2020 Volume 23 Issue 2

Strategic Principles in a Troubled World

Strategic Principles in a Troubled World

Finding Solutions from the Inside-Out

Troubled times abound. The global COVID-19 pandemic has created the greatest financial crisis since the Great Depression.[1] Residents of every country struggle to understand what their futures will hold at a time when old assumptions no longer seem to apply.[2] Even in Dubai, one of the wealthiest cities in the world, “a staggering 70 percent of businesses” expect to fail within the next six months due to the ravages of the global pandemic and its resulting economic impact according to a study conducted by the Dubai Chamber of Commerce.[3]

 

 

The cloud of uncertainty that boggles the minds of governmental and business leaders confirms that there are no “instant pudding” solutions to the elusive problems created by the COVID-19 pandemic.[4] Certainly, the coronavirus pandemic has changed the ground rules of the modern world—creating unprecedented problems with a worldwide impact that transcend today’s concerns about personal health. Coupled with events about social justice, or the lack thereof, and the downturn in the world economy, many people throughout the world wonder what the future will bring and whether new approaches need to be applied to address a multitude of health-related, social, and economic problems.

Despite the challenges of today’s unprecedented times, there are, nonetheless, strategic principles that merit thoughtful consideration in solving today’s unprecedented problems. The “inside-out” approach to solving problems developed by Stephen R. Covey offers four levels of analysis that contribute insights to address today’s various challenges and suggests six strategic principles for individuals willing to rethink old “command and control” models of leadership.[5]

Understanding the Levels of Analysis

Albert Einstein famously noted that present-day challenges cannot be resolved successfully when we apply paradigms that no longer apply.[6] The capacity to recognize new conditions and their significance at four separate levels of analysis determines whether leaders understand the problems that they face and the requirements for successful solutions. The diagram below identifies each of these four levels and suggests their interrelated nature.

Figure 1: Levels of Analysis

Stephen Covey, explained that solutions to virtually every organizational problem begin from “the inside-out.”[7] The intrapersonal level of self-awareness is vital as leaders identify the factors that influence a problem or issue. Each individual’s approach to a problem is based upon the complex combination of style characteristics, values, assumptions, and history that make up the lens through which that person sees the world.[8] However, virtually every individual possesses blind spots in their perceptions.[9] This inability to recognize one’s perceptual limitations and shortcomings serves as a significant barrier to understanding the nature of a problem and in communicating about that topic to others and in developing solutions that must be addressed.

The pressures of day-to-day events and the ingrained habit patterns of self-deception distort many people’s ability to accurately understand factors critical to resolving problems.[10] Until individuals acknowledge the fact that the “reality” that they perceive may not be universally understood by others, their ability to craft solutions can be impaired by their faulty assumptions and blurred vision. Although leaders must be accountable for the decisions that they make and the relationships that they establish, their capacity to lead is ultimately a function of their ability to understand their own biases, strengths, and limitations.

Because leadership is a profoundly personal face-to-face relationship,[11] the interpersonal level of analysis is fundamental to creating trust.[12] Trust is established when leaders treat others as valued “Yous” rather than as “Its.”[13] Authentic leadership involves honoring the moral obligation to care genuinely for others’ welfare[14]—an idea that seems to have fallen by the wayside by many leaders in many organizations.[15] According to trustworthiness experts Schoorman, Mayer, & Davis, leaders who are trustworthy create interpersonal relationships based upon open communication, demonstrate personal competence, exhibit by their actions a commitment to others’ welfare, and model unflagging integrity.[16]

Such leaders recognize the importance of “power with” rather than “power over” others[17] in order to unlock human potential and achieve optimal results. They care genuinely. They listen to others and demonstrate that others’ ideas, opinions, and priorities are heard, understood, and acknowledged. As ethical stewards, their interactions are based upon a desire to achieve outcomes that benefit all parties and seek long-term value creation.[18]

For leaders, the organizational level of analysis, is critical to problem-solving success. Effective leadership involves creating relationships that unite individuals and engage them as full owners and partners.[19] Unfortunately, many leaders view employees as commodities or interchangeable parts that can be easily replaced. Their relationship with team members is largely transactional and the organization owes no long-term commitment to developing employees or utilizing their capacity to make meaningful decisions or become full partners in improving the organization. Currently, organizations hire part-time employees that reinforce this “temporary” view of the employer-employee relationship—essentially demonstrating employers’ interest in short-term self-interest rather than a true partnership with those with whom they work.[20] Remarkably, according to Leonard Katz of Harvard and Alan Krueger of Princeton University, the tendency is for employers to create “gig” jobs—hiring part-time employees on an arms-length relationship, rather than making a full-time commitment to the people that they hire.[21]

