Effective leadership in a complex society: creating a context of critical thinking, clarity, and

flexibility

Brian Pochinski

Industrial Psychology

12/01/14

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Abstract

A crucial problem facing businesses today is finding effective leaders. Managers are the major

source of employee stress and half of managers in corporate America fail. Stress decreases

performance and health. These adverse effects on employees interact with the surrounding

context which has a negative impact on the leader’s performance. Furthermore, ineffective

leaders push businesses towards wasting financial resources in the form of expensive hiring

processes to replace managers, and low performance from employees and managers which leads

to a decrease in profits. As knowledge and technology grow, people have become more

specialized to accommodate this growth. Specialization has created a context where we are

dependent on experts. While expert advice can be useful, it can also lead to disastrous mistakes

because experts can be wrong. Evidence from both psychology and neuroscience shows that

people are more easily persuaded by experts and think less critically about information presented

by experts. Given this knowledge regarding experts, it is crucial that businesses promote

empowered and proactive employees that are willing to critique leaders in order to prevent major

mistakes. Furthermore, empowered and proactive employees have better job performance

compared to other employees. However, it is important to note that leader-follower congruence

is another crucial component of work performance. Thus, it may be beneficial to maintain the

status quo in an established context. Furthermore, not everyone in the organization can

adequately critique everyone else. However, members of the organization with similar or

overlapping knowledge can provide adequate critiques for each other in order to avoid

catastrophic mistakes. Experts should also be required to present their information in a clear and

transparent manner that will allow for adequate critiques and allow others in the organization to

flexibly transition between different areas of expertise. Solving the problem of what determines

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effective leadership will benefit the well-being of employees and managers which will create a

context with increased productivity. The increased productivity will increase profits which

benefit virtually all aspects of the business including shareholders, employees, and managers.

The problem of ineffective leadership

Effective leadership is crucial for every business organization, yet it is incredibly difficult

to find an effective leader. Sixty to seventy percent of employees say the most stressful aspect of

their job is their immediate boss (Hogan, 2006). Stressed employees are bad for businesses.

Stress causes brain atrophy (Radley et al., 2005) and cell death (Sapolsky, Krey, and McEwan,

1985). Stress also impairs performance on long-term memory tests (de Quervain, Roozendaal,

and McGaugh, 1998). Stress is also associated with prolonged illness (Clauw and Williams,

2002) and mortality (Vasunilashorn, Glei, Weinstein, and Golgman, 2013). Thus, stress is

detrimental to employee performance and health. Ill employees are not as productive as healthy

employees. Effective leaders cannot expect to be effective if they themselves are actually

detrimental to the performance of their followers and the group as a whole.

Another disturbing statistic is that half of managers in corporate America fail (Hogan and

Kaiser, 2005). This statistic should be alarming for corporate America because a fifty percent

failure rate should not be acceptable for businesses. A fifty percent failure rate creates a large

and unnecessary financial burden on the corporation by in the form of wasted financial

resources. Finding a new manager requires an expensive hiring process, it decreases in

productivity in the form time spent training the new manager and it decreases productivity due to

employees adjusting to working for a new leader. Cycling through new managers also creates the

perception of social instability in the work place. Unstable social interactions have been shown

to elevate stress (Haller, Baranyi, Bakos, and Halasz, 2004). Thus, management is not only

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creating a stressful environment with failing work-place relationships, but management itself is

also failing creating unnecessary financial burdens on the organization and creating even more

stress on employees.

The benefits from solving the dilemma of what defines effective leadership and how to

obtain effective leaders are vast. An effective leader providing a stress-free work place can

improve the productivity of their employees. Stress-free employees can perform at a higher level

and display better learning and memory than stressed employees. Stress-free employees can also

experience better physical health which benefits both the employees’ performance at work as

well as their family life. Furthermore, more productive employees can provide more and higher

quality for their manager which can in turn increase the manager’s performance. A positive

feedback-loop whereby managers’ are improving the performance of followers who are

simultaneously improving the manager’s performance is quite desirable. All parts of the system

work to help make the other parts more effective leading to a highly effective collective.

Finding what makes an effect leader also brings forth economic gains. Constantly

replacing managers that have failed is an expensive process. Furthermore, an effective leader that

can increase productivity will subsequently increase profits. Increased profits benefits

shareholders, increases employee wages, and allows for expansion within the organization which

can in turn increase profits. Thus, finding effective leaders improves virtually every aspect of the

business, making it an especially critical priority for every business and organization.

