212 REFLECTIONS ON CHARACTER AND LEADERSHIP
The effects of leaders on their organizations
Some organizational observers argue that the leader ’ s role is not very
signifi cant and that the importance of leadership is highly overrated. To
them, an organization is mainly infl uenced by the environment in which
it operates. Leaders are subjected not only to many internal organiza-
tional constraints in the form of structures, procedures, and political
processes, as well as to numerous external constraints; they are also
prisoners of immutable environmental strictures.
It is not surprising that the theory of impotent leadership has its
proponents. After all, adding a leadership dimension to the business
equation does muddle things up: if leaders really make a difference,
then a host of complicated human factors must be taken into con-
sideration. Advocates of this point of view reduce the complex
person – organization – environment interface to a limited number of
simple variables supposedly infl uencing a fi rm ’ s strategic direction and
performance.
Clearly environmental forces do play an important role in organi-
zational life, but underestimating the human factor is a mistake. Without
the character of King Henry, Shakespeare ’ s historic account in Henry
V wouldn ’ t make any sense. The English would certainly have lost the
Battle of Agincourt if they had underestimated the importance of the
leadership factor. I would argue that any astute observer of organiza-
tions will notice that CEOs have a considerable impact on their com-
panies, for better or worse. And the quality of leadership is particularly
relevant in situations of strategic transformation and change. A good
leader has the capacity to transform strategic constraints into new
challenges.
The signifi cance of the leadership factor can be demonstrated by
looking at the stories of three contemporary business leaders who
now, or in the recent past, regularly grace or graced the front pages
of the major business journals: Richard Branson of Virgin, Jack Welch
of General Electric, and Percy Barnevik of ABB. These CEOs, although
quite different in personal philosophy and leadership style, continue
to have a major impact on the way we view organizations (Kets de
Vries and Florent, 1999 ; Welch and Byrne, 2001 ; Welch and Welch,
2005 ).
So, what is it that these three individuals have done to change
our way of looking at organizations? What is it about their particular
way of running their companies that has made them unique?