Heroes of Leadership (BetaCodex14)

1. Makeitreal! HEROES OF LEADERSHIP Themenandwomenwhoadvanced organizationalthinkingintheoryandpractice 14 BetaCodexNetworkAssociates NielsPflaeging BetaCodexNetworkWhitePaperNo.14-February2013

2. Whydotheseheroes matterfor leadershiptoday?

3. Mostbooks,articlesandconceptsonleadershipareridiculous. Mainly,that´sbecausetheyfailtoconsiderhistory,availablescience, andthesystemicnatureofworkandorganizations. Thispaperapproachesleadershipbylookingatitthroughthelensof history,andbypresentingmorethanthirtynotablemenandwomen whoenrichedandshapedthewaywe (should) perceiveleadership today. Wewillstartourjourneyatthetimewhenlarge-scalecorporations andtheprofessionofmanagementstartedtogainweight,atthe heightoftheindustrialage.Itstretchestosomeoftheleadership “heroes”ofthisday.Wehaveselectedawiderangeofnotablesof thefield-somefamous,somelessso.Manythinkersand practitionershavebeenleftout–forpractical,forobviousorless obviousreasons.Let´sjustsaythatthenotablesweselectedwere chosenaftercarefulandrigorousconsideration. Thechoicesmademayhavebeensubjective.

4. “Acomplete mentalrevolution onthepartof theworkingman, aswellason management´s side,isrequired“ FrederickW.Taylor. TheFatherofManagement

5. FrederickW.Tayloris,atthesametime,heroandanti- herointhestoryofleadership.Heisconsidered,by some,themostinfluentialfigureinhumanhistory.Maybe rightlyso.ManagementbeginswithTaylor-hewasthe onewhodefineditscorecharacteristicandwhothus consolidatedthethennascentcasteofmanagementinto aprofessionthatwasheretostay. Theguidingprincipleofhierarchicallydividingthe thinkingfromthedoing,andthenfindingtheoptimalway tofulfilleachtask,outlinedinhisseminalbookThe Principles of Scientific Management,co-promoted previouslyunknownleapsinindustrialefficiencyand productivity.Thisdivisionbecamethedefiningprinciple ofmanagementper sé,shapingorganizations,business education,workmethodsandpracticeseverywhere,until thisveryday.Taylor´sapproachbecamecorecontentat HarvardBusinessSchool.Hisquestfortheone best way profoundlyimpactedlife-styleinthe20thcentury. Taylorsawrestrictionofindustrialoutputasa consequenceofpoormethod,notworkerinferiority;he thoughtthatlaborstrifewasnotinevitable,andhespoke eloquentlyandpassionatelyforlabor-management cooperation–anidealthathistechniquescouldnot support.Later-on,consultants,technocraticengineers andmanagersalikemasteredTaylor´smethod,and forgottheintent.

6. “Tofreethe energiesofthe humanspirit isthehighpotentiality ofallhumanassociation” MaryParkerFollett. TheLeadershipSage

7. MaryParkerFollettwasapioneerinthefieldofhuman relationsanddemocraticorganization.PeterDrucker calledherthe"prophetofmanagement”-meaning leadership,ofcourse.Hercontributiontothe developmentofthefieldwasinstarkcontrasttothe scientificmanagementtheoryoftheearly1900’s:Unlike efficiencyengineerssuchasTaylor,andlaterbehaviorists suchasEltonMayowhowould“humanize”the command-and-controlmodel,shearguedforahuman relations approach thatwasdecadesaheadofitstime. Follettisincreasinglyrecognizedastheoriginatorofideas thataretodaycommonlyacceptedascuttingedgein organizationaltheory.Theseincludetheideaofseeking win-winsolutions,strengthinhumandiversity,and situationalleadership.Shestressedtheinteractionsof managersandworkers,presagingmodernsystems approaches.Shewasalsoasuccessfulmanagement consultant. Follettwasconcernedaboutthemisuseoftheterm leadershipthathadalreadybecomecommoninhertime. Inherdefinition,aleaderwassomeonewhoseesthe wholeratherthantheparticular:"The best leader knows how to make his followers actually feel power themselves, not merely acknowledge his power.” Shewasoneofthe firsttointegratetheideaoforganizationalconflictinto leadershiptheory.

