Leadership and Change

By Hughes, R.L., Ginnett, R.C., Curphy, G.J.

Edited by Paul Ducham


Followers’ level of satisfaction is an important ingredient in a leader’s ability to drive change. Followers who are relatively content are not apt to change; malcontents are much more likely to do something to change the situation. Although employee satisfaction is an important outcome of leadership, leaders who want to change the status quo may need to take action to decrease employee satisfaction levels. Follower’s emotions are the fuel for organizational change, and change often requires a considerable amount of fuel. The key for leadership practitioners is to increase dissatisfaction ( D ) to the point where followers are inclined to take action, but not so much that they decide to leave the organization. So what can leaders do to increase follower dissatisfaction levels? Probably the first step is to determine how satisfied followers are with the current situation. This information can be gleaned from employee satisfaction surveys, grievance records, customer complaints, or conversations with followers. To increase dissatisfaction, leaders can talk about potential competitive, technology, or legal threats or employee concerns about the status quo. They can also capitalize on or even create some type of financial or political crisis, compare benchmarks against other organizations, or substantially increase performance standards. All of these actions can potentially heighten followers’ emotional levels; however, leaders must ensure that these emotions are channeled toward the leader’s vision for the organization (see Highlight 14.3).

Constructive Dissatisfaction and Employee Engagement

As stated earlier, it may be difficult to drive organizational change if employees are happy with the status quo. Employees can have high levels of job satisfaction and low levels of job performance. The key ingredients in organizational change may be constructive dissatisfaction and employee engagement. Constructive dissatisfaction defines a state where followers are unhappy with their current situation and are willing to do something to change it. They are not so happy to be content with the status quo or so demoralized to think the situation is hopeless. Leaders implementing the rational approach to change want to create a state of constructive dissatisfaction in followers, where followers willingly suggest ideas and exert energy to change the status quo.
        Another factor leaders need to be aware of when driving organizational change is employee engagement. Engaged employees are those who

• Exert high levels of effort that go beyond expectations.
• Persist with difficult tasks.
• Help others.
• Voice recommendations for improvement.
• Readily adapt to change.

         A leader’s ability to drive change will depend to a large extent on the degree to which he or she manages a highly engaged workforce. Those who create teams of engaged employees are more likely to make organizational change happen; those who do not are likely to see their organizational change efforts fail. So what should leaders do to create engaged employees? Some of the key things leaders can do to engage followers is to have them do meaningful work, create work Culture where followers feel safe raising difficult issues with leaders, treat people fairly, and give them the training and resources needed to get work completed. Employee engagement is a huge buzzword in corporate America these days, but there is some uncertainty whether employee engagement (and the actions needed to create engaged employees) is really anything new.


There are four key components to the model ( M ) variable in the change formula, and these include environmental scanning, a vision, the setting of new goals to support the vision, and needed system changes. As discussed earlier, organizations are constantly bombarded with economic, technological, competitive, legal, and social challenges. Good leaders constantly scan the external environment to assess the seriousness of these threats. They are also adept at internal scanning; they understand where the organization is doing well and falling short. Thus keeping up to date taking time to listen to followers’ concerns are some techniques leaders use to conduct external and internal scans. This information in turn is used to formulate a vision for the change initiative. What would a new organization look like if it were to successfully counter the gravest external threats, take advantage of new market opportunities, and overcome organizational shortcomings? What would be the purpose of the new organization, and why would people want to work in it? A good vision statement should answer these questions. Fortunately a vision statement does not have to be a solo effort on the part of the leader. Often leaders will either solicit followers for ideas or work with a team of followers to craft a vision statement.  Both of these actions can help to increase followers’ commitment to the new vision.
       It is important to understand the difference between an organization’s vision and goals. Just as ancient mariners used the stars to navigate, so should a vision provide guidance for an organization’s actions. A vision helps an organization make choices about what it should and should not do, the kind of people it should hire and retain, the rules by which it should operate, and so on. But just as the stars were not the final destination for the mariners, a vision is not the final destination for an organization. An organization’s goals are the equivalent of the mariners’ final destination, and they should spell out specifically what the organization is trying to accomplish and when they will get done. Depending on the organization, these goals might concern market share, profitability, revenue or customer growth, quality, the implementation of new customer service or information technology systems, the number of patents awarded, school test scores, fund-raising targets, or the reduction of crime rates. Thus an organization’s goals can be externally or internally focused or both, depending on the results of the environmental scan and the vision of the organization. Highlight 14.4 provides an example of a vision statement and organizational goals for a waste-to-energy power company. (This company burns trash to create electricity.)
         After determining the organization’s goals, the leader will need to determine which systems need to change for the organization to fulfill its vision and accomplish its goals. In other words, how do the marketing, sales, manufacturing, quality, human resource, shipping, accounting, or customer service systems need to change if the organization is to succeed? And does the current organizational structure or culture support or interfere with the new vision? Leaders wanting their organizational change initiatives to succeed will need to take a systems thinking approach after setting organizational goals.  A systems thinking approach asks leaders to think about the organization as a set of interlocking systems, and explains how changes in one system can have intended and unintended consequences for other parts of the organization. For example, if a company wanted to grow market share and revenue, it might change the compensation system to motivate salespeople to go after new customers. However, this approach could also cause a number of problems in the manufacturing, quality, shipping, accounting, and customer service departments. Leaders who anticipate these problems make all of the necessary systems changes to increase the odds of organizational success. Leaders may need to set goals and put action plans in place for each of these system changes. These actions can be contrasted to siloed thinking, where leaders act to optimize their part of the organization at the expense of suboptimizing the organization’s overall effectiveness. For example, the vice president of sales could change the sales compensation plan if she believed her sole concern was annual revenues. This belief could be reinforced if her compensation was based primarily on hitting certain revenue targets. If she were a siloed thinker, she would also believe that profitability, quality, or customer service were not her concerns. However, this mode of thinking could ultimately lead to her downfall: quality and order fulfillment problems might cause customers to leave faster than new customers buy products.
         Figure 14.1 is a graphic depiction of a systems model for leadership practitioners. All the components of this model interact with and affect all the other components of the model. Therefore, leaders changing organizational vision or goals will need to think through the commensurate changes in the organization’s structure, culture, systems, and leader and follower capabilities. Similarly, changes in the information or hiring systems can affect the organization’s capabilities, culture, structure, or ability to meet its goals. One of the keys to successful organizational change is ensuring that all components in Figure 14.1 are in alignment. A common mistake for many leaders is to change the organization’s vision, structure, and systems and overlook the organization’s culture and leader and follower capabilities. This makes sense in that it is relatively easy to create a new vision statement, organizational chart, or compensation plan. Leaders either discount the importance of Organizational culture and capabilities, falsely believe they are easy to change, or believe they are a given because they are so difficult to change. It is possible to change the culture and capabilities of an organization, but it takes considerable time and focused effort. Unfortunately about 70 percent of change initiatives fail, and the underlying cause for many of these failures is the leader’s inability or unwillingness to address these culture and capabilities issues.

