The Leadership Chain:

McClelland and his Legacy

By Bradford F. Spencer, Ph.D.
INTRODUCTION
Leadership is a much written about topic. The popular business magazines and indeed, some
rather well selling books are often focused on specific leaders. In America, we often deify or
crucify our leaders, and our business leaders are no exception to this foible.

However, today’s research into the true causes of the patterns of what molds leaders does not
focus on nearly enough. Certainly the scientific community looks down on the “research
methodology.” The fact is the research often consists of interviews by business professors asking
prominent captains of industry to speculate on why they are so different. To give credit where it
is due, most executives admit they have no clue -- before they continue the dialogue to try to
help the struggling researcher find the childhood incident which led to the drive that has set him
or her apart. No wonder the conclusions are both suspect and not helpful to those asking what
they do to improve themselves. This is where the approach of Dr. David McClelland differed so
dramatically.

This series of articles is designed as a pre-reading for the workshop (Leadership Process:
Motivating Achievement) designed to both explain and cover how to apply the extensive work of
Dr. McClelland and his students. For that reason much on detail “how to” implement the findings
will be left for the lectures and interactions of the workshop. Our experience is that an overview
of this extensive body of knowledge will give the group a running start, thus allowing much
more territory to be covered in our limited time.

Interestingly enough, the initial research was not about the systemic and predictable causes of
leadership at all. Nor was his interest in business, and certainly not business applications. More
will be said later as to why this social scientist toiled away in relative obscurity and to this day
his name is not recognized by many -- but most of today’s works of substance cite his
contributions. Certainly he was recognized as a giant among his peers and his position as head
of the School of Social Psychology at Harvard University provided him with a unique platform.
He used this platform to forward his work rather than to build fame.

The sheer differentiation of businesses and the demands on their leaders in differing times and
marketplaces makes comparison a daunting task. The unpredictability of the battlefields they find
themselves on compounded by the changing competitive landscape expands the difficulty.
Fortunately, we have generally accepted definitions of success as defined by Wall Street and its
counterparts in every major free market nation which make it possible to compare results across
continents, and indeed, oceans.

When people of good will do their best and succeed beyond their peers it is only natural to seek
to find if a pattern exists. A primary reason is to create an edge by standing on their shoulders in
developing the next generation of successful leaders. It seems the general public has in a rather
cynical (but perhaps understandable) fashion bought the myth that the drive is to dominate one’s
fellow man -- or simple greed -- is the explanation behind what drives executives to positions of
power.
The retailing of this perspective yields no help to the true student. Explaining the common
obsessions that brought them to the position where they are surprised by the acclaim and often
reluctantly find themselves on the covers of magazines, is the question we are setting out to
answer with the implications for every managerial and executive level. Successful leaders
recognize at a profound level the article is truly not about them, but rather a way to sell
magazines while covering a business story. Pictures of the corporate headquarters do not jump
off the newsstands.

What this series of articles does not attempt to review is the root causes of the numerous reasons
for failure once the pinnacle seems to have been reached. Conflicts so varied and deep as to defy
a research process seem to be at work. But we think we have hints as to why the great often fall.
However, the reality is that those driven to make businesses succeed tend to stay successful
much more often than not. We do think we have a modicum of insight into why that is. Frankly,
it does not make for great headlines or even at times for interesting reading.

I apologize in advance if this series proves to be a bit dry and suffers from a few too many
footnotes and charts. If you seek a study in the “management du jour” techniques, you are
reading the wrong paper. What makes “the few” able to consistently elicit more discretionary
effort, to hire better people and have systematically more motivated people with better results is
what we are attempting to document. We have labeled the phenomenon “The Leadership
Chain.”

INITIAL PREMISE
Right out of the gate, the initial premise is simple. Without question, the key to beating the odds
against today’s challenges has to do with creating an environment that produces an
“achievement aroused,” high performing workforce.

So what is the job of an effective leader? Is it to provide direction? To motivate? To challenge?