The causes of ineffective leadership

One potential cause for this failure in leadership relates to the history of leadership

theories. While early leadership research focused on personality traits, more recent research has

begun incorporating the context in which leader-follower interactions occur (Avolio, 2007;

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Eberly, Johnson, Hernandez, and Avolio, 2013). Eberly et al. (2013) point out the complex

interaction between leaders, followers, and the surrounding context. A leader can display

positive emotions, an optimistic personality, and belief in their followers. This will in turn create

self-confidence, optimism, and self-efficacy in the followers. These interactions will create an

environment or context where people feel empowered, there are high levels of positivity, and

there is distributed leadership. However, a leader could also display negative attitudes and

behaviors which would lead negative attitudes and behaviors in followers and an adverse context

for work place productivity.

Ignoring the complex interaction between leaders and followers which can in turn shape

the context is detrimental to the workplace. For example, the quality of leader-member exchange

(LMX) is related to the congruence of leader-follower proactive personality (Zhang, Wang, and

Shi, 2012). This congruence is also related to job satisfaction, affective commitment, and job

performance. In general, it appears optimal to seek both proactive leaders and followers because

this leads to high LMX quality, job satisfaction, affective commitment, and job performance.

However, incongruent proactive personalities produce worse results than congruent low

proactive personalities. Thus, any theory focusing solely on personality traits of the leader is

incomplete at best. A proactive personality can produce the best results, but only when both the

leader and followers display a proactive personality. The results of a leader with a proactive

personality are dependent on the surrounding context of their followers’ proactive personalities.

As society becomes more complex and technology advances, knowledge becomes more

specialized and we become more dependent on experts. The changes in technology has changed

the context and now more and more experts are being required to interact with one another in the

work place (Barley, 1990). Experts tend to convey a lot of power because of the knowledge they

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possess (French and Raven, 1960). Furthermore, experts are able to use their specialized

knowledge to form arguments with complex jargon that can be intimidating to others without

that specialized knowledge. Intimidating and overly complex arguments appear strong because

they cannot be adequately critiqued by the majority of people. Arguments presented by experts

are less likely to be consciously deliberated and more likely to be accepted than arguments

presented by non-experts (Petty and Cacioppo, 1986). Thus, experts have a special persuasive

power compared to non-experts.

While depending on experts is not always a problem, there are major problems with

depending on experts and their exclusive knowledge. People are far less critical of information

presented by experts and this has even been shown at the neurobiological level. Listening to

experts caused decreased activity in brain regions associated with executive decision making and

critical thinking (Engelmann, Capra, Noussair, and Berns, 2009). Exposure to experts enhances

participants’ memory and neural activity in regions associated with memory (Klucharev, Smidts,

and Fernandez, 2008). Exposure to experts also increased subjects’ positive attitudes, trust, and

neural activity in a brain region associated with reward. Thus, we are prone to accepting the

information presented by experts at both the psychological and biological levels.

The problem with not critically thinking about the complex information that experts share

is that experts are not always correct. For example, approximately twelve million adults in the

U.S. receive incorrect outpatient diagnoses every year (Singh, Meyer, and Thomas, 2014) and

radiologist commit false-negatives at an average rate of thirty percent (Berlin, 1986). Experts in

the business and financial world have also made critical errors, as evidenced by the economic

recession. However, despite the clear fallibility of experts, people still depend on experts for

advice, leadership, and guidance. In the work-place, managers and executives are the leaders and

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experts, and their knowledge is also fallible. Given the fallibility of expert advice, it is crucial to

obtain second, third, fourth, and maybe even fifth opinions from others involved in the

organization. Leaders and followers should create a transparent environment and use clear and

interpretable explanations for their decisions based on clear evidence and support.

A synthesis of this knowledge yields a startling conclusion for corporate America. A

large corporation requires a wide variety of skills to effectively function in contemporary society.

Thus, corporations recruit experts in their respective fields. However, this power in the form of

expert knowledge brings with it certain dangers. Experts can be wrong, but we are less likely to

think they are wrong compared to non-experts (Petty and Cacioppo, 1986). At the biological

level, we even have evidence that people do not critically examine information that comes from

experts (Engelmann et al., 2009) and memory is increased for information associated with

experts. Thus, people are more likely to remember information from experts that they have not

critically examined, despite not having a solid basis to accept the knowledge as correct. Critique

is crucial for both leaders and followers. Top executives in corporations must coordinate

numerous departments which possess numerous experts across various fields. Thus,

contemporary corporations are in a context where leaders are dependent on numerous experts

which decreases critical thinking about information. Dependence on experts is a major

contextual hurdle that must be adequately tackled by every successful corporation.

