What Makes You a Leader?

Dr. Nathan C. Wright, Transformational Performance Solutions

In my last article, I told you that I was going to follow up with some history about leadership and what makes you a leader. Most of us do not get the opportunity to spend 8 years studying leadership and style in the pursuit of a doctorate, and then follow it up with seven years and counting of post-doctoral work on the subject, so this summary will catch you up on that research in just a few minutes. It is impossible to lead your organization in its transformation with a transactional leadership style.

If you take nothing else from this article, I want you to know that to lead you must have followers. The act of following is completely voluntary. A job title does not make you a leader. It is much more complicated than having a title. Leaders come from all levels of organizations and if you understand what makes you a leader, then you can inspire, motivate, build, coach, mentor, etc., people to follow you. The short answer to the question above is: You Need Followers!

The latest trend in maintenance and reliability is to take shortcuts. This approach, which rarely succeeds, often is determined at the senior leadership level and without the knowledge necessary to make the right decision. Eventually, these leaders will be forced to choose whether they wish to remain victims of their bad decision or take ownership and repair the damage. What do some of these shortcuts look like? The most prominent shortcut trend today is placing engineers in charge of maintenance.

An engineering degree in and of itself does not qualify you to lead maintenance or reliability. Companies not wanting to take the time to develop the resources necessary to lead their reliability efforts is the single greatest danger we face. They falsely believe that they will let mommy and daddy pay for 4 years of college or some brief trade school and that is equivalent to years of experience and an apprenticeship program is proof of what I am about to tell you.

Do a brief search on the internet for jobs in the reliability leadership field and you will find that most if not all list the first requirement for the position to be an engineering degree. This article will outline what maintenance and reliability professionals can do to educate their organizations to prevent these types of failed approaches. You will learn not only how to have these discussions but win them. We will cover why all reliability efforts must start with qualified leaders and owners, and what it takes to be an owner and not a victim.

This article will touch on the lack of representation of true reliability management personnel on the Top Management Team (TMT). This includes a lot of the research that I have relied on in writing both my books and my dissertation. I think it is important for us to understand what is meant by true leadership. I am going to say it again, it is impossible to lead your organization in its transformation with a transactional leadership style.

The fact is that reliability can account for 40-60% of an organization’s budget. Manpower is not weighed when selecting the TMT. Reliability is usually represented in the TMT by operational managers. The focus of operational managers is production. The mindset of a reliability manager is production capacity. In most organizations’ reliability is not considered a part of the organization’s strategic planning or competitive strength equation.

Most organizations’ TMT spends less than three or four percent of its time considering reliability issues. When they do, they concentrate on the cost and not the management of this key part of the company’s overall success. When a company is looking for waste within its operation, the TMT does not realize that its creativity would be better spent concentrating on reliability problems and how it is operating its equipment. Organizational reports focus on profits while reliability is lost in the maze of other costs.

Companies look to the obvious: airlines look to the number of seats sold and schedule compliance, hotels look to the number of rooms sold each night, schools look to enrollment, and manufacturing firms look to units produced. Buried in all of this is the cost to keep the planes flying and on schedule, the rooms suitable for occupancy, the environment suitable for the students to learn in, and the equipment necessary to produce the units defect free, is maintenance and reliability.

The value-added potential of true reliability management can have a significant influence on the bottom line. This is where the lack of the TMT reliability background is detrimental to the company’s overall effectiveness. There is more to reliability management than just costs, and that is where representation by an operations manager falls short. Despite their overwhelming qualifications, why do corporations fail to view reliability management as a resource for the Top Management Team?

Top Management Team

I would propose the addition of a reliability background to the functional track currently considered when selecting a corporation’s TMT. I hope to remove the obstacles that currently exist which prevent reliability professionals from ascending to Top Management Team positions within corporations. I believe that adding this functional background to the composition of the TMT will strengthen the organization and result in greater profitability. Without it, the death of reliability is certain.

During my research into leadership style and its effects on company profitability for my dissertation, I found that the historical concepts of transactional and transformational leadership began with James McGregor Burns.  He was the first to propose that followers will strive for goals that characterize their values and motivation.  He defined transactional leadership as an exchange between followers and leaders of one thing for another. 

Transformational leadership focuses on leadership between followers and leaders to help raise each other to a higher level of morality and motivation.  Dr. Bernard M. Bass believed that transformational leadership was more powerful than transactional leadership.  There is a considerable body of literature that establishes a positive relationship between transformational leadership and company performance (profitability), follower outlooks (i.e., job satisfaction, organizational commitment), and performance (i.e., profitability) at the individual level. 