“All of the above” may be correct, but they are limited views of what a leader is. Leaders do all
these things. But what is the essential aim of leadership? It is to create a climate wherein
people want to -- are aroused to -- produce great results, and seem to be driven to do it over
and over.

This is the job of the leader -- to create conditions wherein others produce great results, and they
do it repeatedly. Reproducing these results over time is what produces greatness, in leaders,
in organizations, and in people. The job of an effective leader is to stimulate employees to push
themselves and accept personal responsibility to meet or exceed tough performance targets. It is
to create organizations where people do things above and beyond the call of duty; where people
are highly committed to delivering extraordinary results. In other words, great leaders
systematically create highly motivated, high achievement aroused organizations.
RESEARCH
No body of research and practical application has come close to matching the profound impact of
the work of Dr. McClelland, his students, and his many associates. McClelland is footnoted in
literally every major work on leadership from Drucker to Peters to Kotter, and is recognized as
the foundation upon which most motivational theories are based. Yet he is not well known. The
reason his name is not a household word is not from lack of quality, but a genuine humility and
commitment to high quality, high impact research, rather than the lecture circuit or publishing
best sellers.

To explore the implications of this research and practice, we have summarized the research
findings and their impact in this article. The end result is not intended to be a formula per se, but
hopefully a clear and insightful look at a chain of cause and effect between individual motives,
leadership behavior, and organizational climate, and how these dynamics drive organizational
effectiveness. Leadership style is the critical link in the chain, connecting climate to motives
to achieve organizational results. The findings presented in this article, and the research and
practice contained within, form a chain of logic, the results of which provide a powerful guide
for developing one’s own leadership and for creating and sustaining high performing
organizations. You will learn to recognize what works and what doesn’t, and why.

“great leaders systematically create highly

motivated, high achievement aroused organizations”

THE LEADERSHIP CHAIN

Consider for a moment the following scenario. You have just accepted the role of CEO of a
company that has been struggling for many years. The prior CEO founded the company and,
after many years and numerous waves of venture capital investment, was ousted due to an
inability to meet the financial projections and commitments. The business concept is a sound
one, and the people hired are quite talented. The market is growing and needs your product. Yet
the company stands on the brink of extinction. Something needs to be done and you were hired
to do the job.

The first thing you do is assess the business environment and discover that indeed the company
has a good product and the market is ripe. The company has a clear strategy, one which will
likely bear fruit. Unfortunately the organization’s climate is in shambles. Good people are
leaving, morale has hit rock bottom and the people feel that the future is bleak. Your job is
clear--get the company aligned around the strategy and get the people working together toward a
shared cause. In other words, create a high performing work climate. The measure will be
whether or not you meet the financial projections and commitments.
REVERSE ENGINEERING THE LEADERSHIP CHAIN
McClelland and his associates, fortunately, have a lot to say on the subject, and their research
provides a clear guide for your leadership mandate. By connecting the dots of his research
findings, a compelling chain of reasoning unfolds. We call this the leadership chain. There are
four links in the leadership chain. To understand the logic, we will reverse engineer it by looking
at the end of the chain, the organization’s results, and then move backward to identify the
primary causal logic.

The End of the Chain: Climate and Organizational

Performance
In the above scenario, the leadership chain is first evidenced by the organization’s performance--
how is the company doing in the marketplace? If the company is not producing effectively, one
contributing cause is often the result of a culture that is misaligned to the strategy manifested by
a depressed organizational climate.

By climate, we mean those factors in the culture that affect people’s, motivation, desire and
commitment. Because our focus is on the motivation role in leadership we will further specify
the definition of climate to “a subset of measurable variables in the culture that directly affect
motivation.” As we heard above, morale is low, people are concerned about the future, and we
can predict that the organization is likely to feel unfulfilling and unrewarding to be a part of. In
other words, the organization’s performance is directly linked to the organization’s climate. We
will discuss the quantitative proof later, but anyone who has worked under these circumstances
will attest to the relationship between the work environment (which we are narrowing to
“climate”) and results.