An Example of a Vision Statement and Organizational Goals

Vision Statement
To be the industry leader in waste-to-energy operating companies.

Selected Organizational Goals

• Increase profitability growth from 5 to 8.5 percent.
• Hold maintenance and repair spending to 2011 levels.
• Maintain 92 percent boiler availability rate across all plants.
• Reduce unscheduled boiler downtime by 29 percent.
• Reduce accounting costs by 12 percent by centralizing the accounting function.
• Achieve zero recordables and zero lost time safety incidents across all plants.
• Implement a metals recovery system across all plants in order to boost recycle revenues by 26 percent.
• Win five new waste-to energy plant operating contracts in 2011.

fugure 14.1


At this point in the change process, the leader may have taken certain steps to increase follower dissatisfaction. She may also have worked with followers to craft a new vision statement, set new team or organizational goals, and determined what organizational systems, capabilities, or structures need to change. In many ways, the D and M components of the change model are the easiest for leadership practitioners to alter. The process ( P ) component of the change model is where the change initiative becomes tangible and actionable because it consists of the development and execution of the change plan. Good change plans outline the sequence of events, key deliverables, timelines, responsible parties, metrics, and feedback mechanisms needed to achieve the new organizational goals. They may also include the steps needed to increase dissatisfaction and deal with anticipated resistance, an outline of training and resource needs, and a comprehensive communication plan to keep all relevant parties informed.
      Depending on the depth and breadth of change, change plans can be detailed and complicated. For example, the waste-to-energy company described earlier could no longer do what it had always done if it were to reach its goals outlined in Highlight 14.3. The company needed new behaviors, metrics, and feedback systems to achieve these goals. The company’s change plan was quite extensive and consisted of an overall plan for the company as well as plant-specific goals and change plans. Each of these plans outlined the action steps, responsible parties, metrics, and due dates; progress against the plans was regularly reviewed in monthly plant business and operational reviews. The goals and change plans were constantly adjusted in these meetings to take into account unforeseen barriers, sooner-than-expected progress, and so on.
        Of course the plan itself is only a road map for change. Change will occur only when the action steps outlined in the plan are actually carried out. This is another area where leadership practitioners can run into trouble. One of the reasons why CEOs fail is an inability to execute, and this is also one of the reasons why first-line supervisors through executives derail. Perhaps the best way to get followers committed to a change plan is to have them create it. This way followers become early adopters and know what, why, when, where, who, and how things are to be done. Nevertheless, many times it is impossible for all the followers affected by the change to be involved with plan creation. In these cases follower commitment can be increased if the new expectations for behavior and performance are explicit, the personal benefits of the change initiative are made clear, and followers already have a strong and trusting relationship with their leader. Even after taking all of these steps, leadership practitioners will still need to spend considerable time regularly reviewing progress and holding people accountable for their roles and responsibilities in the change plan. Followers face competing demands for time and effort, and a lack of follow-through will cause many followers to drop the change initiative off of their radar screens. Leaders should also anticipate shifts in followership types once the change plan is implemented. Self-starters may shift to become criticizers, brown-nosers to slackers, or slackers to criticizers. Leaders who address these shifts in types and inappropriate follower behaviors in a swift and consistent manner are more likely to succeed with their change initiatives.

Constructive Dissatisfaction and Employee Engagement

As stated earlier, it may be difficult to drive organizational change if employees are happy with the status quo. Employees can have high levels of job satisfaction and low levels of job performance. The key ingredients in organizational change may be constructive dissatisfaction and employee engagement. Constructive dissatisfaction defines a state where followers are unhappy with their current situation and are willing to do something to change it. They are not so happy to be content with the status quo or so demoralized to think the situation is hopeless. Leaders implementing the rational approach to change want to create a state of constructive dissatisfaction in followers, where followers willingly suggest ideas and exert energy to change the status quo.
         Another factor leaders need to be aware of when driving organizational change is employee engagement. Engaged employees are those who

• Exert high levels of effort that go beyond expectations.
• Persist with difficult tasks.
• Help others.
• Voice recommendations for improvement.
• Readily adapt to change.