The Gallup organization found that only 15 percent of employees worldwide are actively engaged at work—and that the role of leaders, managers, and supervisors accounts for 70 percent of the variance that determines whether employees are engaged and empowered.[22] Organizations that treat people as commodities rather than as valued assets undermine their ability to sustain employee loyalty, creativity, and the “extra mile” dedication—factors essential for creating a sustainable competitive advantage in a world where global competition threatens the survival of even the most well-respected firms.[23]

The societal level of analysis reflects the obligation of leaders to create a sustainable world. The importance of responsible leadership and the need for organizations to be accountable for their economic, legal, and ethical imprint on society has been a message conveyed to those who lead for decades[24]—but continues to be ignored by many elite corporations like General Electric and Goldman Sachs.[25] A growing body of evidence confirms that corporations and their leaders have been the root cause of many of the critical problems facing society in today’s troubled world.[26] Leaders and organizations owe a moral obligation to be part of the solution in solving these critical problems—and their ability to make that contribution is not only desperately needed but a means whereby they can improve their image and bottom line in the eyes of many customers.[27]

Effective leaders recognize the importance of all four of these levels of analysis. Although all four levels of analysis play important roles in developing solutions for complex problems,[28] it is the rare leader who understands the implications of each of these levels.[29] More importantly, the ability to apply that understanding eludes many of those leaders who—despite that insight at the cognitive level—nonetheless struggle to apply the principles required to create organizational cultures and interpersonal relationships that enable their organizations to thrive.[30]

Six Principles for Strategic Effectiveness

Although there are no magic solutions that can solve the gnawing problems facing today’s leaders and organizations, there are principles that serve as strategic guidelines that can improve their effectiveness. The six principles that follow address the four levels of analysis and enable leaders to involve others in accomplishing shared goals.

  1. Formally Define a Moral Compass.

A moral compass incorporates natural laws that guide a leader in defining his or her life decisions.[31] That compass includes values that make up a person’s assumptions about self, others, universal law, the past, current reality, and the future.[32] Guided by those core beliefs, the moral compass defines obligations due to others.[33] Conducting the formal process of identifying one’s beliefs, values, and assumptions enables leaders to increase their awareness of the specific defining elements of that compass. Although the moral compass is developed at the intrapersonal level, it impacts every relationship and profoundly affects organizational and social outcomes.

  1. Establish Personal Accountability.

Leadership is frequently defined as a set of obligations to assist others to become the best version of themselves[34] while achieving optimal outcomes for organizations.[35] Moral leaders hold themselves personally accountable and use specific performance measures to assess their effectiveness. An outcome-based approach to accomplishing priorities, the ongoing monitoring of progress, and partnering with others in the pursuit of shared objectives increase leader accountability.[36] Though accountability for results is internally motivated, it is a foundation element for relationships and accomplishing virtually every type of meaningful outcome.

  1. Recognize Dependence Upon Others.

More than eight decades ago, Chester Barnard explained at Harvard College that successful leadership required engaging others in the cooperative pursuit of shared goals.[37] The latest research by Gallup affirms the importance of engaging and empowering employees to achieve profitability.[38] Without the buy-in and collaboration of employees, organizations are unable to deal with the challenges of global competition.[39] Effective leaders recognize that their ability to inspire others in the pursuit of a shared vision is the key to cooperative success.

  1. Adopt a Servant Perspective.

Robert Greenleaf observed that effective leaders are first and foremost servants of others.[40] Servant Leaders view leadership as a sacred responsibility in the pursuit of worthy outcomes.[41] Such leaders feel a “calling” to serve, view their lives as centering around achieving noble purposes, and equate their callings with their very identities.[42] Mahatma Gandhi, the great Indian leader expressed this commitment in saying, “If we could change ourselves, the tendencies in the world would also change. As a man changes his own nature, so does the attitude of the world change towards him.”[43]

  1. Invest in Constant Improvement.

The pursuit of new knowledge and the ability to adapt and change are priorities for success in the 21st century. Leaders who invest in their own development and who are committed to constant improvement honor their obligations to others—and to themselves. Competence in all areas is demanded of individuals worthy of the leadership mantle.[44] Leadership skills extend far beyond technical competence and the ability to interpret the external world. Great leaders need to also polish their ability to establish close relationships with others as well—and in creating those relationships they are able to unite an organization in the pursuit of its goals.[45]

