Last Updated on October 24, 2021

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One of Gene Bellinger’s systems thinking archetypes on his Mental Model Musings website is about the difference between Leadership and Management. He provides both a structural view and a dynamical (system) view of the problem. I was so intrigued by this idea that I had to investigate it further.

The Structural view

The basis of Gene’s model is a structure “made out of toothpicks and gumdrops” forming a traditional hierarchical structure that is rotated by 90 deg so it is positioned like in the pictures below:

Gene’s simple idea is that if you pull (lead) on such a structure, the natural tendency is for it (the team) to “fall in line” behind and follow the leader who is “walking the path”, first among equals, creating a vacuum of opportunities that members of the structure feel obliged to fill in with their creative contributions. The only management (vertical) corrections in this situation may possibly be to assure the team is not just narrowly fixated on the goals in front of them, but also want to spend some time exploring a wider area for new opportunities.

On the other hand, in the management (push) case, the natural tendency of the structure is to “fan out” when pushed, so the manager must apply a significant amount of energy just to keep the team focused on the general course of the effort. In such a structure, even if some team members understand the overall intent and show an initiative leading in the right direction, all such efforts will soon be suppressed by the inherent dynamics of the whole structure.

I agree with Gene that Management and Leadership are not mutually exclusive categories. The only thing to keep in mind is that the pull (leadership) style as the more “natural” form of management should prevail, and the organization should “alter the perception of the role of management to a supportive function rather than a traditional directive function“:

In this context is seems that management would be a service providing function offering training, development, coaching, mentoring, and the like, rather than performing the traditional planning, organizing, directing and controlling functions.

This is not to say that those functions are not necessary for an organization, it is just that they have to be deployed in a different manner. One possible organizational structure that may be able to fit in this paradigm could be the traditional matrix organization with functional managers and project leaders.

The Dynamical (Rewards) view

In his Systemic Perspective of Management & Leadership, Gene equates management to a balancing loop with negative feedback, where the goal is to close the gap between the desired and the current state:

This migration might be the development of a new product, the resolution of a problem, the alteration of a process, i.e., anything with a defined objective different from the initial state when the effort was started.

On the other side, leadership is associated with a reinforcing loop with positive feedback, where:

the results produced by the activity promote more (of) the same activity that produced the initial results. In this way the focus of activity is driven by the results which simply produces more results.

The main “driving force” in this reinforcing (leadership) structure is the “perceived meaningfulness (of the results) which represents intrinsic rewards to the actors and promotes the continued increase in focused activity necessary to produce greater results.”

Gene contrasts these internal (intrinsic) rewards (results) to external (extrinsic) rewards that can, I believe, be understood as the perceived value external actors such as customers or shareholders assign to the products and services of the organization. This kind of reward can be measured by tangible variables such as income, market share, or similar. Gene explains:

If the rewards are extrinsic, i.e.rewards provided from outside the structure for the results achieved then, over time, the activity portion of the structure actually splits to create two separate activities develop. The first activity, i.e., activity(1), continues to be the appropriate activity to produce desired results. The second activity, i.e. activity(2), develops driven directly by the rewards.

To better understand the dynamics and all the repercussions of Gene’s insights into this matter I ended up with building this map in Cauzality:

If I understand correctly what Gene is saying, his activity2 (represented by Loop 1 in my map) is the external loop of production of goods and services for which clients are willing to pay money (the immediate extrinsic reward), while activity1 (Loop 2 on my map) is the original work producing intrinsic rewards of good leadership results, for example, some change that was tried and introduced in the organization that may have streamlined the production process or lowered production costs?

If my assumptions are correct, then it is clear that tangible resources (income) that sustain the “life” of the organization, are produced only with the exploitative Work for Rewards” in Loop 1, so it is understandable why companies are more focused on this type of work. It is also understandable why this exploitation of current opportunities may detract the organization from “wasting” resources on explorations that do not produce any income.

The explorative Work for Results” from Loop 2 not only does not produce any immediate “return on investment”, but also, any benefit of an outcome from this activity may be visible (useful) only at some later point in time when external circumstances outside the control of the organization inevitably change, causing the rewards from the work in Loop 1 to wane and the necessity for the organization to explore some new ways of doing business.

The orange “negative” (balancing) connection from the exploitation to the exploration activity is here to indicate the primacy of the former over the latter. The company is not viable without a strong process for exploiting existing opportunities. Also, the exploration process can not be “free-range” but must be in the service and focused on the improvement of the organization’s core business.