8. “Youcannot understand asystem untilyoutry tochangeit” KurtLewin. ThePracticalTheorist

9. KurtLewinpioneeredthefieldofsocial psychology.Hisenormouslyinfluential bodyofworkincludesthecreationorco- creationofconceptssuchasgroup dynamics, action research, experiential learning, andtheunderstandingofthe toxiceffectsofbothautocratic and laissez- faire leadership styles. HisHarwood experimentsarethefirstrecorded attemptsatparticipativesystemschange throughdirectparticipation. Lewinsensedthatnottoolsmatterin organizations,butthatinvolvingall stakeholdersdoes.Thecoreprincipleof participation:wearemorelikelytocarry outdecisionswehavehelpedmake.This notionwouldevolveintothetheoryof participative management. Lewinthus addedanewvaluetoorganizational leadershipanddevelopment:democracy. TheconsistentthemeinallKurtLewin’s workwashisconcernfortheintegrationof theoryandpractice.Thiswassymbolized inhisbestknownquotation:“There is nothing so practical as a good theory”. It’salessonwestillneedtointernalize.

10. “Wecannot changeanything untilweacceptit. Condemnation doesnotliberate, itoppresses” “sddss” CarlGustavJung. C.G.Jung. ThePeopleDecypherer TheInventorofDevelopment

11. CarlGustavJungwasapioneerof analyticalpsychology,buthecanalsobe consideredthefounderofwhattodaywe callpositivepsychology–theideaof “developmentalpsychologyofthe healthy”.Hewasalife-longadvocatefor self-awarenessandreflectionasameans tohumanprogress. Thecentralconceptofhumandevelop- ment,accordingtoJung,isindividuation- thepsychologicalprocessofintegrating theopposites,includingtheconscious withtheunconscious,whilestillmain- tainingtheirrelativeautonomy.Anotion inseparablefromcontemporaryconcepts oftheindividual,aswellasofmodern leadership. Jungproposedanddevelopedconcepts suchasthecollectiveunconscious, archetypes,extraversionandintroversion, thecomplex,andsynchronicity.Jung's theoryofpsychologicaltypes,or preferencetheory,hasfoundespecially wide-spreadapplicationinorganizations.

12. “Effectiveness oforganizations couldbe doubledif managers discoveredhow totapintotheunrealized potentialpresentin theirworkforces” DouglasMcGregor. TheMissionaryofHumanism

13. DouglasMcGregorwasaconsultant,aprofessor andforsixyearspresidentofAntiochCollege. TogetherwithcontemporariessuchasAbraham MaslowandFrederickHerzberg,hewasatthe forefrontofmotivationalresearchandtheory developmentinthe1950sand1960s. McGregor,betterthananybodyelse,understood theinterdependencebetweenthebeliefsabout humannaturethatweholdinourhearts,andthe organizationalsystemsthatweendupcreating. Externalcontrolsdemotivate,hefigured,inducing thebehaviortheypredict.McGregordescribedthe twooppositeapproachestoleadershipand organizationaldesign,andtheTheory X and Theory Yconceptsofhumannaturethatunderpin them,inhisbookThe Human Side of the Enterprise.Itbecameoneofthemostinfluential businessbooksofthe20thcentury. McGregorwasdecadesaheadofhistime,which explainsthemixedreceptionsofhisworksincethe 60s.Hewentasfarassuggestinghowtoabolish thethenyoungHRfunction,andstaffdepartments overall.“It is probable that one day we shall begin to draw organization charts as a series of linked groups rather than as a hierarchical structure of individual reporting relationships”,hemused.

