Warren Bennis is one of the world’s pre-eminent thinkers and authorities on leadership. A distinguished academic, prolific author and respected consultant and adviser, Mr. Bennis has had a profound impact on business leaders and how organizations develop effective leaders. He has also been an adviser to six U.S. presidents. As well, he has greatly influenced how the subject of leadership is taught in universities today.

M. Bennis is the University Professor and Distinguished Professor of Business Administration at the Marshall School of Business, University of Southern California, and the Founding Chairman of The Leadership Institute at USC. He is also Visiting Professor of Leadership at the University of Exeter and a Fellow of the Royal Society of the Arts (U.K.). Earlier in his academic career, Mr. Bennis taught at Harvard and Boston universities, and was chairman of the Organizational Studies Department at MIT’s Sloan School of Management. In assuming that post, Mr. Bennis succeeded James MacGregor Burns, whose book, Leadership, is considered the definitive work on the subject. He was later Provost and Executive Vice-President of the State University of New York-Buffalo, and President of the University of Cincinnati.

Mr. Bennis has written 27 books, including Organizing Genius, On Becoming a Leader, and An Invented Life, which was nominated for a Pulitzer Prize. His latest book is Managing the Dream (Perseus Books), which was published last year.

Journal: You’ve written that the key to competitive advantage is a leader’s ability to create an environment that generates intellectual capital. How does a leader create that environment?

Bennis: I think that gets to the very core of what leadership is all about, and that means creating the social architecture that can in turn create intellectual capital. Part of that intellectual capital is developing leaders and building a learning environment.

Social architecture really has to do with two things. It has to do with the organizational design, like the number of levels of the hierarchy, or the number of people working on teams. It also has to do with the more elusive concept called “culture”…what’s expected of people, what the climate is like, is it a culture that encourages learning and risk by being bold without being reckless. I was recently at a hotel in Las Vegas called Circus Circus. Well, one of the big things a leader today has to do is create an organization that could be called Learning Learning.

What must a leader do to create that culture?
The first thing a leader has to do is to recognize the organizational ecology. One has to understand the context of organizational life in this visual, virtual, digital world. I want to make that much clearer.

The metaphor I’m using is the difference between an analogue and a digital society, or an analogue organization and a digital organization. The first step for any leader who wants to create a culture that generates intellectual capital is to understand the context of the organizational world we’re living in today. And I want to be very clear about this, because I see it as a set of 11 dichotomies. Unless leaders understand the analogue-digital metaphor, they’re not going to be able to create the kind of organizations and the kind of spirit, morale, purpose and passion that’s needed today.

The first dichotomy is the difference between linear-continuous and non-linear-discontinuous. Because it’s very clear that in the world we’re living in right now, we talk about disruptive technologies, about galloping technology, about rapid change and complexity. That’s really what I mean by linear and non-linear.

The second has to do with the difference between maps and compasses, that Karl Weick of the University of Michigan wrote about in The Legitimization of Doubt. The analogue world is one of maps. It’s like charted territory. Today, the best that one can have is a compass that can set a general direction and meaning. Because it seems to me that what leaders have to do is to create direction and meaning in a world that’s vertiginous and volatile. You’re always blinking. The best thing that leaders can do is to have a compass that will give general direction and meaning.

I think the acronym for an analogue world of organizations is COP—Control, Order, Predict. In a digital world it’s ACE, Align, Create, Empower. These are totally different worlds and ways of viewing organizational design.

What’s another difference between the analogue and digital organization?
You’ve got to understand the difference between the big picture and the big story. The big picture is an analogue notion: “Give me the big picture.” I remember giving a lecture about five years ago about being in a helicopter and seeing 10,000 feet above, and getting a snapshot of it all. That’s the big picture. I think it’s an obsolete notion. I think the real question is, “What’s the story?” Because stories are unfolding and emerging and ever changing. There’s no one picture that gives you a static picture of the structure. The story is, “What’s moving, what’s changing, what’s dynamic, what isn’t?” Look at the world of experience versus the mind of a beginner. I think organizations need, yes, experience—that’s the analogue idea. The more experience, the better. But I also think that the digital society wants more of a beginner’s mind, more of a sense of wonder and creation and knowing what you don’t know.

