The Leadership Molecule: A Hidden Asset By Eric G.

Flamholtz President, Management Systems Consulting Corporation Professor Emeritus, Anderson School of Management, UCLA

It is said that penicillin was discovered accidentally when Alexander Fleming, a scientist, left a dish siting in his laboratorty for an extended period of time and then noticed the mould that had formed had properties which inhibited the growth of the staphylococcus bacteria. Our concept of the leadership molecule was also the product of an accidental discovery.

Origins of the Leadership Molecule Construct

In 1994, I was asked to do coaching with the senior three people who were leading Starbucks: Howard Schultz, founder and CEO, Howard Behar, SVP of operations, and Orin Smith, CFO. In brief, I would visit Starbucks in Seattle and do individual coaching for each individual and then work with the three as a team. As Orin Smith stated in his initial phone call, We have Tiger by the tail and only once chance to get this right. This thing is growing very rapidly and we are all under great pressure individually and as a management team. They were looking for someone to coach each individually and help them smooth out some wrinkles as a team. Smith had read the third edition of our book, Growing Pains, and fell that Starbucks was a classic of what we described in that book.1

Eric Flamholtz, and Yvonne Randle, Growing Pains, Jossey-Bass publishers, Inc., 2007.

Over the next few years, I worked with Starbucks and this leadership team to help position them for sustainable successful growth.2 And then I moved on to working with other companies facing similar issues. One of my strong impressions was how well the Big 3 at Starbucks ended up working together. They became a true team, not merely a team in the nominal sense of the word. Each had his own defined sphere of responsibility but they worked together formally and informally. They had, for example, a weekly dinner at McCormick and Schmicks, a Seattle sea food restaurant, where they met without agenda and as equals to discuss the business very openly. They had gelled into a true leadership unit.

The Flash of Recognition

A few years later as I was working with another company in a difference space (financial services) I observed that they had a very strong core senior leadership team that (like Starbucks) seemed to work very well as a true leadership team. They seemed also like a molecule, or compound that was a unit. That moment of recognition led me to think about various companies with which I had worked in organizational development. It seemed to me that where this leadership unit existed the there was also high performance, and where it did not exist performance was not so good or even great problems.

For a description of my work at SBUX, see Howard Schultz and Dori jones, Yang, Pour Your Heart into it: How Starbucks Built a Company one Cup at a time, Hyperion, 1997.

The Construct and Hypothesis That flash of recognition led me to formulate what I now term a leadership molecule construct and related hypothesis. This construct has now been formulated and studied empirically.3 Specifically, I was invited by Cheung Kong Graduate School of Business in China to participate in their CEO leadership program, where I did coaching for one year with CEOs of forty leading Chinese companies. As part of that program, I designed a survey to assess the extent to which a leadership molecule existed in companies, and studied the extent to which the existence of the molecule was associated with varying degrees of organizational development, using measures that have been show to link to financial performance.4

Stated briefly, a leadership molecule is a core team (group or unit), including a two person dyad) that cohesively performs a set of five key functional of strategic leadership as a unit rather than as a set of individuals. These functions are: 1) 2) 3) 4) 5) Creating the vision, Defining and managing culture, Coordinating operations, Overseeing systems development, and Leading and managing innovation and change.

It is a core leadership team (in true sociological sense) with defined but overlapping and complementary roles. Typically the roles of vision, culture, operations, and overseeing systems development, are performed by one or more individuals comprising the molecule, while the fifth task of strategic leadership (leading and managing innovation and change) is performed as a collective team.

Eric Flamholtz, The Leadership Molecule: Implications for Entrepreneurial Firms, International Review of Entrepreneurship, 2011.
4

Ibid.

Formation of the Molecule A team can either pass through these stages by (accidental) natural evolution or by design through team building activities. Team building can help accelerate the process of creating the molecule. For example, I helped create this leadership molecule at Starbucks (without calling it that or thinking of it in those terms) through role definitions and team building activities. A Marker of a Molecules Existence A marker of the existence of such a molecule is typically (but not always) that an organization has assigned a nickname or label to the molecule, such as: H2O and H2O2 (at Starbucks) The three Musketeers, (at PacifiCare) Batman and Robin (Steve jobs and John Scully at Apple), The Troika (at Google)

Also where the molecule is seen as negative, dysfunctional or even toxic by the organization at large, it can receive a nickname with negative connotations or overtones, such as: Gang of Four, and The Ghost and the Darkness: (Dyad)

The absence so a nickname is not conclusive evidence that a molecule does not exist, but it is suggestive. However, the nickname is a marker or DNA signature for a true leadership molecule (team). Conclusion In any organization that has it, a leadership molecule is a valuable asset. It is hidden in plain sight, recognized by all inside the company but not susceptible to copying by competitors. Where it does not exist, it can be developed with the proper ingredients and process. Further Information For further information about the Leadership Molecule and how it can be created, see www.mgtsystems.com/team-building and www.mgtsystems.com/leadershipmolecule as well as the articles referenced above.