14. “External supervision maycorrecterrors. Butonlyinternal supervisioncan preventtheiroccurrence” EricTrist. TheGroupWhisperer

15. EricTristwasapsychologist,researcher,teacher,and consultantandaleadingfigureinthefieldof Organizational Development.Hewasco-founderofthe Quality of Work Life movementandoftheinfluential Tavistock Institute for Social Research inLondonthat pioneeredso-calledT-groups,studyingself-organization andgroupdynamicsduringthe1950sand60s. Tristcoinedthephrasesociotechnical system to underscorethattheinteractionofpeople (social) withtools andtechniques (technical) resultsfromchoice,not chance.Togetherwithhisfrequentcollaborator,Fred Emery,hethenenlargedthisconcept,creatingthe theoriesnecessarytocontemporaryworkredesign.Trist alsoorganizedearlyfieldstudiesthatledtonewwork designs,andinspiredmajorchangeeffortsincitiesand communities. In1949,TristandhiscolleaguesdiscoveredaBritishcoal minenearYorkshirethatdemonstratedhowallthefeatures ofhighlyautonomous,self-organizingandresponsible teamswouldcometogetherinanewworkplacereality. Thecaseprovedthatanewmatchbetweencustomer needs,producersandtheirtechnologycouldbeachieved. Itwasaneconomicandasocialbreakthrough. Sociotechnicaldesignputthefragmentsofdumbed-down, taylorizedjobsateverylevelbacktogether,bytreatingthe worksystem,notdiscretetasks,astheunitofanalysis.

16. Y^ “Wegettogether onthebasisof oursimilarities; wegrowonthe basisofour differences” VirginiaSatir. TheRelationshipDecipherer

17. VirginiaSatirissometimesreferredtoas theMotherofFamilyTherapy,butindeed pioneeredsystemicapproachesto psychologyandtherapy:shetookcontext intoaccount,insteadoffocusingon tryingtorepairtheindividual.Sheis probablybestknownforidealizinga widelyrecognizedpsychologicalchange processmodel,whichshedeveloped throughclinicalstudies. Thismodelisabouthowindividuals experiencechange:whilecopingwith unexpectedorsignificantchange,we predictablymovethroughthestagesof LateStatusQuo,Resistance,Chaos, Integration,andNewStatusQuo.These areaccompaniedbysetsofemotions, behaviorsandperformancepatterns. Satir´suniquecontributionliesinher positive,consistentnotionofhuman nature,andherinsightthatweneedto adaptandadjusttoothers,inorderto improverelationships.Herworkbecame asubstantialinfluencetovarious movementsinpsychology,suchasNLP.

18. “90%ofwhat wecallmanagement consistsofmaking itdifficultfor peopletoget theirworkdone” PeterDrucker. TheManagementConsolidator

19. PeterDruckerhadahighlyproductive, enduringandinfluentialcareerspanningmore thansixdecades,asamanagementwriter, consultant,researcherandprofessor–starting withthepublicationofhisfirstbookThe End of Economic Man,in1939,andstretchingtohis deathin2005. Austrian-bornDruckerwasagenuine intellectualwhodeliveredsomegreatwriting andmanyaccuratepredictions.Amongthe conceptsheintroducedweretheideasof empowermentandtheknowledge worker. Unfortunately,hisideathatwouldbecomemost widelyadoptedinpracticewasalsohismost destructiveone:Management by Objectives. Druckerwastheleadershipthinkerwho “invented”theimportanceofmanagersby holdingthemupasculturalandeconomic heroes,duringthe1950sand60s.With unfavorableconsequences.Inthe1980s,he beganfallingoutoflovewiththemanager caste,whenthetrendtowardsexecutivegreed becameapparent.Druckerwasavocalcriticof currentbusinesseducation:"The purpose of professional schools is to educate competent mediocrities”,hesaid.

20. “94%ofthe problemsin businessare system-driven andonly6%are people-driven” W.EdwardsDeming. TheAnti-Taylor

21. W.EdwardsDemingwasthefirsttoapplyrigorous systemsthinking,andindeedsystemstheory,to organizations.Hedidsostartingin1950inJapan, wherehisworkgainedwide-spreadattention,and profoundlyimpactedmanyJapanesefirms,including Toyota.Later,thisculminatedinthe“Japanesequality miracle”. Demingcondemnedmanagementbyobjectives, incentivesystems,meritranking,appraisal,and command-and-control:"Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment.” Acharismatic andhumorousfigure,heonlybecamewell-knownin theWestwhenin1980hewasfeaturedinanNBCTV documentarytitledIf Japan can... Why can't we? Hisworkbecamehugelyinfluentialtotheinternational QualityManagementmovementofthe80sand90s, butthedecidedlysystemicnatureofhisthinking becameside-trappedhere.His1986bookOut of the Crisis consolidatedDemingsthinking.Hecontinued teachingandconsultingforindustrythroughoutthe worlduntilhisdeathattheageof93,in1993.Deming remainsoneofthegreatestandwide-rangingthinkers ofleadershiphistory.

