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What leadership style makes up a great leader for a corporation? Discussed are the three types of leadership styles, Transactional, Transformational and Level 5, and how they apply to the given scenario.
Transactional leadership is a style that is commonly used by many corporations. Transactional leaders believe that punishment and rewards motivate people, so assignments are then structured for their employees. The early stage of Transactional Leadership is in the discussing the employment (or contract), whereby the employee is then given a salary and some other benefits, and the corporation gets authority over the employee. The main goal of the employee is directly to obey and follow orders. The idea is that when an employee takes up a job, they are also agreeing to obey and follow their managers totally. The money or any other award that the company pays to its employees for doing their job is the "transaction". The relationship between the employee and the leader becomes transactional.
Transactional leaders believe that when an employee agrees to do an assignment, they are also agreeing to take full responsibility of that assignment. Employees are personally responsible when things go wrong, and will be punish for their failures. The Transactional leader will not take any blame if the assignment fails. Transactional leadership is based on rewards or punishments which is contingent upon performance.
The Transactional Leader has the right to reward their employees if their performance is above standard or punishment if not to predetermined standards. Transactional leaders make sure their employees are clear what is required of them. If the assigned job is not completed on time or correctly, then they are punished for their failure. Now, on the other hand, if the employees accomplish the job on time then they are given a reward for successfully completing the assignment. Employees are also given award and praises for exceeding the expectations of the job. Some corporations use incentives to encourage their employees for greater productivity. Transactional leadership can be a way to increasing the performance of their employees by giving those rewards. Though punishments are not mentioned, they are well understood that they are there in place.
There are three steps that Transformational leaders do before starting. The first step is by developing a vision that will excite others to follow. A Transformational Leader is great to work for because they are very uplifting. They care about others and want you to succeed just as much, so they put passion and energy into everything they do.
Once the vision is in play, the second step is continuously selling that vision. Because it takes energy and commitment, the Transformational Leader has to take every opportunity to convince others to follow him. There are some people that will immediately join in, but there are others that move more slowly and those are the ones that take more time to convince to follow. Transformational Leaders have to create trust, and their personal integrity is also important in selling the vision.
Many Transformational Leaders know the way the corporation is going, and some do not but are willing to lead. The route to move forward may not be straight forward and plotted out in detail, but the direction is always known because the vision is clear and known. Moving forward is always an ongoing process of course corrections, but the Transformational Leaders does accept that there will be failures and blind spots along the way; as long as there is progress they are happy.
The final and third step is to remain up-front, visible and never hide behind their employees. Transformational Leaders show how everyone should behave and act by their attitudes and actions. They will also keep making continuous efforts to motivate their employees, by constantly making rounds, listening, and enthusing. It is their strong commitment that keeps people motivated in going on, particularly through the hard times when the vision seems impossible to achieve. The people will fail if they believe that their efforts are not going to succeed. The Transformational Leader keeps inspiring their employers with a high level of their own commitment to the vision.
Ceremonies are one method that Transformational Leader uses to sustain motivation. When showing appreciation to those that do follow, it helps pump up their appreciation as indicators of tangible progress. It also shows others that they too will get recognition for their hard work, as well. Transformational Leaders focus their attention on the action that creates the progress and the mental state of their employees. Transformational Leaders are people-oriented, and believes success comes first.
Transformational Leader seeks to transform an organization, but there is also a promise to employees who follow that they will also be transformed in some way, becoming a product of the transformations. A characteristic of a Transformational Leader is that they are often charismatic, but they are not as narcissistic as a real Charismatic Leaders.
Sometimes people have mistaken passion and confidence as for the truth and reality that Transformational Leader shows. Through enthusiastic leadership, many things are accomplished, but also true that many dedicated people have led their followers over the cliff. Even when a person thinks they are right, does not mean they are, also that same energy that gets people motivated can cause them to give up. Transformational Leaders enthusiasm can be so overwhelming which can wear out their employees if relentlessly applied.
Transformational Leaders tend not pay any attention to details and only see the vision. If they did not have someone to take care of the details, they would be doom to fail. Finally, when the corporation no longer needs a change, and everything is going smoothly, Transformational Leaders, will become frustrated because there is nothing for them to do. However, given the right situation these leaders can personally responsible for saving companies.
