Is it the ability to navigate in the choppy waters of change? Do leaders see the hidden opportunity in every setback? Is there really any such thing as a "born leader"? Five HBS faculty and some prominent alumni offer their perspectives on an increasingly essential quality for managers at the dawn of the 21st century.

by Deborah Blagg and Susan Young

A stroll through the business section of any large bookstore these days reveals an astounding array of titles related to leadership in business. There has been an explosion of books, articles, instructional tapes, and CD-ROMs aimed at defining, analyzing, and honing the qualities that have raised the likes of Jack Welch, Bill Gates, and Jeff Bezos to the status of revered icons.

HBS professor John P. Kotter — a distinguished authority on leadership — sees this phenomenon as a sign of the times. "The transition from the industrial age to the information age is a huge shift," he notes. "In all of human history, there have only been two other socioeconomic revolutions of this magnitude: the move from hunting and gathering to agriculture and from agriculture to industry. We know that leadership is very much related to change. As the pace of change accelerates, there is naturally a greater need for effective leadership."

"Times of upheaval require not just more leadership but more leaders," says HBS professor Rosabeth Moss Kanter, a renowned expert on change. "People at all organizational levels, whether anointed or self-appointed, must be empowered to share leadership responsibilities."

Leadership has been central to the mission of Harvard Business School since its inception almost a hundred years ago. "Our primary purpose has always been to educate leaders," notes Dean Kim B. Clark. "Our students learn to be managers here, but they also learn that it is important to make a difference in the world — to bring commitment, integrity, and a sense of values to their work."

While the leadership theme has long resonated across the MBA and Executive Education curriculum, in 1999 Dean Clark launched the HBS Global Leadership Initiative in order to broaden the School's outreach in this area. Headed by Kotter and Director Alan Price, the initiative uses traditional and nontraditional teaching methods to bring the latest developments in leadership to HBS alumni and other executives all over the world. What Change Demands of Us, a new Executive Education course developed by the initiative, will be offered later this year.

The initiative draws on the accumulated wisdom of HBS faculty members whose groundbreaking research in leadership has helped to define the field. Five of these experts — Joseph L. Badaracco, Rosabeth Moss Kanter, John Kotter, Nitin Nohria, and David A. Thomas — agreed to help the Bulletin answer perhaps the most basic question asked about leadership: What are the qualities that make a good leader?

LEADER AND MANAGER

When discussing business leadership, the distinction between good management and good leadership is often made. Managers are thought to be the budgeters, the organizers, the controllers — the ants, as one observer puts it — while leaders are the charismatic, big-picture visionaries, the ones who change the whole ant farm. But such a construction, those interviewed for this article agree, erroneously leads to a bimodal way of looking at something that should really be evaluated on two separate scales. "Everybody has got a little bit of each in them," says John Kotter, who admits he is sometimes guilty of using the dichotomy in an effort at simplification. "It's much better to think in terms of measuring people on a zero-to-ten scale for each quality."

HBS professor Joe Badaracco agrees that the traditional manager versus leader argument ("Clark Kent versus Superman," he jokes) tends to undermine the value of management. "There are lots of people who look and act like managers, who have excellent managerial skills, and who don't make a lot of noise. Nobody is writing cover stories about them. But after they have been in an organization for a period of time, things are significantly better," observes Badaracco. "Now, are these mere managers because we can't compare them with Martin Luther King? Or are they leaders because they accomplished something that needed to be done?"

Some great managers struggle with change and fail to be great leaders, while a great leader might fail to create a sense of stability in an organization and not measure up as a manager. HBS professor David Thomas points out that "increasingly, the people who are the most effective are those who essentially are both managers and leaders."

COMMUNICATION IS KEY

"Communication is the real work of leadership," says HBS professor Nitin Nohria, who documented the importance of persuasion in his 1992 book Beyond the Hype: Rediscovering the Essence of Management. Nohria believes effective leaders are masters of the classical elements of rhetoric, as outlined by Aristotle centuries ago. "You can reach people through logos or logic, by appealing to their sense of what is rational," he explains. "You can use pathos, appealing to their emotions, or you can make an argument based on their sense of values or ethos." Great leaders, he notes, "spend the bulk of their time communicating, and they know how to employ all three of Aristotle's rhetorical elements."

Nohria also feels that leaders are able to distill their message, however complex it may be, to something that is accessible to those who may not share their knowledge or background. Joe Badaracco agrees. "You need a talent for simplicity — for saying things in a few words. General Electric's Jack Welch is a good example. He is astonishingly articulate and able to convey complicated concepts in just a few phrases."

