Leadership is a process by which a person influences others to accomplish an objec- tive and directs a group or organization in a cohesive and coherent fashion (Blake
& Moulton, 1985). To do this, leaders apply various skills and abilities such as knowledge and expertise, beliefs, values, and ethics, known collectively as leader- ship skills (ibid.).
Bass (1989, 1990) identifies three distinct categories of leaders: Some people are
“natural” leaders, others rise to the occasion during a crisis or important event, and the third category relates to people who through promotion and seniority find themselves in leadership roles. The tenets of transformational leadership—the need to embrace personal transformation from a “member of the troop” to its leader, the need to learn new skills, and the requirement to apply the learned skills in the process of leading pertain most strongly to the third group. Ultimately, however, it is the dynamic leadership that fosters innovation and entrepreneurship (Bjerke &
Hultman, 2003; Gudergan & Gudergan, 2004; Llorens-Montes, Garcia-Morales, &
Verdu-Jover, 2004; Sharma, Gupta, & Wickramasinghe, 2005). The term “dynamic leadership” seems to define a fairly obvious form of action: a forceful, sweeping approach that solves problems in a visionary manner, the “I am in charge here” of General Haig following the shooting of President Reagan. In reality, the process is much more complex, difficult, extremely demanding, and requires far more than a dynamic personality and the willingness either to charge or to be in charge.
Leadership becomes the essential operational factor when organizations, be it small work teams or major international corporations, face unstable environments, where change is unpredictable, the actors within the “action space” change, where the rules of competition are in constant flux, and where good ideas of the past turn into suicidal concepts of the current reality. In many ways, this is the situation of today—new competitors entered many formerly stable markets and changed the rules almost at will, rapidly developing technology transformed traditional concepts and practically instantaneous access to information resulted, at least in some activities (e.g., banking) in decision cycles lasting seconds rather than days or even months.
The present environment of business is clearly demanding but what is less evident is the fact that unless the leader devises and implements measured responses to the current challenge in a manner that will address its future transformation, the cho- sen solutions will fail. They will fail since their underlying assumption is the static nature of the challenge and that its characteristics remain constant over the near future. The solutions devised under such a conceptual umbrella will fail because the leader fails to recognize the inevitable truth that while solutions to the perceived change are being devised, the environment might have already transformed into something new and entirely different. The latter problem is the continuing dilemma of IT managers—hardware and software required to cope with the increasing
operational requirements demand continuous and substantial expenditure. On the other hand, the tempo of technology development is such that within a very short time, the “leading edge” becomes “legacy.” Thus, in order to retain operational competitiveness, the organization may spend vast amounts of funds in maintaining modern IT infrastructure. But, funds being a finite resource, it may be necessary to shift their allocation and reduce the support of R&D, which, in turn, may adversely affect competitiveness on the market.
A good example is provided by the recently reported losses of General Motors caused by rapidly escalating healthcare costs. Maintaining a high level of employee healthcare benefits is unquestionably welcome by the workforce and enhances its stability. On the other hand, with foreign manufacturers benefiting from socialized healthcare, the costs of benefits incurred by GM shift the profitability balance toward the negative side and, almost incredibly, force the automotive giant to the brink of bankruptcy. The company leadership is thus faced with a number of choices start- ing from lobbying for national healthcare services to actually declaring bankruptcy and shutting down. In more general terms, leaders operating within complex and changing environments face the essential dilemma: is it better to wait and observe the transformational trends of the field or join the battle and attempt to steer the change in the required direction by being directly involved in the process of the change itself? Either approach can be deadly as demonstrated by almost countless examples not only from business but also from politics, education, war, medicine, or any other field where leadership is essential to progress and good leadership is not necessarily the equivalent of success.
