We are used to thinking of responsibility as conscious and voluntary. In The Godfather movies, when Michael Corleone asks "Who gave the order," he is asking whom to hold responsible for an act of betrayal. At the other end of the spectrum is a recent statement by the former CEO of a company called Netmarket that he cannot be held responsible for accounting fraud which occurred on his watch, because he did not know about it.
The legal theory under which the Netmarket CEO may be held responsible involves a two part question: did he know or should he have known? The first approach holds a leader responsible for giving the order, or being aware of an intended action and failing to stop it. The second blames him for failing to ask the right questions or to set the right standards for the organization. Lawyers call the first failing "intent" and the second "negligence".
There is a third legal theory which is relevant: that of "absolute liability". Under certain circumstances, the law calls a party to account for a bad outcome regardless of intention or negligence. Absolute liability is a concept indispensable to a full-fledged theory of leadership.
The famous sign on Harry Truman's desk said, "The buck stops here." It didn't say, "The buck stops here if I asked you to do it, knew you were doing it, or should have figured it out." He meant something more primitive: everyone in his organization chart could point a finger upwards except him, because he was at the top of the organization.
Power in an organization is seated in a chief executive and delegated downwards. That power consists of authority and responsibility. Both may be delegated together, but whatever is delegated is still retained. If I argue I am not retaining any responsibility, than I am claiming to have abdicated power, not delegated it. The best boss I ever had wrote a memo to a subordinate about an error the firm had made: "I take 100% of the responsibility. How much do you take?"
In order for an organization to function, people must be made accountable for the performance of certain duties. They must also be given the decision-making power to carry these duties out. It is a matter of logic that in order to "make someone accountable" the maker must originally have been accountable himself. By tapping someone below him in the organization to execute the particular duty, he is not released from accountability himself.
When an executive attempts to evade blame by blaming his subordinates, like the Netmarket CEO did, he is behaving weakly and exploiting a misconception of the nature of power.
Authority and responsibility must, of course, travel together in order for the people to whom they are delegated to perform their duties effectively. The worst nightmare in any human enterprise is to be responsible for something but to lack the authority to make it come out right. The Netmarket CEO, by contrast, was claiming to have only authority, no responsibility---a situation which creates monsters. The CEO's very statement that he is not at fault confirms that he is, for creating an environment in which such an irrational separation of authority and responsibility could encourage people to believe that wild and improper actions could be taken without consequences.
An executive's statement blaming his subordinates may be translated as: "I am not a leader."
Responsibility
If authority were never an issue, one would want to delegate maximum responsibility everywhere. In order most fully to realize the potential of every member, and best guarantee the success of the organization, you would want to have everyone feeling just as responsible as the chief executive for the success or failure of the enterprise. The correct answer to my former boss's question, "How much of the responsibility do you take?" is: "Also 100%". The only limitation on a complete delegation of responsibility is that it would be unfair, and ineffective, not to match it with the appropriate authority necessary to get the job done. The janitor cannot feel as responsible as the chief executive unless he has the ability to make the corresponding decisions without asking anyone. Thus our willingness (or not) to delegate authority is a braking factor on the dissemination of responsibility.
Authority
Authority is quite simply the ability to make particular decisions without having to ask someone else's permission. (Responsibility is then being held to account for these decisions.) For any kind of human enterprise to operate, hundreds or thousands of decisions must be made daily. While someone is deciding whether or when to take the company public, someone else is choosing which brands of pencil to buy. If no-one can make decisions, the organization cannot act. If everyone can make any decision, there is no organization.
The modulation of authority is a more subtle problem than the dissemination of responsibility. Unlike responsibility, which should be as fully distributed as possible, authority must be more sparingly handed out. In order for there to be an organization, there must be a cohesive vision imparted from the top. In some organizations---democratic ones---it reflects the will of the group. In others, such as most businesses, it is imparted from the top and people join the organization based in part on their desire to adhere to the vision. In either event, the complete delegation of authority means there can be no cohesive mission. For example, in my organization the mission is to be a consulting firm developing business applications using Web technology. This means that we should not be in the hosting business. If I delegated the authority to an employee to decide to bid on a hosting contract, the organization would not have a unified mission.
