Why Everyone in an Enterprise Can -- and
Should -- Be a Leader
Published: December 23, 2003 in Knowledge@Wharton
Leadership doesn't just start at the top. Leaders can also be found at the bottom of an
organization and at just about every place in between. In this special report by
Knowledge@Wharton and The McKinsey Quarterly, the management journal of consulting
firm McKinsey & Co., experts from McKinsey and Wharton point out that regardless of
whether people are on the top line or the front line, they should explore ways to exercise
their leadership potential to the fullest. That is the only way in which they can create
meaningful working lives for themselves and the organization can get the most from their
efforts.
It is said that leadership starts at the top. This is often true, of course, but it is far from
being the whole story. Leaders can also be found at the bottom of an organization and at
just about every place in between.
Indeed, management experts at Wharton and McKinsey say that leadership can be found
and must be practiced by employees at all levels of an organization. That is the only way in
which an enterprise can get the most from managers and employees alike, achieve its
strategic goals, fulfill the personal career aspirations of its people, and lay the groundwork
for identifying and developing future leaders, including those who may eventually serve at
the highest levels. A payroll clerk who recommends a way to streamline the process of
cutting a check is demonstrating leadership -- given the parameters of his or her place in an
organization -- in the same way as a CEO who is launching an initiative to transform a
corporation.
“Everybody can lead at every level; there are no excuses,” says Michael Useem, director of the
Center for Leadership and Change Management at Wharton and the author of many articles and
books on leadership. “It doesn’t matter if you’re on the front line or the top line. If you are given
an office with the powers of that office, what do you add to the office above and beyond those
powers? Do you excite and motivate people? Do you bring excellence and vision to what
ultimately is the objective of that office or even the whole company? Everybody should be good
at leading, whatever their level in the hierarchy.”
“Everyone can exercise leadership by being an individual contributor at any level of an
organization,” agrees Helen Handfield-Jones, an independent consultant on leadership talent
strategy and co-author of the book The War for Talent. “What does that mean? Ultimately it
comes down to looking for opportunities to make the world a better place. That sounds grand,
but when people apply that idea to their work situations, it means having a vision of how your
unit, or you as an individual, can be more effective and creative, go beyond day-to-day
requirements, and energize others around that vision.”
Keith Leslie, a principal in McKinsey’s London office, notes that in recent years many business
people and business journalists have become enamored with the idea of the “heroic” leader -- the
super-talented individual who single-handedly shepherds his or her organization to new heights.
While powerful, charismatic individuals can make a difference, it is usually leadership teams, not
the lone wolf, which prove essential to organizational success. In a 2001 article in The McKinsey
Quarterly titled “Teamwork at the Top,” Leslie and two co-authors underscore this point by
including a statement by former General Electric CEO Jack Welch, who says of GE: “We’ve
developed an incredibly talented team of people running our major businesses, and, perhaps
more important, there’s a healthy sense of collegiality, mutual trust, and respect for performance
that pervades this organization.”
“The emphasis that we at McKinsey place on team leadership is applicable to management
teams at all levels -- top, middle or front line,” says Leslie. “There are two reasons we disagree
with the view that leadership means a heroic leader who will bring the organization to the future.
One, we observe lots of different kinds of people being successful leaders. I have some very
successful CEOs as clients who are introspective and data-oriented. Those kinds of people can be
just as effective as big-message, extroverted types. The second thing we observe is that there are
people who are great leaders in one institution but not elsewhere. Quite a few chief executives
have moved from one company to another and not struck gold twice. The reason is that context
really matters. Having the right fit for leadership activity is incredibly important.”
Both Useem and Handfield-Jones emphasize that leaders are made, not born. “There is no
born leader as such,” says Useem. “Leadership at the front, mid and top lines alike is not
innate. It is true some people have a huge head start. They’re exceptionally clear minded.