Organizational climates can range from a structured, conforming, impersonal orientation to a

more unstructured, collaborative, and personal orientation. Some climates emphasize group
accomplishments, while others reward individual achievements. Climate, together with
organizational strategy, dictate competitive advantage. While your strategy may be copied, it is
extremely difficult to duplicate a culture and the climate.

So we have the last link in the chain: organizational climate to organizational performance. A
misaligned climate resulting in depressed discretionary effort and collaboration towards goal
attainment indisputably affects organizational performance.
Figure 1. The End of the Chain: Climate and

Organizational Performance
Climate, Business Strategy and Culture. It is important to understand the link between climate
and the “bigger picture” concept of organizational culture. (I have included an appendix -- with
greater detail on culture as defined by the significant contemporary research of Dr. William
Schneider. The reason it is not included in the body of this series is that while it is extremely
important, I am limiting this discussion to the topic of motivation. Thus we can cover the issues
we need to under the subset of culture we call climate. I am also leaving out an extensive
discussion explaining the strategic “value disciplines” as outlined by Michael Treacy and Fred
Wiersema. (For a deeper discussion of these concepts, I refer you to their book Discipline of the
Market Leaders.)

We will revisit the concept in greater depth, but for now suffice it to say, the theory states that
ideally the culture lines up with the strategic imperative of the organization. Strategy for our
purposes simply refers to the marketing decisions designed to give the products competitive
advantage. If you choose “product leadership” (Intel, Sony) you have no choice but to adopt a
“competence culture” to maintain alignment. If you choose to adopt an “operational excellence”
strategy (Wal-Mart, WellPoint), your options of culture to remain in alignment is limited to
“Control.” If you choose “customer intimacy” as the best strategy, (Southwest Airlines, Avon
Products) the culture that will be aligned is “collaboration.” The last strategic option comes from
Geoffrey Moore, the high tech marketing guru, and is referred to as “discontinuous innovation.”
If that is your option, the only aligned culture is “cultivation.”

The model looks like this, but the detail is the topic of another book entirely:

The Middle Of The Chain: Leadership Behavior and

Climate
While other factors certainly impact an organization’s climate, the most potent impact is the
behavioral style of leadership of the CEO and/or the leadership team. When organizations, like
the one above, find themselves struggling, missing product deadlines, not responding to market
changes, missing opportunities, etc., the most likely leadership response is fear and frustration.
Out of fear and frustration, leaders resort to styles such as command and control, or blame.
These coping styles, by their very nature, make the situation much worse. A strongly dominating
or governing leadership style may not work to foster innovation, and a placating or involving
style may not be best for producing timely results. In short, leadership style directly impacts the
organization’s climate.
 Figure 2. The Middle of the Chain: Leadership
Behavior and Climate

The Beginning of the Chain: Motives and Leadership

Behavior
Finally, while many factors affect a leader’s style, the most significant variable is the thinking
patterns, assumptions, world view, and personality of the leader. In other words, how a leader
thinks and what drives his or her behavior directly impacts his or her style. (In these articles, to
minimize gender bias, we will use “he” and “she” interchangeably.)
We call this thinking pattern and drive--the leader’s motive pattern.

Figure 3. The Beginning of the Chain: Motive Pattern

and Leadership Behavior

The Complete Leadership Chain

The above premises represent, in effect, three connections between four links on a chain of
causality that have profound implications for leadership and organization performance (figure 4).
They can best be expressed simply as follows: Your motive pattern combined with your
ability to express those motives maturely and effectively has a direct impact on your
leadership style. Your leadership style in turn directly impacts the organization climate
you create, which in turn affects the degree to which people desire to achieve and perform
in your organization.

