Application of Contemporary Style Leadership in Publicly Traded Software Development Companies

Application of Contemporary Style Leadership in Publicly Traded Software Development Companies

Andras Bori

University of Phoenix

Application of Contemporary Style Leadership in Software Development Companies

This paper examines contemporary leadership styles that could be adopted by leaders within publicly traded software development companies. Employees can assume formal and informal leadership roles within a big corporation. Companies promote into supervisory role selected individuals based on various skills sets to establish a formal leadership structure. Informal leaders also emerge usually based on their special interests, talent, skills or new technology that people get excited about and decide to promote within a company. This paper analyzes how the social network, transactional and transformational, the paradox in harmony, charismatic and instrumental, and situational leadership styles apply to formal and informal leadership within software companies at the Vice President level or above leadership positions.

Analysis Section

Burns (1978) establishes the definition of leadership as leaders inducing followers to accomplish common goals that serve the interest of both leaders and followers. He suggests that there are two types of leadership to achieve that, transactional and transformational leadership. Transactional leaders focus on value exchanged between a leader and follower to accomplish a common goal. Transformational leaders motivate their followers to achieve a common purpose in a way that increases each other’s motivation and morality.

Nadler and Tushman (1990) introduce charismatic and instrumental leadership. They argue that instrumental leadership plays a significant role to ensure changes achieved by charismatic leadership stay in effect over time. Charismatic leaders create a vision that unites people to accomplish change, energizes people, sets high expectations, express personal support, and confidence. On the other hand, Instrumental leaders build competent teams, establish standards, measurements, rewards, punishments and create processes to support consistent behaviors to accomplish change.

Kotter (1990) argues that leadership and management are two unique system of actions. Leadership's primary focus is dealing with change, setting direction, aligning, motivating and inspiring people. Kotter (1990) also discusses that informal relationships are important in coordinating leadership activities. Management focuses on activities such as planning and budgeting, quality and profitability of products, organizing and staffing, controlling and problem-solving, coping with complexity as well as building fail-safe and risk-free processes.

Balkundi and Kilduff (2006) suggest that “Starting with the cognitions in the mind of the leader concerning the patterns of relationships in the ego network, the organizational network, and the inter-organizational network, social ties are formed and maintained, initiatives are launched or avoided, and through these actions and interactions, the work of the leader is accomplished”(p.434). Strong leaders have a dense, cohesive, ego network with a diverse range of people. They form alliances to create an inter-organizational network that span across boundaries. Leaders also play a central role in organizational level. The focus of leader effectiveness at the organizational level is survival, growth, and innovation. On the other hand at the intra-organizational level the focus is on coalition-building, mentoring distributed leadership as well as brokering.

Thompson and Vecchio (2009) investigated the validity of situational leadership theory. Situational Leadership theory states that the level of task structuring should decrease as the level of maturity of the employee increases. The research conducted by Thompson and Vecchio (2009) did not provide explicit support for the situational leadership theory.

McElhatton and Jackson (2012) advocating for leaders to find harmony in their leadership styles. They suggested that “hard power and soft power is managed through ‘smart power’, or the contextual skills that help the leader adjust, adapt and ‘create luck’" (p.453). The leaders should acquire hard power skills associated with transactional leadership such as managing organizational capacity, reward and punishment. Leaders should also learn soft-power skills like attraction, persuasion, emotional IQ, communications, and vision. The successful leader masters the different styles and selects the leadership style that is most relevant to the situations at hand.

Burns (1978) and Kotter (1990) have similar ideas about categorizing the activities managers perform into two categories leadership and management. Burns discusses it as transactional leadership and transforming leadership whereas Kotter calls out the difference between management and leadership. They have similar suggestions in that both management and transactional leadership focuses on controlling transactions and processes. On the other hand leadership and transformational leadership is focused on motivating, inspiring, aligning people to achieve a vision.

Kotter (1990), Balkundi and Kilduff (2006) had similar views in that building social network for leaders is a key ingredient to their success. Kotter argued that extensive informal networks are so important that if they do not exist they need to become a central focus of creating them to enable successful leadership. Balkundi and Kilduff (2006) have analyzed the impact and importance of the social network, and they argued that leadership is around successfully interacting and playing a central role in various social networks.

McElhatton and Jackson (2012), Thompson and Vecchio (2009) had similar ideas in that leadership styles would change depending on the situation. McElhatton and Jackson (2012) suggested that leadership styles should be adjusted based on the context at hand. Thompson and Vecchio (2009) argued that leaders should base their style of leadership based on their follower's experience level.

The difference between the suggestions to leadership styles is that some advocate to focus on adopting one particular style independent of the situation, whereas others suggest that leaders should be well versed in many different leadership styles and be able to apply the one most relevant based on the situation at hand. Balkundi and Kilduff (2006) recommend using the social network approach in any case. Others have recommended a different style of leadership based on changes in context and situation.

