1990BEST OF HBR

What LeadersReally Do

The article reprinted here stands on its

own, ofcourse, but it can also be seen

as a crucial contribution to a debate that

began in 1977. when Harvard Business

School professor Abraham Zaleznik

published an HBR article with the

deceptively mild title "Managers and

Leaders: Are They Different?" The piece

caused an uproar in business schools. It argued that the

theoreticians of scientific management, with their organiza-

tional diagrams and time-and-motion studies, were missing

half the picture-the half filled with inspiration, vision, and

the full spectrum of human drives and desires. The study of

leadership hasn't been the same since.

"What Leaders Really Do" first published im99O, deepens

and extends the insights ofthe 1977 article. Introducing one of

those brand-new ideas that seems obvious once it's expressed,

retired Harvard Business School professor John Kotter pro-

poses that management and leadership are different but com-

plementary, and that in a changing world, one cannot function

withoutthe other. He then enumerates and contrasts the pri-

mary tasks ofthe manager and the leader. His key point bears

repeating: Managers promote stability while leaders press for

change, and only organizations that embrace both sides of

that contradiction can thrive in turbulent times.

They don't make plans; they

don't solve problems; they

don't even organize people.

What leaders really do is

prepare organizations for

change and help them cope

as they struggle through it

by John P. Kotter

I EADERSHIP IS DIFFERENTI management, but not for the rea-^ ^ sons most people think. Leadershipisn't mystical and mysterious. It hasnothing to do with having "charisma"or other exotic personality traits. It isnot the province of a chosen few. Noris leadership necessarily better thanmanagement or a replacement for i t

Rather, leadership and managementare two distinctive and complementarysystems of action. Each has its own func-tion and characteristic activities. Bothare necessary for success in an increas-ingly complex and volatile businessenvironment.

Most U.S. corporations today are over-managed and underled. They need todevelop their capacity to exercise lead-ership. Successful corporations don'twait for leaders to come along. Theyactively seek out people with leadershippotential and expose them to careerexperiences designed to develop that

BREAKTHROUGH LEADERSHIP DECEMBER 2001 85

BEST OF HBR • What Leaders Really Do

potential. Indeed, with careful selection,nurturing, and encouragement, dozensof people can play important leadershiproles in a business organization.

But while improving their ability tolead, companies should remember thatstrong leadership with weak manage-ment is no better, and is sometimesactually worse, than the reverse. Therea! challenge is to combine strong lead-ership and strong management and useeach to balance the other.

Of course, not everyone can be goodat both leading and managing. Somepeople have the capacity to becomeexcellent managers but not strongleaders. Others have great leadershippotential but, for a variety of reasons,have great difficulty becoming strongmanagers. Smart companies value bothkinds of people and work hard to makethem a part ofthe team.

But when it comes to preparing peo-ple for executive jobs, such companiesrightly ignore the recent literature thatsays people cannot manage and lead.They try to develop leader-managers.Once companies understand the funda-mental difference between leadershipand management, they can begin togroom their top people to provide both.

The Difference BetweenManagement and LeadershipManagement is about coping with com-plexity. Its practices and procedures arelargely a response to one ofthe most sig-nificant developments ofthe twentiethcentury: the emergence of large organi-zations. Without good management,complex enterprises tend to becomechaotic in ways that threaten their very

Management is about coping with

complexity. Leadership, by contrast,

is about coping with change.

Now retired, John P. Kotter was a profes-sor of organizational behavior at HarvardBusiness Sch(X)l in Boston. He is the au-thor of such books as The General Man-agers (Free Press, 1986), The LeadershipFactor (Free Press, 19SS), and A Force forChange: How Leadership Differs fromManagement (Free Press, 1990).

existence. Good management brings adegree of order and consistency to keydimensions like the quality and prof-itability of products.

Leadership, by contrast, is about cop-ing with change. Part of the reason ithas become so important in recent yearsis that the business world has becomemore competitive and more volatile.Faster technological change, greater in-temational competition, the deregula-tion of markets, overcapacity in capital-intensive industries, an unstable oilcartel, raiders with junk bonds, and thechanging demographics of the work-force are among the many factors thathave contributed to this shift. The netresult is that doing what was done yes-terday, or doing it 5% better, is no longera formula for success. Major changes aremore and more necessary to survive andcompete effectively in this new envi-ronment. More change always demandsmore leadership.

