Leaders are not only found working at the top. Needed: people who provide credibility and inspiration

Credibility is at the heart of leadership issues on Wall Street, in religion, in politics, and in education, says James Kouzes. ``The foundation of all leadership is credibility,'' he says. ``You can take any institution, and people are asking why people aren't living up to the one basic criterion that we all must have if we're going to have faith in people.'' Mr. Kouzes is the director of the Executive Development Center at Santa Clara University.

``You spend your whole career building up your credibility, and you can lose it in an instant. That is what has happened to a lot of our so-called leaders,'' observes Kouzes, who just published the book ``The Leadership Challenge,'' with Barry Posner. Kouzes has been training executives since 1969 and on Jan. 1 will become president of the Center for Management Excellence, in Palo Alto, Calif.

Leadership books have appeared on bookshelves and best-seller lists during the last few years, because, given rapid industrial change, people wonder where the United States is headed, Kouzes says.

``One of the principal functions of a leader is to provide a sense of direction,'' he points out. ``We've never experienced a 508-point drop in a single day on Wall Street. The cover story of Time magazine three weeks after the fall asked, `Who's in charge?'''

In defining leaders, Kouzes and Mr. Posner use Vance Packard's definition from his 25-year-old book, ``The Pyramid Climbers'': ``In essence leadership appears to be the art of getting others to want to do something you are convinced should be done.''

``The two key words in that definition that we focus on are `to want,''' Kouzes says. ``Leaders seem to have the skill that enables other people just to want to do something.''

An important aspect of leadership is that leaders are leaders only because they have followers. And followers have extraordinarily high expectations of leaders. ``Our studies show that in the US the top four expectations are that a leader be honest, competent, forward-looking, and inspiring,'' Kouzes says. More than 50 percent of respondents say those items are important, he adds.

``We expect our leaders to be ethical, truthful, trustworthy, to have expertise, competence, and a track record,'' he says. People also want a sense of direction, a vision of the future, and they want leaders be dynamic, energetic, exciting, and enthusiastic. ``We also have expectations that they be imaginative, intelligent, and fair minded. That's a tough profile for anyone to meet, but as a set of standards, it's not bad,'' he says.

Kouzes and Posner identify five leadership characteristics. First, leaders challenge the process. ``One of the things that's characteristic of the situations leaders face is very difficult times,'' Kouzes notes. ``[Chrysler Corporation chairman] Lee Iacocca is the most frequently mentioned business leader. There's a positive correlation between leadership and change.''

The second characteristic is inspiring others to share the vision. ``Not just to envision the future, but to be able to communicate it in such a way that other people see and understand it,'' he explains.

The third is enabling others to act. ``Everybody in our studies said they couldn't do it alone,'' Kouzes notes.

The fourth factor is modeling, or leading by example. ``Leaders have a set of values and beliefs, be it customer service, innovation, or treating people with respect, and they must articulate those. More important, they must practice what they preach,'' he says.

The last factor is providing encouragement: ``Leaders encourage other people through recognizing individual contributions and through celebrating those milestones and ends of projects,'' Kouzes says.

Employers in industries that face layoffs, such as Wall Street or steel companies, should provide direction for their employees' futures. ``The not knowing is by far more difficult to cope with; at least if I know I'm going to get laid off, I can begin to look for another job. If I know I'm going to stay I can get back to work,'' Kouzes says.

If employers cannot promise jobs, they can establish outplacement programs, offer severance programs, or make voluntary cutbacks. Or they can be creative, Kouzes says. Instead of laying off people, one company took an across-the-board 10 percent pay cut. Another did not lay off people, but asked its employees to work 10 percent more for the same pay.

``Layoffs ought to be the last thing we look at if we don't have the business to support the people,'' Kouzes says, because leaders need to consider what happens when the companies turn around. What happens when the stock market improves? Will those same people want to go back to a company that laid them off?

``If I were a Wall Street managing director, I think I'd want to ask myself long-term what are my expectations for this firm. Have I invested something in my people's knowledge, skill, and development, and do I want to let them go to a competitor?''

Kouzes asserts that anyone can be taught to be a leader, although some people are predisposed to lead. ``By virtue of one's upbringing or personality characteristics, it's clear that some people have an advantage over others,'' he notes.

``But the issue that we have with making the assumption that leaders are born, not made, is that there is no perfect predictor of leadership. Our model can account for about 65 percent of the variants. We ought to make an effort to provide everyone with the opportunity to learn more about their capabilities, because we'll probably get more and better leaders out of the process.''

Studies show that between 10 and 20 percent of what one knows about leadership comes from the classroom. ``We learned that 80 percent is from experience,'' Kouzes says.

America's corporate leaders, with few exceptions, are struggling to find answers to a competitive world. ``American corporations have had a model of leadership that doesn't fit with the times,'' he says.

The old model of leader was a cop, controller, analyst, and drill sergeant. ``What we have is a new model that says a leader ought to be a coach, a cheerleader, an inspirer, a visionary, but you don't find the word visionary in business school textbooks,'' he says.

American companies tend to lack an understanding of international business and affairs. ``And now, what we're doing doesn't work as well, and what other people are doing works better,'' Kouzes says.

So, what should America be doing? One answer is some kind of collaboration, such as the Swedish Leadership Initiative, which brings people together from noncompetitive companies to learn to solve problems.

``Most of the collaborative things the US has tried to do have been corporations getting together to form a consortium, because they're afraid of the Japanese, not necessarily to learn to do things better,'' he observes.