“Uber is an example of value-driven leadership gone bad”
Ron, how do you picture the ideal business organization?
For me an ideal organization, whether a business organization or not, is an organization which is leadership-led and not management-led.
An organization which is management-led is one in which we use formal power, positions, systems, procedures and processes. We slot the people in to the mechanism. A very mechanistic organization. To a certain extent, all organizations have a mechanistic part to them. But there are various degrees: the more machine-like the organization, the more horrible it is for the people living in the machine and generally the less productive and innovative the organization will be. It is almost like an industrial approach to keeping animals – we went from farm to industrial production of meat, now we need to go back to bio-farming. And I think that in that sense for humans it’s more or less the same. We have to get away from the industrial type of keeping people.
A leadership-led organization is one in which we try to get people to be productive, to move, to work together – all by informal power, not by formal power. Not by using positions of power, but by getting people to take leadership roles, inspiring each other, seducing each other to actually move in certain directions.
You mention mechanical organizations on one end of the spectrum and leadership-led organizations on the other end of the spectrum. What is your definition of leadership?
My definition of leadership would be that leadership, simply put, is the ability to get others to follow you. And so it does mean that you require influence to get people to come along in a certain direction. Now, you can force people to come along, or you can influence them. I always say that it’s about seduction: you can seduce people to come along. So you can lead on the basis of formal power or on the basis of informal power. The formal power part will come from your management position. So leadership very much is a role that you play. Your ability to get people to come along. Management, simply put, is a position to which you’re appointed. You’re going to have formal powers and you can use the formal powers to force people to do what you want.
Have you seen in practice an organization that came close to being leadership-led?
I think there are many organizations that are leadership-led, but in my ideal organization, within being leadership-led you have organizations which are leadership-concentrated and you have leadership-led organizations where the leadership is distributed.
I would prefer a distributed leadership-led organization, because if the leadership is concentrated, you’re going to have a number of strong leaders that either force you to come along, inspire you to come along, or seduce you to come along, but it’s still going to be a very small leadership group. In my ideal organization, leadership is distributed which means that we have many leaders, but it also means that you are not a leader all the time. There are certain moments at which you lead, there are also many moments at which you follow. You don’t have to lead all the time.
So you don’t perceive leadership to be an organic function, but more like a mechanical function in a way? If anybody can be a leader, obviously there are no born leaders in this concept?
To that I would say, I sometimes draw a parallel: is anyone a born football player? Well, probably if you want to play Champions League, you’re going to have to be born with a number of talents. So, yes it’s true that there are a number of top football players. But I think that everybody can learn to be a football player. So we need to make a distinction – are we talking about the most fantastic types of talent?
Yes, there’s going to be a part nature and a part nurture. But I’m a little bit hesitant to always equate leadership to heroic leadership. And I think that we as a field are much too much involved with looking at the heroes, the Steve Jobs, the Nelson Mandelas, etcetera. And we equate leadership much too much with these exceptional types of leaders. To get over that, we need to realize that at least 50% of people are able to lead, just like we need to see that 50% of the people to be able to be reasonable football players or reasonable teachers. If we get away from this heroic view: everybody can learn to be a reasonable football player, everybody can learn to be a reasonable leader. So I would say that that absolutely is something which is almost all nurture and very little nature.
If you say that there are top football players and there are people who are not born as top football player, but can learn to play football, which is the nurture part, then the people who have to be nurtured are probably nurtured for a role that they were not born into.
Wouldn’t it be better for them just to perform a different role and should we just assume that not everyone has to lead if they are equipped to do other tasks?
I would like to go back. So, if I summarize my argument it would be indeed that almost everyone can learn to become a reasonable leader. And the question is how much of that needs to be authentic and how much of that needs to be adaptive. And I make a distinction here between authenticity and adaptation. Authenticity is that which comes out of yourself and adaptation is what you need to do to adjust yourself to the demands of the environment. And I would argue that, just as with nature or nurture, it’s usually a little bit of both.
I’m a bit critical of people who dwell too much on authenticity because, yes it is true that you need to remain close to who you really are, but who you really are can be developed a lot. To a lot of people who say ‘Oh, I’m just authentic’ I would say that is very cheap argument for not really adapting and not really learning.
Identity is certainly something that is dynamic and evolving.
Exactly! So there is much more room to develop yourself. And this clinging to authenticity can sometimes be a bit too much of an excuse. Having said that, not everything is entirely easily adjustable. There are some things closer to our core personality which are more difficult to adjust and then it makes more sense to develop a leadership style which fits closer to a number of your personality traits and a number of your deeper seeded beliefs and competencies. And then we come to what my book is about, which is about leadership agility, where I say that there is a lot of different types of leadership styles. Some of them are going to be needed under different circumstances and it might be a good idea to try to learn these styles. On the other hand, some of these styles are going to be very far away from what you are going to be able to learn. So it might make more sense to learn other styles because those are just going to be much easier for you to master. But everybody can learn to be a leader so pick your battles selectively. Learn a number of styles which are easier for you.
How do you see the relationship between leadership and the true purpose of organizations? I don’t mean the bullshit purpose that typically they formulate but the deep underlying purpose. Many times this underlying purpose is really the fashionable shareholder values; that is why companies exist. The purpose that they try to formulate aims at selling employees on the idea of coming to work. Is it possible for an organization to show leadership that exists only to serve shareholder values?