The solution to the complex problem of being an effective leader in such a highly

specialized society is empowerment, proactive behaviors, clarity, transparency, and flexibility.

Transparency is crucial to ensure that when experts do make mistakes, they will be visible

mistakes. Providing clear evidence and rational should be behind every major decision. Leaders

should make their followers feel empowered. An empowered follower will be more likely to

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point out a leader’s mistake and provide stronger critiques of the evidence and the rational the

leaders present. Being open to being incorrect is being open to improvement. A group of

employees can provide a wide range of input that can lead to improvements in the decision

making process. Furthermore, proactive behaviors by both leaders and followers appear to have

benefits in terms of LMX, job satisfaction, affective commitment, and job performance (Zhang et

al., 2012). Finally, flexibility is possibly the most important component of an effective leader.

Given that leaders have to coordinate dozens if not hundreds of experts, it is crucial for effective

leaders to flexibly transition from one expert’s area of knowledge to another expert’s entirely

different area of knowledge. Clarity and transparency on the part of all of the experts in an

organization are critical for an effective leader to make this flexible transition between experts.

Solving the dilemma of obtaining effective leadership

Effective leaders should be empowering their employees. Boundria, Gaudreau, Savoie,

and Morin (2009) conducted an analysis looking at Supervisors’ empowering management

practices (SEMP), and how they related to psychological empowerment (PE) and behavioral

empowerment (BE) of employees. The latent variable PE consisted of the observed variables

meaning, competence, self-determination, and impact. The latent variable BE consisted of the

observed variables efficacy-task, improvement-task, collaboration-group, improvement-group,

and involvement-organization. SEMP had a significant positive correlation with both PE and BE.

However, SEMP was only significantly correlated with BE when self-assessed but only reached

a p-value of 0.08 when assessed externally. SEMP was significantly correlated with PE for both

self-assessment and external assessment. PE was also significantly correlated with BE for both

self-assessment and external assessment. Boundria et al. (2009) also used structural equation

modeling to analyze the data and found support for a model where PE completely mediates the

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relationship between SEMP and BE. In the structural equation model, the paths from SEMP to

PE and from PE to BE were significant for both the single source self-assessment and the multi-

source assessment including both self and external assessments. Thus, promoting an environment

where employees feel empowered creates a crucial psychological state that can induce proactive

behaviors by employees.

A crucial aspect of having employees that feel empowered is that they will be more likely

to stand up when a leader makes a mistake or is incorrect. This also requires that leaders accept

their employees’ empowerment and the capacity of followers to critique leaders. Given that

experts are fallible (Singh et al., 2014; Berlin, 1986), all effective leaders should accept when

they make a mistake. Accepting a mistake can be difficult for leaders and experts because they

tend to self-verify in a manner that is consistent with them being correct (Swann and Read,

1981). People tend to employ three cognitive strategies promoting self-verify: attention, memory,

and interpretation (Swann, 1983). People spend more time looking at information that confirms

their self-concept (Swann and Read 1981). People are also better at remembering information

that confirms their self-concept. Finally, people will only endorse the validity of a test if it

confirms their self-concept (Crary, 1966). Given our cognitive disposition towards assuming we

are always correct, an effective leader must use this knowledge and insist on employees being

empowered and provide a context of empowerment. An empowered employee can point out

these cognitive errors and help contribute towards a more successful outcome for the

organization.

Another crucial as aspect of effective leadership is proactive behavior, and leader-

follower congruence in proactive personality. Leaders and followers that have congruent

proactive personalities have a higher quality LMX than those with incongruent proactive

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personalities (Zhang et al., 2012). However, leaders and followers that are both high in proactive

personality have an even greater LMX than those with low proactive personalities. Thus, the

optimal choice is to create an environment where everyone is proactive. Furthermore, it is the

proactive follower and the proactive leader that will attempt to correct an error they see.