               A leader’s ability to drive change will depend to a large extent on the degree to which he or she manages a highly engaged workforce. Those who create teams of engaged employees are more likely to make organizational change happen; those who do not are likely to see their organizational change efforts fail. So what should leaders do to create engaged employees? Some of the key things leaders can do to engage followers is to have them do meaningful work, create work Culture where followers feel safe raising difficult issues with leaders, treat people fairly, and give them the training and resources needed to get work completed. Employee engagement is a huge buzzword in corporate America these days, but there is some uncertainty whether employee engagement (and the actions needed to create engaged employees) is really anything new.


The situational, follower, and leader components of the rational approach to organizational change are shown in Figure 14.4. Although organizational vision, goals, and change plans are often a collaborative effort between the leader and followers, they are the primary responsibility of the leader. Leaders also need to think about the importance of critical mass for driving change. They may be more successful by initially focusing their change efforts on early adopters and those on the fence rather than on those followers who are the most adamant about maintaining the status quo. Once a critical mass is reached, the adopters can exert peer pressure on followers who are reluctant to change. This approach also maintains that the leader needs both good leadership and good management skills if a change initiative is to succeed over the long term. Leadership skills are important for determining a new vision for the organization, increasing dissatisfaction, coaching followers on how to do things differently, and overcoming resistance. Management skills are important when setting new goals and creating, implementing, and reviewing progress on change plans. Both sets of skills not only are important components in organizational change but also may play a key role in determining whether a new company will succeed or fail. Because of their strong leadership skills, entrepreneurs are often good at starting up new organizations. Many of these individuals can get people excited about their vision for the new company. However, if entrepreneurs fail to possess or appreciate the importance of management skills, they may not create the systems, policies, and procedures necessary to keep track of shifting consumer preferences, revenues, customer satisfaction, quality, and costs. As a result, these individuals may not have the information they need to make good operational and financial decisions, and their companies eventually file for bankruptcy. On the other hand, it is hard to see how planning and execution skills alone will result in the formation of a new company or drive organizational change. It is almost impossible to start up a new company—or for an organization to successfully change—if the person in charge does not have a compelling vision or fails to motivate others to do something different. Many of the other reasons why organizational change initiatives fail have their roots in underdeveloped leadership or management skills.
         Although both sets of skills are important, leadership practitioners should recognize that there is a natural tension between leadership and management skills. In many ways management skills help to maintain the status quo; they help to ensure consistency in behaviors and results. Leadership skills are often used to change the status quo; they help to change the purpose and processes by which an organization gets things done. Leaders who overuse or overemphasize either set of skills are likely to suboptimize team or organizational performance. Nonetheless, two leadership and management skills seem vitally important to driving change and are worth discussing in more detail. adaptive leadership involves behaviors associated with being able to successfully flex and adjust to changing situations. Change, challenge, and adversity seem to be part of most organizations today, and the most Effective Leaders are those who readily adapt their Leadership Style to changing situational demands. And because of the constant bombardment of change, learning agility also seems to play a vital role in leadership effectiveness. Learning agility is the capability and willingness to learn from experience and apply these lessons to new situations.  The most effective leaders are those with high levels of learning agility and adaptability—not only do they know how to build teams and get results through others in changing situations, but also they can flex and adjust their behavior as needed to adapt to situational demands. The first part of this chapter was designed to help leadership practitioners better understand when to use leadership and management skills in the change process, and education and experience can help leadership practitioners improve both sets of skills.
      Finally, it is worth noting that the rational approach gives leaders a systematic process for driving change and increasing understanding of why change initiatives succeed or fail in their respective organizations. Leadership practitioners can use the C = D X M X P > R model as a road map for creating a new vision and goals, changing the products and services their organizations provide, or changing the IT, financial, operations, maintenance, or compensation systems used to support organizational goals. Likewise, leadership practitioners can also use this model to diagnose where their change initiatives have fallen short—perhaps followers were reasonably satisfied with the status quo or did not buy into the new vision and goals, critical systems changes were not adequately identified, or change plans were incomplete or improperly implemented. Given the explanatory power of the model, the rational approach to change gives leaders a useful heuristic for driving organizational and community change.

Figure 14.4



Prior to the mid-1970s charismatic leadership was studied primarily by historians, political scientists, and sociologists. Of this early research, Max Weber arguably wrote the single most important work. Weber was a sociologist interested primarily in how authority and religious and economic forces affected Societies over time. Weber maintained that societies could be categorized into one of three types of authority systems: traditional, legal–rational, and charismatic.
     In the traditional authority system, the traditions or unwritten laws of the society dictate who has authority and how this authority can be used. The transfer of authority in such systems is based on traditions such as passing power to the first-born son of a king after the king dies. Historical examples would include the monarchies of England from the 1400s to 1600s or the dynasties of China from 3000 BC to the 1700s. Some modern examples of the traditional authority system include Saudi Arabia, Kuwait, Syria, North Korea, Brunei, and Libya. But these examples should not be limited to countries—many of the CEOs in privately held companies or publicly traded companies that are controlled by a majority shareholder are often the children or relatives of the previous CEO. Examples include Ford, Marriott, Anheuser-Busch, Cargill, Marriott Hotels, Amway, and Carlson Companies (owners of T.G.I. Friday’s restaurants and Radisson Hotels).
        In the legal–rational authority system a person possesses authority not because of tradition or birthright but because of the laws that govern the position occupied. For example, elected officials and most leaders in nonprofit or publicly traded companies are authorized to take certain actions because of the positions they occupy. The power is in the position itself rather than in the person who occupies the position. Thus Hillary Clinton can take certain actions not because of whom she is or is related to but because of her role as U.S. Secretary of State.