They communicate well. They’re exceptionally persuasive. They look physically like a leader
should, at least in the idealized Hollywood version. But the real skills of leadership at every
level must be acquired in our lifetimes. There are no biological advantages. You have to
learn those skills. And any organization, by implication, has to provide a chance for
everybody to be a leader.”
Organizations can help managers and employees become leaders in a variety of ways:
encouraging people to read histories, study biographies, carefully observe leaders around
them, and engage in lifelong education. Organizations can also mentor people and help
them discover, in their own way, how they can improve. Perhaps the most important thing
organizations can do is encourage people to get out of their “comfort zones” and take on
new tasks and challenges.
Leading in Different Ways
While everyone in an enterprise can demonstrate leadership skills, middle managers and other
people in non-executive positions must lead for different purposes and by different means than
CEOs and other senior executives. No one suggests, for example, that a middle manager can
influence a company’s strategic direction to the same extent as a chief executive. But nonexecutives can readily find ways to make their influence felt.
Wharton management professor Anne Cummings agrees with Useem and Handfield-Jones that
all employees can be leaders, even those who have no one reporting to them. All employees can
exert what Cummings calls “horizontal” leadership -- leading in a setting where a person does
not have the formal authority that is bestowed by a supervisory relationship.
“There is a set of skills and capabilities that are useful at the lowest levels; you exert it through
your peers and in team settings,” Cummings says. Leadership in the lower ranks can involve
everything from prioritizing tasks and managing time to getting people to accomplish goals and
resolving conflicts. Such commonplace actions are important because they help an organization
at any level meet its goals.
The essential set of skills for a senior executive -- character and integrity; the ability to think
strategically; the ability to communicate and persuade; decisiveness and thoroughness in
execution -- should be manifested by all employees. But they are exercised differently, and are
narrower in their scope and influence, by people lower in the ranks. “If you’re an associate at
Wal-Mart, you don’t look to change the entire corporate system,” according to Cummings. “You
do what you can do to improve things where you are.”
Consider the differences and similarities involved in how senior executives and middle managers
approach communications. Senior executives must communicate a company’s overall strategy to
investors, securities analysts, politicians and other external constituents. Internally, executives
must be adept at communicating through channels ranging from an e-mail to one person to an
on-stage presentation in front of thousands of employees.
Mid-level managers, on the other hand, are almost never responsible for talking with political
leaders or Wall Street analysts. Their public persona, if they even have one, is unimportant
because typically their communication is done internally and to small groups of people. Yet the
fundamental communication tenets of clarity and persuasion, accompanied by a healthy sense of
ethics, should shine through even if everything is done, more or less, with a handshake and eyeto-eye contact, according to Useem.
Like senior executives, non-executives can demonstrate leadership by taking into account three
important themes in making decisions: direction, interaction and renewal. Leaders look at the
direction in which they are trying to take their business, according to Leslie, the McKinsey
consultant. Leaders ask the right questions about overall organizational performance and how
teams work together to improve performance. Leaders set clear goals for their businesses as a
whole. They then work to institute processes that revitalize the effort and commitment of the
people they work with. Effective leaders are rarely satisfied. They continually ask: What is the
next level of improvement?
Middle managers and others can also exhibit leadership by “leading up,” according to Useem,
who is the author of a book of that title. Leading up means offering new ideas and new directions
to one’s superiors. Leadership is not a matter of how many subordinates one has; it is “a calling
to help the organization go in the right direction, which means leading up.”
Look for Challenges
People who wish to strengthen their leadership skills should seek out challenging experiences.
“Put yourself in situations you’ve never been in before,” says Handfield-Jones. “If you’ve spent
three to five years in one business unit, make a change. Lead a mature business, then a start-up
business. Learn to lead in a line position, then put yourself in a staff role. You also have to seek
out feedback, coaching and mentoring, so you can reflect on your own leadership style and learn
about yourself as you go along.”
