1. BUILDING HIGH-PERFORMANCE THE TWENTY-FIRST CENTURY
Commonwealth Centers
FOR HIGH-PERFORMANCE ORGANIZATIONS
MODULE III:
LEADERSHIP
PHILOSOPHY
BUILDING HIGH-PERFORMANCE
ORGANIZATIONS IN
THE TWENTY-FIRST CENTURY

2. LEADERSHIP PHILOSOPHY 4. Why do we need to be high performance?
5.Right “What?”
3. According to whom?
STRATEGY
STRUCTURE
SYSTEMS
VISION
1. What is it?
LEADERSHIP
Philosophy
Functions
Form
6. How Good?
ENV HP
7. How
Treat?
WORK
CULTURE
VALUES
LEADERSHIP PHILOSOPHY
Quality
Customer “Value”
Financial Performance
What does the organization and its systems (by the way they treat people) believe to be the Nature of People and Their Attitudes Toward Work?
What is believed to be the Primary Source of Motivation for Most People?
What is believed to be the Distribution of Know-ledge and Creativity and, therefore, How Decisions Should be Made?
What is believed to be the Nature of Work?
4. Why do we need to be high performance?
Higher Moral Purpose
Self Pride
Survival
Beneficiary Chain
2. How would we know? P
Partners

3. LEADERSHIP PHILOSOPHY
BELIEFS ABOUT THE NATURE AND MOTIVATION OF PEOPLE
1. The Nature of People and Their Attitudes Toward Work
People don’t like to work; they are not ambitious and don’t want responsibility; will not do a good job unless directed, closely supervised, and often coerced.
Doing a good job is core need of people; they want to be part of something important and to be empowered; self-control and self-direction are more effective than external control
2. Primary Source
of Motivation
People are motivated primarily by the “lower level” needs (Maslow) of physiological, safety/security, and belongingness; “hygiene factors” (Herzberg) including salary, benefits, security, status, working conditions, supervision, conflict, fairness
People are motivated primarily by the “higher level” needs (Maslow) of esteem and self-actualization; “motivators” (Herzberg) including interesting/challenging work, responsibility, achievement, recognition, growth, and advancement
3. Distribution of Knowledge and
Creativity and How Decisions are Made
Knowledge and creativity is concentrated mostly at the top of the organization; top management and “experts” know best what is needed; no need to consult with less knowledgeable lower levels
Knowledge and creativity are widely distributed throughout the organiza-tion; those closest to a function often know best how to direct and improve it; consultation is necessary to get the best decisions
4. What is Assumed
to be the “Nature
of Work”?
Work is best accomplished by dividing it up into simpler and simpler pieces with management responsible for integration; work is what an individual does alone; rewards are “win-lose” based on competition
Work is “larger” than any single individual and needs a network of talented individuals working together to accomplish it; rewards are “win-win” based on cooperative performance in teams

4. LEADERSHIP PHILOSOPHY
BELIEFS ABOUT THE NATURE AND MOTIVATION OF PEOPLE
5. Douglas McGregor
The Human Side
of Enterprise, 1960
Theory Y
Theory X
6. Rensis Likert, The
Human Organization,
1967
System 1
Exploitative
Autocratic
System 2
Benevolent
Autocratic
System 3
Consultative
System 4
Participative
7. Peter Block, The
Empowered Manager,
1991
Bureaucratic Cycle
Entrepreneurial Cycle

5. MASLOW’S “HIERARCHY OF NEEDS”*
Growth
(Self-Actualization)
Esteem
(Ego-Status)
Belongingness
Safety/Security
Physical /Basic Survival
(food, shelter, warmth, etc.)
Adapted from A. H. Maslow, Motivation and Personality (NY: Harper & Row, 1954)