These two authority systems can be contrasted to the charismatic authority system, in which people derive authority because of their exemplary characteristics. Charismatic leaders are thought to possess superhuman qualities or powers of divine origin that set them apart from ordinary mortals. The locus of authority in this system rests with the individual possessing these unusual qualities; it is not derived from birthright or laws. According to Weber, charismatic leaders come from the margins of society and emerge as leaders in times of great social crisis. These leaders focus society both on the problems it faces and on the revolutionary solutions proposed by the leader. Thus charismatic authority systems are usually the result of a revolution against the traditional and legal–rational authority systems. Examples of these revolutions might be the overthrow of the Shah of Iran by the Ayatollah Khomeini, the ousting of the British in India by Mahatma Gandhi, the success of Martin Luther King Jr. in changing the civil rights laws in the United States, or the economic and social change movements led by Hugo Chavez in Venezuela. Unlike traditional or legal–rational authority systems, charismatic authority systems tend to be short-lived. Charismatic leaders must project an image of success in order for followers to believe they possess superhuman qualities; any failures will cause followers to question the divine qualities of the leader and in turn erode the leader’s authority.
               A number of historians, political scientists, and sociologists have commented on various aspects of Weber’s conceptualization of charismatic authority systems. Of all these comments, however, probably the biggest controversy surrounding Weber’s theory concerns the locus of charismatic leadership. Is charisma primarily the result of the situation or social context facing the leader, the leader’s extraordinary qualities, or the strong relationships between charismatic leaders and followers? A number of authors have argued that charismatic movements could not take place unless the society was in a crisis. Along these lines, Friedland, Gerth and Mills, and Kanter have argued that before a leader with extraordinary qualities would be perceived as charismatic, the social situation must be such that followers recognize the relevance of the leader’s qualities. Others have argued that charismatic leadership is primarily a function of the leader’s extraordinary qualities, not the situation. These qualities include having extraordinary powers of vision, the rhetorical skills to communicate this vision, a sense of mission, high self-confidence and intelligence, and setting high expectations for followers. Finally, several authors have argued that the litmus test for charismatic leadership does not depend on the leader’s qualities or the presence of a crisis, but rather on followers’ reactions to their leader. According to this argument, charisma is attributed only to those leaders who can develop particularly strong emotional attachments with followers.
             The debate surrounding charismatic leadership shifted dramatically with the publication of James MacGregor Burns’s Leadership. Burns was a prominent political scientist who had spent a career studying leadership in the national political arena. He believed that leadership could take one of two forms. Transactional leadership occurred when leaders and followers were in some type of exchange relationship to get needs met. The exchange could be economic, political, or psychological, and examples might include exchanging money for work, votes for political favors, loyalty for consideration, and so forth. Transactional leadership is common but tends to be transitory in that there may be no enduring purpose to hold parties together once a transaction is made. Burns also noted that while this type of leadership could be quite effective, it did not result in organizational or societal change and instead tended to perpetuate and legitimize the status quo.
               The second form of leadership is transformational leadership, which changes the status quo by appealing to followers’ values and their sense of higher purpose. Transformational leaders articulate the problems in the current system and have a compelling vision of what a new society or organization could be. This new vision of society is intimately linked to the values of both the leader and the followers; it represents an ideal that is congruent with their value systems. According to Burns, transformational leadership is ultimately a moral exercise in that it raises the standard of human conduct. This implies that the acid test for transformational leadership might be the answer to the question “Do the changes advocated by the leader advance or hinder` the development of the organization or society?” Transformational leaders are also adept at reframing issues; they point out how the problems or issues facing followers can be resolved if they fulfill the leader’s vision of the future. These leaders also teach followers how to become leaders in their own right and incite them to play active roles in the change movement.
             All transformational leaders are charismatic, but not all charismatic leaders are transformational. Transformational leaders are charismatic because they can articulate a compelling vision of the future and form strong emotional attachments with followers. However, this vision and these relationships are aligned with followers’ value systems and help them get their needs met. Charismatic leaders who are not transformational can convey a vision and form strong emotional bonds with followers, but they do so to get their own (that is, the leader’s) needs met. Both charismatic and transformational leaders strive for organizational or societal change; the difference is whether the changes are for the benefit of the leader or the followers. Finally, transformational leaders are always controversial. Charismatic leadership almost inherently raises conflicts over values or definitions of the social good. Controversy also arises because the people with the most to lose in any existing system will put up the most resistance to a transformational change initiative. The emotional levels of those resisting the transformational leadership movement are often just as great as those who embrace it, and this may be the underlying cause for the violent ends to Martin Luther King Jr., John F. Kennedy, Mahatma Gandhi, Joan of Arc, and Jesus Christ. Burns stated that transformational leadership always involves conflict and change, and transformational leaders must be willing to embrace conflict, focused to perpetuate their cause (see Profiles in Leadership 14.3).
                   Leadership researchers Gary Yukl, Jerry Hunt, and Jay Conger have all maintained that the publication of Leadership played a key role in renewing interest in the topic of leadership. As a result, research over the past 35 years has explored cross-cultural, gender, succession, leader, follower, situational, and performance issues in charismatic or transformational leadership. From these efforts we now know that charismatic or transformational leadership is both common and rare. It is common because it can occur in almost every social stratum across every culture. For example, a high school student leader in France, a military cadet leader at the U.S. Naval Academy, a Kenyan community leader, an Indonesian hospital leader, or a Russian business executive could all be perceived as charismatic or transformational leaders. But it is also rare because most people in positions of authority are not perceived to be charismatic or transformational leaders. We also know that females such as Sarah Palin, Carly Fiorina, or Oprah Winfrey tend to be perceived as more charismatic than their male counterparts and that transformational leadership results in higher group performance than transactional leadership. Although charismatic or transformational leadership often results in large-scale organizational change and higher organizational performance, there is little evidence that these changes remain permanent in organizational settings after the leader moves on. In addition, some researchers have found that charismatic or transformational leaders did not result in higher organizational performance, but they did earn higher paychecks for themselves. In other words, these leaders were good at garnering attention, hogging credit, and changing their respective organizations, but many of these changes did not result in higher organizational performance.
            As a result of this research, we also have three newer theories of charismatic or transformational leadership. Conger and Kanungo used a stage model to differentiate charismatic from noncharismatic leaders. Charismatic leaders begin by thoroughly assessing the current situation and pinpointing problems with the status quo. They then articulate a vision that represents a change from the status quo. This vision represents a challenge and is a motivating force for change for followers. The vision must be articulated in a way that increases dissatisfaction with the status quo and compels followers to take action. In the final stage, leaders build trust in their vision and goals by personal example, risk taking, and their total commitment to the vision. The theory developed by House and his colleagues describes how charismatic leaders achieve higher performance by changing followers’ self-concepts. Charismatic leaders are believed to motivate followers by changing their perceptions of work itself, offering an appealing vision of the future, developing a collective identity among followers, and increasing their confidence in getting the job done. Avolio and Bass’s theory of transformational and transactional leadership is essentially an extension of Burns’s theory. Unlike Burns, who viewed transactional and transformational leadership as the extremes of a single continuum, Avolio and Bass viewed these two concepts as independent leadership dimensions. Thus leaders can be transformational and transactional, transactional but not transformational, and so on. Transformational leaders are believed to achieve stronger results because they heighten followers’ awareness of goals and the means to achieve them, they convince followers to take action for the collective good of the group, and their vision of the future helps followers satisfy higher-order needs. Because Avolio and Bass created a questionnaire to assess a leader’s standing on transactional and transformational leadership, this theory is by far the most thoroughly researched and will be discussed in more detail later in this chapter.