If I must withhold some authority to assure cohesiveness, it follows that I withhold some responsibility as well, as these travel together. Delegating accountability unmatched by the ability to make decisions places unbearable stress on people and is also unfair. Therefore, authority and responsibility must be carefully tailored to one another. A member of the organization must be able to decide precisely those things for which I wish to hold him accountable.
The Rift
A split between authority and responsibility is probably the most common failing in organizations today. On the one hand, people suffer over their accountability for projects which they lack permission to manage to a successful conclusion. The responsibility should not be fixed on such people, but at the first level of the organization chart at which the necessary authority also exists. In some cases, no-one below the executive may have the ability to affect an outcome. (If this is true of too many outcomes, the executive has done a piss-poor job of delegating.) In all cases, the executive shares the authority and responsibility with the individual to whom they are delegated.
While responsibility unhinged from authority creates hapless victims, authority without responsibility creates monsters. People who can make decisions for which they can never be held accountable have the potential to be incredibly destructive of the organization and of the lives of its members.
The sense that one has responsibility---for one's family, job, possessions---without the ability to make things come out right is pervasive in society today. The panacea promised to people with a strong sense of victimhood is all too often the opposite evil: authority without responsibility. Win the lottery or the lasuit, and you will have power, but be accountable for nothing.
Compassion
The role of compassion in leadership is poorly understood. Many people believe there is no relationship. "You can't make an omelette without breaking eggs."
Compassion is located near responsibility in the geography of leadership. Compassion for people is one motive (not the only one) for taking responsibility for them. The converse is that we tend to feel compassion towards people we are already responsible for.
Compassion as an element of leadership has a bad reputation today. Social conservatives believe that compassion, inappropriately exercised, turns people into children, granting them benefits while requiring nothing in return. Compassion leads to the welfare state. Similarly, compassion in business may be viewed as inconsistent with the goal of maximizing shareholder value, or in a worst case, may lead to indecisiveness (since every decision hurts or disappoints somebody).
Certainly, compassion in any organizational setting must be tempered by fairness. One of its dangers is that we will tolerate behavior from people to whom we feel attached that is prejudicial or demotivating to the rest of the group.
Compassion is either a reminder, or the product, of the fact that the people in the organization are not property. If they are seen as ends rather than means--- a necessary condition to the organization's existence, and a major constituency-- we can fashion an organically healthy operation. If, on the other hand, we regard people as objects---eggs to be broken---they will cotton to this fact and drop out sooner or later.
Looked at this way, it is hard to fashion a definition of leadership which excludes compassion. One does not lead one's house or one's bank account. Cows are herded, not led. Leadership implies a dialog between the executive and the members of an organization, in which both are treated as ends by the other. In this case, compassion is a convenient term for the enlightened self-interest that binds them together.
Constituencies
Always in the background in any discussion of leadership is the question: who does the leader represent? From whom does he derive his power? If he represents only himself (for example, the sole proprietor of a company) we are likely to see the classic authority/responsibility rift: he is accountable to no-one. In this situation, which echoes the primitive monarchy in which the king was sole owner of his people, compassion, common sense and a desire not to commit waste, may act as the sole brakes on authority.
In the 1980's, much was made of the fact that an executive's sole constituency in a public corporation is the shareholders, and therefore that maximizing shareholder value was the exclusive goal. This message was always heard in the context of the leveraged buy-out and break-up of a corporation as a rationale for its destruction. It was not a long-term philosophy.
A corporation, public or private, which desires to stay in business long-term, as opposed to one which is closing up tomorrow, has four constituencies: its employees, its clients, its shareholders and the public in general. The philosophy of "maximizing shareholder value" suggests that you can do so by exploiting or even by destroying the other three groups. The opposite is true. In most cases, shareholder value is maximized in the long term only when the other three constituencies are being cared for properly. The healthy organization is one which regards all four constituencies as ends, not means.