That is a fantastically interesting question with a numbers of layers. Let me answer it in three ways. Answer one is that you have to think about your own purpose as person: are you value-driven or are you virtue-driven? Do you feel that you yourself are interested in creating value? And value could be making money for yourself, it could be creating wealth, not only for yourself but wealth for your shareholders. Are you focused on wealth creation or do you yourself have other virtues that you are striving for: knowledge-creation, helping others, helping society, helping the environment. So it starts with understanding your own purpose.
The next step is, as a leader, if I want to influence others, not only about what is my own purpose, but do I understand the purpose of the other? If I want to influence other people and if I only think about myself and I’m authentically value-driven, I’m going to try to influence you by trying to also get you to be value-driven. But as a leader, if I want to connect with the other, I have to understand the other. And so I’m going to have to ask myself what is your purpose. Now, if your purpose is not value-driven but it’s virtue-driven, then the question is can I connect with that? And can I appeal to your sense of purpose. Although your sense of purpose might be different from my sense of purpose.
And I would argue that if I want to create wealth and you want to protect the environment, I might still be able to connect to you and I might still be able to find a way in which we can both achieve our purpose.
The third level of my answer is: now I have to be honest because if I’m now not genuine I am going to manipulate you; if in reality I’m wealth-driven but I’m going to pretend I’m virtue-driven, I’m not influencing you in a genuine way, but I’m influencing you in a manipulative way. And my definition of manipulation is: I’m using arguments that are not honest. I might be able to fool you in the short run, I might be able even to fool you in the long run. But I would argue that if at some moment you feel manipulated, you have been manipulated.
So if it’s not genuine, you as a leader you’re manipulating other people and that is, I would say, ethically not right. And even from a leadership-impact perspective it’s not wise, because in the long run people are going to find you out and therefore you have a short-term orientation as a leader: manipulate now and hope to get away with that. Not a good idea.
This brings us to the closing question: in this context of value versus virtue: how do you perceive the recent scandals at Uber in terms of leadership and culture?
I’m not exactly sure whether Uber actually ever suggested that they were virtue driven. I think that they’ve always in essence honestly indicated that they were value-driven. It’s about ‘come and join us and make a lot of money’ as managers. ‘Come and join us as shareholders and make a lot of money’. So I think that in that sense they haven’t really manipulated very many people.
Having said that, you can be value-driven in a good way and you can be value-driven in a bad way. I’m going to be the very last one who says that being value-driven is a bad thing. Or that being virtue-driven is a bad thing. Both can be done in good ways and in bad ways. For example I think that Pol Pot was probably virtue-driven and he murdered one-sixth of the Cambodian population. Having a higher purpose can be a justification to do horrible things. But in the same way, being value driven can be misused and can lead to very very bad behavior.
So if I would look at Uber, it’s an example of value-driven leadership gone bad because it’s become short-termist. And trying to create wealth doesn’t mean that you should cut ethical corners. I think that what you see here is that there’s been a lot of cutting ethical corners and a lot of manipulative type of behavior.
And unfortunately what you see is that the culture of an organization is a reflection of the worst behavior of a number of the most visible leaders. If you see again that Uber is an organization with not distributed leadership but with concentrated leadership, so there is a number of very highly visible leaders who actually do most of the leading, which happened also to be the managers so that they’re in a position of formal power as well as informal power. And these people make a number of ethical lapses and don’t seem to be really sorry about it. It doesn’t matter what you say, what matters is what you do. Culture is typically the reflection of the worst behavior of the visible leaders. I’m afraid Uber created a culture that is reflective of that. It’s going to be really difficult to change that culture.
How do you approach, from a very high level point of view, fixing such a situation?
The way not to fix it is to hire culture consultants who are going to run workshops on ethical behavior or do ethical audits. Or put together a mission statement which we hang on the walls. Because all of this is just superficial trying to fix things from the outside. We are tribal and we are not very far removed from groups of monkeys. And the way we behave as a tribe, the way we behave as a group of monkeys, is that we look to others and how others behave.
So the only way to fix this is by changing the behaviors and particularly the example behaviors of highly visible people. So either you have to kick out a number of the top managers or also the most visible leaders. Or they really really have to start behaving differently. Going to the media and say sorry about that is not genuine. And looking for a sacrificial lamb that can be slaughtered and putting all the guilt on the person we’re kicking out doesn’t cleanse the organization. So either you really mean it as top leaders and you start really behaving genuinely in that way or you have to start changing a number of those visible people or bringing in a number of very visible people and starting to walk the talk. It’s all about walking the talk.
Final one: in Europe, how close are we to the ideal business organization?
I see so many green sprouts coming up all over the place. I think that in twenty years’ time we’ll look back to this period, not as a post-industrial revolution, but to an organizational revolution in which we’re really re-inventing the way that we as humans ought to work together. I would say that we’re making enormous strides in re-inventing organizations and re-inventing organizing, as I see so many beautiful starts. But I can’t say ‘this is the big example’. I see some pretty good practices, but the best practices are still in the pipeline.