Joel Klein


The comment that best summarized the situation as I moved into the chancellor’s role was when somebody told me that the Department of Education was there not to serve the kids, but to serve the employees.

Joel Klein, Chancellor, New York City Department of Education

Prior to becoming the chancellor of the Department of Education in New York City, Joel Klein was the head of the Antitrust Division in the Department of Justice during the Clinton administration and played the role of lead prosecutor during the Microsoft antitrust case. Klein received his BA from Columbia University and his law degree from Harvard. After graduating from Harvard, Klein worked as a clerk for U.S. Supreme Court Justice Lewis Powell and then went into private practice and specialized in appellate cases. Immediately prior to the chancellor position, he was the general counsel for Bertelsmann.
              Upon getting elected as the mayor of New York City, Michael Bloomberg determined that upgrading the public education system was his number one priority. The department was spending approximately $15 billion a year to educate over 1.1 million students, yet only 48 percent were graduating from high school. Because the department was spending nearly twice as much per pupil than other school districts but achieving much lower graduation rates, Bloomberg determined that giving the department more money would not improve results. Bloomberg needed someone who could change the way education was delivered by the department and asked Joel Klein to be the lead change agent for the department.
         Upon assuming the chancellor position, Klein noted that the Department of Education was subdivided into different school districts, with each district having its own school board, administration, teachers, and students. The school districts were run autonomously and had dramatically different educational goals and curriculums. However, internal politics, favoritism, poor district–community relationships, and a lack of results and accountability seemed to permeate all the districts. One of the first things Klein did was to eliminate the school districts and their boards and create one consolidated board for the Department of Education. The next thing Klein did was to create common reading, writing, and math educational standards and curriculum across all 1,400 schools in the department. Needless to say, these changes caused a considerable amount of conflict within the department and became grist for the New York City media. But as dramatic and unpopular as these changes were, they were nothing compared to what Klein did next.
           The next major change Klein introduced was to create charter schools. These schools were often located within an existing school, but students had to achieve set educational goals and adhere to strict behavioral standards. Teachers and administrators were freed from many of the rules and regulations governing education but had to achieve specific educational goals. Students, teachers, and administrators were held accountable to these goals and standards and would be dismissed from the charter school if they failed to achieve results. Due to the popularity of the program the department now has over 400 charter schools. This program was even more unpopular than those earlier changes, with much of the resistance coming from the 80,000 members of the United Federation of Teachers. The department had 3,000 teachers whom no one wanted, but because of seniority rules many young and motivated teachers were bumped to make room for older and unmotivated teachers. The charter school system eliminated the seniority system, and the United Federation of Teachers generated a lot of negative publicity to kill the charter school concept. Despite this negative publicity from the teachers’ union, the charter schools have continued to deliver superior results and the public remains firmly behind this approach to education.
           What would you do to improve the quality of primary and secondary education in your area? What steps would you need to take? Who would be the key stakeholders? How would you overcome Resistance to Change?