22. “Socialsystems consistentirely ofcommunication” NiklasLuhmann. TheTheoristofEverything

23. NiklasLuhmannwasaleadingcomplexity theorist.Asocialscientistwhotaughtatthe UniversityofBielefeld,Germany,heinsistedthat approachingscienceinter-disciplinarilywasthe onlywaytomoveforward,andclaimingthathis approachtosystemstheorywasevolvingintono lessthanthe“science of everything”, orwhatis sometimescalledgrand theory. Toachievethis,itwasnecessarytodevelop powerfuldistinctionsandprofoundsemantic meanings-whichmakehisworkdifficulttoread andhardtotranslate.Hedeliberatelykepthis proseenigmatictopreventitfrombeing understood"too quickly",whichwouldonly producesimplisticmisunderstandings.Luhmann's systemstheoryisbeingappliedorusedworldwide bysociologistsandotherscholars.Hisorganization sociology provedhighlyusefulforcontemporary organizationalresearchersandconsultants. Luhmannwrote70booksandnearly400scholarly articlespublishedonavarietyofsubjects, includinglaw,economy,politics,art,religion, ecology,massmedia,andlove.Trappedinapre- wiki-age,Luhmanncollectedandsystematizedhis researchandwisdominhisfabled,highlyindexed “Zettelkästen”,alabyrinthofpapercardboxes.

24. “Yourarely improvean organization asawholeby improvingthe performanceof oneofitsparts” .RussellAckoff. TheDonofComplexity

25. RussellAckoffwasanAmericanorganizationaltheorist, consultant,andprofessor-notedforcombiningtheoryand practice,escapingdisciplinarybounds,anddrivingstudents andpractitionersaliketowardindependentthoughtandaction. Ackoffearly-onunderstoodtheconsequencesoftheonsetof theSystems Age thathadstartedinthe1940s:TheMachine Age,bequeathedbytheindustrialrevolution,hadbeencarried bytwoconcepts–reductionism (everythingcanintheendbe decomposedintoindivisibleparts) andmechanism.Here, everythingwasexplainedbyusingonlyonesimplerelationship: cause-effect.AccordingtoAckoff,however,“managers are not confronted with problems that are independent of each other; but with dynamic situations that consist of complex systems of changing problems that interact with each other.” Ackoffcalled suchsituationsmesses.“Managers do not solve problems, they manage messes.” Ackoffwouldpatientlyandhumorouslyexplainthenecessary paradigmchange.Duringthelastyearsofhislife,he developedwhathecalledf-Laws, aseriesofover100distilled observationsorsubversiveepigramsofbadleadershipandthe misplacedwisdomthatsurroundsmanagementin organizations:“f-Laws are truths about organizations that we might wish to deny or ignore – simple and more reliable guides to managers' everyday behavior than the complex truths proposed by scientists, economists, sociologists, politicians and philosophers.”

26. “Infact,people themselves areresponsible formakingthe statusquoso resistanttochange. Wearetrappedby ourownbehavior” ChrisArgyris, TheLearningAnalyst

27. ChrisArgyrisisawriter,researcherandacademic teacher,commonlyknownforhisseminalworkinthe areaofLearningOrganizations.Headvocatedthe Action Scienceresearchapproach,aswellasthe notionsofSingle and Double Loop Learning,aconcept thatheappliedtobothindividualsandorganizations. Argyris’earlyresearchexploredtheimpactofformal organizationalstructures,controlsystems,and managementonindividuals-andhowtheyresponded andadaptedtothem).Hecametotheconclusionthat problemswithemployeesaremostlytheresultof maturepersonalitiesbeingmanagedbyusing outdatedpractices. Oneofhismaininterestsisinuncoveringthesubtle patternsofreasoningwhichunderlieourbehavior;and howthosepatternscontinuallygetusintotrouble, individuallyandcollectively.Argyrisshowedthat humanstendtousetwotheories,mentalmodelsor “guidingmaps”thatdramaticallyinfluencetheir actions,butthatfewareawareof.Oneisthe Espoused Theory,theothertheactualTheory-in-use. Troubleis:moreoftenthennot,thesetwotheoriesof actionareopposed.Effectivenessresultsfrom developingcongruencebetweenthetwo.

