Beyond the Charismatic Leader: Leadership and Organizational Change

TLDR

In turbulent environments, executive leadership is critical for organizational speed, flexibility, and executing discontinuous change, yet charismatic leaders alone cannot build competitive, agile firms. The study proposes that charismatic leadership must be complemented by institutional leadership—defining roles, structures, and rewards—and that responsibility for managing turbulence should be institutionalized across the entire management system.

Abstract

In ever more turbulent environments, executive leadership matters as never before. Organization speed, flexibility, and the need to execute discontinuous change require sharpened leadership skills. Charismatic leaders are important. These relatively rare leaders provide vision, direction, and energy for their firms. However, charisma is never enough to build competitive, agile organizations. Charismatic leadership must be bolstered by institutional leadership through attention to details on roles, structures, and rewards. Further, as most organizations are too large and complex for any one executive or senior team to directly manage, responsibility for managing in turbulent environments must be institutionalized throughout the management system.