Bill Roberts


Although transformational leaders come from all walks of life, one common characteristic they share is their ability to drive change and get things done. One of the best examples of a transformational leader is Bill Roberts, the vice president of operations for Wheelabrator Technologies, Inc. (WTI). Wheelabrator Technologies runs a fleet of 22 waste-to-energy facilities—power plants that burn trash to create electricity and steam for residential and commercial customers. These plants are environmentally friendly in that only 10 percent of the trash they burn is returned to landfills; they have much lower air pollution emissions than coal-fired plants; and all the metals in the trash are recovered and recycled. As the vice president of operations, Roberts is responsible for the financial, operational, safety, and environmental performance of the fleet. When he took over operations three years ago, Roberts recognized that the fleet was not performing nearly as well as it could. Boiler availability (a measure of operating capacity) was down, safety performance was eroding, and the fleet’s financial performance had substantial room for improvement. At about the same time WTI embraced an aggressive growth strategy and was looking to expand both domestically and internationally. The fleet needed to perform at a much higher level to fund these business development efforts as well as provide the operating, safety, and environmental statistics needed to give WTI a competitive advantage when bidding for new business.
       Since taking over Roberts has driven a number of major changes across the fleet. An engaging and dynamic speaker, Roberts painted a compelling picture of the future of WTI and set clear expectations of performance for all his plant managers. He empowered his plant managers to find ways to improve boiler availability, safety, and financial performance and provided training to help them think more like business owners. By constantly reviewing results with the plant managers, Roberts kept challenging and encouraging his staff to find ways to continuously improve performance. He rewarded plant managers who improved plant performance and coached or removed those who could not meet his expectations. By getting plant managers to work together to solve mutual problems, Roberts also broke down the walls that had previously existed between his staff and got them to work together as a high-performing team.
          From an operational perspective, the 22 plants are running about 10 percent better than they were when he took over. The fleet now has an impeccable environmental and safety record, and the plant managers have a much stronger understanding of plant financials. Because of these efforts, WTI has achieved world-class operational, safety, and environmental performance and has been able to use these results to expand the business in the United States, the United Kingdom, and China.
     Given this description of Bill Roberts, do you think he is more of a charismatic or Level 5 leader? What other information would you need to make this assessment?

Osama bin Laden


Osama bin Laden is a member of the prestigious bin Laden family in Saudi Arabia and is the founder of al-Qaeda. Bin Laden was born in Riyadh, Saudi Arabia, and was brought up as a devout Sunni Muslim. He attended the Al-Thager Model School in Jeddah, “the school of the elite,” and was exposed to many teachings of the Muslim Brotherhood while growing up. He attended university after his secondary schooling, but it is uncertain what he majored in or whether he obtained a degree. At the age of 17 he married his first wife and reportedly has had up to four wives and fathered anywhere between 12 and 24 children. In person he is said to be soft-spoken, charming, respectful, and polite. He appears to live a life of discipline, simplicity, and self-sacrifice, preferring that his wealth be used to benefit al-Qaeda rather than improve his personal lifestyle.
        Bin Laden first engaged in militant activities in the late 1970s, when he moved to Pakistan to help the mujahedeen fight a guerilla war to oust the Soviet Union from Afghanistan. His family connections and wealth helped to fund many of the mujahedeen’s efforts over the next 10 years. Some of his money and arms may have come from the Central Intelligence Agency: the United States also wanted to get the Soviet Union out of Afghanistan.
     After Iraq invaded Kuwait in 1990, bin Laden offered to protect Saudi Arabia with 12,000 armed men, but his offer was rebuffed by the Saudi royal family. Shortly thereafter bin Laden publicly denounced the presence of coalition troops (“infidels”) on Saudi soil and wanted all U.S. bases on the Arab peninsula to be closed. He eventually left Saudi Arabia to take up residence in Sudan, where he established a new base for mujahedeen operations. The purpose of his African organization was to propagate Islamist philosophy and recruit new members to the cause. In 1996 bin Laden left Sudan and went to Afghanistan to set up a new base of operations, where he forged a close relationship with the leaders of the new Taliban government.
      Bin Laden issued fatwas in 1996 and 1998 that stated that Muslims should kill civilians and military personnel from the United States and allied countries until they withdraw support for Israel and withdraw military forces from Islamic countries. It is believed he was either directly involved with or funded the 1992 bombing of the Gold Mihor Hotel in Aden, Yemen; the massacre of German tourists in Luxor, Egypt, in 1997; the 1998 bombings of two United States embassies in Africa; and the World Trade Center and Pentagon bombings on 9/11/2001. He, al-Qaeda, and its splinter movements have been involved with the London subway bombing, the wars in Afghanistan and Iraq, and unrest in the Philippines, Thailand, Indonesia, and Somalia. Given his ability to evade capture and track record, it is likely the world will see more violence from these groups.
       It is clear that bin Laden has a following, and that following has grown into the tens of thousands over the past 20 years. These followers are very devoted; some are so committed that they volunteer to be suicide bombers. A much larger group may not play active roles in al-Qaeda but are clearly sympathetic to its cause. But as strong as these followers’ feelings are about bin Laden, others are just as intent to see him dead or behind bars.
      Is Osama bin Laden a charismatic leader or a transformational leader? Would your answer to this question change if you were sympathetic to the al- Qaeda cause?