Proactive people will stand up to experts and desire a clear explanation regarding the

interpretation of the information. Proactive people will resist self-verification which is crucial

because not only do people self-verify, but they also make attempts to make others perceive them

as they do (Swann, 2012). Thus, an expert that believes they are correct presents their argument

in a manner consistent with them actually being correct. Proactive people are able to look beyond

how a message is presented, and instead critically examine the facts and the data for themselves.

It is crucial that leaders can resist the persuasive power of messages presented by experts,

and their tendency to convey self-verifying information suggesting they are correct. For example,

Wood (1982) found that having knowledge about a topic increases resistance to persuasion.

Thus, having some knowledge of the experts area of expertise would have a beneficial effect for

resisting persuasion and lead to a less biased decision by the leader. Furthermore, feedback

delivered by a competent source that has a firm basis to make the judgment can prevent self-

verification from biasing people’s opinions (Webster and Sobieszek, 1974). Similarly, feedback

coming from a large number of people can prevent unwanted bias caused by self-verification

(Backman, Secord, and Pierce, 1963). Thus, successful businesses must create an environment

where numerous people have at least acceptable knowledge in a given area of expertise. This will

help mitigate unwanted effects that can arise when relying on experts when they make mistakes.

Aside from early psychological evidence showing the problems that can arise from

depending on experts, new technologies in neuroscience have allowed functional brain imaging

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studies to examine the neural consequences of being exposed to experts. Listening to experts

decreases activity in brain regions associated with executive decision making and critical

thinking (Engelmann et al., 2009) as well as enhances memory and activity in brain regions

associated with memory (Klucharev et al., 2008). Based on this knowledge, it is crucial that all

expert decisions be adequately critiqued. Members of a business or organization should expect

all of their employees to try and find any possible flaws in the decisions made by other members.

Contemplating potential flaws can help increase activity in brain regions associated with

executive decision making and critical thinking allowing employees to serve as adequate critics.

Because cognitive processing can enhance subsequent memory and neural activity in brain

regions associated with memory (Chun and Turk-Brown, 2007), adequate critical thinking would

also enhance memory for the critical ideas.

While the advantages of creating a context where both leaders and followers are willing

to adequately critique each other, there are certainly disadvantages. As previously mention,

having both leaders and followers that are high in proactive personality appears to have the best

workplace outcomes (Zhang et al., 2012). However, it is better to have both employees and

followers that are low in proactive personality than leaders and followers with incongruent

proactive personalities. Thus, although the optimal outcome requires everyone having a

proactive personality, the worst outcome occurs when proactive personalities are incongruent. It

may not always be realistic to have everyone in the collective engaging in proactive behaviors.

However, people who are not engaging in proactive behaviors will not stand up to the decisions

leaders and experts make which can deter implementing a proactive solution.

Another disadvantage of trying to empower everyone is that not every employee can

adequately critique every other employee. It should be obvious that a person with a background

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in cultural anthropology will be unlikely to adequately critique someone with a background in

mathematics. Each person’s area of expertise is fairly separate from the other person’s area of

expertise making any solid critiques rather difficult. However, a cultural anthropologist would be

qualified to critique the work of a psychologist who had ignored or inadequately considered

cross-cultural differences in their own work. Thus, although not everyone can adequately critique

everyone, people with similar and overlapping backgrounds could provide adequate critiques.

Given that there are disadvantages of having empowered and proactive employees readily

critiquing each other, experts must do their part to make sure the information they present is

clear, concise, and transparent. Presenting clear information will allow others to clearly

understand the information. Presenting transparent information will prevent experts from trying

to cover up any information that does not support their decision. Promoting the idea that

everyone should be presenting their ideas clearly and transparently will help people to flexibly

transition between different areas of knowledge and provide helpful and adequate critiques.

Proper critiques will help create a context where expert mistakes can be checked by other

members in the organization. Preventing mistakes and incorrect interpretations are crucial for

any successful business.

Conclusions

Effective leadership is a crucial priority for every business and organization. However,

the data paint a bleak picture regarding obtaining effective leadership in businesses. As society

becomes more complex and people become more specialized, people are becoming more

susceptible to the errors made by experts. Effective leaders must identify these errors and correct

them regardless of who made the errors. Effective leaders should create a context where

employees are empowered and promote proactive behaviors are encouraged. Finally, effective

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leaders should ensure that all information pertaining to important decisions is clear and

transparent. Clear and transparent information will ease the difficult task of leaders flexibly

transitioning from expert to expert and prevent fatal errors made by experts.

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