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Posted on Harvard Business Review: May 6, 2010 3:58 PM

In 2000, Cox Communications' Arizona branch hadn't met a budget for three years, their P&L was in shambles and morale was in the cellar. Today, the branch models organizational effectiveness, and is the U.S.-based company's largest and most successful region. A $1.6 billion operation blanketing the state, it is envy of cable systems industry-wide. What caused this dramatic change in success? All it took was a reevaluation of leadership style, and the profits followed.

Steve Rizley took over Cox Arizona at this pivotal time. A caring but tough, naturally gifted leader, Steve immediately went to work focusing on the people in his organization. In wise hands, this transformational style of leadership yielded staggering growth-like growing from $700 million to $1.3 billion, in little more than two years. So what's at the heart of their version of leadership?

The traditional or transactional leader says "I'm the leader-you're the follower; I have something you need (money) and you have something I need (labor). So let's make an exchange." Transformational leaders like Steve understand that there is something bigger at stake. He not only challenged his people to grow professionally, but also personally-emotionally and intellectually.

Within this new paradigm, there are four non-negotiable human needs that the transformational leader recognizes must be satisfied if he and his people are to succeed:

First, and arguably most important, is the need to love and be loved. It sounds touchy-feely, but people who are not both receiving and giving love-and by love I mean focused concern and action directed at another exclusively for that person's good-cannot be fully healthy, biologically and psychologically. We usually think of love as beyond the pale in the work-a-day world, but the transformational leader vividly understands that tough-minded caring is essential to leading and developing a powerful, fully expressed workforce.

Second is the need to grow. The only alternative to growth is death and decay. The transformational leader recognizes that stasis, or maintenance, is a myth that only exists in the human imagination. Nowhere in nature do we find such a thing as stability. Even in a balanced ecosystem, there is either expansive, unfolding growth, or degeneration, decay and ultimately death. By creating a culture that allows our people (and ourselves) to grow, we are expanding our capacities as leaders, as employees, and as human beings.

Third is the need to contribute. Like a battery, this need is best understood when we think of it as having two distinct poles. The negative pole reminds us that that which does not contribute is eliminated. We see it in nature all the time, and at a primal, pre-conscious level we all seem to know this fundamental fact. Failing to contribute in a significant way yields a gnawing, just-beneath-the-surface anxiety of which we are usually only vaguely aware. The other pole, the positive one, answers this anxiety. When we are contributing in a significant way we have an inexplicable peace of mind. We know we belong. The simple principle at work here goes something like this: life works when we forget about ourselves and contribute to others. To feel fulfilled and empowered, employees must know they are contributing to the whole.

The fourth and final need to be met for full leadership, effectiveness and happiness, is the need for meaning. We are meaning-seeking creatures. If our lives lack a clear sense of meaning, if we are not engaged in some larger purpose, we will not be fully satisfied, regardless of whatever else we may have.

The transformational leader understands that satisfying all four of these needs may not be easy, but when they are being met in the day-to-day affairs of his or her people, something magnificent begins to emerge: people instinctively play a bigger game, and show up in a more passionate, creative, engaged and effective way. The consequences are difficult to argue with-hard, measurable, and in many instances, astonishing results.

Have you ever worked for or known a leader who addressed any of these human needs? Did his or her leadership style improve the performance of the organization?

Copyright © 2012 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

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