Although there are some important differences in the theories offered by Conger and Kanungo, House, and Avolio and Bass, in reality they are far more similar than different. These researchers either do not differentiate charismatic from transformational leadership, or see charisma as a component of transformational leadership. Therefore, we will use these terms somewhat interchangeably in the next section, although we acknowledge the fundamental difference between these two types of leadership. A review of the common leader, follower, and situational factors from Burns and the three more recent theories can be found in Figure 14.5. Like the past debates surrounding charismatic leadership, modern researchers are divided on whether charismatic leadership is due to the leader’s superhuman qualities, a special relationship between leaders and followers, the situation, or some combination of these factors. Irrespective of the locus of charismatic leadership, the research provides overwhelming support for the notion that transformational leaders are effective at large-scale societal or organizational change.

fIGURE 14.5


Both transformational and charismatic leaders are inherently futureoriented. They involve helping a group move “from here to there.” Charismatic leaders perceive fundamental discrepancies between the way things are and the way things can (or should) be. They recognize the shortcomings of the present order and offer an imaginative vision to overcome them. A charismatic leader’s vision is not limited to grand social movements; leaders can develop a compelling vision for any organization and organizational level. This vision can have both a stimulating and a unifying effect on the efforts of followers, which can help drive greater organizational alignment and change and higher performance levels by followers (see Figure 14.6). Paradoxically, the magic of a leader’s vision is often that the more complicated the problem, the more people may be drawn to simplistic solutions.

fIGURE 14.6


In addition to having vision, charismatic leaders are gifted in sharing their
vision. As discussed earlier, charismatic and transformational leaders
have superb rhetorical skills that heighten followers’ emotional levels
and inspire them to embrace the vision. As it turns out, both the content of a transformational leader’s speeches and the way they are delivered are
vitally important. Charismatic leaders make extensive use of metaphors,
analogies, and stories rather than abstract and colorless rational
discourse to reframe issues and make their points. Often the delivery of
the speech is even more important than the content itself—poor delivery
can detract from compelling content. Adolf Hitler mastered his delivery
techniques so well that his speeches can have hypnotic power even to
people who do not understand German. Similarly, many people consider
Martin Luther King Jr.’s “I Have a Dream” speech one of the most moving
speeches they have ever heard. Note his use of different speech techniques
and his masterful evocation of patriotic and cultural themes in the speech
found at www.mlkonline.net/video-i-have-a-dream-speech.html


As demonstrated in Profiles in Leadership 14.2 and 14.3, transformational leaders build trust in their leadership and the attainability of their goals through an image of seemingly unshakable self-confidence, strength of moral conviction, personal example and self-sacrifice, and unconventional tactics or behavior. They are perceived to have unusual insight and ability and act in a manner consistent with their vision and values. Whereas transformational leaders build trust by showing commitment to followers’ needs over self-interest, some charismatic leaders are so concerned with their image that they are not beyond taking credit for others’ accomplishments or exaggerating their expertise

Nelson Mandela

South Africa was ruled by a white minority government for much of the past 200 years. Although blacks made up over 75 percent of the populace, whites owned most of the property, ran most of the businesses, and controlled virtually all the country’s resources. Moreover, blacks did not have the right to vote and often worked under horrible conditions for little or no wages. Seeing the frustration of his people, Nelson Mandela spent 50 years working to overturn white minority rule. He started by organizing the African National Congress, a nonviolent organization that protested white rule through work stoppages, strikes, and riots. Several whites were killed in the early riots, and in 1960 the police killed or injured over 250 blacks in Sharpeville. Unrest over the Sharpeville incident caused 95 percent of the black workforce to go on strike for two weeks, and the country declared a state of emergency. Mandela then orchestrated acts of sabotage to further pressure the South African government to change. The organization targeted installations and took special care to ensure that no lives were lost in the bombing campaign. Mandela was arrested in 1962 and spent the next 27 years in prison. While in prison he continued to promote civil unrest and majority rule, and his cause eventually gained international recognition. He was offered but turned down a conditional release from prison in 1985. After enormous international and internal pressure, South African President F. W. de Klerk “unbanned” the ANC and unconditionally released Nelson Mandela from prison. Nonetheless South Africa remained in turmoil, and in 1992 4 million workers went on strike to protest white rule. Because of this pressure, Mandela forced de Klerk to sign a document outlining multiparty elections. Mandela won the 1994 national election and was the first democratically elected leader of the country.
     Do you think Nelson Mandela is a charismatic leader? Why or why not?


One of the most important aspects of charismatic and transformational leadership is the personal nature of the leader’s power. These leaders share strong, personal bonds with followers, even when the leader occupies a formal organizational role. It is this personalized leadership style that seems to be responsible for the feelings of empowerment notable among followers of charismatic or transformational leaders. Charismatic leaders seem more adept at picking up social cues and tend to be emotionally expressive, especially through such nonverbal channels as their eye contact, posture, movement, gestures, tone of voice, and facial expressions. Transformational leaders also empower followers by giving them tasks that lead to heightened self-confidence and creating environments of heightened expectations and positive emotions


Charismatic leaders are able to stir followers’ feelings, and this heightened emotional level results in increased levels of effort and performa nce. Emotions are often the fuel driving large-scale initiatives for change, and charismatic leaders will often do all they can to maintain them, including getting followers to think about their dissatisfaction with the status quo or making impassioned appeals directly to followers. But charismatic leaders need to keep in mind that some people will become alienated with the vision and movement and can have emotions just as intense as those of the followers of the vision. This polarizing effect of charismatic leaders may be one reason why they tend to have violent deaths: those alienated by a charismatic leader are almost as likely to act on their emotions as followers within the movement. 


Followers of charismatic leaders are moved to expect more of themselves, and they work harder to achieve these higher goals. Charismatic leaders set high expectations while expressing confidence in their abilities and providing ongoing encouragement and support. Somewhat paradoxically, followers feel stronger and more powerful at the same time they willingly subordinate themselves to the charismatic leader. These feelings of empowerment, when combined with heightened emotional levels and a leader’s vision of the future, often result in increases in organizational, group, or team performance or significant social change.  (See Table 14.2 for typical reactions to change requests.)

