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All living things follow a path from birth to death, from the chaos of rapid growth to the stability of maturity and then decay. The study of civilizations and corporations proves a similar life cycle of integration and then disintegration and leaders are the primary cause of both. Durig this course you will assess your own leadership style, the dominant style of your organization, and place your organization on the life cycle curve. You will understand the attributes of leaders who can renew and rescue a company from what may appear to be the inevitable decline. And, you will understand the necessary diversity of leadership styles required to maintain a company or culture in a mature state.
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|Section 1: Introductions to Leadership and Life Cycles|
Mark Twain said “History doesn’t repeat itself – but it does rhyme.” That is probably an accurate assessment of the value of history. There are broad patterns that seem to follow some natural evolution as there are natural patterns in the birth and growth of infants, animals and even plants. There can be no exact roadmap drawn from history, but there can be wisdom derived from the patterns. The culture at the birth of a company or civilization is of one kind, and that is entirely different than the culture at maturity or in decline. The behavior of leaders, their relationships, skills and intentions are different at each age. And wealth varies by stage. Obviously at birth a company is not rich in financial assets. But it may be rich in innovation or in the spiritual quality of dedication to a worthy purpose. In maturity a company becomes increasingly focused on the refinement of process and builds its social capital both in brand equity and internal relations. Material resources are growing, and with that growth the motivations are likely to shift from the single cause the excited the early followers to a more narrow self -interest. And as financial assets increase and managers are increasingly drawn from those who know more about finance and mechanisms of financial control, the innovative spirit declines, and social relations fragment. Companies toward their end, like civilizations, decline in a process of social disintegration, the loss of trust and innovation. The loss of money is only the last sign of decay.
The important thing to understand is that leaders are diverse, with different styles and skills. But leaders provide that competence and style that is needed in a particular organization and a particular time.
What is a leader?
In maturity leaders are subordinate to process and principles. A constitutional democracy puts principles and process above personalities. Cultures and companies in their early stages and in their last stages of decline have leaders who dominate over process and principles.
|Lecture 4||25 pages|
This synopsis contains the major points of my Barbarians to Bureaucrats book and the self-assessments that are presented in the following lectures.
|Section 2: The Culture Curve|
In the life cycle of civilizations and companies there is a twin-fold process of integration and disintegration. Civilizations or companies, when growing, expand their borders and are integrating different people, ideas, competencies, and cultures. When they cease the process of integration and expansion, they start defending their borders and building walls to keep out the energetic barbarians, and the process of internal disintegration begins. As the focus shifts from offense to defense, the focus of energy is increasingly internal rather than external. The spirit of unity of purpose increasingly becomes the spirit of self interest and internal division. Soon the body of the culture is engaged in internal warfare and self-mutilation, and the enemy does not so much conquer as to march in to fill the void created by the impotence of the old culture. Toynbee concluded that the decline of every civilization was not at the hands of an external enemy but rather an act of suicide, the loss of will, and the disintegration of the culture. Whether or not you accept Toynbee's analysis of the rise and fall of civilizations, there are clearly lessons for leaders of companies and countries. You can see these in the emerging periods of the Prophet, Barbarian and Builder and Explorer. You can also see the decay and decline beginning the dominance of the Administrator, the Barbarian and the Aristocrat. You can only hope to see an age of the Synergist, when the best qualities are held in balance.
Characteristics of Growth and Decline
The Wealth Curve?
|Section 3: Wealth Creating Leaders and Life Cycle Stages|
You may be a Prophet if…
The Failure of the Prophet
“To be a successful soldier, you must know history… What you must know is how man reacts. Weapons change, but man, who uses them, changes not at all. To win battles, you do not beat weapons – you beat the soul of the enemy man.” George S. Patton IV
The prophet founders of companies are soon followed by, or become themselves, barbarians, the commanding generals whose strength of will focuses energy in crisis. The idea and inspiration is not enough. Decisive action is now required to build a company. Every new company is in a crisis, a fight for survival. When business is in a fight for survival it has more in common with war than many managers realize. The ability to move quickly, with discipline and unity of energy and effort, is the key to victory.
You may be a Barbarian if…
Your organization may be in the Barbarian age if…
The Failure of the Barbarian
The period of the Prophet may be a brief moment in the history of the corporation. The age of the Barbarian should also be short. If an organization’s leadership remains in the Barbarian Age, its growth will be arrested. It must move on and enter a period of specialization, a time when systems and structure take form, and the organization matures.