Now, Level 5 leaders are highly driven individuals, with a fervent desire to produce extraordinary results. They are willing to do what it takes to make the company great, as Darwin E. Smith, Chief Executive of Kimberly-Clark, and a Level 5 Leader stated, and "I never stopped trying to become qualified for the job." (Collins 2001). Level 5 leaders attribute success to factors other than themselves; however, they will blame themselves and take full responsibility when something does go wrong. Non-Level 5 CEOs would do this; they would take credit for success, but blame others for failures.
Jim Collins researched Level 5 leaderships exhaustively. He researched in what made a great leader, or as Mr. Collins puts it, Good to Great (Collins 2001). Mr. Collins researched showed that Top Executives of businesses did not all match into one category. The ones that made a true, great leader turned out to be, "humble and modest though very single-minded." (Collins 2001).
Let's back up for a minute and state what a Level 4 Leader is before discussing what a Level 5 Leader is. A Level 4 Leader will come up with their own visions of how they feel the business should move. Once they have this vision, they will get people to start to implement this vision. Mr. Collins refers this as, "first what, then who." (Collins 2001). Now, Level 4 Leaders do well in getting a business on the right track, but they are more concern in how they appear to others than how the company is doing. Good examples of Level 4 Leaders would be like Donald Trump, and Lee Iacocca.
Now let's look at what makes a Level 5 Leader. Level 5 Leaders are humble and want to see the company does well. Instead of promoting their own ideals and visions, they get the right group of people for the job, and successively come up with strategies that will help the company become great. Collins slogan: "first who, then what." (Collins 2001) Level 5 leaders do not decide what to do alone; they get input from a team of savvy associates. They get the best people, the "who", together and decide the best choices, the "what". This makes Level 5 Leaders a participative leader.
First, Level 5 leaders are all very intelligent and know their business. They have the intellectual, and knowledge to manage their companies effectively. So what separates them from the rest is who they are, their "personality attributes." According to Collins research there are five attributes of being a Level 5 Leader:
1. Self-confident in helping their successors to succeed.
2. Humble and modest.
3. Have "unwavering resolve."
4. Display a "workmanlike diligence - more of a work horse than show horse."
5. Give credit to others for their success and take complete responsibility for unsatisfactory results. They "attribute much of their success to 'good luck' rather than personal greatness." (Collins 2001)
The question that I had to ask myself was, can you learn to become a level 5 leader? Well there are two categories according to Collins, those people who do not have it within them and those that are born with it. (Collins 2001) The first category of people is those who could never bring themselves to build something bigger than themselves. These people work mainly for their own fame, fortune and power.
The second category of people has what it takes to evolve to Level 5; the capability resides within them. Being under the ideal circumstance, which are self-reflection, conscious personal development, having the right mentor, the best teacher, caring parents, a great life experience, hopefully a Level 5 employer, and, any other factors, they will begin to develop into a Level 5 Leader themselves.
There are Level 5 leaders all around us, from history and present, if we know what to look for. There are also many people that have the potential to evolve into Level 5. If we look closely, we can see from the past that people like President Abe Lincoln and General Lee were extraordinary Level 5 Leaders themselves. From the present, we have people like Darwin E. Smith, and Colman M. Mockler.
So how can one try to become a level 5 leader? Well with no steps to do but to understanding how your decisions can dictate in what you can become. Consider yourself to be walking down the road, and you came to a fork in the road. You need to make a choice in which road to take. One road is where you make a decision using self, ego and the attitude of what's in it for me; the other road is where your decision is more for the good of others. When you come to that fork, you will want to go to the one path that is for yourself ego, but if you start to choose the road that is for the good of others, you will be on the right road to becoming successful.
How do you develop these skills? One valuable thing is that Level 5 Leaders develop and groom their successors. They first hire competent people and then delegate. The primary job of a CEO is to help develop, set strategy, and energize employees and then to keep everyone focus. The core of a Level 5 leader is their self-confidence that is developed in early childhood. You can acquire willingness, self-reflective and then to engage in what Collins calls "conscious personal development." (Collins 2001). Confident people have experience looking at themselves, and accepting who they are. Sometimes self-reelection comes through a critical point in your life, such as a loss of a loved one, heart attack, or any failure.
To be a Level 5 Leader, you can start by trying to act like one. As you do this often, you will get more comfortable doing this, and you will get more competent and more successful. Do not jump to give "the answer" to everyone's problems. Always hire top people and delegate work. Then, always give credit due to your team for any successes. The most crucial thing, be accountable, accept blame for failures.