One does not need to look far. Even the best local bookshop, led by the most insight- ful management and beloved by its loyal customers will wither under the impact of an international bookselling chain. And yet, some magnificent little bookshops have survived despite rubbing shoulders with giants, and their survival has been the result of close observation of the nature and characteristics of the ongoing trans- formation within the operational space. Such a transformation may be extremely rapid and, as we have already discussed in the preceding chapter, the leader needs to be prepared and ready to direct the organization and its people successfully in order to maintain the organization’s competitive position in its industry. Failure or slowness to respond, lack of direction, unfocused responses (or responses focused on irrelevant aspects of the environmental pressure), organizational inflexibility or adherence to the rule of “it is not done this way here” usually result in severe and detrimental consequences for the organization. Speed, precision, and adequacy of action, anticipation of future changes, and flexibility of response are the principal leadership challenges (Bolman & Deal, 1991; Kouzes & Posner, 1987). The reader may recall in this context the essential aspects of Boyd’s OODA loop discussed earlier, and the fact that implementation of OODA loop-based training and (subse- quently) thinking greatly facilitates acquisition, development, and implementation of these cardinal operational attributes of a leader.
Operationally, all actions of a leader must be formulated, defined, and executed with the “winning strategy” in mind (Sahay, Mohan, & Maini, 2004). However, it must be emphasized that “winning” may at times signify nothing else but a grace- ful retreat that assures future return to battle. Too often great leaders are penalized by presiding over “organized defeats” which form the backbone of future victories (remember Churchill and the evacuation of the British Expeditionary Force at Dunkirk?). It must be remembered, however, that all executed actions will have an impact on the operational environment (Figure 9) which may be highly com- plex and contain both the immediate subject of these actions as well as many less indirectly influenced entities and systems of entities. Thus, unless environmental diversity and the wide range of potential impacts of one’s own strategy on the en- vironment are carefully considered, evaluated, and incorporated into that strategy, the response of the environment to the proposed actions may be far more complex than originally assumed, and the results adverse rather than promoting the original intentions (Porter, 1980, 1985). It is then necessary to reconfigure the next set of actions in such a way that the subsequent stage of interaction with the environment opens again the unobstructed path to the predetermined objective. The pattern of action-counteraction-restructuring-new action is a cyclical process.
Although organization A interacts only with B, the latter interacts with C (stippled arrow) and indirectly with D. As close collaborators, C and D form their own “micro operational universe” (oval denoted by a broken line). Firm D has two satellite divi- sions (x, y), one of which (x) affects negatively “C” whose lowered performance
Figure 9. Complexity of interactions within the operational universe
impact B. Consequently A is also negatively affected (downward stippled arrow).
In complex operational spaces, influences that are least obvious may be the most destructive cycle progressing along the time axis and characterized by three cardinal attributes: complexity, speed, and direction of movement (von Lubitz & Wickra- masinghe, 2006 and Figure 10). We are once again reminded of Boyd’s OODA loop (refer to Chapter I).
Note that in the context of leadership theory, the concept of the OODA loop has an- other significant function: it facilitates understanding the critical role of the mistakes made during the initial data collection (e.g., selective or biased selection, rejection of “non-conforming” data as necessarily false, etc., conducted at the observation stage of the loop) that precedes (or at least should do) every decision made by the leader. Of equal importance are the errors made during the subsequent orientation stage of the loop (such subjective analysis of data/facts based on preconceived no- tions, influence of personal bias, inflexibility, etc.). Errors made at these two stages of the leadership process have the cardinal impact on everything that follows (i.e., the determination and action stages of the loop.). Analysis of the loop progression clearly indicates that with each subsequent action cycle, correction of errors com- mitted at the earliest stages demands increasingly larger resources and removes them from where they should be otherwise committed—at the centre of action, at the time and place where concentration of effort will assure maximum success. Uncorrected errors compound at each new revolution of the loop and exponentially increase the chance of failure. Probably the best example of “leadership loop failure” was the disastrous response of state and federal authorities to hurricane Katrina in August 2005. The response to Hurricane Wilma (its shortcomings notwithstanding) shows how application of Boyd’s loop-based leadership can lead to positive outcomes in situations demanding flexible, ongoing, and dynamic response to the continuously but unpredictably changing operational environment. Clearly, to assure efficiency of action, the interval separating each individual stage of the loop must be as short as possible, particularly when interacting with highly fluid, ultra-complex systems such as military or healthcare information. Hence, leadership procrastination in exploration of the action environment and early threat detection and identification are among the most powerful determinants of success. Knowledge management and IC2T are the most effective tools in averting such delays by facilitating rapid, reliable, and in many instances automated sampling of the environment involving collection of multi-source data, their manipulation, analysis, and classification into larger information/germane knowledge entities. Consequently, decision support- ing outputs are faster, more situation/operational environment-relevant and, most importantly, allow a robustly elevated rate of stimulus-response cycle (operations
“inside the loop”). Ultimately, by increasing reaction relevance and speed, effec- tive use of IC2T and KM facilitates leadership’s goal-oriented manipulation of the operational environment and also increases both the level (accuracy) and predictive range of responses to environment induced pressures.