As leaders grow and take on greater responsibilities, it becomes necessary for them to begin
nurturing future leaders. Yet this is one of those responsibilities that appears obvious yet is often
neglected, according to Handfield-Jones. “Managers and executives think developing talent is
what HR does. That’s not true.”
Indeed, while many major companies have formal leadership development programs, employees
who seek to grow as leaders and be recognized for their leadership capabilities should not rely
solely on these programs.
“It’s generally recognized that if you want to retain talented junior executives you have to give
them opportunities to grow or develop,” Cummings says. “Most companies these days have
some sort of leadership development program, but just how well organizations actually support
these programs varies. These programs have to be in place, but having them in place is not
enough. I’m hearing more and more that formal mentoring programs don’t necessarily work. It’s
the informal development of people that may matter more.”
A Reluctance to Lead
Useem notes that people occupying the middle and lower levels of organizations sometimes
resist, or even resent, bearing the mantle of leadership. Leadership is something for senior people
to do, the thinking goes, and, after all, the rank and file are not paid to lead anybody. “Yes, you
often hear people say those kinds of things: ‘They pay the execs at top level the big bucks to be
leaders. But I think it’s a misstatement of what is required. Your leadership will have less impact
at a lower level, by definition. Therefore you’re paid less. But leadership, in my view, is still
obligatory on the part of everyone.”
Robert Felton, a McKinsey director and manager of the firm’s Seattle office, has had extensive
experience studying change management. He says organizations that wish to improve and adapt
with the times may find that middle managers are not only unwilling to act as leaders in fostering
change but will actually work to thwart it -- not out of malice but out of inertia and a stubborn
unwillingness to think and act in different ways.
It may seem counterintuitive, but when it comes to identifying and tackling problems, senior
executives and front-line employees, along with their immediate supervisors, are often the
groups of employees who see eye-to-eye on the need for action. The stumbling block to fixing
what is wrong frequently is middle management.
“The problem comes in the middle,” says Felton. “The middle manager, in my view, tends to
overcome many, many change initiatives from both directions. CEOs are trying to change things
from top, and front-line people are trying to change things from the bottom, and middle
managers kill it. The middle manager is generally the enemy of serious change.”
To avoid this situation, Felton suggests that organizations recognize that they employ two kinds
of middle managers. The first group consists of managers who possess neither the mettle nor the
inclination to rise through the ranks but play vital roles because they have experience and know
their jobs inside and out. The second group consists of people on the promotion track who may
some day reach the senior level.
Both types of managers are necessary to organizations but both are also quite capable of
thwarting necessary change if they find it in their interest to do so. If senior executives want to
initiate change of any kind, Felton recommends that they form a special task force with the frontline folks who share the view that change is required and have them report directly to the senior
people rather than middle management – at least until the task is accomplished and perhaps
permanently.
Says Felton: “You need to create a partnership between the senior people and the front-line
people -- and the front-line people need to be empowered. If they work for middle management,
they will never be empowered.” Eliminating layers of middle management permanently can also
reap rewards, as was famously demonstrated at General Electric under former chief executive
Jack Welch.
Felton adds that middle managers who embrace change are exerting leadership by setting an
example for their peers and direct reports. In doing so, they are also putting themselves in a
better position for promotion to more senior levels.
As people grow as leaders, they are likely to find that their ability to lead requires a more
sophisticated and less direct approach. “You have to find ways to influence people and inspire
people around a vision,” says Handfield-Jones. “Then you have to shape that vision and shape
the culture and values of your organization. You also have to have the fairly sophisticated
leadership skill of making sure the leaders who report to you are themselves effective leaders to
their people. So you’re reaching more broadly and more indirectly than your own immediate
circle.”
And how, exactly, does someone with little or no managerial or supervisory experience go
about taking that first step toward being a leader? “It simply involves an act of will,” says
Useem. “You must simply decide, ‘I’m going to step forward to make a difference. I’m going
to offer fresh insights and get people excited about where this company or organization
ought to go.’ Leadership is a matter of personal commitment and drive.”