We have all seen (and probably worked or lived in) organizations in which there was a pervasive sense that the members were regarded with contempt. A lack of reciprocity (why should I work hard for you if you don't care about me?) encourages apathy, dishonesty, or a bureaucratic mentality in which people lose themselves in the details of process and don't care about outcomes.
Selfishness and disregard at the top levels promotes the victim/winner mentality described above. Why should people desire to feel more responsible for the organization as a whole than their leaders do?
I am not arguing that the market never rewards companies which are disregardful of one or more constituencies. Aside from those whose stock climbs as a brief run-up to their destruction via merger or break-up, companies may be rewarded sometimes for treating their customers or the public like chattels. Microsoft is an example.
Nevertheless, given enough time, I believe that the company which will succeed best in the long term is one which respects all four constituencies.
Values
Leadership is not a binary state. Most people spend some of their time leading and some being led. Nor does the existence of a leader imply a lack of capacity in others; human organizations are all based on the concept of one or a few people playing an executive role, which involves making decisions which cannot conveniently be made by the whole group acting together. If we were all equally qualified to lead, we would still want to designate one of us, perhaps in rotation, to act as the leader.
If we thus define a leader as an individual designated to focus the action of a group, what are the qualifications which would make someone effective in that role?
Assuming that the group exists in a democratic, competent society where people want to be treated as adults, and not abdicate all power to a paternalistic leader, they will pick an individual somewhat more experienced than the rest, and capable of applying that experience to decision-making.
Decisiveness is important. Nothing harms confidence as much as a perceived inability to decide. To survive, let alone flourish, an organization needs a large number of decisions made in real-time. It is, unfortunately, a common phenomenon for an organization to die because hard decisions are deferred from month to month.
A leader's values should be an "open system", meaning that the "internals" should be visible to everyone. No-one likes dealing with, let alone being led by, people whose values are deliberately hidden from us. Phrased differently: before we salute a flag, we need to know what it stands for.
A leader is simultaneously a relay, communicating the values of the group, an amplifier, intensifying them, and a transmitter broadcasting entirely new values when they are needed.
In order to command the respect of a group of people, nothing is as crucial as the willingness to delegate both responsibility and authority. All of us seek meaning in our own lives. It is almost impossible to find any in a life deprived both of accountability and the right to decide. This is the life Kundera described in Unbearable Lightness of Being.
The exchange, carried out in an atmosphere of enlightened self-interest, of power for work is beneficial to the executive, who cannot do everything himself, and to the member of the organization whose life is made more meaningful by the ownership conferred on him.
The organization can be conceived of as a partnership of mature adults, specialized in different areas, who barter rewards with one another in pursuit of a mutually significant goal. In this atmosphere of rough euqality, the executive is a first among equals, the individual tapped by the others to make decisions and impart the organization's vision.
Vanity is the biggest danger for all human enterprises. It is very easy to reason in reverse, from position to talent: I hold this job, therefore I am good. A better approach would be to think of an executive position as a daily job interview, in the same sense in which Renan said nationhood is a daily plebiscite: what have I done today to justify the confidence people place in me? Did I live up to my standards today? To the expectations I have encouraged others to place in me?
Instead, I recommend basing one's code of conduct as an executive on humility, tolerance and optimism.
Humility involves constantly reminding yourself that you do not know all the answers and that a dialog with everyone in the group offers both procedural and substantive benefits. Procedurally, the dialog communicates to the others that they are significant participants in the enterprise, with power and influence of their own. Substantively, you will learn things and be alerted to dangers you will not see on your own.
Tolerance means being aware that people loyal to you and the organization may have very different ideas than your own. Punishing people for disagreement creates a silent, moody and sycophantic group. The criterion for a healthy organization is not that there be no dissent, but that the dissenters trust you, and the group enough, to go along with most decisions with which they do not agree. If people hold themselves out, there is no organization.
Optimism speaks for itself. No-one wants the pilot screaming on the loudspeaker, "Oh my God, we're going down!" The combination of experience with decisiveness means there is always something left to try. When people believe in themselves and in you, the possibilities of redemption are almost endless, even in a serious crisis.
In a healthy organization, it is not hard to feel this optimism: it is generated by the good will the members bear to one another.