TABLE 14.2 Followers’ Responses to Change

Malicious compliance: This occurs when followers either ignore or actively sabotage change requests.
Compliance: This takes place when followers do no more than abide by the policies and procedures surrounding change requests.
Cooperation: Followers willingly engage in those activities needed to make the change request become reality.
Commitment: Followers embrace change requests as their own and often go the extra mile to make sure work gets done. Charismatic and transformational leaders are adept at getting followers committed to their vision of the future.


Two other situational characteristics may help or hinder the emergence of a charismatic leader. One of these is outsourcing and organizational downsizing. Many people believe that downsizing destroys the implicit contract between employer and employee and leaves many employees disillusioned with corporate life. Because charismatic or transformational leadership is intensely relational in nature, destroying the implicit contract between leaders and followers greatly diminishes the odds of charismatic leadership emergence. But of all the situational variables affecting charismatic leadership, perhaps the most important and overlooked variable is time. Charismatic or transformational leadership does not happen overnight. It takes time for leaders to develop and articulate their vision, heighten followers’ emotional levels, build trusting relationships with followers, and direct and empower followers to fulfill the vision. A crisis may compress the amount of time needed for charismatic leadership to emerge, whereas relatively stable situations lengthen this period.


To date, over 350 studies have used the MLQ to investigate transformational and transactional leadership across a wide variety of situations. These results indicated that transformational leadership can be observed in all countries, institutions, and organizational levels, but it was more prevalent in public institutions and at lower organizational levels. In other words, there seemed to be more transformational leaders in the lower levels of the military or other public sector organizations than anywhere else. Second, there is overwhelming evidence that transformational leadership is a significantly better predictor of organizational effectiveness than transactional or laissez-faire leadership. Transformational leaders, whether they are U.S. presidents, CEOs, school administrators, or plant managers, seem to be more effective than transactional leaders at driving organizational change and getting results. Avolio and Bass also believed that transformational leadership augments performance above and beyond what is associated with transactional leadership. Third, as expected, laissez-faire leadership was negatively correlated with effectiveness.
      Given that the MLQ can reliably identify transformational leaders and that these leaders can drive higher levels of organizational change and effectiveness than their transactional counterparts, it seems reasonable to ask whether it is possible to train or select charismatic leaders. Fortunately researchers have looked at the effects of transformational leadership training on the performance of military, public sector, and private industry leaders in the United States, Canada, and Israel. Usually these training programs consisted of several one- to five-day training sessions in which participants learned about the theory of transformational and transactional leadership; received MLQ feedback on the extent to which they exhibit transformational, transactional, and laissez-faire leadership; and then went through a series of skill-building exercises and activities to improve their leadership effectiveness. This research provided strong evidence that it is possible for leaders to systematically develop their transformational and transactional leadership skills.
         An alternative to training leaders to be more transformational is to select leaders with the propensity to be transformational or charismatic in the first place. Several researchers have looked at the importance of childhood experiences, leadership traits, and even genetics in transformational leadership. Zacharatos, Barling, and Kelloway reported that adolescents who were rated by coaches and peers to be more transformational were also more likely to have parents who were transformational leaders.  There is also evidence that certain five factor model (FFM) leadership traits can be reliably used to identify transformational leaders. Some of the most compelling evidence comes from Nilsen, who looked at the relationships between FFM personality traits and 125 CEOs. As shown in Table 14.3, not only are the FFM personality dimensions strongly correlated with certain components of transformational leadership, but the pattern of high and low correlations seems to make sense. Given that certain leadership traits are related to transformational leadership, and that leadership traits have a genetic component, it is not surprising that some researchers also believe that some aspect of transformational leadership is heritable.
           Despite this evidence that it may be possible to select and train transformational leaders, the fact remains that charisma ultimately exists in the eye of the beholder. Thus there can be no guarantee that leaders who have the right stuff and are schooled in the appropriate techniques will be seen as charismatic by followers. As discussed earlier, follower and situational variables play a key role in determining whether leaders are perceived as transformational and drive organizational change. Certain leaders may get higher transformational leadership scores as a result of a training program; but do they actually heighten followers’ emotional levels, get followers to exert extra effort, and as a result achieve greater organizational change or performance after the program? Given what we know about individual differences and leadership skills training, it seems likely that a leader’s personality will also play a major role in determining whether he or she will benefit from such training.
      Finally, several other important comments about the theory of transformational and transactional leadership are worth noting. First, and perhaps most important, this theory has generated a considerable amount of interest among leadership researchers. This research has helped leadership practitioners better understand the leader, follower, and situational components of charismatic or transformational leadership, whether transformational leaders are born or made, and so forth. Nevertheless, this approach to leadership may be more a reflection of socially desirable Leadership Behavior than the full range of skills needed by leaders. For example, it seems likely that business leaders wanting to drive organizational change or performance need to have a good understanding of the industry, business operations, market trends, finance, strategy, and technical or functional knowledge; they also need to effectively cope with stress, negotiate contracts with vendors, demonstrate good planning skills, and develop and monitor key metrics. Yet none of these attributes and skills is directly measured by the MLQ. This leads us to another point, which is that a primary problem with this theory is that there is only one way to be an effective leader, and that is by demonstrating transformational leadership skills. The Contingency Theories of Leadership no longer matter, and situational or follower factors have little impact on leadership effectiveness. In all likelihood leaders probably need to do more than just exhibit transformational leadership skills if they wish to achieve greater organizational change and performance.

Table 14.3