Consider a simple military analogy:A peacetime army can usually survivewith good administration and manage-ment up and down the hierarchy, cou-pled with good leadership concentratedat the very top. A wartime army, how-ever, needs competent leadership at alllevels. No one yet has figured out how tomanage people effectively into battle;they must be led.

These two different functions - cop-ing with complexity and coping withchange-shape the characteristic activi-ties of management and leadership.Each system of action involves decidingwhat needs to be done, creating net-works of people and relationships thatcan accomplish an agenda, and then try-ing to ensure that those people actuallydo the job. But each accomplishes thesethree tasks in different ways.

Companies manage complexity firstby planning and budgeting-sen'mg tar-gets or goals for the future (typicallyforthe next month oryear),establishingdetailed steps for achieving those tar-gets, and then allocating resources toaccomplish those plans. By contrast,leading an organization to constructivechange begins by setting a direction -developing a vision ofthe future (oftenthe distant future) along with strategiesfor producing the changes needed toachieve that vision.

Management develops the capacityto achieve its plan by organizing andittT^n^-creating an organizational struc-ture and set of jobs for accomplishingplan requirements, staffing the jobs withqualified individuals, communicatingthe plan to those people, delegating re-sponsibility for carrying out the plan,and devising systems to monitor imple-mentation. The equivalent leadershipactivity, however, is aligning people. Thismeans communicating the new direc-tion to those who can create coalitionsthat understand the vision and are com-mitted to its achievement.

Finally, management ensures planaccomplishment by conm>//(fi^andprob-lem 5(j/i'(Vi - monitoring results versusthe plan in some detail, both formallyand informally, by means of reports,meetings, and other ttwis; identifyingdeviations; and then planning and or-ganizing to solve the problems. But forleadership, achieving a vision requiresmotivating and inspiring-keeping peo-ple moving in the right direction,despite major obstacles to change, byappealing to basic but often untappedhuman needs, values, and emotions.

A closer examination of each of theseactivities will help clarify the skills lead-ers need.

86 HARVARD BUSINESS REVIEW

Setting a Direction VersusPlanning and BudgetingSince the function of leadership is toproduce change, setting the direction ofthat change is fundamental to leader-ship. Setting direction is never the sameas planning or even long-term planning,although people often confuse the two.Planning is a management process, de-ductive in nature and designed to pro-duce orderly results, not change. Settinga direction is more inductive. Leadersgather a broad range of data and lookfor patterns, relationships, and linkagesthat help explain things. What's more,the direction-setting aspect of leader-ship does not produce plans; it createsvision and strategies. These describe abusiness, technology, or corporate cul-ture in terms of what it should becomeover the long temi and articulate a fea-sible way of achieving this goal.

Most discussions of vision have a ten-dency to degenerate into the mystical.The implication is that a vision is some-thing mysterious that mere mortals,even talented ones, could never hope tohave. But developing good business di-rection isn't magic. It is a tough, some-times exhausting process of gatheringand analyzing information. People whoarticulate such visions aren't magiciansbut broad-based strategic thinkers whoare willing to take risks.

Nor do visions and strategies have tobe brilliantly innovative; in fact, some ofthe best are not. Effective business vi-sions regularly have an almost mundanequality, usually consisting of ideas thatare already well known. The particularcombination or patterning of the ideasmay be new, but sometimes even that isnot the case.

For example, when CEO Jan Carlzonarticulated his vision to make Scandi-navian Airlines System (SAS) the bestairline in the world for the frequentbusiness traveler, he was not saying any-thing that everyone in the airline in-dustry didn't already know. Businesstravelers fly more consistently than

other market segments and are gen-erally willing to pay higher fares. Thus,focusing on business customers offersan airline the possibility of high mar-gins, steady business, and considerablegrowth. But in an industry known morefor bureaucracy than vision, no com-pany had ever put these simple ideastogether and dedicated itself to imple-menting them. SAS did, and it worked.

What's crucial about a vision is notits originality but how well it serves theinterests of important constituencies ~customers, stockholders, employees -and how easily it can be translated intoa realistic competitive strategy. Badvisions tend to ignore the legitimateneeds and rights of important constit-uencies-favoring, say, employees overcustomers or stockholders. Or they arestrategically unsound. When a companythat has never been better than a weakcompetitor in an industry suddenly

starts talking about becoming numberone, that is a pipe dream, not a vision.

