Systems Leadership

1. Leadership is the Art of Influencing People, Not Controlling Machines.

We can control objects; we can only influence people.

People are not objects. Many change initiatives fail because leaders mistakenly treat people as if they were machines or inanimate objects, assuming they can be controlled or programmed. This objectification breeds cynicism and malicious compliance, as people inherently possess will, intent, and a sense of personal value that cannot be ignored. True leadership acknowledges this fundamental difference, focusing on influence rather than coercive control.

Influence, not control. Unlike objects that react predictably to force, people respond to actions based on their interpretation of context and intent. Leaders must understand that human behavior is driven by internal beliefs, values, and aspirations, which means influence requires engaging with these internal states. Attempts to completely control people are self-defeating, stifling initiative, creativity, and enthusiasm, ultimately leading to inefficient outcomes.

Beyond simple logic. People do not base all their behavior on purely objective logic; their actions are deeply intertwined with their perceptions and values. Leaders must move beyond simplistic assumptions that people will comply if the economic or rational argument is clear. Instead, they need to consider how individuals view events, how they perceive the leader, and how they are likely to react over time, fostering an environment where people feel valued and understood.

2. Human Behavior is Driven by Predictability and Core Values.

If a group of people is to maintain a productive relationship that lasts, then the members of that group must demonstrate behaviour that will be rated at the positive end of the continua of the core values by the other group members.

Predictability is paramount. Humans possess a fundamental need to predict their environment, constantly scanning and testing expectations to avoid anxiety and feel secure. When predictions fail, individuals seek explanations, often inventing them if none are apparent, to restore a sense of order. This innate drive to understand and anticipate behavior is crucial for well-being and even survival, as it allows individuals to navigate social interactions effectively.

Values underpin relationships. Beyond mere predictability, human behavior is deeply value-based, with individuals constantly judging actions against a set of universal core values. These values—honesty, trustworthiness, courage, respect for human dignity, fairness, and love—are not chosen but are inherent properties of constructive social relationships. Behavior aligning with the positive end of these continua strengthens social cohesion, while negative expressions lead to fragmentation and exclusion.

Mythologies shape culture. People form cultures by sharing "mythologies," which are underlying assumptions and beliefs about what constitutes positive or negative valued behavior. These mythologies, a blend of emotional stories (mythos) and rationality (logos), act as perceptual lenses through which individuals interpret the world and others' actions. Leaders must understand these deeply ingrained mythologies to effectively influence behavior and create dissonance—the necessary catalyst for change—by demonstrating consistent actions that challenge old beliefs and build new, positive narratives.

3. Effective Organizations are Meritocracies Built on Clear Work and Capability.

A positive organisation is one where each person’s skills and ability matches the work they are required to do.

Meritocracy for performance. The most efficient way for organizations to produce goods and services is through a meritocracy, where individuals are selected, appointed, and rewarded based on their capability to perform the required work. This contrasts sharply with systems based on seniority, nepotism, or pure democracy, which often fail to align talent with organizational needs. A true meritocracy ensures the "right people are in the right roles, doing the right work."

Capability is multifaceted. Human capability, essential for matching individuals to work, comprises five key elements: knowledge (accepted and self-generated), technical skills, social process skills, mental processing ability (MPA), and application (effort and energy). MPA, in particular, refers to an individual's innate ability to process information and solve problems of varying complexity, which matures over time but is largely set by early adulthood. Leaders must assess these elements to ensure a proper fit between person and role.

Work defines value. "Work" is fundamentally defined as "turning intention into reality," a process crucial for individual identity and mental health. It involves exercising discretion, making decisions, and overcoming obstacles within defined constraints. In a meritocracy, recognition and reward are tied directly to this work performance, encouraging individuals to apply their full capabilities. This focus on work, rather than mere effort or presence, ensures that contributions are genuinely valued and aligned with organizational goals.

4. Authority, Not Power, Forms the Backbone of Productive Relationships.

It is better to build relationships on the basis of authority rather than power.

Authority vs. Power. In organizational contexts, influence can be exerted through authority or power. Authority is defined as the mutual acceptance of agreed-upon limits in exerting one's will, operating within known and accepted boundaries. Power, conversely, is the exertion of will by breaching one or more of these agreed limits. Productive relationships are built on clear, explicit authority, which fosters trust and clarity, whereas power breeds cynicism, resentment, and ultimately undermines organizational effectiveness.

Clarity enables freedom. Clear boundaries and defined areas of discretion are not restrictive but are, in fact, the basis of freedom and creativity within an organization. When individuals understand their roles, responsibilities, and the limits of their authority, they are empowered to act decisively and innovatively. Conversely, a lack of clarity leads to confusion, anxiety, and a reliance on informal power dynamics, where personal agendas and implicit rules can cause significant damage.

Hierarchy of accountability. An employment hierarchy, when properly structured, is an authority structure where accountability flows clearly from the top down, but authority is distributed throughout. Every role must have explicit authority commensurate with its work, allowing individuals to make decisions and be held accountable for their performance. This structured distribution of authority, rather than an authoritarian imposition, enables efficient decision-making and resource deployment, crucial for organizational coherence and success.

5. Systems are the Organization's Non-Verbal Language, Driving Behavior.

In organisations, systems are the equivalent of non-verbal behaviour in human interaction.

Systems drive behavior. Systems are the "non-verbal behavior" of an organization, constantly operating and profoundly influencing how people act. While leaders may articulate grand visions or policies, it is the actual functioning of systems that demonstrates the organization's true intent and values. A disconnect between stated policy and systemic reality leads to cynicism, as people inherently trust observable behavior (systems) over mere words.