Figure 4. The Complete Leadership Chain

Motive Leadership Organizational Organizational

Pattern Behavior Climate Performance

In summary, effective leadership is the act of impacting clear and distinct organization
factors, ones that are well within your control. Recognizing motive patterns and arousing
motives towards accomplishing organizational results becomes easier when you understand
the linkages between motive, leadership style, climate and behavior. Effective leadership can
be learned through the direct application of a McClelland’s set of principles.
In the first part of this article, we will explore the first connection of this causal chain in detail
and demonstrate the implication of this connection on leadership behavior. Then, each
subsequent connection will be examined. Here is the outline for what follows:

Part I. The Relationship Between Motives and Leadership

Part II. The Leadership Chain Continued: The Relationship Between

Leadership Style and Culture

Part III. The Leadership Chain Completed: The Connection Between

Culture and Performance

Part IV. The Organizational Culture Alignment Model

Part V. Review and Summary of Conclusions

Appendix: A Brief History of McClelland and his Research

Appendix: A brief Summary of the work of Schneider and Culture
Part I

THE RELATIONSHIP BETWEEN

MOTIVES AND LEADERSHIP

Before looking at the relationship between motives and leadership style, let’s first explore in more
detail what we mean by “motive.” For our purposes it is neither a dictionary definition nor a reason for
a crime.

What Do We Mean by “Motive”?

The term “motive” is a specific adjective in the behavioral sciences having to do with the
repetitive underlying concerns or needs of a person. When you understand a person’s needs, you
understand the recurring types of thinking this person engages in and the behavior that results. As
an example, some people think about relationships, and tend to seek social and nurturing settings
that follow that thinking pattern. Others are motivated primarily by their need to accomplish
things of importance. They often would rather do it alone, if alone helps them meet their goals.

To understand why a person acts a certain way, we need to discover their patterns of thinking.
Patterns of thinking affect the person’s patterns of behavior. Think for a moment about your first
professional job. You probably were nervous, and you probably rehearsed in your mind over and
over how you would act early on in the job. You probably even thought a lot about your first
day, well before you got there. Why did you think about it? Because you had a concern. You
either wanted to do well in the job, that is, be efficient or you wanted to make an “impression,”
or you wanted to connect with people, or you wanted to avoid failure, or some combination of
the above. These are thinking patterns. They reflect some set of underlying concerns. These
concerns drove your thinking pattern and therefore, the patterns in your behavior.

“to understand why a person acts a certain

way, we need to discover his or her patterns of
thinking”
When we are talking about a motive, then, we are not referring to wants or desires or
preferences. We are referring to “psychological needs” which must be satisfied for a person to
function well. McClelland, in fact, defines a motive as a “recurrent concern for a goal state
(measured in fantasy) which drives, directs and selects a person’s behavior.”

A motive is a “recurrent concern for a goal

state (measured in fantasy) which drives,
directs and selects a person’s behavior.”
(McClelland)

Think about a time when you needed to be with someone you cared about. If the need was
strong, you probably did whatever it took to be with that person. This was not a preference or a
wish, but a strong need, which you took action to fill. It is needs and the motives which reflect
the urge to meet those needs that was the focus of McClelland’s research.

How Motives Work

McClelland’s initial focus of study was to determine whether or not he could identify within
individuals a motive or need, which, if impacted, would significantly increase their productivity.
He and his associates did in fact identify such a variable. They called the motive, the need for
achievement (described in shorthand as nAch). Such a need, as in all psychological needs,
affects the patterns of thinking which drives the patterns of behavior. The fact is, there are no
behaviors without precedent thoughts and thus, if you know your patterns of thoughts, your
patterns of behavior in a given set of circumstances are predictable.

If you have a strong need for achievement, for example, you will likely seek ways of improving
past or current performance, you will strive to better yourself, and you will seek to make
significant and/or unique contributions to your work. Everyone has this need to some extent.
This will occur in all parts of your life and it takes place unconsciously. What is interesting,
however, is not that this need exists, but that different people have this need in varying amounts.
It is also clear that different jobs require this to varying degrees and thus peoples “fit” varies
dramatically. A night watchman with a high achievement motive will go stir crazy, drive others
stir crazy with constant suggestions or get the meets met elsewhere. Moreover, one can, in fact,
increase this need in others and in oneself.