6. MOTIVATION: MASLOW, HERZBERG, AND EMERY
(motives/needs)
Growth (Self-Actualization)
Esteem (Ego-Status)
HERZBERG
(goals/incentives)
Interesting, Challenging Work
Responsibility
Achievement
Recognition
Professional Growth
Advancement to Higher-Level Tasks
EMERY
(job design)
Variety and Challenge
Elbow Room for Decision-Making
Feedback and Learning
Mutual Support and Respect
View of the Whole
Room to Grow
MOTIVATORS
(Factors associated with job satisfaction and motivation)
HYGIENE FACTORS
(Adequate levels of these factors can prevent dissatis- faction but are not themselves “motivators”)
Belongingness
Safety/Security
Physical (Basic Survival -- e.g., food, shelter, warmth, etc.)
Salary and Benefits
Sense of Security
Interpersonal Relationships
Status
Working Conditions
Quality of Supervision
Organization Policies and Fair Administra-tion
Fair and Adequate Pay
Job Security
Benefits
Safety
Health
Due Process
Adapted from A. H. Maslow, Motivation and Personality (NY: Harper & Row, 1954); F. Herzberg, et.al., Motivation to Work (NY:John Wiley, 1959); and F. Emery, Report on the Hunsfoss Project (London: Tavistock, 1964)

7. McGREGOR’S THEORY X vs. THEORY Y
Work is inherently distasteful to most people
Most people are not ambitious, have little desire for responsi-bility, and prefer to be directed
Most people have little capacity for creativity in solving organizational problems
Motivation occurs only at the physiological and safety levels (Maslow’s “Hierarchy of Needs”)
Most people must be closely controlled and often coerced to achieve organizational objectives
Work is as natural as play, if the conditions are favorable
Self-control is often indispensable in achieving organizational goals
The capacity for creativity in solving organizational problems is widely distributed in the population
Motivation occurs at the social, esteem, and self-actualization levels, as well as physiological and security levels
People can be self-directed and creative at work if properly motivated
Adapted from Douglas McGregor, The Human Side of Enterprise (NY: McGraw-Hill, 1960)

8. BLOCK’S “BUREAUCRATIC vs ENTREPRENEURAL CYCLES” ENTREPRENEURIAL CYCLE
BUREAUCRATIC CYCLE
THE PATRIARCHAL CONTRACT REQUIRES:
submittal to a higher authority; the “top” knows best; management is autocratic, centralized control; hierarchical; values clear lines of authority
denial of self-expression; be careful, safe
personal sacrifice for unnamed future rewards
believing the contract is “just” or seen as “disloyal”
MYOPIC SELF-INTEREST
success is defined as obtaining personal rewards -- e.g., advancement, gaining more formal authority, tangible rewards, and “corporate jewelry”
MANIPULATIVE TACTICS
autocratic culture and personal ambition support behaviors which are personally strategic, cautious, and indirect -- i.e., manipulative; based on controlling people without their knowing it; “playing the game”
DEPENDENCY
we feel our survival is in the hands of someone else; our situation depends on what others decide and how they choose to treat us
ENTREPRENEURIAL CYCLE
THE ENTREPRENEURAL CONTRACT SEES:
authority as coming from within each person; individuals are responsible for their own actions and for the success of the organization; management focuses the organization on its purpose and helps create the needed culture and structure
self-expression is necessary to free people’s energy, excitement, passion, and motivation
commitment to the commonly held vision and values forms the basis for responsible individual action
people committing to the organization because they want to, not because they have to
ENLIGHTENED SELF-INTEREST
success is defined as making a contribution, doing something important, serving internal partners and external customers, acting with integrity; personal rewards are of secondary importance
AUTHENTIC TACTICS
behavior is direct and honest; information and control are shared; people know where they stand
AUTONOMY
we feel our survival is in our own hands; we take responsibility for our own situation and future
Adapted from Peter Block, The Empowered Manager (San Francisco: Josey-Bass, 1991), pp

