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Organizational Entrepreneurs: 21st Century Leaders

Making Mountains out of Capitol Hill

A first time visitor to Capitol Hill will probably be surprised to find the legislative branch of United States government essentially run by twenty-something-year-olds fresh out of school. “I’m 33 and I am past my time,” Eric Johnson, former Chief of Staff to Robert Wexler (D-FL), told a group of visiting high school students. “People look at me and say, ‘What are you still doing here Johnson?’”[i] His hyperbole illustrates a point that’s been true for some time: The Hill attracts some of our country’s brightest and most motivated young people to work long hours for little pay (according to the Washington Post, “Many paid interns — which Hill aides often start their careers as — take home barely $200 per month,”[ii] and a fulltime staffer can expect to start in the low $30,000s) to do some of our country’s most important work.

But pay isn’t what motivates these staffers. Instead, they’re driven by an intense interest in politics and a sincere desire to affect change on a national scale. They stay, and work the long hours for low pay, because the structure of Congress allows even the lowest level staffers to play an integral part.

The dirty little secret of Capitol Hill isn’t an affair or cover-up but the simple fact that most of the work we elect our Congressmen and Congresswomen to do isn’t done by them. Unpaid college interns open mail, an autopen signs the response letters, and paid staff research, write, and pass legislation with minimal oversight from their bosses. And although it’s popular, especially now, to dwell on the partisanship that occasionally gridlocks Congress, it’s important to note that Congress still performs remarkably well in representing the interests of its constituents and members.

The secret to Congress’s success is its structure. Eric Redman, a former member of Senator Warren Magnuson’s staff explains in his book, The Dance of Legislation, that Congress, as an institution, offers staff a great deal of individual initiative and responsibility. This type of organizational structure represents a new paradigm. It pushes decision making down to the level of the staffer who must implement and work towards the outcome. The staffer, due to her proximity to the issue and process, best understands not only the desired outcome, but also how to achieve it. If the staffer owns the project, she is more likely to be personally invested in its success. Further, the Senator “at the same time increase(s) the quality and quantity of his legislative output.”[iii]

The new model for leadership is to funnel the natural energy, initiative, and interests of followers in such a way that produces the outcomes desired by the leader. Redman explains the process of leadership in the context of Congress:

“Contrary to what one might think, therefore, the “best” Senator is not one who sees to every detail of his legislation at every stage in its development, or who personally studies each issue on which he must vote, or who comes to the office each morning and tells every individual staff member precisely what he or she should be doing that day. Such a strict hierarchy is inefficient, and produces only a demoralized, browbeater, and unimaginative staff – and a torpid legislative career for the Senator.

An efficient office is one in which the Senator devotes his time to tasks that he alone can perform, delegating responsibility for all the preliminaries and details to his aid… Such an office is exciting to work in, for ideas flow up as well as down, and everyone has something important to be doing all the time.”

– Eric Redman, The Dance of Legislation, pg. 210-211

But this type of leadership goes beyond just delegating… it’s about empowering employees and followers. The Senator is responsible for setting the vision and agenda, and, because she is ultimately responsible to the voters, for achieving goals. Staffers do the rest.

A Senator who clings to the old hierarchical model gets left behind. He can’t produce nearly the necessary quantity or quality of legislation needed to stay relevant if every policy idea has to come down from him and every initiative has to travel upwards for approval. Voters wait a few years and replace him with someone who can meet their growing demands and expectations – with shrinking resources.

If that last sentence sounds familiar, it’s because every business, every organization, every person, is facing a similar problem: How to meet the growing demands and expectations of clients, customers, or constituents with fewer resources. Congress answered that question by blowing up the old hierarchy that governed its structure and empowered staffers to be organizational entrepreneurs – essentially someone who can take an idea and run with it. How are you going to answer the question?

Unless you live in China or India, the answer can’t be “let’s lower the cost and produce more of the same.” Author Dan Pink has already shown that “abundance, Asia, and automation” spell death for any job that can be outsourced overseas or done by a computer formula. Instead, the 21st century leader needs to focus, more so than ever before, on organizational entrepreneurship rather than organizational hierarchy. Our world moves too quickly and there are too many choices for a customer to wait around while they’re transferred from the customer service desk to the supervisor to the shift manager to the store owner.

