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BUSINESS: The Ultimate Resource

November 2004 Upgrade 26

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Viewpoint: Manfred Kets de Vries Analyzing Organizations

Manfred Kets de Vries is one of Europes leading business thinkers. A Dutch academic and INSEAD professor, he brings a unique perspective to the crowded arena of leadership theory. His expertise spans economics, management, and psychoanalysis. A clinical professor of leadership development, he holds the Raoul de Vitry dAvaucourt Chair of Leadership Development at INSEAD, where he is program director of the top management seminar The Challenge of Leadership: Developing Your Emotional Intelligence, and the program Mastering Change: Developing Your Coaching and Consulting Skills. He has received INSEADs distinguished teacher award five times. He has also held professorships at McGill University and Harvard Business School. Professor Kets de Vries is the author, co-author, or editor of 20 books, including Power and the Corporate Mind (1975); The Neurotic Organization (1984); Organizations on the Couch (1991); and Life and Death in the Executive Fast Lane (1995)a collection of essays on organizations and leadership. His more recent books include Struggling with the Demon (2001), The Leadership Mystique (2001), and The Happiness Equation (2002). He has also published over 180 scientific papers, and his work has been featured in publications including the New York Times, the Wall Street Journal, The Economist, the Financial Times, and Fortune. Leadership is a very crowded field. What is distinctive about your approach is the eclectic mix of disciplines you bring to the subject. How did that come about? Really, it is an evolution of trying to work in two main areasmanagement and psychoanalysis. I basically started as an economist, so I did a doctorate in economics at Amsterdam, which wasnt all that inspiring. But I went to the Harvard summer school when I was 17 and really enjoyed the experience, so I talked my way into the business school after my studies in Holland. Initially, I was in a program called the International Teachers Program, which was one year of studiesaimed at spreading the Harvard case method message around the world. At that time, I took an elective on psychoanalysis and management that was taught by Abraham Zaleznik, who came from production management but had become a psychoanalyst. I found the course very interesting.

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BUSINESS: The Ultimate Resource


November 2004 Upgrade 26

At that point I decided to retrain, which was very difficultparticularly, in those days, if you were not a psychiatrist. So I did my M.B.A. and D.B.A. at Harvard Business School. Then I went to INSEAD for two years, followed by a year back in Harvard, and then Professor Henry Mintzberg persuaded me to move to McGill University in Montreal, where he was based. There I did my psychoanalytic training. I basically spent seven years with psychiatrists, and some clinical psychologists. That was a very different experience to my previous work. Trying to teach organizational behavior with traditional training in a doctoral program, you really dont learn that much about human beings. But when you are exposed to people who have a serious pathology, thats a really interesting contrast. It made a big impression on me. So that combination of disciplines resulted in me having a particular slant. In those days I didnt know it would be useful. I knew it was interesting, but I didnt know if it could really be applied. What was the breakthrough? The first serious application of the two fieldsmanagement and psychoanalysis was in the book I did with Danny Miller, entitled The Neurotic Organization. Although it was written in 1984, in many ways it has been a seminal book for management. People know me because of that book. That was the first time that someone had tried to show in a systematic way the relationship between personality, leadership, corporate culture, and strategy. At that time, too, Henry Mintzberg had produced his book The Structuring of Organizations in which he classifies organizational typesadhocracy, machine bureaucracy, and so on. So it is not surprising, given Henrys influence, that we came up with the darker side of his configurationshow organizations go wrong, in other words. All the organizational forms he described enjoyed a period when they were successful, but eventually they went down the drain for one reason or another. So we were stating some kind of organizational life cycle. Where did that lead you? From there, Danny and I wrote one more book together called Unstable at the Top, which was a popularization of The Neurotic Organization. It was not a great book in some ways, but it was still in the days of In Search of Excellence and every publisher thought the next bestseller was just around the corner. So we fell into that trap, by publishing a book that tried to use the ideas in a more populist format. Danny and I then went our separate ways. I left Canada and went to INSEAD, where I extrapolated from some of the ideas and wrote a series of books. I became a sort of corporation pathologist, where people would ask me to look at organizations that they thought were going wrong, and I edited a book called Organizations on the Couch. Id written some books beforePrisoners of Leadership and Leaders, Fools, and Impostersbut they were looking at the darker side of organizations, and particularly the darker side of leadershiphow do leaders derail, what goes wrong? How can you recognize the signals, and are there things you can do about it?

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BUSINESS: The Ultimate Resource