Drawing from a growing body of knowledge on the subject of motives, McClelland sought to
understand the relationship between the need for achievement and a wide variety of effects, from
the economic success of nations, to behavior of people under the influence of alcohol, to
leadership effectiveness. In the latter arena (the subject of this series of articles) McClelland
hypothesized that if you could understand and predict the motives that drive effective
leaders, and then train people to alter or develop their drives, the result would be that any
organization, and ultimately any society can be significantly enhanced. (For a detailed
summary of the history of McClelland’s research, see the insert at the end of this article.)

In later studies of people and their motives, McClelland and his associates isolated two other
specific motives, which, along with the achievement motive, account for as much as 95% of all
social interaction. Since we are interested here in how people behave in organizations or at
work, these are most relevant for our exploration. They are the need for affiliation (nAff), and
the need for power (nPow). To understand the relationship between motives and leadership,
let’s first explore these primary motives more fully.

The Three Primary Motives

Achievement (nAch). The need for achievement is characterized by the need to outperform
others, high internal standards of excellence, and a desire to innovate. People high in nAch
prefer to take responsibility for their actions, set challenging goals, and need a lot of feedback.
They tend to be most successful in entrepreneurial settings, and in jobs that require high
standards, efficiency, responsibility, and independent work. Their daytime and nighttime dreams
(fantasies) are actually about these topics.

In Western society “achievement” is a value laden word which usually represents “good” as
opposed to “bad.” Seeking the best and most effective way to rob a bank or commit an act of
terror is lodged in nAch. In our usage it is the outcome the motive can be judged rather than the
drive.

Affiliation (nAff). The need for affiliation is characterized by having a strong desire to
establish and maintain close relations with others. People high in nAff often tend to be highly
cooperative, supportive, and communicative. They tend to be most successful in job settings that
require teamwork and integration. Their daytime and nighttime dreams are about establishing
relations and avoiding the disruption of these relationships.

Again in Western society, “affiliation” is often viewed as a positive trait. For our purposes, the
drive comes unattached to “good” or “bad.”

Power (nPow). The need for power is characterized by the need to influence others. People
whose nPow is high tend to get significant satisfaction in influencing others, are often concerned
for their reputation and position. They typically act in ways that generate strong feelings in
others, both positive and negative and they influence others naturally through their actions. They
tend to prefer jobs where they can have a direct impact on others, and as a result, are often well
suited for management positions where success depends on their ability to influence. Their
daytime and nighttime dreams are about these topics.

Again, in Western societies, “power” is considered a trait that comes loaded with baggage that
makes it undesirable. It is the goals of this need to influence that determine the goals as positive
or negative, but the “why” behind the behavior is nPow.
Because of our narrow definition, it is not the motive, but the goals which drive the ethics
discussion.

Importantly, the power motivation in individuals can be divided into two types:

A. Personalized power—the degree to which a person expresses his or her

power needs for personal gain and self aggrandizement;
B. Socialized power—the degree to which a person expresses his or her power
needs to get something done for the greater good.

This distinction between types of power is significant, as will be seen later, because the former
power drive can often invoke resistance in others and therefore be detrimental to an
organization’s performance, while the latter is often essential.

A Hypothetical Scenario
In order to demonstrate the three motives in action, let’s look at a scenario to see how three
different people in the same company might handle it. These examples are all caricatures and are
purposely exaggerated to make a point.

Let’s imagine three people are driving to work who are involved in the same project. This is a
project in trouble. It’s over budget, behind schedule, in disarray. Later, they will meet with the
fourth person, their boss, a vice-president. No one slept well last night. Notice in the description
below the different goal states each seeks, their differing thinking patterns, and the way that they
direct and select different behavioral strategies to satisfy their dominant motive.

Mr. nAch is driving and traffic is a nightmare; cars are moving at a snail’s pace. The radio says
there’s a wreck ahead. Within 5 minutes of being stuck, Mr. nAch had identified 2 alternate
routes to work and he’s off the freeway in a flash, trying alternate 1. He can’t figure out why in
the world all these other people would sit in traffic when there is obviously a better way, after all,
they’ve been on this freeway a thousand times, just like him. Now, he’s way ahead of the game,
feeling a little better for his efforts. “Sheep,” he mutters to himself. “Not only that,” he thinks,
“but I’ve got the solution to the work situation. We’ve got to get the decision process to work
better. Expertise is the key.

