Examine Successful Organizational Leaders
OLB 7004, Assignment 3
DuBose, Justin Z.
Dr. Rosa Cassell
28 January 2018
Tony Hsieh seems to possess a combination of leadership characteristics to include transformational leadership, charismatic leadership, and situational leadership (Landis, 2014). Hsieh has managed to radically transform not only the online shoe company, Zappos.com, but an entire area of downtown Las Vegas. He has taken advantage of a unique situation and, using his charismatic personality to inspire and motivate his workforce, he has transformed their working environment.
This transformation took place despite a tremendous cut in Hsieh’s working force upon his arrival as CEO of Zappos. In an article published by Business Insider, Feloni (2016) reported that 18% of Zappos employees took severance packages and left the company when faced with working under Hsieh’s “holacracy” where each employee is self-managed and traditional structures and titles are eliminated. This new working environment, while cutting almost one-fifth of his workforce, drastically transformed both employees and overall production.
Hsieh also undertook a project which fits his leadership style of transformational and charismatic leadership: a $350 million renovation of downtown Las Vegas which would transform the area into “a mecca for entrepreneurs” (Guzman, 2016).
Anderson (2017) notes that transformational leadership is characterized primarily by four leadership factors: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration. Idealized influence attracts followers who want to be like them. Inspirational motivation casts a vision which motivates followers to participate. Intellectual stimulation is a providing of challenges which increase creativity and development. Lastly, individualized consideration leads them to consider and attend to the needs of their followers and encourage personal growth. In each of these categories, Hsieh’s transformational leadership is evident in his influence of employees and ideas, his motivation of workers to meaningfully contribute, his stimulation by freeing employees under his “holacracy”, and his consider of each individual in his workforce.
Leadership Categorization Theory
The study of Leadership Categorization Theory (LCT) and Implicit Leadership Theory (ILT) began with the research of Robert Lord in the 1980’s. Lord (1984) began studying how followers categorized typical and ideal leaders as well as how leaders categorized typical and ideal leaders. This led to Lord et al (1984) conducting three separate studies on leadership categorization. In synthesizing the results of his research, and related results of similar studies, he observed that leaders should endeavor to understand the implicit theories held by their followers in order to maximize and improve performance appraisals. In other words, Lord et al (1984) discovered that followers hold implicit theories about what constitutes good leadership and internally categorize leaders accordingly. Therefore, it behooves the leader to understand the implicit leadership theories held by their followers in order to improve their own appraisals and evaluations.
Perception of Leader Success
LCT and ILT have everything to do with perception. A leader seeks to understand how each follower perceives success in order not only to lead well, but to increase the confidence of the follower and the leader and, ultimately, increase their performance as well. Research has supported this notion of ILT and its impact of follower perception of leader success, and such perception has consistently been proven to be a powerful, albeit subjective, criteria for analysis. Junker (2014) observed that followers often do not rate or judge leaders based on actual behavior and results, but rather on their own subjective impressions of leadership which may or may not accurately reflect the leader in his/her context. Similarly, it was reported that followers experience a higher degree of satisfaction in their jobs when the leader fits their own implicit theories of leadership.
In studying LCT and ILT, researchers have discovered several common traits and characteristics generally held by followers which contribute to their perception of leadership success. Junker (2014) notes that very few studies “have investigated implicit followership theories”, but that studies have revealed certain characteristics as being embedded within implicit leadership theories of the typical and ideal leader. Among such characteristics are “a masculine face and being tall” which “give the image of being competitive”. Whether these categorizations by followers of leadership are completely accurate or entirely false, they are strong enough to influence both leader and follower and should not be ignored by those in positions of leadership within organizations. The research of Junker (2014) concluded that the importance of implicit theories regarding leadership and followership cannot be overstated as such theories have been proven to influence not only how leaders and followers interpret one another’s behavior, but how they actually behave toward one another.