November 2004 Upgrade 26

Around that time, I also wrote a book on family businesses, which was a bit of a sideline. It was a reflection of my work consulting for smaller family businesses, that had real soap operas going on, which made my clinical knowledge very useful. Usually there were major Greek dramas taking place, from Medea to Oedipus, and to have a sense of the psychodynamics of social systems was very helpful. So I started to focus on the clinical orientation to managementwhat I call the clinical paradigm. When they think of psychoanalysis, most people probably think of Freud. But who really influenced your thinking? I use the concepts of psychoanalysisalthough not necessarily traditional psychoanalysis. Of course, I cannot deny that Freuds contributions influenced me, but one of the advantages of my training in Montreal was that it was a place where different schools of thought could be applied. I was particularly influenced by Heinz Kohut (19131981), who was a pioneer of self-psychology, and, to some extent, Melanie Klein (18821960) and her successors. They went away from classical psychoanalysis, which is very drive-centered, to a more interpersonal centered approach. When I was at Harvard I was also very much influenced by Erik Erikson (19021994), the great old man of the human life cyclewho coined the phrase identity crisis. Its due to the influence of those people that I call my approach the clinical orientation. In that respect I am quite a pragmatist, in that I try to do things that work. After all, I am a professor at a business school. What sorts of practical issues do you use the clinical paradigm to address? As an analyst, you get a little bit skeptical about the speed of change. I wanted to find new methods of dealing with it. At INSEAD I started a program called The Challenge of Leadership: Developing Your Emotional Intelligence. Now, of course, emotional intelligence has been popularized by Daniel Goleman. But emotional intelligence has always been there. Any decent clinician has always been involved with emotional intelligence. I decided that after working with middle managers it would be useful to work with C.E.O.s, because if you want to create change in an organization, you stand a much better chance if you have their collaboration. So for 12 years now, Ive been running a seminar in which I work with 20 C.E.O.s. That has been a major source of research for me, because traditionally when you write cases about executives they tell you the party line. But when you have people together three times a year for a five-day period, with follows-ups years after, you talk about things that really matter. Otherwise, they wouldnt hang aroundgiven the cost of their time. How has your writing evolved since youve been working closely with C.E.O.s? Because I had previously specialized in looking at the negative side, I felt that I should try to write about what makes a great organization. So my books The New Global Leaders and Struggling with the Demon deal with aspects of this question. I even wrote a book called The Happiness Equation, which is very different to what Ive written before.

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BUSINESS: The Ultimate Resource


November 2004 Upgrade 26

You mentioned the importance of emotional intelligence in clinical psychoanalysis. In the past, corporations tried to keep emotions out of the workplace: is that changing now? It has been changing for a while. I think the emotional intelligence movement has influenced that shift, but there is also a growing recognition that emotional management is required to effect change. Another program I am involved with at INSEAD is called Coaching and Consulting for Change. My original idea was to aim it at consultants six years into their careers. They are usually brains on a stick, analytical machines, but they have to know something about emotional management if they want to be really effective. The program also attracts people who are involved with implementing change programs. So there are three main groups on the programconsultants, HR directors, and senior executives involved in major change programs. What they realize is that they have to be very good at emotional management. Ive learnt in my two programs that you can only change people if you hit them in the stomach and in the head: cognitively and emotionally. If you dont use a two-pronged attack, nothing is going to happen. The best programs realize this. But many M.B.A. programs still go their own merry way and are totally cognitive. It is ironic that M.B.A.s love functional coursesthe latest technique in financial analysis or marketing. But 10 years afterwards, when they come back to our school for executive programs, the only thing they are really interested in is people management, because thats what its all about. And they havent learned that in MBA programs, because to give this type of education is too costly. Do 21st century leaders need different qualities and skills to previous generations? You need to know some different things when you live in a networked world. You probably need a slightly different approach. But Ive always said that many of the leadership techniques of Alexander the Great are still highly applicable. In fact, Ive just written a book on Alexander the Great, as I was curious to know whether I would have to eat my wordsbut happily, its true. Leaders still need to walk the talkset the example. They still need to speak to the collective imagination of their people to create a group identity. They need to create an executive role constellation. The use of languagesymbol manipulationalso remains very important. However, when you work in a knowledge society, you have to be careful. If you have a highly skilled workforce, then old-fashioned, autocratic practices are not going to be appropriateyou will lose your people. Also, because most leaders have so many subcontracting relationships and strategic alliances these days, you need to know how to lead people who dont work for you. So its a much more subtle style. And it doesnt hurt if you know something about the business, and you love itif you go beyond being just a financial engineer.

Bloomsbury Publishing Plc 2004

BUSINESS: The Ultimate Resource


November 2004 Upgrade 26

Do you think there is too much emphasis on the financial aspects of the C.E.O. role? It has been a problem recently. Many of the business leaders who have fallen from grace were financial engineers, rather than people managers. Twenty years ago, most C.E.O.s came through the operations routeand really knew their people. Now, most come through the financial engineering route, and have no sense of the people. Thats very different. Derailment at the top is rarely because of lack of marketing or financial skills, its a lack of interpersonal skills. Has our understanding of leadership advanced in the past 50 years? What is different is that, if you look at what effective leaders do, there is much more awareness of the larger context. That was not explicitly stated in the past. It was quite mechanical. Leadership was characterized as highly task-orientated or highly relationship-orientated. The best leader was the one who could do both. It was probably true but it didnt go much further. Now, however, more leaders see themselves as the high priests of corporate culture. Probably, intuitively, people were already that in the past. But it is now much more explicit. The turning point came in 1981 with the book the Art of Japanese Management, by Pascale and Athos. And then In Search of Excellence followed very soon after. Those two books were very influential in making people aware of the role of corporate culture. Nobody had explicitly thought about it until then. Now we know it.

The Best Sources of Help


Book: Kets de Vries, Manfred. The Happiness Equation. London: Vermilion, 2002.

Bloomsbury Publishing Plc 2004