It’s no damn good that we take forever to decide everything. A geriatric unit makes a decision
faster than us. Meetings about meetings. If I had the job, I’d get it done in no time. First, I’d
reduce the paperwork 75%. No point to most of it. I already have the fastest turnaround of all
the managers. I don’t know what they do with all their time. Maybe if they understood my
system they could speed the process.” Mr. nAch felt very proud of the system he developed to
process requests. It was unique to the best of his knowledge, and gave him a real advantage. Mr.
nAch saw the light turn yellow and accelerated. “Made it,” he thought, “now if I keep it at 35,
I’ll time ‘em all the way to Broad Street.”
Meanwhile, on another road, Mr. nAff is concerned that his group was demoralized by Mr.
nAch’s and Ms. nPow’s tirades. He thinks, “Steve Smith’s wife just had a baby, and Mr. nAch
did not take even a moment to congratulate him. He is so preoccupied that he doesn’t even seem
to care about people. I just don’t understand people who don’t care about others.”

As traffic slows down to a crawl, he thinks about each person’s needs and preferences. “Smith is
at a major crossroads in his career. His workload is increasing and yet he is being pulled to be at
home more with his family. How will he create the balance he needs in life. Mr. nAch and Ms.
nPow are almost unbearable. They are at each others’ throats. You’d think we weren’t on the
same team. Yet they each have a legitimate concern, stemming from their highly aggressive
goals, which conflict with each other. Unfortunately, this conflict has not been dealt with.

“We’ve worked together for years; we don’t want to become enemies,” he’d say to them later.
“That’s the whole problem; we’ve lost each other’s support; who can work with all the back
stabbing and anger.” Mr. nAff thinks about how he can help them resolve their differences. “I
know people, how to get them back together, and once that happens, the rest will be easy. People
can think again. No one wants to work when everyone’s angry and resentful of one another;
what’s the point?” Relationships are the key.

On a different freeway, Ms. nPow was focusing on the company as a whole. “We’ve reached a
major crossroads in our company,” she thinks, “and we’ve got to change direction or we will
surely perish as a company. She turns her attention to Mr. nAch, and thinks about her frustration
with how driven he is to succeed. She appreciates his drive, and sees him as one of the most
productive people she has ever met, but also feels like if he succeeds in his sales goals, the
company will likely fail. “I can’t seem to get this through to him,” she thinks, “and I wonder
how to help him see the bigger picture. If he does, and we can harness his enthusiasm to help
affect change in the company, then we have a good chance of success.” Ms. nPow then begins to
think about other people in the company and how she can influence them to help the company
shift gears toward a new product line and new strategy.

These three vignettes are not just about what people think in their cars that day. The kinds of
thoughts, the themes of the thought, what each person sees as important and meaningful, will
play themselves out repeatedly, throughout these three people’s lives. Mr. nAch has developed
what are technically referred to as neuro-networks that unconsciously pattern his thoughts around
how to do things better. Mr. nAff’s neuro-networks unconsciously pattern his first concerns
around relationships. Ms. nPow’s neuro-networks revolve around influence and having an impact
on her world. It is both reasonable to conclude and more importantly, we have empirical
evidence to categorically prove, that they will adopt different patterns of behavior.

The Motive “Signature”

We describe each of these three social motives in order to accentuate their differences. In fact,
everyone has each of these needs in varying degrees, and indeed, one can be high in all
three. In other words, the amount of need one has is not a zero sum situation. and the relative
amounts of each of these we have represents our motive profile. Because we each have distinct
and different profiles, these differences make up what we might refer to as a motive
“signature.” It is this signature that, in part, makes us each unique in terms of our
personality.
Figure 5. Three Different Motive “Signatures”