This means that leaders need to create an organization that pushes autonomy and innovation down the chain of command to those serving the customer. Former General Electric Chairman and CEO Jack Welch is known as “Neutron Jack” for both his decimation of staffing levels and how he blew up the old hierarchy that governed GE. “Hierarchy is an organization with its face towards the CEO and its ass towards the customer,” Welch once famously said. Welch should know. He almost left GE in 1961, a year after starting, in part because he was fed up with the red tape and bureaucracy. Desperate to keep Welch, a higher-up, Reuben Gutoff, promised a small-company environment with big-company resources. Welch agreed to stay and adopted that leadership style of empowering employees as his own. “The idea flow from the human spirit is absolutely unlimited,” Welch said. “All you have to do is tap into that well. I don’t like to use the word efficiency. It’s creativity. It’s a belief that every person counts.”[iv]

So, the future of leadership is, in part, one that empowers. Decisions can’t solely come from the top to be executed by the bottom. The hierarchal pyramid takes too long, stifles creativity, and makes work a terrible place to… well, work. 21st century leaders understand this. They can see better than anyone else that the old system isn’t just dying – it’s dead – and they can see a future in which their organization must be nimble, efficient, and responsive. Implementing the changes and structure that move their organization to that goal is why leaders are paid the big bucks, but leaders shouldn’t be so arrogant as to think that the person on the line (i.e. the person closest to the client, the customer, or product) has nothing to add – no better way of doing things.

“Companies… have to put more and more accountability, authority, and information into the hands of the people who are closest to the products and the customers.”

– Robert Hass, CEO of Levi Strauss[v]

In fact, the litmus test of a 21st century leader is how they treat those front line employees. The Senator in the earlier example is an effective leader because she built a system that allows talented young people to pursue policy goals on her behalf. It’s her vision and his agenda, but it’s the energy, motivation, and skill of these young organizational entrepreneurs that get things done. If she hadn’t changed the system, the voters would have replaced her long ago. If you’re a leader and not empowering your employees to create more, be responsive, and essentially, be human; not just a cog in your organization, your customers will replace you too. The only difference is: they don’t constitutionally have to wait every six years to do it.

The Leader as a System Destroyer

Micro-managing is the paradigm of old, outdated leadership. A good leader in this 20th century model is one that can maximize the output of staff by developing a better hierarchical system (e.g. Henry Ford’s assembly line and division of labor). Most great leaders of the 20th century were engineers by training because the old leadership model required the type of systematic, analytical problem solving, left brain thinking that most engineers excel at. Processing more applications, according to the old model, is essentially a mathematical problem. A leader can increase output by employing more workers, creating divisions of labor, and establishing standard operating procedures. By implementing these changes, leaders could ensure their workers became very proficient at process oriented tasks.

So, why did this model become obsolete? Why aren’t all good engineers also good leaders? The answer is: The nature of work changed.

The tasks associated with application processing can now be automated or outsourced, and in an age of open source and unlimited information, anyone with the Internet can access best practices. Essentially, it’s not enough to perform a task as proficiently as possible, because workers abroad can do it cheaper and computers can do it faster. As the old type of work is automated or outsourced, the new type of work even low level employees face is often complex and requires creative, yet timely solutions. Whereas, a standard operating procedure might have been appropriate for processing applications, it isn’t very useful when dealing with an irate customer angry that he hasn’t heard anything two weeks after sending a thousand dollar check.

“The world works too fast for centralized control. These systems can’t be run by a supervisor at the top of the organizational chart. Bullet trains in Japan run fast and on schedule without a centralized switchboard. It turns out that pushing decision making down the chart is faster and more efficient.”

– Seth Godin, Linchpin p. 37[vi]

Pushing decision making down the chart has to be a deliberate leadership style. Leaders need to understand that holding employees to strict SOPs, manuals, rules, and chains of command will only make staff as proficient as the system allows. Empowering staff to think, innovate, and respond creates a new dimension of success. Consider the axis on the previous page. Any changes that improve the performance of a task (e.g. having one staff member process applications while another sends receipts) move production upwards along the Y-axis. However, these improvements plateau at a certain point of diminishing returns – where the cost of adding another staff member is less than the value that staff member produces.

The responsibility of a leader is to move the organization along the X-axis toward greater efficiency. These changes don’t necessarily require more training, resources, or direction; what they do require is innovative ideas and the redesigning of work. At my work, we could move right on the X-axis by installing software similar to what Amazon uses – not only because it’s cheaper and faster, but also because it allows workers to deal with complex and often emotionally charged problems that computers simply cannot. But the only people who likely understand the value of implementing such changes are those on the front lines dealing with the applications – or other task work – on a daily basis.

Google understands the importance of empowering employees to be entrepreneurs within the organization. That is why Google requires that all their employees spend 20 percent of their week pursuing activities that aren’t in their job description – essentially tasks that move the organization towards “good” on the X-axis. According to a Google Staff blogger, “You can use the time to develop something new, or if you see something that’s broken, you can use the time to fix it.”[vii] Engineers following the 20 percent rule produced Gmail, Adsense, and Google News. For a leader, empowering employees is a value added and output maximizing proposition.’