9. LIKERT’S ORGANIZATIONAL “SYSTEMS”*
SYSTEM 1 (Exploitative Autocratic)
Security Money
None
Down Only
Boss Alone
Top Down
Hostile
Mediocre
SYSTEM 2 (Benevolent Autocratic)
Status
Little
Mostly Down
Boss Mostly, Some Technical at 1st Level
Top Down
Mixed (toward negative)
Fair to Good
SYSTEM 3 (Consultative)
Growth Recognition
Some
Up and Down
Boss Focused: Asks, Decides, Explains
At Top, with Consultation
Mixed (toward positive)
Good to Excellent
SYSTEM 4 (Participative)
Identity Achievement Influence
Much
Up, Down,
and Sideways
Team Based
Group Participation
Favorable
Excellent
SYSTEM “ZERO”** (Laissez Faire)
Higher Level (comes from outside org.)
Mixed (but mostly within tech. areas)
Mixed (but mostly on technical issues)
Mixed (often avoided)
Mixed (sometimes not set at all)
Mixed
(positive toward job but not org.) Mixed (poor to good)
EMPLOYEE MOTIVATION
TEAMWORK
COMMUNI-CATION
DECISION
MAKING
GOALS SET
EMPLOYEE ATTITUDES
OUTPUT
* Adapted from Rensis Likert, The Human Organization, (New York: McGraw-Hill, 1967)
** Adapted from Marvin Weisbord, “Why Organizational Development Hasn’t Worked (So Far) in Medical Centers” Health Care Management Review (Spring, 1976).

10. LIKERT’S FOUR LEADERSHIP PHILOSOPHIES*
SYSTEM 1 (Exploitative Autocratic)
People are seen as basically lazy, selfish, dishonest, and inept; they will not work unless constantly threatened and closely supervised; workers are exploited and have little recourse.
People are motivated by the fear of the loss of job, pay, or dignity; they will be terminated or punished if they do not comply with management’s directions; “it’s my way (the bosses) or the highway.”
Knowledge, ability, and creativity are seen as concentrated in management; workers are seen as largely incompetent; as a result, there is no need for management to consult, because labor has nothing useful to say.
To best control labor, work is divided into small (“dumber and dumber”) pieces; there is a supervisor for every 6-8 workers, a manager for each 6-8 supervisors to tightly control, direct, and punish; results in a steep, high hierarchy.
This is a “master-slave” style; it is clear that the worker is not important to the organization; “if you don’t like this deal, there’s a bus leaving every 5 minutes;” its only positive aspect is that it is honest about not caring about the worker; fear and mistrust characterize relationships.
SYSTEM 2 (Benevolent Autocratic)
Not much shift from S1; people are still seen as self-centered and in need of close supervision; because management wants to prevent costly turnover, however, policies are more benevolent.
In addition to fear/punishment, status is added as a motivator; if workers are mindlessly loyal and compliant, they are rewarded with the illusion of advancement; S2 organizations usually have many status layers with each layer having many pay “steps.”
Knowledge, ability, and creativity are still seen as concentrated in management; some confidence is shown in the technical ability of workers; but organizational decisions are still made without consultation.
Work is still broken into pieces with management responsible for the integration of work; “critical parent-child” relationship between management and labor (and between each layer in the steep hierarchy).
This style, while more benevolent, is manipulative; “masters” treat the “servants” better because “good help is hard to get,” but there is still no say for the servants on “management” issues; mistrust often characterizes the relationships.
SYSTEM 3 (Consultative)
A major shift from S1/S2; people are seen as wanting--even needing-- to do a good job; if they know what needs doing and have the skills, they will do a good job without very much external control or direction.
Once the basic “hygiene” factors (pay, benefits, working conditions, safety, etc.) are taken care of in a “fair” way, then motivation is seen as coming from within the work; it must provide challenge, growth, recognition, and a sense of contribution.
Knowledge, ability, and creativity are seen as widely distributed; management does not know all the answers (or even all the questions); it needs help if the best decisions for the customer and the organization are to be found; consultation is the norm; less hierarchy is needed.
Work is seen as complex processes involving networks or employees working together to reach goals; management’s responsibility is to create a culture (values, strategies, structures, and systems) that allow for maximum consultation.
This style is “adult-adult” in relationship; management is still accountable, but it recognizes that it must consult widely if good decisions are to be made.
SYSTEM 4 (Participative)
Very similar to S3; people are seen as wanting--even needing-- to do a good job; if they know what needs doing and have the skills, they will do a good job without very much external control or direction.
Once the basic “hygiene” factors (pay, benefits, working conditions, safety, etc.) are taken care of in a “fair” way, then motivation is seen as coming from within the work; it must provide challenge, growth, recognition, and a sense of contribution.
People are seen as being so capable that many responsibilities seen in the past as being solely the work of managers can be transferred to self-directed work teams who perform these leadership /management functions as a natural part of getting the technical/task work done.
Work is seen as complex processes involving collectives of employees working together to reach goals; teams are responsible for task/technical, managerial, and leadership functions.
This style is “adult-adult” in relationship; management (and team leaders with delegated responsibility) is still accountable, but recognizes it must play a stewardship role in creating empowered work teams.
* Adapted from Rensis Likert, The Human Organization, (New York: McGraw-Hill, 1967)