90

80

70 Person A Person B

60

50
Person C
0

30

20

10

n Achievement n Affiliation n Power

As will be demonstrated below, these social motives have significant implications for ones
leadership style. For example, contrary to popular belief, high nAch people do not always make
good leaders. In fact, an individual’s need to achieve can result in behaviors that unintentionally
undermine the drive in others to achieve by overly competing, or by overly controlling a given
situation. In addition, contrary to popular belief, high nAff leaders also do not always make
good leaders. Sometimes, in their strong preference for harmony, for example, they avoid
conflict, and sometimes these conflicts are a necessary and important part of organizational life.
At the same time, in the right setting, high nAch leaders and high nAff leaders can be very
effective. Where immediate results are needed, and where positive models of the achievement
drive is needed, high nAch people can often thrive. And where the job requires the leader to
integrate different functions and promote teamwork, high nAff leaders can be particularly
effective. Ultimately, however, to understand leadership fully, we must understand the nature of
power, for it is power and influence that moves people, organizations, and society as a whole
when it cannot be done simply by example.

Does a Strong Power Motive Mean You’re a Good Leader?

One might be tempted to jump to the conclusion that a strong power (nPow) motive – the desire
to influence others -- makes for a good leader. As will be shown, a natural power motive helps,
but isn’t required so long as you develop a conscious ability to influence others. This can evolve
over time.

To understand power in action as it relates to leadership, an early study by D. G. Winter,1[1] an

associate of McClelland’s, is instructive. To test the impact of power on others, Winter examined
the effect of Kennedy’s inspiring inaugural address on others. Messages that inspire others are,
by definition, designed to influence and are therefore power driven. He found in his study that
students exposed to Kennedy’s address were uplifted by his message. After hearing the address,
their frequency of power thoughts as measured by a test called the Thematic Apperception Test
statistically increased. This is significant from the point of view of leadership because people
who are positively influenced by power often feel stronger, more capable, and take more actions
to reach organizational aims. To explain his findings, let’s first draw upon McClelland’s
explanation of the difference between a high nPow manager versus a high nAch manager. This
explanation is taken directly from one of his most famous Harvard Business Review Articles:
Power is the Great Motivator.2[2]

Consider the case of Ken Briggs, a sales manager in a large U.S. corporation who
joined one of our managerial workshops. About six years ago, Ken Briggs was
promoted to a managerial position at headquarters, where he was responsible for
salespeople who service his company’s largest accounts. In filling out his
questionnaire at the workshop, Ken showed that he correctly perceived what his job
required of him, namely, that he should influence others’ success more than achieve
new goals himself or socialize with his subordinates. However, when asked with
other members of the workshop to write a story depicting a managerial situation,
Ken unwittingly revealed through his fiction that he did not share those concerns.
Indeed, he discovered that his need for achievement was very high - in fact, over the
ninetieth percentile - and his need for power was very low, in about the fifteenth
percentile. Ken’s high need to achieve was no surprise - after all, he had been a
very successful salesman - but obviously his motivation to influence others was
much less than his job required. Ken was a little disturbed but thought that perhaps
the measuring instruments were not accurate and that the gap between the ideal and
his score was not as great as it seemed.

Then came the real shocker. Ken’s subordinates confirmed what his stories
revealed: he was a poor manager, having little positive impact on those who worked
for him. They felt they had little responsibility delegated to them, he never
rewarded but only criticized them, and the office was not well organized but was
confused and chaotic. On all those scales, his office rated in the tenth to fifteenth
percentile relative to national norms.

As Ken talked the results of the survey over privately with a workshop leader, he
became more and more upset. He finally agreed, however, that the results
confirmed feelings he had been afraid to admit to himself or others. For years, he

1[1]
Winter, D. G., Power Motivation in Thought and Action. Unpublished Ph.D. thesis, Harvard University, 1967.
2[2]
McClelland, D. C. and Burnham, D. H., Power is the Great Motivator, Harvard Business Review, 1976, 54, 100-
111.
 had been miserable in his managerial role. He now knew the reason: he simply did
not want, and he had not been able, to influence or manage others. As he thought
back, he realized he had failed every time he had tried to influence his staff, and he
felt worse than ever.

