There's a lot of talk about "leadership" and "management." The former can be generally considered charismatic and the other, well, bureaucratic. Organizationally, there are clear, existing positions for managers. Just look at the job titles on business cards: She's the Manager of Design Engineering; he's the Quality Manager. Odds are that you are unlikely to find a title that reads "Leader of ——." (If you do, send me a copy.)

Managers are hired. Leaders are inspired.

Noel Tichy has written a new book (along with Eli Cohen). It's titled The Leadership Engine: How Winning Companies Build Leaders at Every Level (HarperBusiness; 367 pp.). On the subject of managers and leaders, he writes, "There is a multibillion-dollar consulting industry in the world today that thrives largely on the fact that most managers don't want to lead." And Tichy, who is a professor at the University of Michigan Business School, openly admits that he, too, is a consultant. But he has little time for managers. He wants to work with leaders.

Asked who the book is written for—as in who he expects to read it—he replies, "It's for everyone," then adds, "I believe that everybody, in their own realm, can and should become leaders."

Why should anyone want to be any less?

What Is A Leader?

"I define `leadership,'" Tichy explains, "as the ability to accomplish things through other people that wouldn't happen without you." He adds, "This isn't hierarchical leadership, CEO leadership, but the front-line sales rep having to influence customers and horizontally influence other people in the company. It's the young man in the machinist training program at Focus:Hope who has to teach the new machinists."

One of the important attributes of leadership is that the leader teaches others to become, in their own ways, leaders. The legacy of a leader is that she or he leaves a stronger organization behind.

Predictably, one of the people who figures large in The Leadership Engine is the subject of Tichy's last book, Control Your Destiny or Someone Else Will: GE chairman Jack Welch; Tichy worked for Welch in the mid-80s; while on a two-year leave of absence from the University of Michigan, he was head of leadership development at GE's Crotonville executive training center. Surprisingly, another one of the leaders that he includes in the book is the late Father William Cunningham, founder of Focus:Hope, a civil rights organization that has created in the inner city of Detroit a world-class manufacturing training institution, the Center for Advanced Technologies. Tichy writes of Cunningham, who died last May, "His boldness in setting enormously high goals and his ability then to energize people to reach them was so astounding that he will inspire and energize me—and hopefully you—for years into the future." Cunningham knew what he wanted, knew how he could accomplish it (through the help of others), and he wasn't satisfied with anything less.

Leaders, then, are people who have ideas that they can clearly and compellingly convey to other people, they have what Tichy calls "teachable points of view." He believes that the teaching organization is the one that will be the most successful. Indeed, he stresses that leaders must be capable of teaching others what needs to be done, and that at the end of one's career, it is undoubtedly more significant how many leaders one has created rather than what a particular quarter's earnings were.

But leadership isn't for the faint of heart. Leaders are often called upon to do tough things, like firing people. But that is not the defining characteristic. He cites, for example, "Chainsaw" Al Dunlap, the man who is called into companies for radical restructuring. As Dunlap writes in the shareholder letter to the 1996 Sunbeam annual report, "a 12,000 employee workforce is now 6,000; 26 production facilities—some operating at 30-50 percent of capacity—are down to nine (soon to be eight); 61 warehouses have been reduced to 18." While Tichy acknowledges that Dunlap's slashing and burning does drive up a company's stock in the short term, he contrasts Dunlap with Larry Bossidy, head of AlliedSignal. Yes, some people lost their jobs when Bossidy took over AlliedSignal. "But he also put 86,000 people through a change program the first year. He will build a stronger institution in the long run that will sustain its performance a lot longer than Al Dunlap's." Dunlap is a manager. Bossidy is a leader.

Bossidy writes in the 1996 shareholders' letter in the AlliedSignal annual report, "As we look to the future, we need to continually increase our capacity to satisfy customers in an ever-more competitive world business environment. I know we've made real progress on this front in 1996, but it's essential that all of our business components meet customer expectations all of the time. Most of our employees can be proud of the progress they've achieved in their efforts to reach 6-Sigma, but in some of our businesses we still have too many deviations from our quality standards. These misfires are embarrassing, and we're determined to eliminate them. We'll reach our 6-Sigma goal only if every employee is infused with a personal revulsion for poor quality and intolerance for disappointing a customer."

