Leadership and Innovation, prof. Verganti

ip VS Management

Lezione 8 - 01/04/2019 - Roberto Verganti

The best way to learn leadership is by practicing it.

eaders manage and managers lead,

Leadership is about the capability of having an impact on the life of other people.

the two activities are not synonymous

Bernard Bass

LEADERSHIP VS MANAGEMENT

“Leaders manage and managers lead, but the two activities are not synonymous” (Bernard Bass)

There is an overlap between leadership and

management. They are connected, but these 2

concepts are not exactly the same. The two

concepts are not exclusive. In fact, every person

practice both leadership and management.

Management Leadership

Management = coordinating the efforts of people to accomplish goals and objectives using

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available resources efficiently and effectively.

So, to bring people together in order to accomplish a goal using available resources. Management

means coordination between people.

Leadership VS Management Functions of a manager (Fayol)

Planning, organizing directing and

controlling activities and resources

Roles of a manager (Mintzberg)

Get things done • Interpersonal: ceremonial/symbolic

through other duties

people in • Informational: collect/transfer

information

organisations • Decisional: choose between

alternatives

Skills of a manager (Katz)

• Technical: apply specialised

expertise

Management • Human: work with other people

• Conceptual: diagnose complex

situations

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Coordinating > bring people together

• Accomplish goals > there is a target

• Available resources > management is about organizing available people and resources in the

• best way

Leadership

Leadership is a process whereby an individual influences a group of individuals to achieve a

shared purpose

While with management you have the authority to coordinate and take decisions, in leadership

you don’t have it and so you should be able to influence. It is about changing the “box” (il

Leadership VS Management

“contesto dato”), it’s about exploring, bringing people together, vision, etc.

Create and communicate a

vision

•Inspire, set the tone, articulate

a vision, communicate and align Influence (group of)

•Manage people individuals toward

Motivate, influence, the achievement of

changing behaviors a vision or goals

Provide support for

performance achievement Leadership

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Leadership is based on a vision that has to be communicated and shared with the others.

Department of Management Engineering

This means to motivate and influence people in taking actions (because there is no authority for

forcing people).

Leadership VS Management

Task is a matter of management, behaviour is a matter of leadership.

Management is about coping with complexity

Leadership vs Management

leadership is about coping with change

John P. Kotter

“Management is about coping with complexity, Leadership is about coping with change.” (John P.

Kotter) Setting a Direction

Planning and Budgeting (Abductive, Direction)

(Deductive, Plans) Aligning

Organizing and Staffing (communicate, stakeholders)

(Design, your box) Motivating

Controlling and Problem Solving (Elicit powerful response,

(Help normal people behave Management Leadership create leadership)

in normal ways)

Leadership is about coping with change:

Instead of planning using a deductive reasoning, leadership is setting a direction

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From organizing to aligning in order to go together in a same direction;

• From controlling and problem solving to motivating people

•

LEADERSHIP ACTS

Leadership acts • Interpreting

Purpose • Finding a Direction

Work with • Understand others

• Engage others

others • Growth

Work on • What is success

yourself • Growth 12 Department of Management Engineering

Leadership is about going together in the same direction, so the starting point (the first action) is

to understand the purpose (finding a direction). Then work with others, which means

understanding, engaging and helping to growth the others. Finally, to understand and work better

with the others, you need to understand yourself. Meaning understanding your personal strengths

and weaknesses.

Purpose and meaning

Purpose is what we call meaning.

Purpose is about answering the question: why we are doing what we are doing?

The purpose, such as the meaning, is strictly connected with the Why of things.

For every activity a person is doing, there is always a purpose, a reason why the person is doing

that activity.

13 Purpose and Meaning Society

People in the Customer

Organization Me

Business

When a person is doing an activity, which has a meaning for him, that person will have an impact

and will create value/meaning for the customers, the people in the organization, the society and

the business itself. The purpose has to be shared with some “identity” such as customer,

business, our society, people in the organization.

We (me), as a person in a network of different stakeholders (identities), cannot have our own

negotiate

purpose, but we need to it with those people which I’m in contact with.

We have to consider that we are in between a network of purpose, every element has its own

purpose.

It is good to find the right balance between all the purposes, so that we can create a shared

purpose. 14 Yvon Chouinard

https://www.youtube.com/watch?v=EHS2X-KoN_w

Yvon Chouinard video (founfer of Patagonia)

In the video the founder of

• Patagonia explains which is the

meaning of its life is and what he

wants to create for the

customers, for the company.

What his own meaning is and

how he translated what is

meaningful to customers,

society, people in the

organization. Department of Management Engineering

Search for Meaning: “We have to define what is quality for us”:

• - Sustainability > not changing clothes every time

- “We would like to make the best quality multi-functional clothes”;

“We have to define what is quality for us and then understand what is the context within the

society.”

