Ninety-one executives gathered at IMD to learn about the importance of “nonsexy” or instrumental leadership. Professors Hooijberg and Antonakis shared their latest research, followed by a negotiation exercise demonstrating how difficult it is to apply the theory in real-world situations.
There is a gap between what can be called the “soft” side of leadership (transformational) and the side that is more focused on “carrots and sticks” (transactional). Although both are important elements of effective leadership, leaders must also know the “nuts and bolts” of the context in which they are leading. Instrumental leadership fills that gap.
Transformational leadership focuses on setting a vision, being charismatic, developing employees and inspiring them to achieve better individual and organizational performance. This type of leadership has received considerable attention and currently dominates the research and practice landscape.
Transactional leadership focuses on ensuring that employee efforts are aligned with those of the organization by using incentives and disincentives. Other areas of leadership have focused on the traits of effective leaders. Within this work researchers have studied the impact of such variables as as height, emotional intelligence, task- and people-oriented behaviors, participative decision-making, mentoring, managing teams, communication and many others.
Because transformational leadership focuses on the big picture and on the inspirational part of leadership, and transactional leadership concentrates on enforcing obligations, there is a huge area of leadership that remains underrepresented in both research and in educational programs. This area is about answering questions such as “What are the implications of the vision?” “Is it realistic?” “How can we make the vision happen?” What we call “instrumental leadership” deals with scanning the external environment, identifying opportunities, choosing the right strategy, and then providing the needed information, tools and resources to get the job done. It is what could be described as the “non-sexy” part of leadership. In executive education, it is much more fun for both participants and professors to focus on developing an inspirational vision and strategy rather than making the difficult instrumental decisions.
Although this might sound obvious, we frequently see leaders who do not think through strategic decisions and/or do not act in ways consistent with their organization’s vision and strategy, and that includes those who formulated that vision and strategy. Organizations often find themselves in the following situations:
- Being led by charismatic leaders who are charming and communicate convincing visions that are difficult to operationalize or are unrealistic.
- Implementing budgeting decisions that are not aligned with the strategy.
- Having unreasonable strategic goals or pursuing opportunities that are inconsistent with the vision.
- Failing to communicate strategic milestones throughout the organization that will help make the vision reality.
- Misaligning various strategic decisions (e.g., HR decisions, reward systems) with the strategy.
- Failing to make business units see how their collective efforts contribute to the strategic vision.
Commissioning consulting strategy reports that do nothing but collect dust.
Instrumental leadership requires knowing which strategy will make the organization adapt to the external environment and aligning that strategy with actions. Leaders must remain attuned to what is happening real-time, both inside and outside the organization, and not just blindly deliver and execute “visions.” Although these tasks are not as sexy as setting a vision and being charismatic or being a great mentor and motivator, instrumental leadership is essential in order for activities relating to vision and strategy to have any real meaning and to ensure that the company stays in business.
One key element that is given relatively short shrift is the role of domain-specific expertise. We would even argue that simply using transformational leadership without such expertise is dangerous for organizations. Research on “expert leadership” shows that leaders who have significant industry experience are more effective than those who do not. According to Professor Amanda Goodall, having experts as managers predicts better performance across different domains such as Formula One teams, basketball teams and hospitals. Similarly, Professor Antonakis’s research clearly shows that deep knowledge of the nuts and bolts of the business you are leading makes a big difference to organizational effectiveness outcomes and matters more than both transformational and transactional leadership.