• Carolin Kassella

food for thought – pt. III

Leadership – is it art or a science?

Recently I came across a section in a book chapter I was reading for one of my PhD courses. The book by Joseph T. Mahoney, currently Professor of Strategy and Entrepreneurship at the University of Illinois at Urbana-Champaign in the U.S., is called Economic Foundations of Strategy. It summarizes and comments on the essential, basic tenets of strategic management of a firm and shows the inter-relationships of the five major theories of the firm that exist today.

In general, the Theory of the firm deals with the main questions of “Why do firms exist?” “What is a firm?” or, as the field advanced, “Why are so many firms (a) different or (b) similar (e.g. in organizational structure or economic performance, the latter measured by revenues or profits)?” He summarizes the main literature works and respective theories, among them a fundamental book called “Functions of the Executive” by Chester Barnard, one of the founding fathers of theory in the strategy field of management studies and organization science.

The short section, in which Mahoney summarizes one of Barnard's key arguments, goes as follows:

“Feeling, judgement, sense, proportion, balance, appropriateness, and other words are used to describe what executives should aspire to become. Leadership is more a matter of art than a matter of science. The processes used are more aesthetic than logical, derived chiefly from intimate, habitual, interested experience. For Barnard, coordination is a creative act.”

from: Mahoney, J.: Economic Foundations of Strategy. Chapter 1. Cambridge University Press, © 2005

There is a lot to say and discuss about this paragraph that clearly belongs to a scientific debate rather than an article for a blog. However, there are two specific points I would like to highlight about this.

It certainly has a strong poetic tone to it, which is why it stood out to me in the first place. However, more importantly, I was astonished to discover this sentiment in an academic publication from an analytical mind like Barnard’s (which I infer from the fact that he was an academic scholar and that he had a broad intellectual background spanning various disciplines including philosophy, political science, economics, sociology, psychology, and the physical sciences) from the Year 1938. Barnard suggests in his book that "cooperation and organization as they are observed and experienced are concrete syntheses of opposed facts, and of opposed thought and emotions of human beings. It is precisely the function of the executive to facilitate the synthesis in concrete action of contradictory forces, to reconcile conflicting forces, instincts, interests, conditions, positions, and ideals."* In other words, the executive's main responsibility is ensuring coordination and alignment of the individuals' (often opposing or at least diverging) goals and motives.

Back when theories and research on strategic management were seriously initiated and carried out in the 1920s, scholars quickly began to realize how different management styles and organizational forms (i. e. how a firm is organized in terms of departments, how formal its processes are, how rules and procedures are established and implemented, and so on) lead to significant variations in firm performance and the overall well-being of the employees. For example, scholars of the so-called Human Relations literature (with Barnard being one of the main figures) established through field experiments and other research methods that employees are not only motivated by material compensation such as certain fixed wages, bonuses or what we would call today “corporate benefits”. They found that the workers’ productivity as well as their willingness to cooperate was strongly linked to their personal circumstances and relational aspects of the job, i. e. their relationship with co-workers and managers, job security, recognition and regular acknowledgements, communication patterns and networks within the firm (and the resulting emergence of the so-called 'informal group') and many other intangible or what we would call today “soft" / "grey” matters. Further, in order for the employees to uphold a sufficient level of productivity over a sustained period of time, they found that workers also need to feel a significant level of intrinsic motivation to do the job.

Who would have thought, hey?

Thus, even in the early days of scientific debate in this field it became clear that leadership and effective, economically sustainable firm management is “about people”, as many inspirational guides, commercial books on management, speakers, founder-turned-motivational-gurus and famous CEOs or venture capitalists repeatedly like to phrase it.

This leads to my second point: The tenor of non-materialistic motivation sounds terribly familiar when looking at the discussions of recent years about the future of work and the new economy, especially in developed countries like Germany or the U.S. Buzzwords such as “agile working”, "scrum", “flex work” or, more broadly summarized, “new work” come to mind. Nowadays, the market is flooded with claims for a “new style of leadership and work environments”, which bring about changes in modern workplaces and deeply impact the way organizations (e. g. hierarchical structures) are re-thought and re-modeled, as it seems. Looking back at the academic discourse of nearly a century (!) ago, it becomes evident that these revolutionary insights are not so ground-breaking after all – scholars have been praising these paradigms for decades. Agile working and co. are simply fashionable terms that are often used to sell an old idea in a new bottle.

This example hints to a more widespread phenomenon which is highly unfortunate, in many instances even detrimental for well-rounded, effective and progressive public discourse: Academic models, theories and scientifically-derived concepts too often get stuck in the academic sphere and stay hidden from the public debate that both our system of democracy and the social free market economy so desperately depend upon in order to thrive and prosper.

How can we ensure that debates are based on scientifically-robust facts and that those essential bodies of information and data do not get overshadowed by “fake news”? How do we set up a healthy and open discourse in digital as well as analog spaces, and do we even need to? Rather than arguing with random strangers on internet forums or twitter, wouldn’t it be better to invest the time in more productive ways and leave some of the discussion to denoted experts? Applied to this specific example: How many more guides and books on new leadership do we really need, instead of focusing on the issues and tasks at hand, within our intermediate environments and work spaces? As I have illustrated, those sentiments have been preached for nearly a century now – how do we put those repeated grand claims into practice, daily?

In the future, there will probably always be new, fashionable words floating around, and commercially-appealing models about work management, leadership and (digital) communities will be repeatedly advertised – consultants and speakers need to earn a living after all. However, in an overly advertisement-driven and commercialized world (RIP Indie Facebook and Instagram that were not oversaturated with ads and sponsorships), we need role models who emphasize personalized debates and discussions rather than one-fits-all buzzwords, and more than ever, we need to recall values such as humility, quiet confidence, integrity and a more minimalistic lifestyle, lest we take our consumerist society and our incredible wealth for granted. And in the age where time is supposedly the most scarce resource for us individuals, we then might finally have more of that valuable time available for reflection and grounded debates to move us forward.

[*Source: Chester Barnard: Functions of the Executive. Harvard University Press, © 1968]

Street Art discovered in Milan, Italy | November 2019 © C. K.