Policy in action. Policies are aspirational statements of intent, but systems are the specific methodologies that turn these intentions into reality. For example, a "customer-focused" policy is only real if the customer service system actually prioritizes customer experience, rather than frustrating them with automated menus and long hold times. Leaders must ensure systems are designed to enact policy, not contradict or obstruct it, as inefficient or misaligned systems can undermine strategy and purpose.

Designing for impact. Effective system design requires careful consideration of its purpose, whether it aims for equalization (treating everyone the same, like safety protocols) or differentiation (treating people differently based on work, like remuneration). Systems should be authorized and productive, avoiding "box B" (authorized but counter-productive, like red tape) and eliminating "box D" (unauthorized and counter-productive, like theft or harassment). The complexity of system design is often underestimated, requiring high-level thinking to ensure they are enabling, not bureaucratic.

6. Clarity in Task Assignment Unleashes Discretion and Accountability.

Correct task assignment for humans must concentrate upon our abilities to learn, to create and to innovate.

Tasks define work. A "task" is a precise statement of intention, providing clear boundaries for work by defining its context, purpose, quantity, quality, resources, and time (CPQ/QRT). Unlike machines that require every step of a pathway to be specified, humans thrive when given room to exercise discretion and judgment in how they achieve a task. This freedom to innovate and adapt is a distinctly human characteristic and essential for effective work.

Empowerment through clarity. True "empowerment" comes not from an absence of rules, but from clear task assignments that define purpose and set explicit boundaries, while leaving the "how" open for the individual's discretion. When tasks are vague or managers micro-manage the methodology, it stifles initiative, saps energy, and can lead to resentment or "malicious compliance." Clear task assignment is liberating, providing the necessary framework for individuals to apply their full capabilities.

Accountability requires understanding. For individuals to accept accountability for their work, they must clearly understand the criteria against which their performance will be judged. This means managers must articulate the task's purpose and context, and specify two of the three core components (output, time, resources) while scoping the third. This ensures the task doer knows what to maximize or minimize, allowing for fair assessment and fostering a sense of ownership over the outcome.

7. People Systems Must Answer "What Am I Doing? How Am I Doing? What's My Future?".

If people have clear answers to these questions they are probably able to concentrate on their work.

Fundamental employee questions. An organization's health can be gauged by its employees' ability to answer three fundamental questions: "What am I meant to be doing?", "How am I doing?", and "What is my future?". These questions are directly linked to the effectiveness of the organization's "people systems," which encompass everything from role descriptions to career development. When these systems are unclear or poorly implemented, employees spend valuable energy trying to find answers, diverting focus from productive work.

Clarity in roles and tasks. To answer "What am I meant to be doing?", organizations need robust systems for role descriptions, clear task assignment, and transparent role relationships. This ensures individuals understand their purpose, responsibilities, and how their work contributes to the broader strategy. Without this clarity, confusion reigns, leading to inefficiency and frustration.

Feedback and growth. Answering "How am I doing?" requires effective task review, recognition, and performance-linked reward systems. This provides continuous feedback and acknowledges individual contributions, fostering a meritocratic environment. For "What is my future?", robust career assessment, development plans, and transparent business information are crucial. This allows employees to see potential career paths and understand how their capabilities can grow within the organization, ensuring talent is retained and nurtured.

8. Teamwork Thrives on Complementary Roles, Not Leaderless Consensus.

Teamwork is about people collaborating for mutual benefit, clear about their mutual authority, their work and the relationship with the leader.

Teamwork is interaction. A "team" is defined as a group of people, including a leader, with a common purpose who must interact with each other to complete their tasks. This emphasizes mutual interdependency, distinguishing a true team from a mere network or collection of individuals. Effective teamwork is not an alternative to hierarchy but an integral part of a well-structured accountability system, where individuals are employed and held accountable for their contributions, including their collaborative efforts.

Leader's role is crucial. There is no such entity as a "leaderless team"; leaders always emerge, either by authority or by power. A team leader is accountable for setting the context, clarifying purpose, identifying critical issues, encouraging contributions, making decisions, assigning tasks, monitoring progress, coaching, and reviewing performance. This active leadership ensures that individual talents are blended into a complementary process, directing collective energy towards shared goals.

Members' active contribution. Team members also have specific responsibilities: clarifying context and purpose, contributing ideas, actively listening, accepting decisions, clarifying their own tasks, cooperating with others, accepting coaching, and demanding review. This complementary dynamic, where both leaders and members fulfill their distinct roles, fosters a productive environment. Training programs like "Working Together" help individuals develop these essential social process skills, ensuring that teamwork is a disciplined practice, not just an exhortation.

9. Successful Change is a Disciplined Process, Not a Magic Bullet.

A good idea can be ruined by poor implementation.

Process is paramount. Successful organizational change is not achieved by magic, charismatic leadership alone, or simply adopting new ideas; it is the result of a disciplined, well-managed process. Even the best concepts can fail if implementation is flawed, highlighting that understanding the social process of change is as critical as the content of the change itself. This requires a coherent, integrated set of concepts understood by all involved.

Integrated approach. A successful change program requires a multi-faceted approach, integrating technical, commercial, and social processes. Key steps include establishing a strong relationship between the CEO and advisors, clearly articulating the CEO's goals, conducting structural reviews and systems/symbols audits, and formulating a comprehensive change program. This program then involves systematic training, restructuring, and meticulous system design and implementation, ensuring all elements are aligned and mutually reinforcing.

Courage and consistency. Critical to success is the courage to address difficult issues, such as removing non-performing individuals from roles, especially at higher levels. Consistency in leadership behavior and the continuous reinforcement of new systems are vital, as old mythologies never truly die but lie dormant, ready to resurface if discipline falters. Regular review and a commitment to continuous improvement, rather than viewing change as a one-off project, are essential for sustaining positive transformation and achieving long-term results.

Last updated: July 29, 2025