  1. Acknowledge their Own Humanity.

Enlightened leadership involves imperfect people who acknowledge their shortcomings but constantly strive to be better.[46] Despite their limitations, those same leaders demonstrate the capacity to love themselves—and acknowledge that others have qualities and skills that they often lack.[47] Though such leaders strive for excellence and set extremely high standards for themselves and others, they also recognize that success is achieved by learning from mistakes rather than being afraid to take risks.[48] It is by acknowledging and demonstrating their own humanity that such leaders create working relationships with others that encourage others’ hearts and empower others to fully invest in the goals of an organization.[49]

Conclusion

The application of each of the six principles requires self-knowledge and an understanding of one’s individual identity.[50] Only when leaders are clear about their values and the standards for evaluating goals and priorities can they apply these principles with the dedication required to earn the trust, commitment, and followership of others. In a world where challenges exist politically, economically, and competitively, leaders must begin to rethink old models and assumptions about dealing with employees because the evidence confirms that those old models simply are not working.[51] Wise leaders understand that they must begin within themselves before they can effectively lead others in the pursuit of shared goals.[52] Even when leaders apply these six principles, however, there are no guarantees[53] in a world frequently that is “volatile, uncertain, complex, and ambiguous.”[54] Leaders with integrity strive to serve their organizations and contribute to the betterment of society. Each of the principles described herein begin from within a leader and depend upon the leader’s willingness to serve others, build organizations, and create a healthier and more sustainable world. Along the way, leaders discover that they also refine their own character, develop their abilities, and become better versions of themselves.

References

 

[1] Jones, L., Palumbo, D. & Brown, D. (2020). “Coronavirus: A Visual Guide to the Economic Impact.” BBC News, June 30, 2020 and found online on September 7, 2020 at https://www.bbc.com/news/business-51706225.

[2] Politico Magazine. (2020). “Coronavirus Will Change the World Permanently. Here’s How.” Politico Magazine, March 19, 2020 and found online on September 7, 2020 at https://www.politico.com/news/magazine/2020/03/19/coronavirus-effect-economy-life-society-analysis-covid-135579.

[3] Turak, N. (2020). “70% of Dubai Companies Expect to Go Out of Business within Six Months, Survey Says” CNN, May 21, 2020 found online on September 7, 2020 at https://www.cnbc.com/2020/05/21/coronavirus-dubai-70percent-of-companies-expect-to-close-in-six-months.html.

[4] Deming, W. E. (2000). Out of the Crisis. Cambridge, MA: MIT Press.

[5] Covey, S. R., (2013). The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change. New York: Simon & Schuster.

[6] “Albert Einstein Quotes.” Credited by Goodreads found online on September 7, 2020 at https://www.goodreads.com/author/quotes/9810.Albert_Einstein,

[7] Covey, S. R. (1992). Principle-Centered Leadership. Salt Lake City, UT: Franklin-Covey.

[8] Caldwell, C. (2020). Communication, Meaning, and Identity: Moving Toward Discovery. Hauppage, New York: NOVA Publishing

[9] in Arbinger Institute. (2018). Leadership and Self-Deception: Getting Out of the Bos (3rd ed.). San Francisco, CA: Berrett-Koehler Publishers.

[10] The Arbinger Institute. (2015). The Anatomy of Peace: Resolving the Heart of Conflict. San Francisco, CA: Berrett-Koehler Publishers.

[11] Burns, J. M. (2010). Leadership. New York: Harper Perennial.

[12] Covey, S. R. (2004). The 8th Habit: From Effectiveness to Greatness. New York: Free Press.

[13] Buber, M. (2000). I and Thou. New York: Scribner.

[14] George, B. (2004). Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value. San Francisco, CA: Jossey-Bass.

[15] Anderson, V., Caldwell, C., & Barfuss, B. (2019). “Love: The Heart of Leadership.” Graziadio Business Review, Vol. 22, Iss. 2.

[16] Schoorman, F. D., Mayer, R. C. & Davis, J. D. (2007). “An Integrative Model of Organizational Trust: Past, Present, and Future.” Academy of Management Review, Vol. 32, No. 2, pp. 344-354.

[17] Follett, M. P. (2013). Dynamic Administration: The Collected Papers of Mary Parker Follett. Eastford, CT: Martino Fine Books.

[18] Hernandez, M. (2012). “Toward an Understanding of the Psychology of Stewardship.: Academy of Management Review, Vol. 37, No. 2., pp. 172-193.

[19] Kouzes, J. M. & Posner, B. Z. (2017). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations (7th ed.). San Francisco, CA: Jossey-Bass.

[20] Block, P. (2013), Stewardship: Choosing Service Over Self-Interest. San Francisco, CA: Jossey-Bass.

[21] Kopf, D. (2016). “Almost all the Jobs Created Since 2005 are Temporary.” QUARTZ, December 5, 2016 and found online on September 7, 2020 at https://qz.com/851066/almost-all-the-10-million-jobs-created-since-2005-are-temporary/.