28. “Workis something youdorather thansomething yougoto” CharlesHandy. ThePhilosopherofKnowledgeWork

29. CharlesHandyisanIrishmanandwidely consideredtobeEurope´smostinfluential leadershipguru.TheEconomistoncesaidof Handy:“Morecommonsenseiswhathestands for,andfewercommonrooms.”Hismain interestalwayswasinorganizations,andabout thesearchforwaysinwhichcompaniescango beyondthepurepursuitofprofits.Organizations, hesaid,are“not machines that can be neatly designed, mapped, measured and controlled.” Handycameupwithcolorfulmetaphors,suchas theshamrock organization which,liketheplant, wouldhavethreeleaves:management, specialistsandanincreasinglyflexiblelabor force.Orportfolio working,alifestyleinwhich theindividualholdsa“number of jobs, clients and types of work” (i.e.roles),allatthesame time. HandyhadakeyroleinshapingBritain´s managementeducationinthe1960sand1970s andlaterregrettedhavingborrowedtooheavily fromtheAmericanMBA,andtakingtoofew lessonsfromprofessionssuchaslaw, architectureandmedicine,which“all consistently mixed formal learning with some form of apprenticeship.”

30. “Badmanagement theoriesare,atpresent, destroyinggood managementpractices” SumantraGhoshal. TheAcademicRebel

31. SumantraGhoshal´searlyacademicworkfocusedon matrixstructuresinmultinationalorganizations,andthe "conflictandconfusion"thatreportingalongboth geographicalandfunctionallinescreated.Hislaterwork grewmoreambitious,andhencemoreimportant:theidea thatitisnecessarytohaltflawedeconomictheoryfrom contaminatingorganizations.This,hetheorized,is importantsincefirmsdonotplayontheperipheryof humanlifetoday,buthavetakenacentralrole. Hisunderstandingoforganizationalissuesledhimto concludethat“all management theory focusing on the economic aspects of man to the exclusion of all others” is incorrectatbest.“A theory that assumes that managers cannot be relied upon by shareholders can make managers less reliable.” Suchtheory,hewarned,wouldbe aself-fulfillingprophecy-aparticularlystingingcritiqueof theoutputofamajorityofhiscolleaguesinbusiness schoolsthatmadethispopularandgentleman controversial. Tohisdeath,Ghoshalsfightwasagainstthe"narrow idea" thatledtotoday'smanagementtheorybeing "under- socialized and one-dimensional, a parody of the human condition more appropriate to a prison or a madhouse than an institution which should be a force for good.”

32. “Thebestthing aleadercando foraGreatGroup istoallowits memberstodiscover theirgreatness” WarrenBennis. TheHemingwayofLeadership

33. WarrenBennisisalaid-back,silver-hairedprofessor attheUniversityofSouthernCaliforniawhohasbeen aninfluentialauthorityonleadershipfordecades. Beginninginthe1960s,Bennischallengedthe prevailingwisdombyshowingthathumanistic, democratic-styleleadersarebettersuitedtodealing withthecomplexityandchangethatcharacterizethe businessenvironment. “Groups become great only when everyone in them, leaders and members alike, is free to do his or her absolute best”, hesaid. Hisfundamentaltenetisthatleadersaremade,not born.AccordingtoBennis,leadershipisnotarare skill;leadersarenotatallsupposedtobe charismatic,norshouldtheycontrolandmanipulate. Oneofthefamousphrasesgoingbacktohimisthe notionthat“Managers do things right. Leaders do the right thing.” TogetherwithGhoshalandHenryMintzberg,Bennis (whoseCVincludesatenureascollegepresident),is oneofthefiercestcriticsofcurrentbusiness education:“Business schools have quietly adopted an inappropriate, and ultimately self-defeating, model of academic excellence.” hewrote.“No curricular reforms will work until the scientific model is replaced by a more appropriate model rooted in the special requirements of a profession.”

