Leadership, Economic Crisis and Stimulus, and Job Creation

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Leaders worldwide somehow recognized the presence of an economic crisis in September 2008. The crisis was at least in part precipitated by poor leadership. Disagreement seems pervasive about the source and the specific indications of poor leadership. Some blame greed while others suggest the housing bubble and mortgage credit woes have their root in the easing of credit in the late 1990s to enable home purchasing by people previously not qualified as homebuyers. Some in the U.S. propose expanding government spending while others express concern about growing federal budget deficits.

Agreement seems rather widespread that job creation is crucial to recovery from a global economic downturn. The focus of the U.S. media is, perhaps understandably, economic recovery and job creation in the U.S. From the perspective as a business consultant for 25 years, mentoring startups and improving productivity in established companies, very few elected representatives in Washington, DC and in state capitals, or in the media for that matter, seem to have much of an understanding of job creation. The White House’s official tally of “jobs created or saved” treats monthly payroll numbers as if one person working for one month is the equivalent of a job created. Whether this is just an example of clerical errors in tabulation or indicative and symptomatic of widespread miscalculation, the integrity and credibility of reports of jobs created or saved is no better than doubtful.

Economic recovery cannot happen with artificial job creation. Job creation is not easy but is no mystery. Enterprises, public or private, must find new activities for new employees or the work associated with existing activities must rise to the point of stimulating the hiring of additional staff. Net job creation means hiring people previously unemployed but it also means adding paid hours to the work weeks of people previously under-employed. In our collective effort to stimulate the economy and promote recovery for individuals, communities, and nations, leaders need to help individuals, communities, and nations discover new and sustainable ways for real net job creation. Community leaders need to meet together to discover the existing needs within the community and uncover the funding to start addressing those needs. Some enterprises will expand their payrolls. Some new enterprises will need to emerge. Some people will need to learn how to perform new tasks. Some people may need to relocate.

In tonight’s State of the Union address, President Obama talked about improving efficiency, creating jobs, and reducing the deficit. Those are not inherently mutually exclusive topics but simultaneously achieving all three will require leadership and creativity. Improving efficiency and productivity generally implies using fewer resources to accomplish the same work or using the same resources to accomplish more work; on a relative basis, improved efficiency and productivity implies job loss. If we, as an economy, want to improve efficiency and productivity, to accomplish our goal of maintaining or improving our competitive position, and we want to have net job creation, the number of net jobs created will inherently be comparatively larger. Increasing the employment base of the country may increase the country’s tax base and contribute to deficit reduction. Reducing spending is another path to deficit reduction. Stimulating the creation of new jobs seems to eliminate reduced spending as an option. If that is the case, the path to deficit reduction is a program strategically to employ the unemployed and to employ the underemployed better. Then, the ultimate scorecard may need to reflect the expansion of the payroll tax base rather than such difficult-to-measure metrics as “jobs created or saved.”

If Leaders Require Followers, How Do I Lead So That Others Will Follow?

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At the risk of stating the obvious, if a person wants to become a leader, and, consequently, wants others to follow her or him, the would-be leader must provide the would-be followers with a reason to follow her or him. Some people label that reason “vision,” a term that has become controversial perhaps through overuse or misunderstanding. Some might be more comfortable with the term “direction” rather than vision; if you want to lead somebody somewhere, most people might consider it reasonable to know where you want to go with them. So, if you want somebody to follow you, having someplace to go is a good starting point.

Having someplace to go is necessary but not entirely sufficient to becoming a leader. The would-be followers eventually need to decide that your chosen destination is interesting, if not desirable, to them. Some leaders need to convince the followers to head in the chosen direction; other leaders may have followers who are more willing. A former pastor of mine was fond of observing that when a crowd is determined to run you out of town get in front and make it look like you are leading a parade! While that is cute, if not humorous, in such a scenario I would argue that the person in front is not the leader but the led. The direction or vision apparently needs to be compelling, if not clear.

The direction does not need a clear or pre-determined path. Since the advent of participative management, leaders seem more inclined to seek input from the followers in determining how to get to the chosen destination. The leader may actually begin to manage a process of determining the appropriate path, including how to overcome obstacles along the way. The leader’s job is to keep everybody moving in the appropriate direction. When the followers are in doubt or disagreement, the followers may look to the leader for guidance. Here, an important distinction seems to emerge – while managers can be imposed on subordinates, leaders lead at the discretion and by the permission of the followers. If followers choose not to follow a would-be leader, the followers are implicitly or explicitly choosing a new leader.