[22] Clifton, J., & Harter, J. (2019). It’s the Manager. Omaha, NE: Gallup Press.

[23] Caldwell, C. & Anderson, V. (2017). Competitive Advantage: Strategies, Management, and Performance. Hauppage, NY: NOVA Publishing.

[24] Hosmer, L. T. (2010). The Ethics of Management (6th ed.). Boston, MA: McGraw Hill/Irwin.

[25] Caldwell, C. & Anderson, V. (2020). Leadership – Touching Lives. Hauppage, N: NOVA Publishing.

[26] Friedman, T. L. (2009). Hot, Flat, and Crowded: Why We Need a Green Revolution – And How It Can Renew America, Release 2.0. New York: Picador Press.

[28]Thornley, M., Patel, M. & Caldwell, C. (2019). “Negotiation Success in a VUCA World.” International Journal of Research in Commerce and Management Studies, Vol. 1, No. 2, pp. 38-53.

[29] Covey, S. R., (1992 & 2004), op. cit.

[30] Arbinger Institute. (2015). The Anatomy of Peace: Resolving the Heart of Conflict. San Francisco, CA: Berrett-Koehler Publishers.

[31] Nakken, C. (2011). Finding Your Moral Compass: Transformative Principles to Guide You in Recovery and In Life. Center City, MN: Hazelden Publishing.

[32] Caldwell, C., and Hayes, L. (2007). “Leadership, Trustworthiness, and the Mediating Lens.” Journal of Management Development. Vol. 26, Iss. 3, pp. 261-278

[33] Ibid.

[34] Covey, S. R. (2004), op. cit., p. 98.

[35] Pava, M. (2003). Leading with Meaning: Using Covenantal Leadership to Build a Better Organization. New York: St. Martin’s Press. 4

[36] Worrall, D. (2013). Accountability Leadership: How Great Leaders Build a High Performance Culture of Accountability and Responsibility. Carlton, NSW Australia: Worrall and Associates.

[37] Barnard, C. I. (1938). The Functions of the Executive. Cambridge, MA: Harvard College.

[38] Clifton, J. & Harter, J. (2019), op. cit.

[39] Beer, M. (2009). High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. San Francisco, CA: Jossey-Bass.

[40] Greenleaf, R. K. (1998). The Power of Servant Leadership. San Francisco, CA: Berrett-Koehler Publishers.

[41] DePree, M. (2004). Leadership is an Art. New York: Crown Publishing.

[42] Conger, J. A. & Kanungo, R. N. (1998). Charismatic Leadership in Organizations. Thousand Oaks, CA: SAGE Publications.

[43] Ranseth, J. (2015). “Gandhi Didn’t Ever Say, “Be the Change You Wish to See in the World” Here’s the Real Quote…” Joseph Ranseth, Inc. August 27, 2015 and found online on August 7, 2020 at https://josephranseth.com/gandhi-didnt-say-be-the-change-you-want-to-see-in-the-world/.

[44] Kouzes, J. M., & Posner, B. Z. (2011). Credibility: How Leaders Gain and Lose It, Why People Demand It. San Francisco, CA: Jossey-Bass.

[45] Kouzes, J. M. & Posner, B. Z. (2017), op. cit.

[46] Anderson, V. and Caldwell, C. (Eds.). (2018). Humility as Enlightened Leadership. Hauppage, New York: NOVA Publishing.

[47] Ibid.

[48] Collins, J. & Hansen, M. T. (2011). Great by Choice: Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them All. New York: Harper Business.

[49] Boyatzis, R. E. & Johnston, F. (2008). Becoming a Resonant Leader: Develop Your Emotional Intelligence, Renew Your Relationships, Sustain Your Effectiveness. Boston, MA: Harvard Business School Publishing.

[50] Caldwell, C. (2020), op cit.

[51][51] Clifton, J. & Harter, J. (2019), op. cit.

[52] Anderson, V. & Caldwell, C. (2018), op. cit.

[53] Quinn, R. E. (1996). Deep Change: Discovering the Leader Within. San Francisco, CA: Jossey-Bass.

[54] Bennett, N. & Lemoine, G. J. (2014). “What VUCA Really Means for You.” Harvard Business Review, Vol. 92, Iss. 1/2, p. 27.

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Author of the article
Cam Caldwell, PhD
Cam Caldwell, PhD

Cam Caldwell, is currently an Associate Professor at the American University in the Emirates. He obtained his PhD degree from Washington State University in 2004 where he was a Thomas S. Foley graduate fellow. He has co-authored over 100 publications about leadership, trust, and ethics and his book about moral leadership was published in 2012 by Business Expert Press. He has published 17 books.

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