One of the most frequent mistakesthat overmanaged and underled corpo-rations make is to embrace long-termplanning as a panacea for their lack ofdirection and inability to adapt to anincreasingly competitive and dynamicbusiness environment. But such anapproach misinterprets the nature ofdirection setting and can never work.

Long-term planning is always timeconsuming. Whenever something unex-pected happens, plans have to be re-done. In a dynamic business environ-ment, the unexpected often becomesthe norm, and long-term planning canbecome an extraordinarily burdensomeactivity. That is why most successful cor-porations limit the time frame of theirplanning activities. Indeed, some evenconsider "long-term planning" a contra-diction in terms.

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BEST OF HBR • What Leaders Really Do

In a company without direction, evenshort-term planning can become a blackhole capable of absorbing an infiniteamount of time and energy. With no vi-sion and strategy to provide constraintsaround the planning process or to guideit, every eventuality deserves a plan.Under these circumstances, contingencyplanning can go on forever, drainingtime and attention from far more essen-tial activities,yet without ever providingthe clear sense of direction that a com-pany desperately needs. After awhile,managers inevitably become cynical,and the planning prtKess can degenerateinto a highly politicized game.

Planning works best not as a substi-tute for direction setting but as a com-plement to it. A competent planningprocess serves as a useful reality checkon direction-setting activities. Likewise,a competent direction-setting processprovides a focus in which planning canthen be realistically carried out. It helpsclarify what kind of planning is essentialand what kind is irrelevant

Aligning People VersusOrganizing and StaffingA central feature of modern organiza-tions is interdependence, where no onehas complete autonomy, where mostemployees are tied to many others bytheir work, technology, managementsystems, and hierarchy. These linkagespresent a special challenge when orga-nizations attempt to change. Unlessmany individuals line up and move to-gether in the same direction, people willtend to fall all over one another. To ex-ecutives who are overeducated in man-agement and undereducated in leader-ship, the idea of getting people movingin the same direction appears to be anorganizational problem. What execu-tives need to do, however, is not orga-nize people but align them.

Managers"organize"to create humansystems that can implement plans asprecisely and efficiently as possible.Typ-ically, this requires a number of poten-

tially complex decisions. A companymust choose a structure of jobs and re-porting relationships, staff it with indi-viduals suited to the jobs, provide train-ing for those who need it, communicateplans to the workforce, and decide howmuch authority to delegate and to whom.Economic incentives also need to beconstructed to accomplish the plan,as well as systems to monitor its im-plementation. These organizationaljudgments are much like architecturaldecisions. It's a question of fit withina particular context.

just because they are understood. An-other big challenge in leadership effortsis credibility-getting people to believethe message. Many things contribute tocredibility: the track record of the per-son delivering the message, the contentof the message itself, the communica-tor's reputation for integrity and trust-worthiness, and the consistency be-tween words and deeds.

Finally, aligning leads to empower-ment in a way that organizing rarelydoes. One of the reasons some organi-zations have difficulty adjusting to rapid

The idea of getting people moving in the

same direction appears to be an organizational

problem. But what executives need to do is not

organize people but align them.

Aligning is different. It is more of acommunications challenge than a designproblem. Aligning invariably involvestalking to many more individuals thanorganizing does. The target populationcan involve not only a manager's subor-dinates but also bosses, peers, staff inother parts of the organization, as well assuppliers, government officials, and evencustomers. Anyone who can help imple-ment the vision and strategies or whocan block implementation is relevant.

Trying to get people to comprehend avision of an alternative future is alsoa communications challenge of a com-pletely different magnitude from orga-nizing them to fulfill a short-term plan.It's much like the difference between afootball quarterback attempting to de-scribe to his team the next two or threeplays versus his trying to explain to thema totally new approach to the game to beused in the second half of the season.

Whether delivered with many wordsor a few carefully chosen symbols, suchmessages are not necessarily accepted

changes in markets or technology isthat so many people in those compa-nies feel relatively powerless. They havelearned from experience that even ifthey correctly perceive important ex-ternal changes and then initiate appro-priate actions, they are vulnerable tosomeone higher up who does not likewhat they have done. Reprimands cantake many different forms: "That'sagainst policy," or "We can't afford it"or"Shut up and do as you're told."