The Role of the Leader

Vivekanand Salimath is the founder and Managing Trustee of Initiatives for Development Foundation (IDF), a nonprofit organization in India that provides expertise in micro credit, sustainable agriculture, rural development, and micro financing for entrepreneurs. Like many of his partners, Salimath background was in the big banking industry of India. And like many Indian industries, banking is dominated by the hierarchical top-down system of leadership. Salimath said only the Chairman of his bank made big decisions and any small decision Salimath made – even a simple emailed response – required a statement that clearly outlined the thought process and logic behind it.[viii]

So when Salimath left banking for the nonprofit world, he did exactly as he was trained and prepared a flow chart justifying his decision making for his new boss. His boss called him in and told him that there should only be two times that he needs to report in: 1) If he can’t make the decision 2) To share progress.

Salimath adopted this style when he founded IDF and it led the foundation to being named one of the top 50 Microfinance Institutions in India. Salimath says his leadership style of empowering employees boils down to one word: “trust.” He says that if you look at decision making processes in the microfinance industry, most losses happen because of delays in decision making. If you empower staff to make decisions, they’ll be even better decision makers in the future. Salimath knows that his staff won’t always make decisions the way he would, and that sometimes that means losses for IDF. But he views each loss as a professional development expense and budgets accordingly.

Salimath’s view of “trust” is a recurring theme one hears over and over from top leaders.

“It has become obvious over the past few years that people will in fact work more creatively and more productively if they are trusted and empowered, and if they know that what they are doing means something.”

– Jack Welch, Chariman and CEO, General Electric

Having that level of trust in your employees requires a tremendous level of self-awareness. According to Daniel Goleman’s “What Makes a Leader,” “self aware people know – and are comfortable talking about – their limitations and strengths… They have a firm grasp of their capabilities and are less likely to set themselves up to fail by, for example, overstretching on assignments.”[ix] The first step, then, to becoming a leader that empowers is to recognize that you can’t possibly know all the answers. When you recognize that simple fact, trust, empowerment, and relationship management – all the things needed to work with others to reach decisions – come naturally.

The 21st century leader’s responsibility is not to be a system builder (developing SOPs, manuals, and rules to govern employees); instead, a successful leader needs to funnel the energy of followers towards a vision and give them the resources needed to get there.

Models of Leadership

Below is a graphical representation of the old model of leadership. It is the traditional top-down hierarchy that governed work for hundreds of years. It was highly proficient during the industrial age because low level workers did monotonous tasks over and over and having an organizational chart guaranteed that tasks were done precisely to leadership’s specifications. Researchers at MIT agree. They found that “for simple tasks under static conditions, an autocratic, centralized structure, such as has characterized most industrial organizations in the past, is quicker, neater, and more efficient.”[x]

Today, those routine tasks are being outsourced or automated and the top-down model is no longer efficient or sufficient. According to the same MIT research on organization and communication, “for adaptability to changing conditions, for ‘rapid acceptance of a new idea,’ for ‘flexibility in dealing with novel problems, generally high morale and loyalty… the more egalitarian or decentralized type (of system) seems to work better.’” MIT researchers have confirmed what others have long argued – that leadership is the ability to empower organizational entrepreneurs to meet ever changing conditions and challenges. This style of leadership requires a new model that illustrates the decentralization of decision making and empowerment of employees.

In this model, the leader acts as a funnel for staff. The leader is responsible for articulating a vision and clearly identifying the goals, objectives, and measures of success for the organization. He or she needs to take the wide array of ideas found in a diverse workplace and channel them toward a more narrow goal.

Using the earlier example of Congress, we can envision the Senator as a funnel for her staff. As an effective leader, she informs her staff of her agenda through briefings, statements, and campaign promises and leaves it to them to pursue the appropriate policy proposals. As a congressional staffer, Redman came to Capitol Hill with a desire to affect health care legislation on a national scale. Senator Magnuson’s leadership provided the boundaries for what policies would be appropriate and acceptable, and within that framework, he allowed Redman to develop what would become the National Health Service Corps – essentially on his own.

However, providing direction and funneling energy is insufficient to produce success. A leader must also provide staff with the resources (represented by the arrows in the model) needed to be organizational entrepreneurs. In the Redman case study, Sen. Magnuson’s status provided Redman with the prestige and institutional reputation needed to garner co-sponsors. He also provided Redman with unfettered access to other key players in the health care debate. An effective leader doesn’t just produce a vision statement and then let staff run wild. Rather, empowerment has two parts. The first is psychological – inspiring people, getting buy-in for your agenda, and creating a culture of entrepreneurship. The second is physical – the resources required to implement change. Sen. Magnuson could have pushed every decision down to staff level, but unless he also gave them the tools to implement decisions, the results would be futile.

The Moral Argument for Empowerment

Throughout this paper, I have attempted to make the practical argument that the key to successful leadership is to empower employees and followers. I’ve argued that empowerment creates innovative solutions, costs less, is quicker, and is simply more productive for your business. Now, I would like to argue that leaders have a moral imperative to empower.