Which leads me perhaps to the most significant point I want to make here. The analogue world is analytic and detached, what in the military they call the “OODA loop.” When I was an officer in the infantry, we had what we called the OODA loop…OBSERVE, ORIENT, DECIDE, ACT. I think that doesn’t work in today’s world. I think we’ve got to keep in motion. I call it the ALA loop…ACT, LEARN, ADAPT.

There’s a very big shift in how leaders ought to think about the world of intellectual capital, where no one really knows what’s going on. If you’re not confused, you don’t know what’s going on. No one really should be certain. There has to be a legitimization of doubt in today’s world. And the only way to find certain things out is to keep in motion, to keep moving and learning and adapting.

In an analogue world we knew the answers, and in the digital world we have to ask discerning questions. In the analogue world, the CEO knew everything. It was a world of hubris. But in the digital world, it’s more humility and vulnerability. Leaders have to understand these differences if they want to really create not only intellectual capital but also social capital.

Speaking of differences, what’s the main difference between leaders today and those of the previous generation?
I’m working on a new book. It’s called Geeks and Geezers, and it’s based on interviews with leaders who are under 30 and over 70. I want to understand that generation of people who have grown up visual, virtual and digital. This is where the analogue-digital metaphor came to mind.

What differences did you notice?
The whole issue of speed leading. I was talking to a guy named Jeff Arnold, who for a while was the head of WebMD. Jeff is 29 and the company brought in a co-leader to work with him who was 60. I asked Jeff what he learned from this and he said, “I’ve learned so many things. How to talk to the Street, how to really do the managing functions, how to organize things a lot better, how to plan…all those marvellous things I didn’t know.” He was a kid who didn’t have an MBA. When I asked Jeff what the other guy had learned from him, he answered in one word, “Speed.”

There are a lot of differences between how the geezers defined success when they were 30, and how the geeks in the 30-and-younger group define success. It’s a profoundly different view of success, because when the 80-year-old geezers were geeks in their 20s, success for them was “to make a living.” But ask today’s geeks and they’ll say, “To make history.” There’s a profound difference.

To the extent that you can generalize, are leaders today aware of this difference?
No, they don’t get it. If you look at the average 50-year old leader today, and I would think that’s probably the average age of most senior leaders, late 40s-50s, I don’t think they quite realize the kind of technological world people who were born in 1970 grew up in. But I think some leaders, like a Jack Welch, do get it. And there are others who do and others who don’t. But that’s only one part. The other part of it is that it’s very hard to do these things.

Let’s just look at the difference between the “OODA loop” and the “ALA loop,” to use my own acronyms. To act and to learn and then adapt; that’s a totally different way of thinking about doing something. So it’s not just a matter of understanding, it’s one of actually doing. So the difference between knowing the right thing to do and doing the right thing is profound.

Who are the people today that in your mind are getting it right?
Surprisingly enough, I think most of the CEOs I interviewed have it right. I think that Sidney Harmon, who runs Harmon International Industries, Harmon Kardon Sound Systems, he’s 83, he gets it and he knows it. At the younger level, I think most of the geeks I know—Jeff Wilkie who’s the number three person at Amazon.com.— they get it.

Why do leaders fail today?
If you look at the churn factor, it’s just amazing the degree to which leaders or CEOs are being ousted or forced to resign these days relative to 10 years ago. One reason is that they stop learning. Frankly, they’ve become arrogant with success. There’s a marvellous line from Waiting for Godot where Didi says, “Habit is a great deadener.” Well, a successful habit is an even greater deadener.

Why did Compaq’s board dismiss its CEO? Because he wasn’t paying attention to his competitors. Gateway and Dell were eating his lunch on his best china. So I think that’s critical. This is the learning-learning thing I was mentioning earlier. Because I think that the CEO, fresh with success, didn’t bother to take into account what his competitors were doing. And he wasn’t listening to the people in Compaq who knew what was going on and were trying to tell him so. He didn’t want to listen to the bad news. And that is the most common reason why CEOs fail. They just do not pay attention, they don’t have peripheral vision. They can’t see the inflection points that are going to influence and affect their businesses, whether it’s demographic, regulatory, technological or fashion.