Now leadership has to take on a different character. It must be shared, delegated, and increasingly collaborative. While the leaders must continue to be creative and fast moving, they must also develop increasingly specialized competence in production, service, marketing, and sales. If they do, this third stage may last for centuries in the life of civilization and decades for a corporation.
The primary leaders in this period of specialization are the Builder and Explorer. The Builders will construct the internal capacity of efficient production, while the Explorers continue the push outward, expanding the boundaries of the developing corporation or culture. In civilization the Builders are literally building cities, roads, reservoirs, libraries and stadiums; the Explorers are conquering new territory to expand the scope and influence of the culture by integrating diverse people. In corporations the Builders are creating the means of production, they are making production efficient. The Explorers are out conquering new customers and territories, seeking to dominate their competition.
In the first two stages of development, growth is highly dependent upon the individual leader, the Prophet and the Barbarian. But in the third stage, the environment – both internal and external – is becoming too complex for such centralized decision making.
You may be a builder if…
You may be an Explorer if…
Your organization is in the Building and Exploring Age if…
The Failure of the Builder and Explorer
|Section 4: Wealth Destroying Leaders and Life Cycle Stages|
“Whenever an individual or a business decides that success has been attained, progress stops.” Thomas Watson, Sr. (Founder, IBM)
“The arrested civilizations have achieved so close an adaptation to their environment that they have taken its shape and colour and rhythm instead of impressing the environment with a stamp which is their own. The equilibrium of forces in their life is so exact that all their energies are absorbed in the effort of maintaining the position which they have attained already, and there is no margin of energy left over for reconnoitering the course of the road ahead, or the face of the cliff above them, with a view to a further advance.” Arnold Toynbee
Increasingly the challenge is within, not from the external environment. Increasingly the leaders are seeking to bring order to the chaos of differentiated organization created in the previous stage. Counting and recording, systems and structure, are now important. And increasingly the processes of administration become dominant in their minds, and the leaders are drawn from the administrators. In time, with Administrators in charge, counting and recording become more important than the substance and spirit of creativity, the response to the external challenge that was the source of initial growth. Increasingly the focus is on internal, rather than external, challenges. The unchecked priorities of administration will soon lead to bureaucracy.
It is difficult to accept that chaos is good. But growth, in people or cultures, implies some degree of chaos. If you want a perfectly clean and orderly house, do not have children. Children, in their most rapid periods of growth, are a mess, and create a mess around them. Mess is good. In old age, the personality becomes obsessed with order and control. Just as the bones become brittle, so too does the mind become intolerant of innovation. But, there is a middle ground, a balance between the disorder of growth and innovation and needs of administering differentiated organization.
Initially administration serves the needs of those producing and selling, building and exploring. To manage a large manufacturing or selling organization you must know where things are, how many you have, and what they cost. Initially, to “take account” is to assist those engaged in the work that serves customers. But it shifts, and it gradually appears that those producing and selling increasingly come to serve those administering. It is the turning of this tide that signals the entry into the Administrative stage.
In this fourth stage, the corporation is holding its ground, creating and maintain order. And now the successful leaders face their single greatest test. Are they able to maintain forward motion, continue to be creative, decisive, and develop increasing competence, while at the same time administering secured territory? If they can, the organization will break through to that ideal balance that assures continued health. If they can’t and the Administrator becomes the dominant leader, imposing his cultural priorities, decline will begin.
You may be an Administrator if…
Your organization may be in the Administrative Age if…
“The piper who has lost his cunning can no longer conjure the feet of the multitude into a dance; and if, in a rage and panic, he now attempts to turn himself into a drill sergeant or a slave-driver, and to coerce by force a people whom he feels that he can no longer lead by his old magnetic charm, then, all the more surely and more swiftly, he defeats his own intention; for the followers who had merely flagged and fallen behind as the heavenly music died away will be stung by a touch of the whip into active rebellion.” Arnold Toynbee
The transition from the Administrative Stage to that of the Bureaucrat occurs without any plan or intention. Old age happens. It needs no encouragement. No one in the history of organization ever created a design team to design and implement bureaucracy.