There have been thousands of studies conducted over the last fifty years that support this position about the effects of leadership on organizations. These studies show that subordinates prefer transformational leadership styles; leaders who inspire, engage, and consider their employees. Study after study revealed that to achieve this leadership style, the leader needs to have practical experience.

This can be developed in other leaders, but it cannot be trained into them.  These studies compared other leadership styles, and the results of these studies were depicted as “emotional” and “metamorphic” with respect to the transformational leaders, as “exchange nature” with respect to the transactional leaders, and through the lens of “permissiveness” with a laissez-faire leader.



Transactional Leaders

Transactional leaders are more worried about maintaining the normal flow of operations. Transactional leadership can be labeled as "keeping the ship afloat." Transactional leaders use disciplinary power and an array of incentives to motivate followers to execute at their best. The term "transactional" refers to the truth that these types of leaders mainly motivate their followers by swapping rewards for performance or worse discipline.

A transactional leader does not look forward in strategically steering an organization to a place of market leadership; instead, these managers are only worried about making sure everything flows effortlessly today. These managers build employees that follow orders but offer little else to the organization.

Transactional leaders are characterized by one or a combination of two styles. Management by exception is where the leader sets out rules and regulations and Key Performance Indicators (Numbers); they manage by waiting for someone to step outside of these parameters and then acting. This is sometimes referred to as the “gotcha” leader. The second style is contingent reward. This is where the leader manages by offering a reward for certain performance. This is sometimes called “the carrot and stick” approach.

Transformational Leaders

In transformational leadership, leaders will elevate their power and influence using referent power (charisma) and visionary approaches (inspiration).  The transformational leader is charismatic; the leader has a God-like quality that creates influence and referent power.  When you think of this type of leader, you may envision Ronald Reagan or Winston Churchill. Inspiration is another aspect of transformational leadership in which the leader possesses the ability to engage and emotionally connect and communicate an idealistic future state. 

You may look to Mother Teresa or Martin Luther King. This type of leader emits power and influences workers through visionary methods.  Individual consideration is described by a leader’s ability to gain power through mentorship and using a developmental approach with subordinates.  Here we might look to Vince Lombardi or Don Shula. Intellectual stimulation is derived from giving subordinates the power to solve old problems with new ideas. 

Employees are encouraged to question everything, including their leaders when appropriate.  Examples of this might be Steve Jobs or Elon Musk. A subset of transformational leaders may be perceived as ideological symbols, representing something much larger than themselves to their subordinates.  Leaders who are perceived as ideological symbols are less likely to be influenced by subordinates.  From a role-modeling viewpoint, there may be moderate influencing from individual consideration and cognitive motivation prompted by intellectual stimulation.  These managers build employees that become leaders and offer all they have to the organization.

Johannes Rank and collaborators examined variables that moderated the relationship between both transformational and transactional leadership behaviors and subordinate behavior in relation to their performance.  Transformational leadership was a strong positive predictor for subordinate self-esteem, whereas subordinates had low company self-esteem. 

Numerous studies have shown positive correlation between individual productivity, unit effectiveness, and transformational leadership.  In their study, it was hypothesized that a positive relationship exists between intellectual stimulation and inspirational motivation, and by extension, transformational leadership is important to motivating innovative activity in employees.

The research focused on the organizational level of management innovation and the importance of leadership behavior as a precursor to organizational success and proposed that management innovation may be a significant source of competitive success.  Top Management Teams have the greatest influence on management innovation. 

Ignacio G. Vaccaro and associates examined transactional and transformational leadership styles with a focus on leadership behavior.  The research concluded that company size can influence the impact of leadership and that both transformational and transactional leadership styles contribute to managerial innovation.  Smaller companies tend to benefit from transactional leadership when innovating, especially when the company is less complex in structure; larger companies, on the other hand, rely more on transformational leaders to counteract their complexity and facilitate management innovation.

Transformational leadership focuses on helping followers to identify with a purpose and goal.  It stimulates the employees to achieve the company’s goals by tempting their need for self-actualization.  Transactional leaders participate in transactions as bargaining agents to achieve their wants and motivate their employees.  They work to gain compliance from their employees by targeting their own interests and concurring with the conditions and rewards that follow the completion of requirements. 

Ultimately, the research of Vaccaro and collaborators supports the Hambrick and Mason position that leaders are internal change agents who implement policy, structure, and processes, and furthermore that organizational size is an important element of effective leadership, and particularly helps to define what type of leader may be effective in each environment.

