What Leaders

Really Do . . .
Article by John P. Kotter, HBR

Group F
Kshitij Ahuja • Rakshit Bansal • Sai Kiran
Saurabh Guglani • Somya Agarwal • Tushar Bhagheria
 Overview

• Leadership is different from

management.

• A balance is needed

• Strong leadership + Strong

Management =
Success!
 Management and
Leadership
• Both systems of action involve deciding:
• What needs to be done
• Creating groups of people that can
accomplish an agenda
• Ensuring people do their job

• Each systems accomplishes these three

tasks in different ways
 Management . . .
• Management is about coping with complexity
• Planning and Budgeting : Setting targets,
Establishing detailed steps, Allocating
resources
• Organizing and Staffing : Staffing jobs,
Communicating the plan , Delegating
responsibility
• Controlling and Problem Solving :
Monitoring results vs. plans, Identifying
deviations, Planning and organizing
 Vs. Leadership

• Leadership is about coping with change

• Setting a Direction : Developing a
vision, Developing strategies
• Aligning People : Communicating
new direction
• Motivating and Inspiring : Keep
people moving in right direction despite
obstacles
• By appealing to basic human needs,
values and emotions
 Setting a Direction . . .

• Creates visions/strategies
• Not planning
• Strategic thinkers
• Inductive (Patterns, relationships to
explain)
• Make ideas better
 Vs. Planning and
Budgeting
• Management process
• Obsolete (Long/Short term)
• Burdensome
• Unexpected
• Combo is Best bet
• Vision provides constraints
• Reality check on direction setting
• Essential vs. irrelevant
 Setting Direction:
Case Study
Lou Gerstner at American Express
• President of TRS-arm of AE in 1979
• Challenges : a)Credit cards by many banks b)
Lot of financial cos. in traveler’s checks
business
• Crafted a vision and saw potential to become
a dynamic and potential firm
• Focused on global marketplace, affluent
customer of AE, served with top products.
• Gerstner Method/Vision:
• Questioned business principles & mental models.
• Instituted entrepreneurial culture.
• Results:
• New markets, products and services.
• Card and travel services combined for corporate
clients.
• Am Ex 5th largest direct mail merchant in US.
• Other unique products and services.
• TRS net income rose by a compounded annual rate
of growth of 18%.
• Outperformed many high tech/growth companies
Organizing and Staffing .
..
• Organization – linkage/interdependence
• Challenge for change as one
• Alignment problem
• Managers organize
• To achieve precision and efficiency
• Requires complex decisions
• Suitable staffing, training, communicate
plans, authority, etc.
 Vs. Aligning People
• Communication problem – not design problem
• Involves talking to many people
• Bosses to peers, peers to bosses
• Even suppliers and customers
• Anyone who can help vision and strategies
• Credibility needed to carry vision to employees
• Leads to Empowerment at all levels
• Have same target
• Lower-level can initiate actions
Aligning People: Case Study
Chuck Trowbridge and Bob Crandall at
Eastman Kodak
• Problem high costs,low profits
• Changes
• Chuck Trowbridge, GM met everyone imp. to
business-crucial area of engineering &
manufacturing head Bob
• Vision: to become a world class manufacturing
Operation & to create a less bureaucratic and
more decentralized organization
• Bob set up no. of ways to empower vision and to
align to it-weekly, monthly, quarterly meetings
• Results
• Appeared within 6 months, more after a
year
• Successes: message more credible: more
people on board
• Quality of one main product line improved
• Defects per unit went down
• Costs on another product line down
• Deliveries on schedule increased
• Inventory levels dropped
• Productivity more than doubled
 Motivating People Vs.
Controlling and Problem Solving

• Change is the key function of Leadership

• Creating Change
• Control mechanisms
• Systems and structures
• Basic Human needs
• Networks of informal relationships
• Communication
 Motivating People: Case
Study
Richard Nicolosi at Proctor & Gamble
• Situation
• No competition for Paper prods. Division for 20yrs
• New market thrusts hurt P&G badly
• Richard, AGM in 1984 finds bureaucratic and centralized
organization
• Focus
• Stresses the need for market driven & creative instead of
low cost producer
• Team work & Multiple Leadership Roles
• Established “ Category & Design Teams.”
• Involves himself more in certain activities
• Vision: “Each of us is a leader” described by ‘Board’,
video graphed and sent to all to see
 Motivating People:
Case
• Results
Study
• Creation of entrepreneurial environment, where
large no. of people motivated to realize vision
• Most innovations from people dealing with new
products
• Ultra Pampers pushes Pampers market share to
58% from 40% & profitability from break-even to
positive
• End 1988, revenues(40%) and profits(68%) up
despite tougher competition
 Creating a Culture of
Leadership
• How a Business Develops Leader-Managers
• Recruiting with leadership potential
• Managing career patterns
• Early Career
• Significant challenges early in career teach about the
difficulty in leading and its potential for producing
change.
• Late Career
• Broadening roles for different displays of leadership
• Relationships built create strong informal networks
needed to support leadership initiatives
 Corporate Leadership
Culture
• Decentralization
• Decentralization is the key: pushing
responsibility lower in organization creates
more challenging jobs.
• Identification
• Making lower level employees visible to senior
management
• Rewards
• Creates a culture where people value strong
leadership and strive to create it.