As soon as the leader imposes increasing levels of control in his love for order, he becomes a bureaucrat and loses understanding of the original organizing principle that was the energy created by the “word,” the creative act that was the reason to unite and sacrifice. Now the lack of creativity leads to impotence in the marketplace, and survival is dependent on cost cutting and control and anyone with the creative spirit, potential Prophets who possess the very cure that is so needed are driven to exile or crucified for their violation of order. The decline will soon lead to death. The bureaucracy causes the exile or execution of those who are creative but unable to conform to the required order. With the departure of creativity, the fate of the company is sealed
You may be a Bureaucrat if…
Your organization may be in the Bureaucratic Age if…
Management derives its power from its legitimacy, and in the Aristocratic Age legitimacy is lost. It is lost because the managers have stopped doing their job, that of leading, creating vision, and building unity of energy and effort across diverse people and interests. Peter Drucker said:
“Power has to be legitimate. Otherwise it has only force and no authority, is only might and never right. To be legitimate, power has to be grounded outside of itself in something transcending that is accepted as a genuine value… If power is an end in itself, it becomes despotism, both illegitimate and tyrannical.”
Legitimacy is a matter of perception, and it is the perceptions of the constituent groups that matter. In every relationship there must be a balance of power, a mutual concern, and respect. When these mechanisms break down, leadership acts on its own interests, and contrary to the interests of its followers; rebellion inevitably results.
The disintegration of culture may appear as either an internal revolution or an attack by a competing Barbarian. In either case, the cause is the same: the loss of social unity brought about by alienation of the leaders and their loss of legitimacy. It is not employees who become alienated from the leaders. It is leaders who have divorced their followers. They have moved to the 48 th floor of the office tower and spent too much of their time surrounded by others who are striving to achieve the same level of detachment from workers and customers. The more detached are the leaders, the more incapable they are of recognizing challenges and issuing forth a creative response to challenge. Woodrow Wilson understood:
“I do not believe that any man can lead who does not act, whether it be consciously or unconsciously, under the impulse of a profound sympathy with those whom he leads – a sympathy which is insight – and insight which is of the heart rather than of the intellect.”
At this stage, the leader’s focus, his motivation, has shifted from serving others to serving self. In the later days of a society, the leaders become obsessed with material self-gratification. This obsession is largely due to the loss of gratification normally derived from productive work. There is satisfaction to be derived from sawing and sanding wood into a piece of furniture, from designing, testing, and watching a mechanical object come to life, from listening to a customer and sincerely striving to meet his or her needs. All of these pleasures are lost to the Aristocrat. Now, the rewards come from the appearance of wealth. The irony is that the Aristocrat is not achieving greater satisfaction than a productive individual of modest resources. The supervisor whose team sets a new production record is undoubtedly achieving a higher level of satisfaction than the Aristocrat purchasing the Gulfstream IV or the new limousine or conducting grand meetings at a country club. The Aristocrat has been so long removed from productive work that he or she no longer remembers their satisfactions.
You may be an Aristocrat if…
Your organization may be in the Aristocratic Age if…
 Drucker, Peter. The Frontiers of Management: (New York: Truman Talley Books, E. P. Dutton, 1986), p. 180.
|Section 5: Creating Unity of Effort and Energy|
Achieving Balance – The Search for the Fountain of Youth
Is it inevitable that growth and expansion are followed by bureaucracy and decline? If you study the course of civilization you might reach that conclusion as the long march of cycles appears as an inevitable pattern. But Arnold Toynbee asked himself this question some years after he wrote A Study of History. His answer was “no”. He said that he believed in free will. He believed that if we understand the causes of integration and disintegration, of emergence and decline, we can alter our behavior and achieve an ever-advancing civilization. It is the failure to recognize and respond to new challenges that leads to a condition of ease, to the loss the power of self-determination, the loss of will.
In human aging there are chemical biological processes over which we have no control. Of course, we can greatly influence human aging with diet, exercise, and our own social and mental activity. Organizations, on the other hand can be influenced even more. They are inherently capable of regeneration. Managers change, products change, the market changes, and all of these are opportunities for adaptation, and for adjusting the style, culture, and processes to prolong the life of the organization. The 3M Corporation has been through numerous periods of refocus, redefining its product portfolio, constantly innovating and maintaining its social capital within the organization and its brand equity. It is an “old” corporation that can act young. There are many other examples. And, of course there are examples of organizations that fail to adapt to new markets and technologies and become rigid and lose their ability to innovate within a very short period.