Bob Haas, Chairman of Levi Strauss, told me, “I lost some of the market because I took my eye off the ball.” The intensity of his attention was elsewhere at the time. He’s changed remarkably. There you go. Taking his eyes off the ball means he lost that passionate intensity of attention, that sense of continuing to learn what was going on.

You spoke about the volatile times we live in. How does a leader get commitment in that kind of environment?
The short answer is to keep reminding people of what’s important. To keep putting people on message. Because I think that when organizations start to atrophy and bureaucratic sluggishness sets in, it’s almost always because they forgot what it was that’s important about the work, what is the meaning of it. It seems to me that when you look at people getting into a habit again, it is because I think it’s habit and success together which deaden us. A leader must continually refresh herself/himself, continually remind people of what’s important. That intensity of attention, which I mentioned earlier, is so critical.

How would you deliver those reminders?
You do it in communication, you do it in reward systems, you do it by making sure there’s alignment right down to the very bottom of the organization. I think you keep repeating the message over and over and over again. Good CEOs never tire of telling the same story. But even that’s not enough. That’s essential and necessary but not sufficient. You’ve also got to reward those behaviours that seem to be in line with, or at least rhyme with, the mission, that people not only can repeat the mission statement, but also act on that basis, get rewarded on that basis.

Are organizations developing leaders? Are they maintaining a leadership pipeline at every level?
Actually, that’s a problem today, and I’d like to illustrate it by what I call the Lemieux [Mario] factor. These days, a lot of people would much rather play than lead. I mean that both figuratively and literally. In the case of Lemieux, it was really literal. He was running the team, and it wasn’t just because they weren’t doing so well, but he said he’d rather go out there and play than be the manager and leader. And I think that when you look at the way organizations are moving today, toward idea factories, or as Jack Welch calls them, “idea pyramids,” you get more and more people who want to play with ideas, who want to do research, who want to teach, who want to trade bonds, who want to do equities. That’s true of more and more young people today and more and more people in the kinds of organizations we’re now creating and inventing.

Well then, how do you develop leaders when faced with that reality?
First of all, organizations have to invest some money in development. But most of them talk the game but don’t actually walk it. They talk about leadership but often it’s left to chance and random occurrences. Some organizations are deliberate about it. Places like GE, General Mills, Intel and other large organizations really do invest two to four percent of their payroll in the development of people, not just leadership development by the way, but development of all kinds. And it seems to me that’s why people join organizations today. It’s not just for money and all the rest, even just for the interesting work, but I think it’s also for developmental experiences. I think it’s now something organizations are going to get wise to.

Secondly, I think leading is going to become more and more a civic responsibility. It’s partly a function of age. It’s partly a function I think of civic responsibility and obligation that people more and more are going to be called on to do it. I also think there’s a certain joy and pleasure and fun in leading and managing, which for the most part, young people don’t yet understand. So I think that it’s got to be seen that way, not just as something that is simply an obligation, but something that one can learn an enormous amount from by doing.

Is that fun and civic responsibility part of what Charles Handy calls “The Hungry Spirit?”
I think Charles is really talking more about meaning and a moral evolution, which, by the way, is a point rarely discussed in a very serious way. We talk about emotional development, we talk about intellectual development, and about moral and spiritual development. I think that’s what Charles was getting at. And I do think that what he was saying in that book primarily was that work has to have meaning. And the word “meaning” to me means to have some sense of significance, to be involved in a purpose beyond oneself. That’s basically how Charles used it. And I think that if organizations don’t provide that, the other factors for the most part won’t keep them. The title The Hungry Spirit is an excellent one, because I think we are so hungry for meaning. And just think of the word “demeaning” which means “lacks significance, lacks weight, lacks things.” Like the kids say today, it’s like “dissing” someone. When you take the meaning out of work, you’re basically taking the soul out of it.