Effectiveness of Leadership Categorization
Since LCT and ILT, while rooted in the subjective perception of both leaders and followers, has been proven to impact performance and relationships, the issue of its effectiveness continues to gain momentum in research. In particular, the application of LCT and ILT in leading different generations of followers has been documented. Generational change highlights the effectiveness of LCT and ILT due to the changing perceptions and expectations of different generations. The research of Anderson (2016) suggests that examinations of leadership theories are necessitated by generational differences; that with each successive generational change comes the need for an examination of leadership theories.
As an example, Anderson notes a study by Laird, Harvey, and Lancaster (2015) which demonstrates that although Millennials “have a greater sense of entitlement, they are also more likely to appreciate accountability and feedback from supervisors”. This openness and even welcoming of accountability and feedback from supervisors changes the way that leaders of a previous generation must interact with such a workforce. In an article written for Inc.com, Peter Economy notes that communication for the modern leader is imperative. Specifically, he notes that providing and welcoming feedback is one of the most positively impactful ways to effect change (Economy, 2014).
Likewise, in an interview with Valarle Willis, the question was posed regarding the effectiveness of authoritarian leadership as compared to influential leadership when leading a workforce of Generation X and Y employees. Valarle responded, in part, that “while authoritative leadership only has room for one leader, influential leadership allows the leader in everyone to be brought forward. In today's fast-paced, rapidly changing environment, everyone has to be a leader.” (Willis, 2015) Glenn Llopis, a consultant who deals with workforce development and business strategy took the idea of leadership communication to a greater depth by not only noting that leaders must be great communicators, but they must use their presence to create a workplace atmosphere of open communication. Llopis states that leaders are “experts at making others feel safe to speak-up and confidently share their perspectives and points of view. They use their executive presence to create an approachable environment.” (Llopis, 2013)
This issue of generational differences in leadership categorization and perception is just one example of the effectiveness of employing LCT by examining the ILT of followers within an organization. Research continues to conclude that LCT is an effective tool for productive and successful leadership.
Implications of Categorization
While LCT has proven to be an effective tool that should be utilized by leaders, its utilization carries with it several implications. Firstly, it requires that leaders constantly evaluate themselves based upon their present context, both the mission in front of them and the followers behind them. Leadership, as observed by Lord et al (1984), is evaluated and categorized by those followers present with the leader, and their appraisal of leadership will be based upon present circumstances according to their own ILT and LCT. This observation is important in that it makes every leadership situation unique and based in the exclusive context of a leader and followers in a particular situation at a particular point in time.
Like Lord et al (1984), Raisio (2015) studied three senior leaders and observed that each leader was able to successfully navigate their own complex work environment and has used that unique to context to shape their own leadership style. The importance of implicit leadership theory is that it is never detached from a localized context and that each group of followers will have their own ideas, images, and theories on leadership which have been shaped and influenced by that context. Therefore, if a leader wishes to achieve success by any measurable standard, they must assess their followers and their implicit leadership theories.
An additional implication of LCT is that the modern workplace and workforce is dynamic and constantly changes. Consequently, not only due demands of a leader evolve, but so do the expectations and ILT’s of those within the organization. Venters et al (2012) studied the impact of LCT of a multi-generational workforce where technology was increasingly integrated into the workforce. In this research, Venters et al (2012) notes that studies have repeatedly concluded that generational differences cause serious strain as it relates to communication and technology. Baby Boomers and Gen-Xers occupy the same workplaces as Gen-Y and Millennials, which makes for serious communication and leadership challenges for organizational leaders. Thus, within the same workforce exist multiple LCT’s and ILT’s to which the leader must constantly adjust and adapt.
These workplace paradoxes were studied by Waldman & Bowen (2016) and the implications they hold for organizational leaders. Their research stressed that leaders be cognizant of implicit leadership theories due to these increasing workplace paradoxes. Leaders must be aware of balancing these paradoxes in order to lead organizations effectively. For example, their research highlights the paradox of “maintaining a strong sense of self while simultaneously maintaining humility” and the paradox of “stressing continuity while simultaneously stressing change”. To best maintain balance between these two poles requires an awareness of not only their own pursuit of these ends, but also how followers perceive their success in these efforts. Additionally, each generational categorizes leaders and their behavior differently and their success in balancing these paradoxes. This is a huge implication of LCT for twenty-first century organizational leaders.
