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Book Review: A New Leadership Ethos (Part 2)

Posted February 08, 2010 5:01 PM by Steve Melito

"All forms of organization are essentially ecosystems," writes Dr. Marc van der Erve in A New Leadership Ethos: The Ability to Predict. Businesses respond to their environments and obey both "basic laws of energy" and "Darwinian notions". Organizations also develop in "four distinct stages", each of which requires a different type of leader. According to van der Erve, these considerations determine whether a business needs a transformer, builder, grower or confronter-type leader.

Part 1 of this book review examined the history of Apple Computer. Apple's example is easy to follow, but the stages of leadership aren't always discrete – nor are all its endings happy.

Digital Equipment Corporation

Digital Equipment Corporation (DEC) endured a flawed beginning, at least according to Marc van der Erve's model. Ken Olsen, the company's founder, was a grower instead of a builder. Although Olsen grew the company's annual revenues to $13 billion (USD), he put all of DEC's proverbial eggs into one basket: mini-computers. Blind to the possibility of personal computers (PCs), he asserted that "There is no reason for any individual to have a computer in his home".

Gordon Bell, a builder-type leader, was recruited by DEC from MIT. A talented inventor, Bell battled Olsen in a series of "dog fights" that the company's founder ultimately won. DEC, however, lost its chance to build and then grow. Resting on a flawed foundation, its last leader plowed ahead to confrontation. Bob Palmer, a confronter-type president, oversaw DEC's sale to rival Compaq. There would be no transformer-type leader for the now-defunct Digital Equipment Corporation.

General Electric

Unlike DEC's Ken Olsen, GE's Jack Welch was both a builder and a grower. He was a confronter and a transformer, too, as the environment required. After becoming General Electric's CEO in 1981, Welch slashed the company's workforce by 100,000 employees. The confronter wasn't content with cost-cutting, however, and soon became "the driving force behind the improvement of people and processes." Now a transformer, Jack Welch initiated the largest total-quality program in corporate America. In a "ruthless process of natural selection", he also ordered his subordinates to axe underperformers. With a leaner, meaner team in place, Welch invested heavily in the organization's future leaders.

Although most CEOs are content to remain in their comfort zone, Jack Welch was more than a confronter – or even a transformer. When the business environment required a builder, he bought "a record number of companies" with both a "proven track record" and the potential for growth. During the last stage of his GE career, Welch served as a grower-type leader who reaped the reward of what he had sown. In 1981, when Welch became CEO, GE's revenues were $12 billion (USD). In 2001, when he retired, they were $280 billion.

Jack Welch's successor, Jeffrey Immelt, was forced to become a confronter-type leader as economic conditions worsened and GE's growth declined. As Marc van der Erve notes, the "Immelt Revolution" broke with GE's promote-from-within policies. The company's new outward focus included the sale of GE Plastics to SABIC. Whether Jeffery Immelt can rise to the environment's eventual demand for a transformer-type leader remains to be seen.

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Guru

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#1

Re: Book Review: A New Leadership Ethos (Part 2)

02/09/2010 12:48 AM

Well, there is jargon going on in your summation that I sort of get, but am not so familiar with.

I did have a very fine experience with a very well respected leadership evaluation and motivational program.

Was there on a scholarship in my mid 40s due to my reputation as a poet.

Leadership is right tough for a leader has to also be a good follower.

Some people are too rigid to understand that the leader may follow, which within an organization may force the cooperative leader to be overly rigid.

Then the autocratic leader will of course be considered safe and strong, while running everything into the ground because they won't follow.

With cooperative members of the organization the leader can be cooperative.

With uncooperative members of the organization the leader must be autocratic.

In life or death situations this is a particular stress that transcends making or losing money.

The ideal leader is both cooperative, and autocratic as need be in both relation to the people he is either cursed to have to work with, or blessed to have found.

Hey we're all gonnah die.

It's all about doing what is right, at the right time, and somehow dying with your integrity intact, whether you get a tombstone, or are just blown to bits.

I don't pity the dead leaders, but the living who are in prison or exile because they cared more about appearance and property, than the work.

P.S. Wall Street is an ecosystem right?

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#2
In reply to #1

Re: Book Review: A New Leadership Ethos (Part 2)

02/10/2010 7:01 AM

P.S. Wall Street is an ecosystem right?..
Or is it a parasite?
Del

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#4
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Re: Book Review: A New Leadership Ethos (Part 2)

02/11/2010 4:29 PM

yes but its at the bottom like sludge.

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Guru

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#3

Re: Book Review: A New Leadership Ethos (Part 2)

02/11/2010 9:08 AM

Market conditions, choice of customer based on satisfaction and reliability could be the best drivers behind corporate survival.

If a lethargy based on turn overs and a take things for granted attitude builds around organizations,then starts deteriration.

Decisions and strategies can not be generalized or readily applicable to other instants.Flukes too play at times.

A vision based advisory panel could be a boon to any corporate.

The leaders should have the attitude of facing adversities and capability to effective alternates including creative visions and a futuristic outlook and strategies.

It is strainful and painful, but is the only way out.

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#5
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Re: Book Review: A New Leadership Ethos (Part 2)

02/11/2010 4:31 PM

I guess toyota is taking this test now

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#6
In reply to #3

Re: Book Review: A New Leadership Ethos (Part 2)

02/11/2010 4:33 PM

I guess toyota is taking this test now.

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Guru

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#7
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Re: Book Review: A New Leadership Ethos (Part 2)

02/12/2010 10:09 PM

Getting the hang of American English aye, S.udhayamarthandan.

"strainful and painful," - way to go!

You might have meant "degeneration" not deteriration, which is a word I don't recognize.

The thing that leaders find most difficult is to always make the right decision, but they are leaders simply because they will make decisions.

Many of us drift and look for leadership, which may be either wrong or right, but sometimes really all it is, leadership.

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#8
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Re: Book Review: A New Leadership Ethos (Part 2)

02/13/2010 12:57 AM

Hi Transcendian,

It is all spontaneous English. Leaders are every where leading themselves and people and activities around them. They are real responsible Hero's instrumental in deciding the fate of all their missions. TRUE LEADERS WITH GENEROUS, BROAD VISIONS AND DIPOLMATIC SKILLS, ENERGISING SKILLS CAN DO WONDERS.

The captain's role in the movie ' THE BOUNTY' means a lot to me. the discipline. the responsibility, the straight forwardness, the boldness and many more.

Even animal populations have dominant leaders, the real greatness is about sacrificing oneself against predators to save the herd.

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#9

Re: Book Review: A New Leadership Ethos (Part 2)

12/23/2010 1:37 AM

I totally agree with Dr Marc Van Der Erve but my concern is that on the four leadership role that he has speculated if for example a transformer leader if he is very good in the transformation of an organization then how can later in his/her life change to be a confronter if the organization face problems? e.g Jack Welch's successor, Jeffrey Immelt, was forced to become a confronter-type leader as economic conditions worsened and GE's growth declined.please also specify if one leader can have all the quality of these four leadership role.

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