A leader today has got to harmonize maintaining a relatively long-term vision with producing results every quarter, even every month. How does a leader do it?
Part of it is, one person alone can’t do it. It sounds trite, but unless the CEO can develop an incredible team of people who can notice the inflection points, worry about product development and the future, as well as meet the returns, it won’t happen. It seems to me that the only executives who are going to succeed are those who are capable of understanding that you can’t lead the way you used to. Nobody knows all the answers—nobody. And it’s ridiculous to think anybody does right now. This explains the proliferation of the “C” roles, the CEO, the COO, the CPO, the CLO, the CKO, the CG. I’m giving you a whole bunch of initials that really stand for things. The Chief Software Architect. The proliferation of those roles says to me that the whole executive suite has to have not only enough people, but also a team of people who are really unified in terms of the overall purpose. If you think that the CEO alone can do it, that’s nuts.

A lot of traditional leaders are venturing into, for them, uncharted territory, e-business. What’s the main peril?
The main peril is something that Rosabeth Moss Kanter wrote about in her recent book [Evolve, Harvard Business School Press, 2001]. It’s like lipstick on a bulldog, bringing in e-commerce just because it’s the fashionable thing to do this year. The two most important questions to ask are, Does it fit with our core competency, and is it going to make money for us? It’s like making an acquisition.

What are the two essential traits that a leader needs to have today?
One is what I would call “learning/learning”—the capacity, adaptive capacity, to keep learning all the time. It seems to me that the executives who don’t get ousted are those who continue to keep their eyebrows raised in wonder and adventure, and are learning all the time. The other trait is emotional intelligence, which means self-awareness and knowing how to motivate and engage others.

With respect to engaging other people, how does a leader today impart his or her vision?
It’s an endless, demanding and worrisome thing that any leader has to face in any organization, from the Dean of the Ivey Business School to the head of GM. And that means everything from video conferences to e-mail messages, to meeting with as many people as possible. I would suspect that Jack Welch spends 60 percent of his time just interacting and going around and being on the road. And it’s a killer, it’s a demanding thing. And on top of that, it also means creating a system, first embedding the vision in the organization, and then making sure that those behaviours that are consistent with, and incarnated in, the vision are rewarded. That’s why a lot of organizations fail. The right behaviour is not rewarded.

Is there a way today for a leader to anticipate the next great disruptive technology?
If you can anticipate it, it cannot be a disruptive technology. What you have to do is get ready for anything, not for something. And what it also means is that—it’s not so much that there won’t be a disruptive technology, there will be of one kind or another, just count on it—it’s how you respond to it. Do you decide that “We’d better drop everything we’re doing,” or do you try to incorporate it into what you’re doing? Do you try to compete with it, and worry that people will too readily drop what they’re doing for being overly concerned, looking over their shoulder, and not be concerned with what they do terrifically well, with doing something that no competitor can even touch.

I’ll give you a very real example, Wells Fargo Bank. There’s a lot of pressure on the current CEO to move almost totally to an e-commerce model, to make it like a huge ATM, which would make it lose its quality of satisfying the customer in a local way. It doesn’t mean they don’t engage in e-commerce. In fact, more and more people are using its network. But if the CEO, Richard Kovacevich, had given in to all the pressure about 18 months ago and become an e-commerce bank and lost, well….But his argument was very good. He said, “I’m not going to beat the banks or the Internet companies without bricks and mortar. I’m not going to beat that—they’re going to be way ahead of us. Why compete with that? What we have to do is integrate that and keep what we have.” Now, if he turns out to be right, he’s done very well. But there’s enormous pressure from board members, from direct reports, from a lot of people—the shareholders. That’s the worry I have today. Some people are going to be looking over their shoulder rather than doing what they do very well. And that’s a dilemma, because you obviously can’t stick with the buggy whip forever. So that’s the issue. There’s no rule for that. That’s where judgment comes in. And this guy’s judgment was right on.

You’ve written that business plans today might as well be drawn in the sand or on an Etch-a-Sketch. Could you elaborate?
What I mean is that we’re going to have to continually adjust our plans. We’re going to have to continually make sure that plans are not engraved in cement. For the first time in 15 years, Intel changed its mission statement. I think we’re going to have a quicker cycle, that’s what I’m saying. No plan is going to last 15 years. Like Michael Porter says, long-term planning and strategy have to be there. But it’s got to be something that can be erased and set anew. Strategy has to be looked at continually, adjusted, reformed and reformatted.

Thank you very much.
You’re welcome.