Leadership Categorization Theory and Implicit Leadership Theory have profound effects on leaders and provide a well-balanced sense of the weighty burden of successful leadership. Since leadership can take a variety of forms (transformational leadership, charismatic leadership, servant leadership, transactional leadership, situational leadership, etc.), and since it is always exercised in a unique context and situations, it is imperative that leaders constantly be aware of those whom they are leading and how each follower views leadership. The brief analysis of Tony Hsieh, CEO of Zappos, demonstrates the potential success of considering the implicit leadership theories of those within the organization and how they individually and collectively categorize their leaders. Hsieh concluded that while 18% of his workforce would not be compatible under his leadership, the other 78% would function well. Thus, he made a calculated and strategic decision to change direction organizationally and the results continue to be positive. A failure in the opposite direction by leaders to successfully evaluate the perceptions of their followers could also have equally disastrous results.
Anderson, H. J., Baur, J. E., Griffith, J. A., & Buckley, M. R. (2017). What works for you may not work for (Gen)Me: Limitations of present leadership theories for the new generation. The Leadership Quarterly, 28(1), 245-260. doi:10.1016/j.leaqua.2016.08.001
Economy, P. (2014, July). 7 Habits of Remarkably Successful Leaders. Retrieved January 28, 2018, from https://www.inc.com/peter-economy/7-habits-of- remarkably-successful-leaders.html
Feloni, R. (2016, January 28). Zappos CEO Tony Hsieh reveals what it was like losing 18% of his employees in a radical management experiment — and why it was worth it. Retrieved January 28, 2018 from http://www.businessinsider.com/tony- hsieh-explains-how-zappos-rebounded-from-employee-exodus-2016-1
Guzman, Z. (2016, August 9). Zappos CEO Tony Hsieh shares what he would have changed about his $350M downtown Las Vegas project. Retrieved January 28, 2018 from https://www.cnbc.com/2016/08/09/zappos-ceo-tony-hsieh-what-i- regret-about-pouring-350-million-into-las-vegas.html
Junker, N. M., & Dick, R. V. (2014). Implicit theories in organizational settings: A systematic review and research agenda of implicit leadership and followership theories. The Leadership Quarterly, 25(6), 1154-1173. doi:10.1016/j.leaqua.2014.09.002
Landis, E. A., Hill, D., & Harvey, M. R. (2014). “A synthesis of leadership theories and styles”. Journal of Management Policy and Practice, 15(2). Retrieved January 14, 2018.
Llopis, G. (2013, February 18). The Most Successful Leaders Do 15 Things Automatically, Every Day. Retrieved January 28, 2018, from https://www.forbes.com/sites/glennllopis/2013/02/18/the-most-successful-leaders- do-15-things-automatically-every-day/#1c0353af69d7
Lord, R. G., Foti, R. J., & Vader, C. L. (1984). A test of leadership categorization theory: Internal structure, information processing, and leadership perceptions. Organizational Behavior and Human Performance, 34(3), 343-378. doi:10.1016/0030-5073(84)90043-6
Raisio, H., & Lundström, N. (2015). “Real leaders embracing the paradigm of complexity”. Emergence: Complexity & Organization, 17(2), 1-5. Accessed January 28, 2018.
Venters, J. W., Green, M. T., & Lopez, D. M. (2012). “Social media: A leadership challenge”. Business Studies Journal, 4, 85-93. Accessed January 28, 2018.
Waldman, D. A., & Bowen, D. E. (2016). “Learning to be a paradox-savvy leader”. Academy of Management Perspectives, 30(3), 316-327. Accessed January 28, 2018.
Willis, V. (2015, July). What is the key to successful leadership? Retrieved January 28, 2018 from http://www.leadershipchallenge.com/resource/what-is-the-key-to- successful-leadership.aspx
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