Revolution is the transformation brought about by leaders who recognize new challenges, acknowledge the failure to adapt to a changing landscape, and promote a new outlook, a new spirit, and new strategy. Corporations have proven that there is no fixed time frame of life cycles. The key to this success is always the ability to create synergy of the different styles or capabilities of leadership and to maintain a healthy balance of the five forms of wealth.
What are the lessons of this story? I think there are several. One is the diversity of leadership styles that are needed to fulfill the potential of any organization. As companies mature, the need for the creative Prophet does not disappear; nor does the need for the conquering spirit of the Barbarian. But what is needed is balance and the creation of synergy or harmony between the diversity of talents, each put to work on the challenges appropriate to the type of temperament. The most difficult of all tasks of leadership is to create unity from diversity. It is the purpose of a leadership team. On a leadership team you do not want ten Administrators who will create excellent and orderly plans but never have the energy to go anywhere. Nor do you want ten Barbarians, each with the strong will and singular focus to fight a battle. You also need the Builders, the engineers and specialists who know how to make complex things work and Explorers to expand the territory. And you need Administrators who bring order to complex organizations and tasks through counting and recording. But you do not need the excess of administration that is bureaucracy. You need leaders, or you need to become a leader, who can bring these personalities together in a harmonious orchestra.
Another lesson regards the role of personalities versus process and principles. Civilizations, when they have been at their peak, have had senates, election processes, systems of law, and separation of powers. When Rome was being born it was highly reliant on principles. This was the period, generally regarded as the peak of the civilization, when the Roman senate was supreme and the acceptance of Roman law and order prevailed. It then was overcome with cults and clashes of personality and the law became subservient to the personalities. The process of disintegration exactly paralleled the decline of the reliance on principles and process and the return of dominance of personalities.
For the past forty years Lawrence M. Miller has worked to improve the performance of organizations and the skills of their leaders. His expertise is derived from hands on experience creating change in the culture of hundreds of organizations.
He began his work in youth prisons after recognizing that the learning system in the organization had exactly the opposite of its intended effect – increasing, rather than decreasing, dysfunctional behavior. For four years he worked to redesign the prison system by establishing the first free-economy behind prison walls, where each inmate had to pay rent, maintain a checking account, and pay for everything he desired. This was his first application of organizational transformation.
He has been consulting, writing and speaking about business organization and culture since 1973. After ten years with another consulting firm, he formed his own firm, the Miller Howard Consulting Group in 1983. In 1998 he sold his firm to Towers Perrin, an international human resource consulting firm and became a Principal of that firm. In 1999 he left that firm to focus on solo consulting projects.
He and his firm were one of the early proponents of team-based management and worked with many clients to implement Team Management from the senior executive team to include every level and every employee in the organization. The Team Management process created a company of business managers, with every employee focused on continuous improvement of business performance. In addition to directing the overall change process, Mr. Miller personally coached the senior management team of many of his clients.
The implementation of Team Management led to the realization that the whole-system of the organization needed to be redesigned to create alignment so all systems, structure, skills, style and symbols support the same goals and culture. From this realization he developed the process of Whole System Architecture that is a high involvement method of rethinking all of the systems, structures and culture of the organization. Among his consulting clients have been 3M, Corning, Shell Oil Company, Amoco and Texaco, Shell Chemicals, Air Canada and Varig Airlines, Eastman Chemicals, Xerox, Harris Corporation, McDonald's and Chick-fil-A, Merck and Upjohn Pharmaceuticals, United Technologies, Metropolitan Life and Landmark Communications.
Mr. Miller has authored ten books, among them American Spirit: Visions of A New Corporate Culture, which was the text for Honda of America's course on their values and culture; and Barbarians to Bureaucrats: Corporate Life Cycle Strategies, which draws on the history of the rise and fall of civilizations to illustrate the patterns of leadership and evolution in corporate cultures. Most recently he authored Getting to Lean – Transformational Change Management that draws on the best change management practices such as socio-technical system design, appreciative inquiry, and systems thinking or learning organizations to provide a road map to transforming organizations. He has also authored Team Kata - Your Guide to Becoming A High Performing Team, the core human process of lean organizations. Most recently he published The Lean Coach that corresponds to his course on Coaching Leaders for Success. He has appeared on the Today Show, CNN, made numerous appearances on CNBC, has written for The New York Times and been the subject of a feature story in Industry Week magazine.