Patagonia is a fashion company, but they do fashion with a purpose; they do fashion in the

Patagonia way. The kind of people we have to bring on board are people that share our vision.

The objective for a company is make business, but the purpose is the why the company makes

business.

When you work for different companies in marketing, management, etc, working about

management is the same while working with leadership is different (leadership is about the

purpose, every company has its own purpose).

Exercise: Meaning of your life vs Meaning of your work

There is a vision for your life but there is a vision also for your work

Vision of your life:

• What do you envision for yourself in the next five years?

• How do you want to grow as a person?

• What do you envision for your family life or friendships?

• Where do you envision to live?

• What do you envision for fun and recreation?

•

Vision of your work

What do you want to gift to the world as a result of your actions?

• How do you envision yourself as a leader?

• What do you want to leave behind you as a student?

• Leadership need to understand and act on

MODEL: TRANSACTIONAL, TRANSFORMATIONAL, SERVANT, SHARED

Leadership need to understand and act on.

Individual Teams Organisation

Organization

• Group structure •

SELF & OTHERS Change

• Group roles

• •

Personality Innovation

• Team

• Perception responsibilities

• Motivation • Decision making

• Emotions • Conflict

• Communication Management How do you interact

When working with others an important thing to understand for a leader is:

with the others? 20 Department of Management Engineering

Example 1: Whisplash Example 2: Pay it forward (2000) Example 3: Invictus (2009)

• Transactional leadership

> Guide followers in the direction of established goals by clarifying role and task requirements.

In this case the leader leads others by making the goals explicit and telling precisely the

expectation and the tasks to do for achieving the goals.

motivating directing

Transactional leadership involves and followers primarily through appealing

own self-interest.

to their transactions reward

It is the sequence of where the actions of subordinates result in either a or a

punishment.

Homo-Economicus > Relationship between people is like a transaction (If you do well you have a

reward, if you do wrong there is a punishment)

Vincent Thomas Lombardi is best known as the head coach of the Green Bay Packers during

the 1960s, where he led the team to three straight and five total National Football League

championships in seven years, in addition to winning the first two Super Bowls following

the 1966 and 1967 NFL seasons. Lombardi is considered by many to be one of the best and

most successful coaches in professional football history. The NFL's Super Bowl trophy is

named in his honor.

“The difference between a successful person and others is not a lack of strength, not a lack of

knowledge, but rather in a lack of will”

“The only place success comes before work is in the dictionary”

“There is only one kind of discipline, and that is the perfect discipline. As a leader, you must

enforce and maintain that discipline; otherwise, you will fail at your job”

(Vince Lombardi)

Contingent Rewards: rewards, expectations,

Transactional leaders link the goal to clarify provide necessary resources,

rewards for successful

set mutually agreed upon goals, and provide various kinds of

performance. They set SMART (specific, measurable, attainable, realistic, and timely) goals for

their subordinates.

Active management by exception:

actively monitor

Transactional leaders the work of their subordinates, watch for deviations from

corrective action to prevent mistakes.

rules and standards and taking

If everything goes well the leader doesn’t intervene while something goes wrong, he takes

actions.

Passive management by exception:

leaders intervene only when standards are not met

Transactional or when the performance is

punishment as a response to unacceptable

not as per the expectations. They may even use

performance.

Laissez-faire: many opportunities to make

The leader provides an environment where the subordinates get

decisions. The leader himself abdicates responsibilities and avoids making decisions and

therefore the group often lacks direction.

For example in “Whisplash” the conductor guide the drummer in the goal to achieve perfectly the

song. In that case it was a punishment and then the rewards from the guy. Dare per avere.

the attention is on the achievement of the goals.

To command, ordinate people what to do.

There is a task and you have to achieve that task perfectly. It push you to the perfection, to the

goal.

• Transformational leadership

> Inspire followers to transcend their own self-interests and who are capable of having a profound

and extraordinary effect on followers.

Example Invictus (film). Nelson Mandela was not telling precisely what to do but was trying to

inspire the capitan.

Individualized Consideration (IC)

Transformational leaders demonstrate genuine concern for the needs and feelings of followers.

This personal attention to each follower is a key element in bringing out their very best efforts.

- The attention is not to the goal but to the person > Focus on the transformation of the person

the leader is working with.

Intellectual Stimulation (IS)

The leader challenges followers to be innovative and creative. A common misunderstanding is

that transformational leaders are “soft", but the truth is that they constantly challenge followers to

higher levels of performance.

- Set challenges to allow the person to go beyond the expectations.

