Four-Ring Leadership
by Jac Fitz-enz | Talent Management
Three-ring circuses have three acts going on simultaneously under
the big top. Separate and outside the rings, clowns run around acting
silly. Leadership is like that, only more so.
Leadership is a four-ring circus, complete with occasional clowns
inside the rings. This is why it is the most studied process. There is
no end to the models, hypotheses and theories. Still, we struggle to
find a simple means to understand and explain how to lead, and even more
difficult, how to develop tomorrow's leaders. The following is one way I
find that works to reduce this enigma to something basic,
understandable and teachable.
I see the essence of leadership as four interlocking rings of
activity: knowledge, development, management and measurement. They are
not linear. They are all in action concurrently, which is why the topic
is so exquisitely mysterious. Consider these rings and how they are
connected, or disconnected, in your organization.
1. Knowledge:
An effective leader needs three types of knowledge: the market, the organization and the self.
To lead, a person must have a thorough knowledge of the current and
near-term future marketplace and how it is likely to affect the
organization's human, structural and relational capital. Second, a
leader has to look across the three and ask, "What are we doing that is
helping or hindering us?" Last, and most important, a leader has to know
himself or herself in two ways. Internally: What is my value system?
What is my preferred style? What are my goals in life and with this
organization? Externally: How do I value people? Are they
interchangeable expense elements or true value generators?
2. Development:
This is a prime responsibility for every leader, along with
generating shareholder value. Leaders need to develop the competencies
necessary to accomplish current goals. Additionally, they must build
capabilities to deal with future challenges.
To meet tomorrow's capability challenges, the best leaders support a
succession planning system that reaches far down into management ranks.
The leader also has to be accountable for management growth and
succession. HR might administer the system, but the leader is
accountable.
3. Management:
Management is divided into effectiveness and efficiency.
Effectiveness is doing the things that are essential for the growth and
success of the enterprise. It is a matter of allocating resources in
ways that ensure long-term, sustained success. Effectiveness is
evaluated in terms of new product and employee development, market share
and revenue growth, among others. Efficiency is managing processes in
ways that incur the lowest costs while leaving sufficient muscle for
future growth, and it is measured in terms of process costs and gross
margins.
4. Measurement:
At the end of the day, leadership quality is a function of value
adding performance. Performance is expressed in both objective and
subjective terms. The metrics come in three forms: strategic,
operational and leading indicators.
Strategic metrics are organization-wide macro-
In the end, leadership is the most popular management topic because
it is a multifaceted, mysterious set of behaviors. Yet leaders are
found at all levels, from homemakers to heads of state. Claiming that
specific leadership behaviors are consistent across all situations is a
stretch. Separating leadership from operational management is impossible
because it raises the question: Leadership for what purpose?
Because leadership is situational, for practical purposes it can be
better understood and applied as four interconnected concepts. So what
can you do to develop leadership within your organization? Tell me what
you think.
[About the Author: Jac Fitz-enz is founder and CEO of the Human Capital Source and Workforce Intelligence Institute.]
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