The Era of Inspiration

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Information, the new source of power and influence in our knowledge economy, is infinite. Since leaders cannot assume they can acquire more information than someone else, previous leadership habits have grown less effective.

Through nearly all of human history, perhaps 1% of the people at the top had all the land, money, and information. The other 99% were chronically information-deficient. In the late 20th century, power and wealth began to shift from those who traditionally hoarded information to those who shared it. The information explosion in the past two decades gave many more people access to knowledge that creates wealth.

Today:

• Information is king.

• Hyper-connectedness puts that information in the hands of the many;

• Hyper-connectedness leads to hyper-transparency, which reveals all, including how people and companies do things.

Because of these new realities, companies have to adapt. Business leaders must change the ways they think and their habits of leadership. The old hierarchical control over things and people is now gone for good. Rather, it's power through something—a power that connects, not one that commands.

Intrinsic Value

Carrots and sticks are necessary and will always be; however, 21st century leaders also recognize the limits of these two sources of external stimuli. Coercion requires an ongoing investment in a bureaucracy of rules, processes, and enforcement. Coughlin learned this when one of his former players, a star running back who retired from the team to become a television analyst, criticized Coughlin's leadership style to millions of viewers of NBC's Today Show and Sunday Night Football.

Carrots are expensive, particularly in a down market where money does not flow as freely and dollar-based performance targets are more difficult to achieve. Financial incentives cannot be shared and rarely connect individuals to a higher sense of purpose. A recent survey of 250 senior corporate executives, conducted by U.S. executive search firm Impact Hiring Solutions, illustrates this point: 38% of executives would accept up to an 18% pay cut for a position with a company that offered a healthier, more inspiring organizational culture.

Leaders with a dollar-based vision also tend to communicate a message ("make the numbers" or "your bonus depends on this") that subordinates register in potentially dangerous ways ("by any means necessary" or "no questions asked"). Unlike coercion and motivation, the source of inspired conduct is intrinsic and internal. Inspired employees act on something they believe in; they are in the grip of ideas; they are compelled by a deeper purpose and propelled by values they hold fundamental. Unlike carrots, beliefs are largely free—and they can be shared. Because they can be shared, they spur collaboration and serve as the glue that keeps people aligned and energized. This is particularly important in the face of current economic times, where external stimuli (carrots and sticks) are not as readily available. In short, values are sustainable.

In a June 12, 2008, interview, when asked about the upcoming season and ensuring his winning "team first" attitude, Coughlin responded: "We are going to work at that because I think, knowing full well how we got there and the fact that we were able to win the Super Bowl by 'team first'…[it] is a theme that we have developed real hard and we will continue to do that." For Coughlin and other 21st century leaders, success looks inspirational.

Dov Seidman is the founder, chairman and chief executive officer of LRN, a company that helps businesses develop ethical corporate cultures and inspire principled performance, and the author of HOW: Why HOW We Do Anything Means Everything…in Business (and in Life). LRN recently announced the acquisition of leading green strategy firm, GreenOrder.