Authors Burns (1978), Kotter (1990), McElhatton and Jackson (2012), Nadler and Tushman (1990), Thompson, and Vecchio (2009) are aligned in that successful events to happen companies need a vision as well as execution focused leadership. Visionary leadership creates excitement and alignment needed to be able to adapt to changing environment. Execution focused leadership on the other hand ensures fluid execution and high-quality process to make sure that required outcome is accomplished in the most efficient manner and that the desired results are sustained in the long run.

Limitations of this analysis could include not taking it into account where a leader is within the organizational structure and how the expectations of the leadership style change based on different positions. Managers need to shift to leading to managing people as they move up in the management ranks. The studies don’t take into account that the closer people manager are to the day to day operations of the business, the more expectations are placed on them to ensure reliable processes and execution. On the other hand, as people move up within the organizational structure, and the scope of their supervision increases the expectations shift toward casting a vision and ensuring alignment. The executive leadership's team responsibility is to cast a compelling vision, whereas middle management is in charge of aligning the rest of the organization to accomplish the vision.

Evaluation Section

The criterion to evaluate the relevance of information is that proposed leadership style enables leaders in a vice president or above leadership position to successfully fulfill a position at a publicly traded company. Shareholders and Wall Street analysts constantly evaluate companies for growth potential, financial health, and vision. Publicly traded companies are required by law to publish quarterly earnings every quarter. In the quarterly earnings, analysts expect the leaders to set targets for upcoming quarters and to be able to tell a compelling story about the company’s vision and what the company intends to do to achieve quarterly targets. Proposed leadership styles and framework should aim to create a vision, setting goals and aligning organizations on executing to that vision.

My conclusion is that the leadership styles that mostly align with the requirements for assuming a leadership position at a publicly traded company to meet shareholders expectations in a VP-level or above role are transforming leadership as outlined by Burns, Leadership as discussed by Kotter and Charismatic Leadership advocated by Nadler and Tushman. They advocated that a leader has to be able to cast a vision, align people, communicate effectively and energize and motivate people.

According to McElhatton and Jackson (2012) a good leader “avoids ideologies or ‘boxed-in’ thought, wields authority without being authoritarian, prefers peace but is decisive in war, and has the toolbox of hard, soft and smart skills that can be utilized according to context.” (p. xx) I agree, and would also offer that within publicly traded companies in some part of the management hierarchy all leadership styles discussed in this paper could be very effective and valuable. I would also suggest that sometimes becoming great in all situations is not feasible and as such a key task for a good leader is to recognize his own strength and weaknesses and to build a team around himself that makes the leadership team well rounded and equipped to face different challenges.

Synthesis Section

Ultimately my goal is to demonstrate that the success of many corporations originates in having a strong leader. Most of those leaders had a vision that was ahead their time to solve large problems, and were able to bring a group of people together to successfully solve that problem better than anyone else. The leaders have been in different industry and times, but what seems to be common in their leadership traits, is that they had a vision, created a great team around them, get their teams energized and motivated, and showed extreme perseverance in executing that vision through many obstacles.

In my professional context, these ideas could be visible in the following ways. Leaders need to ensure that the company they lead is constantly searching for real-life customer problems that impact a large group of people and have the potential to create a major market opportunity. After identifying opportunities the leader create a vision, goals and a strategic plan to solve those customer challenges. Once the vision is in place the leader ensures that the rest of the organization is aligned to the goals and employees are motivated and energized to find ways to tackle the problems and deliver a world class solutions to penetrate those target markets before the competition.

As a result of my professional experience I offer the following model where a leader at publicly traded companies should be focused on building a leadership team and a company culture that enables the organization as a whole to constantly innovate around solving customer problems and delivering exceptional solutions to meet unfulfilled needs. A leader at any level is only as strong as the leadership team he/she is supported by. Strong well-functioning and well-rounded teams can propel companies to excellence. Weak leadership teams can stall a company from moving forward and adapt to changes at the pace to keep up with the competition.

References

Balkundi, P., & Kilduff, M. (2006, 17). The ties that lead: A social network approach to leadership. The Leadership Quarterly, 17(), 419-439.

Burns, J.M. (1978). Transactional and transforming leadership. Leadership, (), 19-20.

Kotter, J.P. (1990, May-June). What Leaders Really Do. Harvard Business Review, ().

McElhatton, E., & Jackson, B. (2012). Paradox in harmony: Formulation a Chinese model of leadership. Leadership, 8(4), 441-461.

Nadler, D.A., & Tushman, M.L. (1990, Winter). Beyond the charismatic leader: Leadership and organizational change. California Management Review, 32(), 77-97.

Thompson, G., & Vecchio, R.P. (2009, 20). Situation leadership theory: A test of three versions. The Leadership Quarterly, 20(), 837-848.

Wren, J.T. (1995). The Leader's Companion. New York, NY: The Free Press.

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