34. “Lettheflow managetheprocesses, andnotletmanagement managetheflow” TaiichiOhno. Toyota

35. TaiichiOhnoisconsideredtobethefatherofthe Toyota Production System,TPS,whichbecameknown asLean,orLeanManufacturingintheWest.Hewrote severalbooksaboutthesystem,including Workplace Management.Possiblybecauseherosetobeapublic figure,Ohnowasdeniedthenormalexecutivetrackat Toyotaandinsteadbecameaconsultantwithsuppliers inhislatercareer. AsayoungproductionengineeratToyota,Ohnoset outtoeradicateinefficiencyandeliminatewasteinthe partofproductionhewasresponsiblefor.Thisbecame thecoreofTPSthatheandotherssubsequently developedbetweenthemid-1940sandthemid-1970s. Severalelementsofthissystemhavebecomefamiliar, likemuda (theeliminationofwaste),jidoka (the injectionofquality) andkanban (thetagsusedaspart ofasystemofjust-in-timestockcontrol). Ohnoinsistedweshouldnevercodifymethod-write tools:foritisthinking,orthewayhowyou conceptualizeyourproblem,thatisthekey. “Why not make the work easier and more interesting”, Ohnomused,“so that people do not have to sweat? The Toyota style is not to create results by working hard. It is a system that says there is no limit to people’s creativity. People don’t go to Toyota to ‘work’, they go there to ‘think’.”

36. “Wedon'tmanage peoplehere.There isafundamental differencein philosophybetween acommitment andacommand” Bill&VieveGore. W.L.Gore

37. Bill&VieveGorefoundedW.L.Gore&Associatesin1958.The companysincegainedinternationalattentionandrespectforevolving inoneoftheworld´smostinnovativecompanies,andoneofthebest placestowork.TheGoresnurturedthefirmfromahome-based businessintoaworldwide,10.000employeecorporation,while embeddingintoitauniqueleadershipstylethatemphasizesfreedom, fairness,commitmentandconsultative“waterline”decision-making inunusuallyopenandentrepreneurialworkenvironments. BillGorepresentedtheconceptofthefirm´suniquestructureand culturalprinciplesinapaperentitledThe Lattice Organization – A Philosophy of EnterprisethatwasdistributedtoGoreemployeesin 1976.Itproposedadecentralizedorganizationwhereeveryonewould sharethesametitleof“associate.”Therewouldbeneitherchainsof command,norpredeterminedchannelsofcommunication. Leadershipwasdisconnectedfrompositionandwouldalwaysbe temporaryonly,replacingtheideaof“bosses”:Associateschooseto workwithleadersratherthanhavebossesassignedtothem.The firmpioneeredconceptssuchasjob sculpting:matchingrolesto employees,notemployeestojobdescriptions. AtGore,hands-onproductinnovationandprototypingare encouraged.Teamsorganizearoundopportunities,newproduct concepts,orexistingbusinesses.Asteamsevolve,leadersemerge astheygainfollowership.Thisculturehasshowntobeasignificant contributortoassociatesatisfactionandretention,aswellastothe company´seconomicsuccess.Thecompanymotto:“Make money and have fun”.Thelatticebecameastateofmind.

38. “Wemust eliminate theorganization's bureaucraticcomplex” JanWallander. Handelsbanken