11. III-11 System 1 System 2 System 3 System 4 Leadership Motivation
Team Work
Communication
Decision Making
Goals
Control

12. LEADERSHIP PHILOSOPHY
WHY DON’T WE CHANGE?
“If managers have to choose between giving up control for the sake of higher performance and maintaining control knowing performance will be less, in most cases managers choose to maintain control.”
Peter Block, The Empowered Manager: Positive Political Skills at Work
(San Francisco: Jossey-Bass, 1991), p. 46

13. LEADERSHIP PHILOSOPHY “People live their lives
WHY DON’T WE CHANGE?
“People live their lives
as prisoners of their
own past.”
Gareth Morgan, Images of Organizations (Newbury Park, CA: Sage, 1986)

14. LEADERSHIP PHILOSOPHY
FOUR TYPES OF MANAGERS
ACCORDING TO GE’S JACK WELCH
SHARES THE VALUES
participative management; empowerment and support
TYPE 3
TYPE 1
More difficult decision:
second chance, new location
Easy, clear decision:
onward and upward
DOESN’T MEET
TASK COMMITMENTS
MEETS TASK COMMITMENTS
TYPE 2
TYPE 4
Tough but clear decision:
OUT
Toughest decision:
OUT
DOESN’T SHARE
THE VALUES
autocratic management;
control and coercion
Adapted from Jack Welch’s “Letter to Stockholders,” GE Annual Report, January 1991

15. LEADERSHIP PHILOSOPHY
THE NATURE OF PEOPLE
100 90 80 70 60
PERCENT OF
PEOPLE 50 40 30 20 10
3. People who are “watching” what happens to “them” before deciding; would have to both fix the system and take care of “them” to get these to do a good job
1. People who will keep trying to do a good job (however they define good job) regardless of the system; will go the “extra mile;” will creatively work around systems blocks
2. People who would do a good job if the system allowed and/or supported; will do as good as they can, but if block-ed, won’t go any farther
4. People who won’t ever do a good job, regardless of the system

16. LEADERSHIP PHILOSOPHY
WHO’S IN CHARGE?
Cooperation Collaborative;
High Teamwork
We’re in Charge S4 S3
Broad Ownership, Global Perspective
Synergy; Consistency; Standardization
Seen as “Empowerment” by line/”Loss of Power” by mgt. S2
S3/4
Seen as ”Loss of Power” by those with autonomy
Consistency; Standardization S1
S1/2 S0
Accountability;Flexibility
Global Perspective
Local Responsiveness
I’m in Charge
You’re in Charge
HQ/Top/Feds Centralized;
High Control
Seen as ”Loss of Power” by HQ/Top mgt.
Seen as ”Loss of Power” by those with autonomy
Field/1st Line/Partners Decentralized;
High Autonomy
Adapted and synthesized from: Robert W. Keidel, “Triangular Design: A New Organizational Geometry,” Academy of Management Executive (Vol. 4, No. 4, 1990), pp and from: Rensis Likert, The Human Organization (New York: McGraw-Hill, 1967)