Understanding the Institution of Leadership

When organizations struggle or fail to produce a Lean transformation (the “effect”), the causes commonly cited include:

  • Lack of management support
  • Leaders not personally engaged
  • Fear of change or failure
  • Poor communication
  • No sense of urgency
  • No training or poor training
  • Middle managers are the obstacle
  • Leaders don’t treat employees with respect
  • Lack of accountability
  • Lack of rewards and recognition
  • Can’t let go of command-and-control
  • No good role models (wrong behaviors)
  • Not interested in developing people

These are the causes that we observe and assign to our collective observation that Lean transformation is difficult and that there are surprisingly few examples of successful Lean transformation — which we’ll define as achieving noteworthy levels of material and information flow, culture change, and related basic attributes. These causes have been recognized for decades, and hundreds of organizations and thousands of people have put a lot of effort into ameliorating these causes. Even Toyota struggles with these things internally, as well as with its suppliers. Yet, after 30 or more years of corrections made to the causes, such as ensuring management support, leadership engagement, eliminating fear of failure, improved communication, and so on, we still don’t have much more to show for it.

It is therefore apparent that something else is going on. The causes listed above are merely visible manifestations of what is occurring at much deeper levels. Years ago, I embarked on a research project to understand those deeper levels, which I call “the institution of leadership.” I wanted to learn the details about people in leadership positions: their culture, habits of thought, interests, social experiences and pressures (emulation), how they learn, what drives them, and how these inform actions such as decision-making, which affect many other people.

It is crucially important to recognize that anyone in a senior leadership position has responsibility for property (which has great monetary value) and vast sums of money — its sources and uses. That means, the institution of leadership is, in great measure, a pecuniary institution. And that makes leadership something very different from any other kind of work. Where does the pecuniary institution of leadership come from? What is its history? How is it different from other kinds of work? And how has it evolved over time? These are the kinds of questions that must be asked in order to understand how to produce many more Lean transformations.

I created the image below several months ago after I completed my recent book, The Triumph of Classical Management Over Lean Management: How Tradition Prevails and What to Do About It, and upon re-reading Dr. Deming’s book, The New Economics. My desire was to visualize the leadership described in each book. Dr. Deming describes the leadership necessary for a progressive management practice, while I examined the leadership that has long existed in classical management practice.

SoPK vs SoPP2

Before going further, allow me the liberty of extending Dr. Deming’s System of Profound Knowledge (SoPK) to other forms of modern progressive management practice such as Toyota Production System, Lean management, Agile, etc. In other words, let’s combine these as one type of progressive management practice for the sake of illustration. The image on the left side shows the System of Profound Knowledge, built by humans from sense-based perceptions gained from doing value-creating work (de facto). Humans are engaged in life processes within ever-changing systems and they use natural senses and abilities to recognize and correct problems using innate curiosity and basic protocols for experimentation. The result is progress that more-or-less keeps pace with the times. A select few people emerge who desire to lead organizations in ways that are consistent with Dr. Deming’s vision for The System of Profound Knowledge. But why is it that only a select few people emerge as leaders? Why not more? Why not many more? What stands in the way?

The image on the right side shows the the System of Profound Privilege (SoPP), which has long been common and is associated with archaic classical management practice. The System of Profound Privilege is built from preconceptions (preconceived ideas or prejudice) and holds a commanding position over Lean. It descends from Deities into the minds, hearts, and hands of Monarchs. Their privileges are enshrined in Natural Rights, Natural Law, and codified in founding legal documents (de jure). After many centuries, these privileges and associated rights were extended to business owners and political leaders. Together, they rule the underlying population. Being in a preferred position in society, one of privilege and benefiting from it, means that business and political leaders prefer the status quo to progress, and so change comes about very slowly — though sometimes quickly, such as in war or other calamity. That is why top leaders find fundamental change so undesirable to undertake, and why non-leaders (working-level employees) usually fail to gain leader’s interest in making the kinds of major improvements associated with Lean management. The result is to always be behind the times; an outcome that is happily welcomed by some, but not the many.

When organizations struggle or fail to produce a Lean transformation (progress in management practice), the underlying cause is a institution that has been carefully designed to require leaders to preserve the status quo. But, as the cliché goes, the devil is in the details. So, to produce greater numbers of Lean transformations, one must understand the details that combine to produce and sustain the status quo — the preconceptions, traditions, privileges, and vested rights and interests that leaders possess and will readily use to avoid needed change. Both books will help you understand that, and no doubt also inspire you to think of new ideas for overcoming long-standing obstacles to progress.

Learn the full scope of the Institution of Leadership and the System of Profound Privilege:


“An action is right when it will advance the cause of humanity, and wrong when it will not.” – Henry Gantt
“The responsibility is ours to correct the mistakes of our ancestors.” – Alfred Korzybski

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