Then again, maybe he nailed it. Maybe the real takeaway from his book is the leadership theory we all know and love really doesn’t apply as much to the C-suite. Let me explain. Consider the idea of three levels of employees requiring three types of leadership for the sake of simplicity. You could view these levels based on a generalized motivational point of view:
- Hourly employee level where motivation is to optimize pay per hour. Although loyalty is a huge factor, so is the pay rate. Finding the right balance is critical and the quality of the management is critical to employee satisfaction. Hourly employees may sacrifice a level of pay to remain in a good work environment. To some degree, working for a meaningful purpose is a factor as well.
- Middle management level where the pay rate is generally fixed and the hours worked can vary greatly. The balancing act at this level is between job satisfaction and engagement driven by fairness in pay and work/life balance. To a great degree, working for a meaningful purpose matters for retention.
- Upper management level (also called the C-suite and defined by me as VP and above) where the compensation is determined by the VP’s directly reporting groups. People in upper management can move further up the chain of command if they perform well over a long period of time. To continually do well, those at this level must have significant influence (power) and few competitors.
In my view, the motivations of the Hourly and Middle management levels are similar to each other. They are concerned with the day to day success of operations driven by their individual efforts in general. What is important is making an income that is on par with others in a similar position, being developed for job progression, and finding meaning (purpose) in what they do.
In contrast, the Upper management level is motivated by how well the organization performs, particularly on Wall Street. Because of the competitiveness at this level, moving up (to company President or CEO) means doing all you can to look good and using all means at your disposal to do so. Politics and keen maneuvering is all important at this level.
Therefore, due to the motivational differences in the levels described above, the application of good leadership principles as described in the academic literature is not same. The “Leadership Industry” as described by Pfeffer really doesn’t apply so much to the Upper management level as it does to the other levels. In addition, the role model approach used often to describe super-CEO’s (CEO-worship) may not be useful either – some the CEO stories may be embellished as noted by Jeffery Pfeffer in a separate article.
Here's the Point
In the end, I think Jeffery Pfeffer was right to say the “Leadership Industry” has it wrong IF you consider the Upper management level only. Leadership theory still applies to the rest of the workforce – although the Upper management level should pay attention. That said, until their motivation changes, they won’t.
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