Of course, knowing your audience is also essential. "Great communicators have an appreciation for positioning," states John Kotter. "They understand the people they're trying to reach and what they can and can't hear. They send their message in through an open door rather than trying to push it through a wall." Badaracco believes part of knowing your audience is the ability to listen. "Communication can't always follow the top-down model," he says. "With the fluidity of information in business today, leaders need to be masterful listeners; they need to be able to receive as well as send."

David Thomas stresses the importance of "multimodality" in communication. "What you say is only the beginning," he states. "Your behavior, your actions, and your decisions are also ways of communicating, and leaders have to learn how to create a consistent message through all of these. It's been said many times, but leaders lead by example."

For Rosabeth Moss Kanter, a key question is whether a leader's personal passion matches his or her aspirations. "There are so many false starts, unexpected obstacles, and surprising turns along the path to change. Daily work often drains energy needed for change," she says. "Leaders must pick causes they won't abandon easily, remain committed despite setbacks, and communicate their big ideas over and over again in every encounter."

TELLING THE HARD TRUTHS

What happens when leaders must communicate facts that are hard to take? Nitin Nohria reflects on Winston Churchill's devastating defeat at Gallipoli, which resulted in over 100,000 Allied casualties during World War I. "The campaign was a total fiasco for British military leadership," he notes. "When it was over, Churchill took complete responsibility. A setback like that could have been paralyzing, but he was able to move forward to lead his country to victory in World War II."

The lesson, says Nohria, is that Churchill and other great leaders are pragmatists who can deal with difficult realities but still have the optimism and courage to act. "Enduring setbacks while maintaining the ability to show others the way to go forward is a true test of leadership," he asserts.

Jeff Bezos, founder and CEO of Amazon.com, has said that one of the key elements of being a good business leader is the capacity to tell the hard truths. "Leaders struggle with this problem all the time," says David Thomas. "From a leadership point of view, you always want to move toward telling the hard truths and helping people cope with the realities of change. But as a manager, you might be more inclined to minimize the complexity of a situation so things can run smoothly for as long as possible. It's often a judgment call."

The ability to render that judgment can sometimes make or break a company. "The phrase 'public confidence, private doubt' comes to mind," observes Joe Badaracco. "If leaders disclosed all their concerns and doubts, stock prices would plummet, their competitors would be all over them, and employees would be jumping ship. But even if you can't be absolutely open with everyone, leaders have to confront their companies' problems and, of course, share them with top management."

John Kotter underscores the positive potential of facing problems head-on. "Great leadership does not mean running away from reality," he argues. "Sometimes the hard truths might just demoralize the company, but at other times sharing difficulties can inspire people to take action that will make the situation better."

COPING WITH CHANGE

Kotter, whose next book is tentatively titled The Leading Change Companion, is intrigued by a leader's ability to thrive in the context of change. Effective leaders help others to understand the necessity of change and to accept a common vision of the desired outcome. "People need to think honestly, 'Wow, this is a good idea,' in order for them to be willing to change," he says. Rosabeth Moss Kanter observes: "Personal passion and force of personality aren't enough. Other people must become believers, too."

Empowerment is also vital to managing the change process. For example, Kotter reasons, "if I'm under pressure from my boss, and the information technology doesn't give me what I need in order to do my job, and every time I take a risk I get shot down by the performance appraisal system, obviously I'm not going to make any progress."

"Individuals at all levels of an organization need to be able to take responsibility for their decisions," Thomas elaborates. "They've got to feel they have a sphere of influence that allows them to have their own version of enacting the organization's vision and strategy." Kanter puts it this way: "Leaders must wake people out of inertia. They must get people excited about something they've never seen before, something that does not yet exist."

Thomas asserts that there needs to be an alignment of the interests of the organization and the interests of the individuals: "It is crucial that the incentives are actually meaningful, whether they are monetary or intrinsic, such as projects that are designed to be satisfying to the worker in addition to taking the organization where it needs to go."

Kanter, whose new book Evolve! deals with leadership challenges when change is threatening, notes that it's important to keep people's "eyes on the prize." She points out that "people often resist change for reasons that make good sense to them, even if those reasons don't correspond to organizational goals. So it is crucial to recognize, reward, and celebrate accomplishments."

