Companies need leaders—or, do they really?

When a company succeeds, people need to give someone credit for that. It’s usually that company’s leader, the CEO, who takes the credit. If the company fails, people need someone to blame. Trundle out the CEO again! The figurehead of the organization is the figurehead of all successes and failures that come to that organization.

In reality, organizations’ successes and failures come from a wide variety of internal and external influences, some in which the CEO played a part, and some in which he or she didn’t. But when things go wrong, the people, the media, even the board of directors, don’t usually ask, “How is ousting the CEO going to solve our current problems?” Often times, the answer is, “It won’t.”

So, is leadership more about appearances than reality?

Leadership Attribution Bias

Attribution is the way people make sense out of cause and effect relationships. If a person wakes up with heartburn in the middle of the night, they may attribute it to the pizza they ate for dinner earlier. If a person is offered a promotion at their job, they may attribute it to the successful completion of a high-profile project earlier in the year.

The attribution framework shows that people characterize those with traits such as intelligence, outgoing personalities, aggressiveness, strong verbal skills and the like as leaders, or at least as leadership material. Similarly, individuals who score highly on task performance and relationship performance are seen to be good leaders. Situation doesn’t really get calculated into this point of view. They just have these traits and skills, so they are, without question, good leaders.

When an organization has extremely poor (or extremely good) performance, people are going to reach to make a leadership attribution to explain that performance. Humans have a tendency to overvalue a leader’s impact on performance. And this is why CEOs are either celebrated or take the fall, regardless of how much they’re actually responsible for the results.

When a leader is replaced, a new leader is likely to benefit from a phenomenon called regression to the mean. That is, most teams or people who are underperforming will naturally improve, without intervention, by reverting to their historical average performance. This will lead observers to come to the conclusion that the new leader is responsible for the improved performance.

So, in keeping with this attribution bias and theory, it would seem that having the appearance of being a leader is actually more important than actual accomplishments. People who aspire to leadership roles can attempt to shape the perception that they’re intelligent, have outgoing personalities, are aggressive, have strong verbal skills, and so on, and they’re likely to increase the probability that their managers, colleagues and employees will view them as an effective leader.

Substitutes and Neutralizers

Just as people can place too much value on the leader’s contributions to the success or failure of an organization, in some situations, a leader’s contribution can be completely irrelevant.

In 1978, Steven Kerr and John Jamier developed the substitutes for leadership theory suggesting that different situational factors can substitute or neutralize the effects of a leader’s efforts.^[1] While there were methodological issues with their findings, the study has held up and is worth considering here.

Situations that are neutralizers make it impossible for the leader behavior to make any difference to follower outcomes. Substitutes act as a replacement for leader influence. The impact of these different substitutes and neutralizers depends on whether leadership is relationship-based or task-based.

For instance, if an individual is intrinsically satisfied in their job, this can be a substitution for the contributions of a relationship-based leader. If an organization has very explicit formalized goals and rigid rules and procedures, this can be a substitute for task-oriented leadership.

There is some application for this theory. For example, autonomous work groups have been considered a substitution for formal leadership. In autonomous work groups, employees are divided into groups that are responsible for managing their own day-to-day work, including recruiting, hiring, distribution of tasks, etc.

Self-leadership is also an application for this theory. In self-leadership, the individual controls his or her own behavior through a set of processes. The underlying assumptions behind self-leadership are that people are able to exercise initiative without the external constraints of management, rules or regulations.

This concept has increased with the popularity of teams, as empowered, self-managed teams need team members who are, themselves, self-directed.