Adaptive Leadership

Transformational leadership is at the core of adaptive leadership.  The focus of adaptive leadership training is exemplified by high levels of moral and ethical conduct.  Leaders demonstrating these values will gain the confidence of their followers, which will compel self-sacrifice for the larger good of their companies.  These leaders are tasked with focusing on their own development and that of their followers in order to meet the challenges confronting their teams. 

Leadership, commitment, cohesion, and morale are critical components in unit performance.  While transactional contingent reward leadership establishes the foundation for connections between followers and leaders in that it sets expectations, provides rewards and recognition, and clarifies responsibilities for accomplishing anticipated performance, Julian Barling and associates stated that transformational leadership boosts the development of devotees, daring them to think creatively and inspiring them to achieve beyond what they believe is possible.  This is accomplished while reminding them to keep their high moral standards and values as guides to their performance.

A transformational leader reaches beyond managing day-to-day operations and fashions strategies for taking his organization or work team to the next level of execution and success. Transformational leadership styles focus on team building, motivation, and collaboration with followers at various levels of an organization to realize change for the better. Transformational leaders set goals and incentives to enterprise their followers to higher performance levels while providing chances for personal and professional development for each follower.

One or more of four combinations of style characterize transformational leaders. Idealized influence is where the leader influences performance through a “charismatic” approach. This is sometimes called “walking the walk.” The second style is intellectual stimulation. This leader influences performance by asking the followers to assist in crafting the design. The power of utilizing all the available resources is limitless, and maximizing this resource eliminates one of the seven wastes identified in lean (waste of intellect).

The third style is inspirational motivation. In this style the leader inspires his followers to perform by showing them the way. It is sometimes called “coaching” or “mentoring.” The final style is individual consideration. This leader takes an interest in followers as individuals and understands their wants and needs and can align them with the goals of the organization.

 What makes a leader transactional or transformational? To answer this, you need to understand where leadership is learned. Our first source is our parents and family members. Forty percent of our leadership style comes from this source. The next sources are our teachers and coaches, then our community, business, and political leaders. Finally, there are professional athletes, entertainers, and religious influences.  If you examine these individuals, you can better understand how you got where you are.

My Leadership Style

How did I make the leap from transactional to transformational? I credit the collective influences of several leaders. The first were my parents. They laid the foundation that I have built my leadership style on. When I left home and joined the Navy, I was lucky enough to have several good leaders to emulate. I find myself frequently using many of these early approaches in my daily tasks.

After I left the Navy, I found myself under the tutelage of a few more great leaders. They are still the folks I aspire to be in my technical and leadership approach. They never shut me down and always encouraged me to use my intellect. A lot of my professional confidence comes from their leadership and how they developed me into the leader I am today.

When it comes to the type of leader I want to be in my chosen profession, I find myself looking to my last true general manager. I worked for him during my tenure in the mines. He always walked the walk. His idealized influence over me still burns bright. I find myself reflecting on what he would do in each situation. He worked his way up the professional ladder, holding every position from entry level to his current title of Chief Operating Officer for a leading organization in his industry.

Along the way, he has developed a list of senior leaders who credit him for their leadership styles and successes. For every one of these great examples, I have had an equal number of bosses who I have worked for but never emulated or followed. The difference between success and failure is your ability to follow great leaders and know which bosses to use as bad examples.

The informative years for all of us are from birth to five years old. Think about how you are taught during these years. You have a coach/mentor by your side guiding you. If you do something well, you are praised and even possibly instructed as to why you did well. If you attempt to do something harmful, you are stopped and instructed in corrective measure to prevent harm. Sometimes you can fail, and then your coach helps you understand why you failed and how to adjust to correct the approach. This coaching continues throughout your first five years.

What changes when you turn five? You are sent off to school. Here the teaching changes. In your academic environment, you are rewarded for good behavior and disciplined for bad. Our schools have shifted from a free exchange of ideas where knowledge and learning are allowed to grow, to institutions of indoctrination. 

They are spewing mindless sheep and “yes” people and have lost the development of innovative thinkers. This is repeated by your leaders and others in leadership positions serving as examples for us. You need only to look at the last leadership meeting you attended to see this is true. Gone are the spirited exchanges of ideas and knowledge and it has been replaced with political correctness and herd mentality. No wonder most of us end up leading transactionally; it is all we know.

My next few articles will focus on lubrication and what you must know to sustain a robust proactive approach to reliability. The key elements behind my approach will lead to reliable plant operations. Feel free to drop me a note or call if there is a topic you would like to see, if you have questions, or would just like to chat.

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About the Author

Nathan Wright, founder and president of Transformational Performance Solutions, LLC is one of the country's foremost experts on maintenance and reliability and transformational leadership.