THE ROLE OF KNOWLEDGE

In this day of high-tech complexity, is the old adage "knowledge is power" as relevant as it used to be? While, as Joe Badaracco observes, leaders have had to rely on the expertise of their workers since before the Industrial Revolution, "nowadays understanding what your employees do is an even more daunting challenge." Badaracco, an expert on ethics, cites the moral violations that have occurred in the financial sector as an example. "Some of these deals are so complicated that only a handful of people in the world really understand them," he says. In order to avoid disaster, Badaracco believes it is more important than ever for a leader to design good systems of reporting, hire the right people, and put together the proper multidisciplinary advisory groups.

David Thomas thinks influence in the new millennium will come more from the ability to learn than from knowledge itself. "In today's environment," he observes, "hoarding knowledge ultimately erodes your power. If I know something very important, the way I'm going to get power is by actually sharing it." Thus, the task becomes one of replenishing the sources of knowledge. "The people in power are the people who are constantly able to discover new and relevant knowledge, which is really tied to the capacity to learn," he says.

Nitin Nohria agrees: "I don't think people look to leaders necessarily because they are smarter or because they know something that others don't." His colleague John Kotter believes a leader must have a basic threshold of knowledge but does not necessarily need to be the most knowledgeable in an organization. "A leader needs enough understanding to fashion an intelligent strategy," observes Kotter.

EINSTEINIAN BREAKTHROUGHS?

Much has been said about the importance of creativity in leadership, and Kotter notes that as the evolution from the industrial age to the information age progresses, the ability to recognize and make the most of new opportunities is highly prized. "History has taught us that transitions of this magnitude create a climate of instability, turbulence, and innovation," he observes. "Leadership under these circumstances demands creativity."

However, when it comes to leadership, creativity may not always take the most obvious form. "Look at Gandhi," urges Nohria. "By sitting at a loom and weaving his own clothing, he symbolized the possibility of India's industrial independence from Great Britain. He mobilized millions. Leaders don't necessarily have Einsteinian breakthroughs," he posits, "but they use their imagination to get others to act."

"When you put aside the handful of pathbreaking geniuses the world has seen, most leaders are creative in an almost microscopic way," Joe Badaracco notes. "There might be a situation where people are polarized around two choices, for example, and a leader might propose a third path. Sometimes creativity just means the daily work of helping others to see a problem in a different way."

"Creativity is a lot like looking at the world through a kaleidoscope," observes Rosabeth Moss Kanter. "You look at a set of elements, the same ones everyone else sees, but then reassemble those floating bits and pieces into an enticing new possibility." Effective leaders, she says, are able to "shake up their thinking as though their brains are kaleidoscopes, permitting an array of different patterns out of the same bits of reality."

Some of the most successful leaders are those who can inspire creativity in others, notes David Thomas. "Leaders have the ability to learn from other people's creativity and to foster an atmosphere in their organizations that welcomes innovation," he says. "I know a lot of great CEOs, but I'm not sure many of them are creative thinkers. Nevertheless, they lead some of the most creative organizations I've ever seen."

NATURE/NURTURE

While at first glance Gandhi, Churchill, and others may seem to have been "born leaders," our panel of experts feels for the most part that each of us has some capacity for leadership. "Some people may have personality traits that make it more likely that they will be leaders," allows John Kotter, "but what I've found is that many people have the potential for leadership, but they haven't developed it."

David Thomas believes leaders are "90 percent made, maybe even more." He says that people's leadership abilities are brought to the fore by their experiences in life, a concept embraced by Joe Badaracco, who notes, "Sometimes there are circumstances or crises that elicit from individuals leadership abilities that even they didn't know they had."

"Every one of us has experiences, but we aren't all open to learning from those experiences in the same way," says Nitin Nohria. "One characteristic most leaders have in common is the capacity to learn and change throughout their lives.

"When I teach leadership to MBAs," Nohria continues, "I don't believe in thirty class sessions I will immediately make them better leaders. What I hope, however, is that I have taught them the capacity for deeper and more thoughtful reflection on their experiences so that they can learn from them and therefore become better leaders."

Dean Kim Clark, who has often talked about the MBA Program as a transformational experience, notes that the School's ability to teach leadership is particularly important now. "The beginning of the 21st century is a remarkable time for business," he says. "The challenges and opportunities that face managers today require extraordinary leadership abilities." Concludes Kotter, "Any institution that can help us understand leadership is serving society very well. It's a big deal, and it's going to become even bigger."

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