39. Dr.JanWallanderjoinedHandelsbanken,Sweden's biggestbank,asCEOin1971,afterastintasCEOata smallregionalbankinthecountry'sNorth. Handelsbankenwasinacrisis,botheconomicallyandin termsofregulation.Wallander,aneconomist,accepted thejobundertheconditionthathewouldhavecarte blanche forreinventingthefirm:Whatheintendedwas, inhisownwords,to“eliminate the bank's bureaucratic complex”. Andsohedid.Inthefollowingyears,theorganization’s hierarchywasreducedtothreemanageriallevels.Fixed- target-setting,budgeting,andincentivesystemswere discontinued,themarketingdepartmentdissolved,as weremanyothercentralareas.Therehasn´tbeenan orgchart,abonussystem,annualfinancialplanningor strategicplanningofanysortatthefirmforover40 years.Instead,“the branch is the bank”,decision- makingisradicallydecentralizedandconsultative.No productcosting,volumeorgrowthtargetsinterferewith thebranches'autonomyandresponsibility. Handelsbankennowasaround10.000employeesand hasbeenEurope´smostsuccessfulbankfordecades, consistentlyoutperformingcompetitorsinanypossible measure,includingROEandthecost/income-ratio.Itis alsooneofthebestcompaniestoworkforinits markets,andhasperformedwellduringfinancialcrises.

40. “Wehavea ‘strategic’plan. It´scalled doingthings” HerbKelleher. SouthwestAirlines

41. HerbKelleherco-foundedSouthwestAirlinesin1971, againstfierceresistancefromestablishedcompetitors. Thecompany´slowcost,no-frillsbusinessmodelwould reshapetheUSairlineindustry,makingflyingwidely affordable.Kelleher,acolorful,enjoyableand charismaticcharacter,headedthecompanyasCEOuntil 2008. Southwesthasbeentheworld´smostsuccessfulairline byanypossiblemeasure,continuouslyearningmoneyin anotoriouslyloss-makingindustry.SaysKelleher:“The business schools used to pose it as a conundrum. They would say, `Well, who comes first? Your employees, your shareholders, or your customers?' But it's not a conundrum. Your employees come first. And if you treat your employees right, guess what? Your customers come back, and that makes your shareholders happy. Start with employees and the rest follows from that.” Thecompanyisproudtohavefewrules,andemployees areinvitedtobreakthemifitisincustomer´sbest interest.Southwestbuiltacorporateculturethatmade employeeswellknownfortakingthemselveslightly-but theirjobsseriously:YouTubevideosofSouthwestcabin personnelrappingin-flightannouncementsorsinging themtothetuneofpopularsongsbecamelegendary. “The business of business is people. Yesterday, today, and forever”,Kellehersays.

42. “Our‘architecture’ isreallythesum ofalltheconventional businesspractices weavoid” RicardoSemler, Semco

43. RicardoSemlertookovercontrolofSemco,the companyfoundedbyhisgrandfather,attheageof 24.HehadpreviouslyconcludedanMBAatHarvard BusinessSchool.Bright,jovialandfast-thinking,he startednotonlytoreinventSemco´sbusinessmodel, buttoradicallytransformitsorganizationmodelas well–creatingacompanyguidedbycoherent, democraticprinciples.It’shardtofindasingleaspect oftraditionalmanagementthatSemcodidnoteither blowup,reinvent,abolishorturnupsidedown- includingworkhours,pay,andHRasawhole. Semlerachievedsuper-starstatusinhisnativeBrazil throughhisfirstbook,Maverick,andprovocative columnsinSaoPaulo´sFolhadaily.Abouttenyears later,hewroteThe Seven-Day Weekend, abookthat wentevenfurtherindescribinglifeinanorganization beyondmanagement,andcommand-and-control. Later,Semlerwouldgrowwaryoftheleadership industry,andofbeingpartoftheinternational speakercircuit,feelinghehadachievedlittlethere. Today,heisanactiveinvestor,andalsofounderof severalsocialinitiatives,amongthemLumiarSchool, ahighlyinnovative,democraticschoolforchildren agedto14.

44. “Thehardpart istoeliminate thearroganceof peopleat headquarters” GoetzWerner. dm-drogeriemarkt