Inspirational Motivation (IM)

Transformational leaders have the ability to inspire and motivate followers. Combined these first

two I's are what constitute the transformational leader's charisma.

- The leader motivates people by inspiring them

Idealize Influence (II)

The leader serves as an ideal role model for followers; the leader "walks the talk” (tr. fare ciò che si

dice, passare dalle parole ai fatti), and is admired for this.

- Ideal role model (being an example for others).

31 How leaders transform followers

How leaders transform followers Department of Management Engineering

Full-range model: from laissez-faire to transformational leader

Full-range model: from laissez-faire to transformational leader (Avolio and Bass)

(Avolio and Bass 1991) Effective

Leader

Transformational

leadership Idealised

Inspire followers to influence

transcend their own Inspirational

self-interests and motivation

who are capable of

having a profound Intellectual

stimulation

and extraordinary

Effect on followers Individualised

consideration

Passive leader leader

Active

Contingent

reward

Management Transactional leadership

by exceptions Guide followers in the direction

Laissez faire of established goals by clarifying

role and task requirements

Ineffective

Leader

© Tommaso Buganza 32

Transactional leadership > Passive and Ineffective style of leadership

Transformational leadership > Active and Efficient style of leadership

Transactional leadership helps people to get the expected outcome. This is good for leading

people in operation scenarios. Transactional leadership doesn’t always work with innovation

because you have to tell people what they have to do. Innovation processes are not linear and

once you’ve set an innovation process, it could change (innovation is about changing the way to

do things).

Transformational leadership moves beyond the expectations and this is good for areas looking for

innovation.

However, leaders should bring a bit of both of the models, one in a larger part than the

other and one predominant than the other according to the phase of the project.

But whatever model of leadership you have to motivate people.

- By being too transformational, people can be lost.

- By being only transactional, people become machines and at the first problem they get lost.

Transformational leadership VS Transactional leadership

TRANSFORMATIONAL LEADERSHIP

INDIVIDUAL INTELLECTUAL IDEALIZED INSPIRATIONAL

CONSIDERATION STIMULATION INFLUENCE MOTIVATION

TRANSACTIONAL

LEADERSHIP

CONTINGENT Performance

REWARD Expected beyond

outcomes

MANAGEMENT expectations

BY EXCEPTION 33 Department of Management Engineering

MOTIVATION

Intrinsic Vs Extrinsic Reward

Whatever style of leadership is adopted there is always a problem of how to motivate people.

Motivation changes by moving from transactional to transformational leadership style.

Intrinsic

Extrinsic There are two types of rewards:

Reward

Reward Extrinsic >> for transactional leadership

Intrinsic >> for transformational leadership

Psychic

Financial

Material We need both according to the situation.

Social → Self-granted

→ From the environment

Extrinsic work more fore repetitive situation, so it is more oriented toward transactional leadership.

Intrinsic work for purpose.

Extrinsic reward and motivation

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Why extrinsic reward and motivation often fail?

1. Too much emphasis on monetary rewards

2. Rewards lack an “appreciation effect”

3. Extensive benefits become entitlements

4. Counterproductive behaviour is rewarded

5. Too long a delay between performance and rewards

6. Too many one-size-fits-all rewards

7. Use of one-shot rewards with a short-lived motivational impact

8. Continued use of demotivating practices such as layoffs, across the-board raises and cuts, and

excessive executive compensation

Intrinsic Reward and Motivation

Intrinsic reward and motivation PEOPLE There are many different ways to give

people incentives that are not related

with a transaction:

Some connected with Purpose

• Some connected with Performance

• Some connected with People

•

PURPOSE PERFORMANCE

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Innovation focus on what we don’t know so creativity has to be incentivised.

The Concept of “Flow”

The flow model

When a person has a task to perform, there are two dimensions for evaluating that task (the

matrix variables): Department of Management Engineering

Challenge level > how difficult is the task?

• 40

Skill level > which skills are needed?

•

If the task is so simple and no skills are required, you develop apathy and boredom (tr. noia).

If the task is too difficult and you don’t have the skills, you develop anxiety.

flow

The state of (quello di cui parlava anche Zurlo) is the most interesting (and productive)

among the others.

High level of skilled needed and very challenging (not too much to prevent anxiety);

• Usually is a task targeted to the skills of a person but very challenging

• The state of flow is the moment in which when doing that task, you lose the sense of time

• This is the most rewarding state

•

Some people (such as developers) like to be in flow because they like to be in that state of mind.

This is a form of intrinsic motivation: giving people a challenge that is not so much for them but is

engaging in order to play with their skills.

BEHAVIOURS

Behaviour theories attempt to describe leaders based upon what they do instead of what they

are: leadership is shown through acts rather than qualities.

Different studies have tried to summarize leaders’ behaviours and have come up wi