Can I Become A Leader?

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During the past month or so on LinkedIn, a very active discussion continues to unfold about perceived distinctions between leaders and managers. Perhaps coincidently, a significant number of people, some new acquaintances and some long-term colleagues, have asked me how a person becomes a leader. Frequently, the question is more specific: how do I become a leader?

The question is intriguing for a number of reasons.

On one hand, people do not seem to be asking how they can become a manager. Perhaps that is because the person asking the question knows that have studied leadership extensively; however, my longer-term colleagues will also be aware of my study of management and, more specifically, improving management effectiveness, since the late 1970′s. Perhaps my colleagues and acquaintances already have an understanding that a person can learn to be a better manager through a combination of study, experience, and effort.

Many organizations have a clearly defined career path and management development track. From observation of dozens of organizations during a 25-plus year consulting career, few organizations seem to have a leadership development track. It is possible that the lower level of development of programs to train new leaders arises at least in part from the comparative newness of the study of leadership compared to approximately a century of the study of management. Even the suggestion that leaders can be trained or developed remains controversial in some circles while management training and development is broadly accepted.

At the risk of appearing trite, one key to becoming a leader is having followers. Organizational structures seem to take care of providing managers with subordinates, although clearly some managers are more skilled than others at actually managing. Having a managerial title places a person in a position in which they are expected to perform certain and specific managerial duties. Having a managerial position does not inherently make a person a manager; neither does a position, of management or leadership, automatically make the holder of the position a leader. Leaders require followers to lead; perhaps it can be said that followers also require leaders to follow.

It is possible to become a leader, but first you need followers.

Willing Leaders and the Unwillingly Led

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In discussions of how leaders can be recognized, a short answer is frequently proposed that an observer can recognize leaders by the presence of followers. Describing a person as a follower seems to imply that the follower, to at least some degree, is willingly adhering to the direction of the would-be leader. In observing groups of many types during the past several months and years, a recurring question for me is whether willingness has anything to do with followership. Is it sufficient for one person to be described as a leader and another as a follower if the so-called follower is aligned with the vision or direction of the so-called leader and not necessarily with the person? If the presence of a follower helps define or identify the presence of a leader and the follower is pursuing a concept or ideal rather than the specific individual promoting that concept or ideal, is the person leading, or is, somehow, the concept or ideal really in the role of leader?

It seems possible that in political contexts we may be seeing people attaching themselves to visions, goals, ideals, or hopes and, so long as one or more individuals move in alignment with those concepts, the individual may be perceived as leading. The reality may be that the individual is not leading at all; rather the individual may be in a position of leadership as a result of ideological alignment, but, in some circumstances, ideology may triumph over the attempts at leadership by the individual.

If I can only lead people where they want to go, where they would be inclined to go with, or without, me, how can I legitimately consider myself a leader? Can anybody else legitimately assert that I am a leader if I am only followed because I happen to be moving in front of a mass of humanity who are simultaneously heading in my direction? What if I am more properly described as being pushed in the direction of the masses, I may be in front of the pack, but it would seem that I am not leading.

Somehow, I may only be able to consider myself a leader, within the contexts presented in the posting, if people are following me, even if they would not have gone there without me.

A New Year for Leadership

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As 2010 begins, my hope for the year, and beyond, is that leaders will devote more time and energy to giving people positive reasons to follow them and, conversely, less time and energy to simply decrying or demonizing those who disagree with them. Regardless of political affiliation or national origin, people in leadership positions seem to have forgotten or abandoned the idea that having a position of leadership does not make a person a leader.

Perhaps some holding elected office want to distinguish between governing and leading; a posting comparing and contrasting governing and leading may follow this. Perhaps some in elected positions of leadership equate leading with pursuing the desires of their constituents. Maybe that is governing or something else, but it is not necessarily leadership.

Theodore Roosevelt noted that leaders work in the open while bosses or managers operate covertly and that leaders lead with bosses drive. Rosalynn Carter noted that great leaders take people where they should go and not simply where they want to go. Dwight Eisenhower observed that leaders get people to do something because they want to do it, not because the leader wants it done. Warren Bennis spoke of leaders translating vision into reality. I find that leaders communicate a clear, compelling vision that people embrace and collectively pursue.

As we move into 2010, I hope that people who want to be perceived as leaders start acting more like leaders and start demonstrating leadership, who spend less time speaking against others and more time discussing why people should follow them, and who demonstrate vision, integrity, confidence, courage, compassion, and humility as they model behavior worthy of emulation.