The significance of appropriate use of IC2T and KM tools is underlined by the fact that under most circumstances the dynamic is highly heterogeneous and consists of a wide range of direct and indirect interrelated subcomponents.
Every organization (large disc) interacts directly or indirectly with a number of other entities (small polygonals) existing within the same operational space (barrier-like oval). Some of these interactions may have beneficial results (solid short arrows) while others may be detrimental (short stippled arrows), and some are uni- while other bi-directional. The environment is unstable and chaotic and only a clear per- ception of the existing complexities aided by the speed of the action cycle (curved arrow--see below) will allow the organization progress successfully to its goal (P).
Some organizations whose leadership is unable to respond to the unpredictable pat- terns of interactions within the operational space will fail entirely (F). Others will be greatly suppressed by the competitors and their development will stagnate (S).
One group will develop a state of equilibrium with the environment (E) which will allow its members a state of “undistinguished survival.” Only those organizations whose leadership is capable of active exploitation of the environment and of flexible response to its pressures will thrive in the chaotic operational space.
The consequences of our interactions with the environment are never unidirectional.
In reality, interaction with one or several constituents of the environment will elicit Figure 10. Action cycle and its variables: Time, direction, and cycle revolution speed
responses of synergy or retaliation or even fail to elicit any immediate response at all. Consequently, progress may either slow down or accelerate, causing perturba- tions in the forthcoming revolutions of the OODA cycle. The most important aspect of operational business environments is their inherent instability (our interaction with them upsets the state of equilibrium) and unpredictability (every interaction with the environment has a potential to elicit its unforeseen changes.) Thus, one of the principal attribute of successful leadership is to conduct the activities of one’s own organization in a manner that will minimize the element of opponent induced unpredictability while, and at the same time, increasing their destabilization. The latter will not be achieved through the mere increase in the complexity or frequency of multiple interactions with the already complex environment. The emerging chaos may, actually, lead to the destabilization of one’s own organization). Instead, unbalancing the opposition is best attained through the elevation of the speed of one’s own action cycle, and by giving it a precise direction of movement to be followed during a predetermined interval (von Lubitz & Wickramasinghe, 2006).
Unpredictability of the environment that indirectly supports the hostile intents of the opposition can be reduced through an increased rate of information extraction from within this environment. The process is, as indicated above, governed by the speed of the action cycle (ibid.) that, in many ways, can be enhanced through the efficient use of fused IC2T and KM. In summary then, the principal function of a leader operating in a complex, changing, and unpredictable environment is to im- pose as rapidly as possible the state of persisting dominance within the action space.
Once such dominance is firmly established, the leader must execute the dominant thrust that will definitively end all opposing influences. Occupation of the action space vacated by the opposition is the ultimate goal of the “winning strategy.” It must be remembered, however, that the goal of a leader is not to vanquish and de- stroy. Instead, the “winning strategy” associated with good leadership establishes a
“win-win” environment for all protagonists. It allows them to thrive but in a manner that, while beneficial to all partners, ultimately assures undivided support for the dominant entity’s interests.