Alignment helps overcome this prob-lem by empowering peopie in at leasttwo ways. First, when a clear senseof direction has been communicatedthroughout an organization, lower-levelemployees can initiate actions withoutthe same degree of vulnerability. As longas their behavior is consistent with thevision, superiors will have more difficultyreprimanding them. Second, becauseeveryone is aiming at the same target,the probability is less that one person'sinitiative will be stalled when it comesinto conflict with someone else's.

90 HARVARD BUSINESS REVIEW

What Leaders Really Do • BEST OF HBR

Motivating People VersusControlling and Problem Solvingsince change is the function of leader-ship, being able to generate highly en-ergized behavior is important for copingwith the inevitable barriers to change.Just as direction setting identifies an ap-propriate path for movement and just aseffective alignment gets people movingdown that path, successful motivationensures that they will have the energy toovercome obstacles.

According to the logic of manage-ment, control mechanisms compare sys-tem behavior with the plan and take ac-tion when a deviation is detected. In awell-managed factory, for example, thismeans the planning process establishessensible quality targets, the organizingprocess builds an organization that canachieve those targets, and a control pro-cess makes sure that quality lapses arespotted immediately, not in 30 or 60days, and corrected.

For some of the same reasons thatcontrol is so central to management,highly motivated or inspired behavior isalmost irrelevant. Managerial processesmust be as close as possible to fail-safeand risk free. That means they cannot bedependent on the unusual or hard toobtain. The whole purpose of systemsand structures is to help normal peoplewho behave in normal ways to completeroutine jobs successfully, day after day.It's not exciting or glamorous. But that'smanagement.

Leadership is different. Achievinggrand visions always requires a burst ofenergy. Motivation and inspiration en-ergize people, not by pushing them inthe right direction as control mecha-nisms do but by satisfying basic humanneeds for achievement, a sense of be-longing, recognition, self-esteem, a feel-ing of control over one's life, and theability to live up to one's ideals. Suchfeelings touch us deeply and elicit apowerful response.

Good leaders motivate people in avariety of ways. First, they always artic-

Motivation and inspiration energize people,

not by pushing them in the right direction but

by satisfying basic human needs.

ulate the organization's vision in a man-ner that stresses the values ofthe audi-ence they are addressing. This makesthe work important to those individu-als. Leaders also regularly involve peo-ple in deciding how to achieve the or-ganization's vision (or the part mostrelevant to a particular individual). Thisgives people a sense of control. Anotherimportant motivational technique is tosupport employee efforts to realize thevision by providing coaching, feedback,and role modeling, thereby helping peo-ple grow professionally and enhancingtheir self-esteem. Finally, good leadersrecognize and reward success, whichnot only gives people a sense of accom-plishment but also makes them feel likethey belong to an organization thatcares about them. When all this is done,the work itself becomes intrinsicallymotivating.

The more that change characterizesthe business environment, the morethat leaders must motivate people toprovide leadership as well. When thisworks, it tends to reproduce leadershipacross the entire organization, withpeople occupying multiple leadershiproles throughout the hierarchy. This ishighly valuable, because coping withchange in any complex business de-mands initiatives from a multitude ofpeople. Nothing less will work.

Of course, leadership from manysources does not necessarily converge.To the contrary, it can easily conflict. Formultiple leadership roles to work to-gether, people's actions must be care-fully coordinated by mechanisms thatdiffer from those coordinating tradi-tional management roles.

Strong networks of informal rela-tionships-the kind found in companieswith healthy cultures-help coordinate

leadership activities in much the sameway that formal structure coordinatesmanagerial activities. The key differenceis that informal networks can deal withthe greater demands for coordinationassociated with nonroutine activitiesand change. The multitude of commu-nication channels and the trust amongthe individuals connected by those chan-nels allow for an ongoing process of ac-commodation and adaptation. Whenconflicts arise among roles, those samerelationships help resolve the conflicts.Perhaps most important, this process ofdialogue and accommodation can pro-duce visions that are linked and com-patible instead of remote and competi-tive. All this requires a great deal morecommunication than is needed to coor-dinate managerial roles, but unlike for-mal structure, strong informal networkscan handle it.

Infomial relations of some sort existin all corporations. But too often thesenetworks are either very weak - somepeople are well connected but most arenot-or they are highly fragmented-astrong network exists inside the mar-keting group and inside R&D but notacross the two departments. Such net-works do not support multiple leader-ship initiatives well, in fact, extensiveinformal networks are so important thatif they do not exist, creating them has tobe the focus of activity early in a majorleadership initiative.