“The quickest way to increase dignity, meaning, and community in the workplace is to involve people in redesigning their own work.”

– Marvin Weisbord, Productive Workplaces[xi]

There is a myth in our culture that work needs to be joyless – even painful at times – to qualify as “work.” Unfortunately, that myth perpetuates the oppressive, autocratic, centralized leadership style that is ill-suited for 21st century type of work. One could argue that the foreman on an assembly line was needed to keep industrial workers performing the same monotonous tasks, but few could argue that the foreman is a productive way to make architects design better buildings, lawyers win cases, or software engineers develop iPhone apps. The old system shackles innovation and creativity. It discourages people from exercising their whole selves in the service of a task. Empowerment is emancipation.

It’s no surprise then that Philip Slater and Warren G. Bennis wrote forty-six years ago that empowering employees was the “democratization” of corporations.[xii]

“Democracy has been so widely embraced not because of some vague yearning for human rights but because under certain conditions it is a more ‘efficient’ form of social organization.”

– Slater and Bennis, “Democracy is Inevitable,” Harvard Business Review[xiii]

The authors establish five key values to define “democracy.” Inherent in each of these are improvements in both efficiency and the way leadership views followers.

  1. “Full and free communication, regardless of rank and power.
  2. A reliance on consensus rather than on coercion or compromise to manage conflicts.
  3. The idea that influence is based on technical competence and knowledge rather than on the vagaries of personal whims or prerogatives of power.
  4. An atmosphere that permits and even encourages emotional expression as well as task-oriented behavior.
  5. A basically human bias, one that accepts the inevitability of conflict between the organization and the individual but is willing to cope with and mediate this conflict on rational grounds.”

Empowerment is essentially the way an effective leader treats other human beings. It should come as no surprise then that one of the most common traits found in a good leader is emotional intelligence. As the work we do becomes less systematic, less process-oriented, and less automated, the ability to relate to and understand others will become more important.


Whenever I share my views on leadership, someone inevitably provides a caveat. “This type of leadership only works if you have great employees.” “That can’t work here.” “My employees don’t have the education or the drive.” Inherent in each of these statements is hubris. If you think that you are the only one in your organization with the right answers, ability, and technical skills, then yes, this leadership style will not work…but its failure won’t have anything to do with your employees.

If you believe in the possibility of others – that every person adds value and wants to do their best – then it becomes your mandate as a leader to unlock that potential.

Kevin Carter is a Presidential Management Fellow

[i] “Fighting the Good Fight.” The Hill. Sundance Channel. 2006. Television.
[ii] Goldfarb, Zachary A. “Hill Salary Site Proves Too Big a Hit.” Hill Salary Site Proves Too Big a Hit 27 Sept. 2006. The Washington Post. Web. 27 Apr. 2010. <http://www.washingtonpost.com/wp-dyn/content/article/2006/09/26/AR2006092601277.html>;.

[iii] Redman, Eric. “Pg 210.” The Dance of Legislation. Seattle: University of Washington, 2001. Print.

[iv] Byrne, John A. “HOW JACK WELCH RUNS GE: A Close-up Look at How America’s #1 Manager Runs GE.” BusinessWeek. 8 June 1998. Web. 27 Apr. 2010. <http://www.businessweek.com/1998/23/b3581001.htm>;.

[v] Hass, Robert, quoted in Robert Howard, “Values Make the Company: An Interview with Robert Hass,” Harvard Business Review (September-October 1990), p. 134

[vi] Godin, Seth. Linchpin: Are You Indispensable? New York: Portfolio, 2010. Print.

[vii] K., Alex. “Google’s “20 Percent Time” in Action.” Web log post. Official Google Blog. Google, 18 May 2006. Web. 27 Apr. 2010. <http://googleblog.blogspot.com/2006/05/googles-20-percent-time-in-action.html>;.

[viii] “Interview with Vivekanand Salimath.” Interview by Christina Gonsalves. Email.

[ix] Goleman, Daniel. “What Makes a Leader?” Harvard Business Review January (2004): 2-11. Print.

[x] Slater, Philip, and Warren G. Bennis. “Democracy Is Inevitable.” Harvard Business Review March-April (1964): 167-76. Print.

[xi] Weisbord, Marvin Ross. Productive Workplaces: Organizing and Managing for Dignity, Meaning, and Community. San Francisco: Jossey-Bass, 1987. 311. Print.

[xii] Slater, Philip, and Warren G. Bennis. “Democracy Is Inevitable.” Harvard Business Review March-April (1964): 167-76. Print.

[xiii] Slater, Philip, and Warren G. Bennis. “Democracy Is Inevitable.” Harvard Business Review March-April (1964): 167-76. Print.

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