Comments like these indicate that Bossidy has a belief system that he is trying to communicate to his employees: "embarrassing," "personal revulsion," and "intolerance" are not exactly the words of a run-of-the-mill manager. These are words that are charged. They are, in effect, words that are part of a teachable point of view. You coach people to begin to think this way. You can't fire them into compliance.

Returns on Leadership

The companies (and, by extension, the leaders) that Tichy holds in regard are those that have proven themselves to be performers. He compares the performance of the companies to the Standard & Poors 500 Index, noting the companies' annualized total return over five- and 10-year periods, and market (i.e., a large basket of stocks) and industry (as best suited to the particular company) comparisons. "One nice thing about the capital markets," he remarks, "is that they don't lie." What he has discovered is that the companies with great leaders tend to perform well. For example, in the case of AlliedSignal during the period between December 31, 1991, to December 31, 1996, the annual total return was 27.20% while the market comparison was 15.20% and the industry index was just 12.64%.

Tichy notes that the Big Three aren't doing particularly well when it comes to the financial numbers and the value as determined by investors. "Part of what this industry has to realize is that the rest of the world in not interested in cyclicality, the yen and regulation. They're interested in putting their capital into investments that give a return." The issue is performing at world standards in the capital markets. And while some people maintain that the big returns tend to be realized by high-tech companies like Intel, Tichy dismisses that: "I am not a big believer in the idea that industry is the only variable that accounts for it. No way." And he points out that GE has several products—including turbines and motors—that are, as he puts it, "As Rust Belt as you can get." Still, GE performs.

"At the end of the day, leadership is about: `Here are some assets, make them more valuable tomorrow,'" Tichy says. This is not just in terms of things that are measured on the financial pages, but on a more personal level, as well. "Believe me, as a professor at the University of Michigan Business School, I have the same assignment. If I don't make that institution more valuable tomorrow, then I'm sucking resources out of it." Resource drains don't endure.

What Can You Do?

But what about individuals? Tichy has some useful recommendations. "First and foremost," he counsels, "people should ask themselves some things. Do you want to be a leader? Do you want to go through life feeling good about yourself because you're adding value to the organization?" If the answers are "yes," then you've got to start working on your values, on your strategies, on your teachable points of view. You have to be prepared to be considered, at times, as a real jerk—to put it mildly. "If you are a transformational leader, you are in the minority," Tichy says.

He notes that it is important to take an external view of the company you're working for, to determine how the company is performing from a financial standpoint and if there are problems, what the strategies are for dealing with it. "Keep asking. Keep checking. Nobody is going to watch out for your career but you." It may be that you may not want to be a leader where you are currently employed.

"Take a hard look at the hand you've been dealt in the organization," Tichy recommends. "It is perfectly conceivable that you're on the third deck of the Titanic and you're making the deck the most fabulous deck in the world—all of the chairs arranged, and it's the highest-performing deck in the world.

"But if there are a lot of turkeys up on the bridge, you might be pretty stupid to stay there. If, on the other hand, they're not real bozos, if they're not going to hit an iceberg and the ship is not going to go down, if they're on the way out and another generation is coming in, then you might want to stay. But be honest about why you're staying."

Actually, Tichy notes that although the domestic auto companies may not be doing particularly well right now, he does point out, "The auto industry is going to be where some of the most exciting leadership opportunities are in the next five years because of the amount of change." He adds, however, "But you're going to have to make your bets on the senior leadership, recognize that there are going to be some turkeys left in between for a while, that life isn't going to be perfect, but that you want to become a transformational leader."

If your assessment is that the company you are currently with isn't the right one, then, he puts it, pointedly, "Make a decision. You are not an indentured servant. You can pick up your resume and go."

Some people have taken the strategy of not making waves, of trying to drift their way, silently, smoothly, through their jobs. Tichy thinks this is destined for disaster in this era of downsizing and change. "If you're a middle manager and you're not driving for change and being a leader, then you are at risk for at least two reasons. You are going to be less marketable, and you're more likely to be the one to get fired."

Leaders have possibilities. Managers have positions. Positions pay. Possibilities reward.