The Best Learnings from 50 Years of Leadership Research

As the business world is getting more complex at a hitherto unimaginable pace, leadership must follow suit. Faced with phenomena such as virtual collaboration, agile work methods, flatter hierarchies, and increasingly decentralized organizations, corporate management simply cannot stick to its old ways. But while HR departments and management boards have just recently started to discuss these developments, research picked up on them decades ago.

The Concept of Duality in Leading

“In principle, there are two major dual leadership concepts: employee- and task-oriented leadership on the one hand and transactional (a reward follows once goals have been met) and transformational (inspire through visions, speak to emotions, motivate) leadership on the other,” says Johannes Steyrer, who serves as the Academic Director of the Executive MBA Health Care Management at the WU Executive Academy and also heads the Interdisciplinary Institute for Management and Organizational Behavior at WU Vienna.

Read on for his account of the most important past leadership trends in research, some of which have persisted to this day, and what today’s managers can learn from them.

1. 1970s: Employee- and Task-Oriented Management

In the long post-war era, the economy flourished and grew by up to eight percent each year. There was a shortage of labor. Most companies were organized according to functions (e.g., production, sales, administration). The so-called line guaranteed a clear hierarchy, providing for unambiguous power and decision-making structures. Management tended to be paternalistic (diligent and loyal employees were rewarded, i.e., retained) and hierarchical at the same time (the top tier made demands, the lower tiers met them; the top tier asked, the lower tiers answered; the top tier accused, the lower tiers had to explain themselves).

Johannes Steyrer points out that this structure resulted in a classic focus on tasks and employees both in practice and in leadership research: “Managers felt that it was their job to listen, be friendly, assign tasks and goals, and monitor that these goals were met. This classic concept relied on clear command structures and a top-down hierarchy.”

• Learning for Today’s Leaders: It’s not enough to be kind and friendly, hoping that “happy cows produce more milk.” Today, managers must primarily act as coaches and develop their staff’s potential. There is no external body monitoring that goals are met. Instead, employees are involved in monitoring progress, are held responsible for outcomes and expected to manage the ways they meet their goals themselves.

2. 1990s: Transactional Versus Transformational Leadership

The 1990s witnessed a profound transformation triggered by “hyper turbulences caused by the triad of globalization, digitalization, and deregulation of the markets,” Johannes Steyrer recounts. Companies started to focus on the new concept of “economic value added” as the be-all and end-all.

This massive transformation in the economy was also reflected in a far-reaching change in management styles: it was the dawn of the era of lean management and efficiency. And the shift was radical: efficiency became everything. At the same time, people longed to fill the vacuum and replace the structures depleted of meaning with visions and leadership.” As a result, the concept of transformational leadership was developed to counterbalance transactional leadership. The latter is about a barter (the reward is provided once the goal is met); transformational leadership, on the other hand, guides subjects on a higher plane of meeting needs, ensuring that they will work towards a greater goal that goes beyond their individual interests. Transformational leadership seeks to inspire people with visions, speak to their emotions, motivate and transform them, true to the conviction that “To drive results, provide purpose”, Steyrer explains.

• Learning for Today’s Leaders: This approach is increasingly applied in companies today. Leadership and transformational management differ from management in that they always start from the why, continue on to the what, which is followed by the how. Classic management takes the opposite direction: it’s about what is done how and why. A quote by Friedrich Nietzsche fittingly describes the purpose leadership can give employees: “He who has a why to live for can bear almost any how.” Those are the lessons learned.

3. 2000s: Agile Leadership

As markets became even more dynamic and product cycles shorter starting at the turn of the millennium, a new fad emerged: agile leadership. “The concepts were mainly old, such as self-organization, empowerment, networking, but they received catchy new names. This was combined with flexibility and agility (meaning a quicker pace),” Johannes Steyrer explains. It’s no coincidence that the basic principle was derived from the fast-paced world of software development and is part of management slang to this day. Steyrer adds: “In the past, there had been two central success parameters: price and quality. Now time entered the picture. Product cycles have been growing shorter and shorter; complexity is on the rise everywhere, and the time available to make sound decisions is getting scarce. These are contradictory requirements. The new concept seeks to provide a solution to this.”