45. GoetzWernerco-foundeddm-drogeriemarktin1973, afterhavingtheinsightthatGermandrugstoresneeded toadoptthediscountretailmodel,whileatthesametime wideningtheirproductportfoliodramatically.Today,dm hasmorethan40.000employeesin12countries,andis acknowledgedastheleaderofitsindustry,beingmore effectivethanitscompetitorsbyanypossiblemeasure. Initially,dmwasmanagedratherconventionally.Butafter aneye-openingexperienceatoneofdm'sstores,in 1991,Wernerdecidedthatthefirm´sorganizationmodel hadtochange-practicallyandphilosophically.He initiatedaprojectcalled“Powertothebranches”, flatteningformalhierarchyanddecidedlydevolving decision-makingtothebranchnetwork.dmpioneered democraticandempoweringorganizationpracticesin employeerecruiting,training,anddevelopment,andalso developedavalue creation accountingsystemstrikingly similartoHandelsbanken´s.Today,dm´sbranches decideoneverythingfromstoredesign,workpractices, staffing,salaries,toproductrange,deliveryfrequency andevenpricing. Anintellectualandanautodidact,Wernerleddmfor35 years.Heneverstudiedatauniversity,butheadedthe departmentforEntrepreneurshipattheUniversityof Karlsruheforsevenyears.Heisthemostinfluential advocateofthebasic income movementinGermany.

46. “Businessesoften forgetaboutthe culture,andultimately, theysufferforit becauseyoucan't delivergood servicefrom unhappyemployees” TonyHsieh. Zappos

47. TonyHsiehisanentrepreneurandventurecapitalist.HeisCEO oftheonlineretailerZappos.com.PriortojoiningZappos,Hsieh co-foundedinternetadvertiserLinkExchange.Hesoldthefirmto Microsoftfor$265million,anexperiencefromwhichhesayshe learnedtheimportanceofbuildingacultureabletostayaliveas acompanygrows:“The culture of your company and your company’s image are really just two sides of the same coin.” HsiehoriginallygotinvolvedwithZapposasanadvisorand investorin1999,butendedupspendingmoreandmoretime withthiscompanythatwasboththemostfunandthemost promisingoutoftheprojectshewasinvolvedwith.TheZappos cultureof“WOW”underhisleadershipwouldbecomedefined by:makeyourcustomershappier (throughrelentlessfocuson customerservice);makeyouremployeeshappier (byfocusing moreoncompanyculture) andmakeyouhappier (tolearnmore aboutthescienceofhappiness). Zappospioneeredrevolutionarytechniquesnotonlytosatisfy customers,butalsotoworkandruntheteam,andmakemore profit–andinlesstime–thanwiththeoldformulasgoverning largecompanies.Mostfamously,Zapposatsomepointstarted tooffernewemployeesafewthousanddollarstoleaveifthey werenotsatisfiedwithbeingpartofthecompany.Theyalso createdaCultureBook,wherestaffwritesaboutwhatthe Zapposculturemeanstothem:Everyyear,aneweditionis producedanddistributedtoprospectiveemployees,suppliers andevencustomers.

48. “Thefutureisambiguous, soonewaytodealwithit istohavethesmartest peopleworkingwithyou. Wearegoodat provokinginternaldebate.” LarryPage&SergeyBrin, Google

49. LarryPageandSergeyBrinco-foundedGooglein 1998,whilebothattendedStanfordUniversity.The company'smissionstatementfromtheoutsetwas"to organize the world's information and make it universally accessible and useful”andthecompany'sunofficial sloganis"Don't be evil”. EverconcernedwithGoogle´sinformality,spiritand values,PageandBrinpromisedinareporttopotential investorsin2004thatthefirm´sIPOwouldnotchange thecompany'sculture,andthatitwouldnotsacrifice long-termimpactforshort-termfinancialresults. Google'scorporatephilosophyembodiessuchcasual principlesas"you can make money without doing evil”, "you can be serious without a suit”,and"work should be challenging and the challenge should be fun”. EventhoughGoogleismostfamousforitsinnovative andpopularproducts,thefirm´smajoraccomplishment maybehowitre-shapedthewaywelookatwork. Googleimpressesobserverswithitsgenerousperkson theGoogleplexandinofficesworldwide.Itmade20%- time (forinnovativeside-activities) astandard,and turnedallemployeesintoshareholders.Ithasamong theworld´smostrigorousselectionprocesses, practicestotalinternaltransparencyandcompletely flexiblework-hours.Thefirmhasconsistentlybeenone oftheworld´sbestcompaniestoworkfor.

50. “Leadersdon't createfollowers, theycreate moreleaders” TomPeters. TheProphetofTransformation