction under ambiguity produces a chosen path where the correct one is unclear. It's replaced when the task is clear, and the correct approach is obvious. Alignment of effort produces capable people pulling toward the same outcome. Strong coordination mechanisms, or shared professional norms, can do that job instead. Motivation and commitment produce effort beyond what compliance alone would produce. Intrinsically engaging work can replace it, and so can a highly cohesive team, from Subchapter eight point two. Sense-making produces a shared interpretation of confusing events. It isn't needed when the situation's meaning is unambiguous and self-evident. And modeling of behavior produces an observed example of expected conduct. Strong established norms, or professional standards, may already be modeling that conduct. The pattern matters. Each contribution is valuable exactly where nothing else supplies it.
The Follower's Side
Leadership Exists Only Where Followership Does
Most frameworks neglect the follower's side of leadership. Yet the point is structural, and unavoidable. Leadership exists only where followership does. A person attempting to lead, with no one actually following, has not led. That's true however compelling the attempt seemed in her own estimation. Leadership is relational. It isn't a property that resides in one person alone. That has a direct consequence worth stating plainly. The characteristics of followers determine what leadership is actually possible in a situation. Not only what leadership is necessary, but what's possible. A highly capable, experienced group makes a different kind of leadership both possible and appropriate. An inexperienced group calls for something else. Subchapter ten point two picks this up, in its fuller treatment of follower readiness.
Who Leads, and Where
Formal, Informal, and 3 Levels
Formal leadership is exercised from a position that carries designated authority. Informal leadership is exercised by someone without such a position, through influence alone. Informal leadership has real organizational significance. An influential employee with no title can shape a team's working norms and decisions. Sometimes as much as the designated leader, and sometimes more. Recall from Subchapter eight point one, an informal leader often emerges to fill a vacuum a formal leader left. Leadership also operates at three levels, each with different demands. Individual-level leadership is influence over a single person, one relationship at a time. Team-level leadership is influence over an interdependent group, with all the dynamics of Chapter eight. Organizational-level leadership works at the scale of the whole organization. There, a direct personal relationship with most people is no longer possible. So influence has to travel through structure, communication, and that sense-making function.
Figure 9.1.1
Real, but Smaller Than the Story
Now for the honest evidence on leadership's effect on organizational outcomes. The effect is real. Leadership measurably matters, across the available evidence. But the effect is consistently smaller than popular accounts suggest. Figure nine point one point one shows the variation in outcomes schematically. Leadership is one block. Structure and resources is another. Industry and market conditions is a third. The relative sizes are illustrative only. They're not a measured or precise figure. The point they make is simple. A substantial share of what's observed traces to factors outside any leader's direct control. Industry, market conditions, structure, and resources all play a part. None of this makes leadership unimportant. It makes leadership one real factor among several, rather than the dominant explanation that popular narrative assigns it.
Substitutes for Leadership
When Leadership Adds Relatively Little
Substitutes for leadership are conditions under which leadership behavior adds relatively little. Something else already supplies what that behavior would otherwise provide. Deep experience can substitute for direction under ambiguity. An experienced person may already know what to do, without being told. Strong professional norms can substitute for the modeling of behavior. The profession's own standards already model the expected conduct. Clear task structure can substitute for direction more generally. A well-defined task leaves little genuine ambiguity for a leader to resolve. And a cohesive team, from Subchapter eight point two, can substitute for alignment of effort. The team's own norms already align its members, without the leader doing it directly. This explains a puzzle. A new leader can change very little, and a strong team keeps performing anyway.
The Romance of Leadership
Why We Overcredit the Leader
The romance of leadership names a well-documented tendency. We attribute organizational outcomes to leadership more heavily than the evidence supports, especially dramatic outcomes. Leaders get credited, or blamed, for results driven substantially by factors outside their control. This connects to a broader attribution problem. People find a personal, leader-centered explanation more satisfying, and easier to construct. A diffuse, structural explanation feels less satisfying, even when it's the more accurate account. Here we only name the phenomenon. Subchapter ten point seven develops the attribution theory behind it. So where does this leave you? Neither dismissive of leadership, nor credulous about it. Leadership is a real, definable process of influence, at individual, team, and organizational levels. Formal and informal leaders both exercise it, and it contributes something genuine. But weigh its effect against the structural and environmental factors that share responsibility for the same results.
Case Vignette
A Turnaround With 2 Explanations
Here's a composite case, constructed for instruction. Harborline Manufacturing's board credited a dramatic sales recovery entirely to a newly appointed division head, Priya. Her confident public messaging and hands-on presence coincided closely with the turnaround's timing. A closer review found something else going on in the same months. Harborline's principal competitor had suffered a serious, widely reported quality failure. A substantial share of its customers went looking elsewhere. Harborline's division picked up a large portion of that displaced demand, regardless of anything Priya did differently. Priya's leadership wasn't irrelevant. By most internal accounts, she genuinely improved morale and communication. But the board's account, crediting the recovery to her alone, was the romance of leadership in action. A dramatic, leader-centered story was more satisfying to tell than the messier, more accurate one. Next, Subchapter nine point two turns to the first named styles, transactional and transformational leadership.
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