So, the obvious conclusion from this discussion may be that it is prudent for an organization to reserve a portion of its earnings from selling products or services (the dimmed blue line in the middle) for the maintenance and future upgrades of its internal structures, so as the organization is prepared for any change in the environment that may otherwise threaten its earnings or existence. This may be the research and development of new products and/or services, investment in new tools and automation, employee training, and other activities that will not produce an immediate return but are for sure necessary if the organization wants to survive in its ever-changing environment.

Another obvious conclusion from this discussion is that it is a mistake to set up “organizational development” efforts as a project with a finite duration and a goal. This kind of exploratory “work for results” should be established as all other maintenance operations of the organization, as a recurrent (autopoietic) process.

Also, I believe that in a matrix (like) organization, functional management should be at the forefront of this continual supporting activity of maintaining and upgrading organizational capabilities (work for results), while the project leaders should be the ones having the responsibility of the work for rewards or creating value for different clients in limited time projects and different product lines, that is, for “bringing home the bacon”.

This somewhat goes against Gene’s original thought of managers being responsible for (short-term) goals of creating rewards, while a leader’s responsibility would be long-term satisfaction and meaningful results, but after this discussion we had above, I believe the opposite might be more fitting, as it seems like a leadership role might be more appropriate for limited-time project operations, while (functional) management might just be the perfect supportive role for continual people, product and process improvement.

In case you are wondering how all of this fits into my Kihbernetic Dynamical System Model here is the mapping 😀:

Expectations & Process

Another aspect of Gene’s Systemic Perspective of Management & Leadership is the difference between the control and support aspects of these two roles where management is mostly associated with rigid hierarchical structures and used in the sense of direct and strict “command and control” similar to what is described in the etymology of the word:

from Italian maneggio, from maneggiare “to handle, touch,” especially “to control a horse,” which ultimately from Latin noun manus “hand”

where the “controlled” part of the system is understood as a passive structure completely void of any other purpose than serving at the will of the “controller” part. This mechanical type of control, although very rare in real-life social systems, is often cited as one of the causes why such rigid hierarchical systems cannot cope with the increased complexity of the “modern world”.

On the other side, leadership is, often associated with the support aspect of a control function where the “controlled” part of the system are active agents allowed to do their “own thing” without much intervention or direction from the “controller” except for the creation and maintenance of an environment used by both the agents and the clients they are selling their products or services. This kind of “flat” management structure is often praised as more palatable and preferred over hierarchies with examples being those from a “gig economy” with no middle management, where the owner of a platform has direct access and control over the information flowing through it. As the founder of the Rendanheyi business model Zhang Ruimin aptly stated in his interview:

I see senior leaders as responsible for creating a rainforest. You can’t decide what trees you want or you don’t. You simply provide nutrients water and sunlight. Of course if you believe something is wrong you can discontinue the water and nutrients.

It is obvious from this brief overview that flat control structures are not inherently better or worse than hierarchical ones. I would in fact argue that flattening the structure by removing the middle management level obviously bring some short-term benefits, but may also cause long-term problems because of the tendency of such a “lean” structure to focus on the exploitation and creation of “immediate rewards” at the expense of investing in the exploration of new products or methods that may bring some future “delayed rewards” as described above in this post.

In any case, the discussion about control structures and methods should not be just about controlling the change process. It should also be about defining expectations about the final outcome Every transition (change) of the system state has a current state and a future expected one. Any control function, regardless of what it is called, management or support, or is it flat or a hierarchy, must have the ability to define and control both:

  1. the expected future state of the system, and
  2. the process that is used to transition one state to another.

Having said that, the issue is then just in how is the difference between the current and expected state routed in the system, as it is depicted in the two images below:

On the left, this difference is available only to the management (control) function where it is used for managing both the expected state as well as providing instructions to the change process.

In contrast, on the right, the difference is fed directly to the change process where it is used to close the gap as swiftly as possible, without waiting for instructions from the managerial (control) level. The management level is still responsible for changing the expected state but now the input is not just the size of the gap as it was on the left, but also contains information about any problems the change process may have in closing it.

By making the difference available directly to the change (regulation) process of the system, the supporting control function became much more efficient, because all small fluctuations (differences) are now taken care of by the regulation process itself, with no intervention necessary from the “higher” level. This fact alone is considerably reducing the variety the controller has to deal with, while still maintaining both control channels open.

The management/leadership function can still directly intervene in the change process by, for example, adding or relocating resources, or/and, if this is not enough, by managing the expectance about subsequent states.

Featured photo is by Karsten Würth (➡️ @karsten.wuerth) on Unsplash

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