Creating a Culture of LeadershipDespite the increasing importance ofleadership to business success, the on-the-job experiences of most people actuallyseem to undermine the development ofthe attributes needed for leadership.Nevertheless, some companies haveconsistently demonstrated an ability to

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BEST OF HBR • What Leaders Really Do

develop people into outstanding leader-managers. Recruiting people with lead-ership potential is only the first step.Equally important is managing theircareer patterns. Individuals who areeffective in large leadership roles oftenshare a number of career experiences.

Perhaps the most typical and mostimportant is significant challenge earlyin a career. Leaders almost always havehad opportunities during their twentiesand thirties to actually try to lead, totake a risk, and to leam from both tri-imiphs and failures. Such leaming seemsessential in developing a wide range ofleadership skills and perspectives. Theseopportunities also teach people some-thing about both the difficulty of lead-ership and its potential for producingchange.

Later in their careers, somethingequally important happens that has todo with broadening. People who pro-vide effective leadership in importantjobs always have a chance, before theyget into those jobs, to grow beyond thenarrow base that characterizes mostmanagerial careers. This is usually theresult of lateral career moves or of earlypromotions to unusually broad job as-signments. Sometimes other vehicleshelp, like special task-force assignmentsor a lengthy general managementcourse. Whatever the case, the breadthof knowledge developed in this wayseems to be helpful in all aspects ofleadership. So does the network of rela-tionships that is often acquired both in-side and outside the company. Whenenough people get opportunities likethis, the relationships that are built alsohelp create the strong informal net-works needed to support multiple lead-ership initiatives.

Corporations that do a better-than-average job of developing leaders put anemphasis on creating challenging op-portunities for relatively young employ-ees, in many businesses, decentralizationis the key. By definition, it pushes re-sponsibility lower in an organization and

in the process creates more challengingjobs at lower levels. Johnson & Johnson,3M, Hewlett-Packard, General Electric,and many other well-known companieshave used that approach quite success-fully. Some of those same companies alsocreate as many small units as possible sothere are a lot of challenging lower-levelgeneral management jobs available.

Sometimes these businesses developadditional challenging opportunities bystressing growth through new products

Armed with a clear sense of who hasconsiderable leadership potential andwhat skills they need to develop, execu-tives in these companies then spend timeplanning for that development. Some-times that is done as part of a formalsuccession planning or high-potential de-velopment prtKess; often it is more in-formal. In either case, the key ingredientappears to be an intelligent assessmentof what feasible development opportu-nities fit each candidate's needs.

Well-led businesses tend to recognize and

reward people who successfully develop leaders.

or services. Over the years, 3M has hada policy that at least 25% of its revenueshould come from products introducedwithin the last five years. That encour-ages small new ventures, which in tumoffer hundreds of opportunities to testand stretch young people with leader-ship potential.

Such practices can, almost by them-selves, prepare people for small- andmedium-sized leadership jobs. But de-veloping people for important leadershippositions requires more work on the partof senior executives, often over a longperiod of time. That work begins with ef-forts to spot people with great leadershippotential early in their careers and toidentify what will be needed to stretchand develop them.

Again, there is nothing magic aboutthis process. The methods successfulcompanies use are surprisingly straight-forward. They go out of their way tomake young employees and people atlower levels in their organizations visi-ble to senior management. Senior man-agers then judge for themselves who haspotential and what the developmentneeds of those people are. Executivesalso discuss their tentative conclusionsamong themselves to draw more accu-rate judgments.

To encourage managers to participatein these activities, well-led businessestend to recognize and reward peoplewbo successfully develop leaders. This israrely done as part of a formal compen-sation or bonus formula, simply becauseit is so difficult to measure such achieve-ments with precisit)n. But it does becomea factor in decisions about promotion,especially to the most senior levels, andthat seems to make a big difference.When told that future promotions wil!depend to some degree on their ability tonurture leaders, even people who saythat leadership cannot be developedsomehow find ways to do it

Such strategies help create a corporateculture where people value strong lead-ership and strive to create it. Just as weneed more people to provide leadershipin the complex organizations that domi-nate our world ttxlay, we also need morepeople to develop the cultures that willcreate that leadership, [nstitutionalizinga leadership-centered culture is the ulti-mate act of leadership. ^

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96 HARVARD BUSINESS REVIEW