• Learning for Today’s Leaders: “There’s a real danger to end up in a state of standstill at a breakneck pace. Engaging in a hectic and aimless busyness for the sake of busyness is another potential pitfall. This concept can easily be misunderstood this way. If more time is required to develop a suitable solution because the situation’s complexity has increased significantly, it simply does not do to demand faster reactions. We need to slow down to do things well. This is why I am skeptical whether this concept will make much sense in practice,” Steyrer concludes.

4. 2010s & 2020s: Servant Leadership

A concept called servant leadership is currently experiencing a revival in the people-focused new work movement. It’s based on Robert K. Greenleaf’s essay “The Servant as Leader” dating back to 1970. The text describes a leader’s duty to serve people and employees. Greenleaf holds that both people and companies could serve others as servant leaders. This approach champions humility and modesty, which are both components of the more recent approach of so-called humble leadership. Concepts such as leading at eye-level and peer leadership, which empowers employees to lead and decide for themselves, pursue similar goals.

Johannes Steyrer cautions that making people the sole center of all decisions is a lopsided way of leading: "It’s easy to say: it’s all about the people. But in the end, people are a means to an end for companies. It’s as simple as that,” the expert stresses. The current hype regarding servant leadership is likely related to the fact that it’s the opposite of the efficiency-obsessed management styles of the 1990s. “It’s possible that it’s a subconscious attempt to make up for the past, where nobody cared about people,” Steyrer says.

• Learning for Today’s Leaders: “Over time, power can make people arrogant and conceited. There are neurobiological reasons for that. Research also shows that this approach is prone to let narcissists rise to power. In the worst case, managers start to perceive themselves as masters of the universe. Acting in ways that are calculated, ruthless, maniacal, and cynical at the same time, they don’t feel bad even when they transgress boundaries. Modesty and a certain restraint can do wonders for managers to self-regulate,” Johannes Steyrer says.

Conflicting Leadership Dilemmas

Steyrer adds: “Managers have always been faced with contradictory goals. Leading means dealing with dilemmas; it’s never either/or.” Steyrer sees three such dilemmas, which, in brief, give rise to the following conflict of interests:

1. Pursue an inspiring vision and foster a habit of sticking to principles – yet be realistic and strive for calculable goals that come with a reward.
2. Look after your staff, promote and develop them, and make sure they are happy – yet never forget that it’s an organization’s job to reach goals and handle tasks efficiently.
3. Foster personal relationships built on trust – yet also create systems and routines which make interactions redundant and anonymize control.

A fad of the recent years called for managers to lead in a situational way, i.e., to adapt their actions to given situations or interaction partners. For Steyrer, this is too ambitious. He calls for a realistic view of what managers can reasonably be asked to do: “Ideally, they are mature people, but their flexibility and adaptability are not endless.” Instead of living up to all expectations, it’s important to find the right context and environment suitable for one’s own leadership style: “The right fit will make a difference. What’s crucial is to know your strengths and weaknesses as a leader and locate an environment suitable for them,” Steyrer explains.

The Future of Leadership – and Its Challenges

The future holds two major challenges in store for managers:

1. Johannes Steyrer predicts that remote and hybrid work and thus remote and hybrid leadership are here to stay. “Surveys show that productivity and satisfaction of staff working from home are higher than was initially assumed, but managers’ job satisfaction drops. One reason for that is that there are no social connections with employees; there is no social control,” Steyrer explains.
2. The second major challenge for managers is the acute shortage of skilled labor, which will further increase in the years to come. “By 2035, there will be a shortage of five to six million skilled workers in Germany alone. There won’t be a way around this issue for managers.”

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