Ken had responded to failure by setting very high standards - his office scored in
the ninety-eighth percentile on this scale - and by trying to do most things himself,
which was close to impossible; his own activity and lack of delegation consequently
left his staff demoralized.

Ken’s experience is typical of those leaders whose strong need for achievement combined with
low need for power causes them to be frustrated with others and move toward a more coercive
approach to leadership. Although Ken demonstrates power, it was not focused on the needs of
others, but on his own needs. As a result, he uses power as a blunt sword. Like many high
achievement driven people, Ken was very successful in his individual contributor role and, as a
consequence, was promoted into a managerial position for which he, ironically, was probably not
well suited. This explains a long misunderstood phenomenon as to why individuals who are
highly productive in one job often demonstrate the “Peter Principle” when promoted into a
management position.

Power Motive: Good or Bad?

A clear eyed view of the concept of motives must be taken to realize that none of the three
motives, nAch, nAff, or nPow, are intrinsically “good” or “bad”. A power motive isn’t bad
per se, unless it is used to accomplish bad things. Closer to the point is the notion that different
motives and motive patterns tend to “fit” different situations better. The many traits of a power-
motivated leader tend to fit the requirements of many (but not all) management positions. When
it comes naturally, it works best, but the traits of a power motive can also be developed.
Unfortunately, because power is such a loaded term for many and in our society often seen as
undesirable, often people deny or don’t develop and refine their ability to influence others toward
productive organizational outcomes.

What Kind of Power?

If achievement motivation does not, by itself make a good leader, asserted McClelland,
socialized power likely will. To demonstrate this, 16 sales districts from a major U.S. company
were tested and then rated for morale, as measured by the degree to which people were clear
about roles, responsibilities, and organizational direction (referred to below as “organizational
clarity”) and the degree to which there was strong and effective teamwork (referred to below as
“team spirit”). The percentage gains and losses in sales for each district were then compared to
their prior year. The difference in sales figures by district ranged from a gain of nearly 30% to a
loss of 8% with a median gain of about 14%. The relationship between morale and sales was
then ascertained showing a clear positive correlation.3[3]

3[3]
Ibid., p. 114.
Figure 6: Relationship Between Morale and Sales

The motive scores of more than 50 managers of both high and low morale units were then
examined, revealing an inescapable pattern. More than 70% of the managers in high morale
units scored high in need for power. Moreover, the best of these managers, as judged by the
morale of those working for them, tended to score the highest on power motivation. Still, the
whole story is not revealed. 80% of the better managers had scores of power motive stronger
than their need for affiliation as compared to only 10% of the lower performing managers. This
pattern held true throughout the whole company. In the research, product development, and
operations divisions, for example, 73% of the better managers had a stronger need for power
than a need to be liked, as compared with only 22% of the lower performing managers.

Towards a Leadership Motive Pattern

McClelland’s most definitive study demonstrating the impact of the motive patterns on
leadership was carried out at AT&T.4[4] In their study, the careers of 311 entry level managers
were tracked over a 16 year period. In this study, they hypothesized that managers whose
predominant needs were high in socialized power and where those needs were higher than their
need for affiliation would likely be more successful than others. We call this the leadership
motive pattern – a “signature” of motives best suited for leadership. Their findings indeed
reinforced the hypothesis. Those managers who were characterized by the leadership motive
pattern at entrance to the company were more likely to be promoted to higher levels of
management over time. Moreover, nearly half of the high level management people followed the
leadership motive pattern. By way of contrast, those with high nAch profiles, while successful in
lower management levels where technical skills were more important, tended to peak in their
careers at lower levels and not move up the corporate ladder as readily.

In a similar study of successful Navy executive officers, the same leadership motive pattern
distinguished the more effective Navy officers from their less effective counterparts.
Interestingly, the characteristics of successful petty officers were similar, with two outstanding
differences. Successful petty officers saw their work as oriented around getting things done
(achieving) and relating effectively to others (affiliation), with less emphasis on the importance
of getting things done through others. In other words, they did not see the game of “influence”
as important as those that moved up the Navy’s organizational ranks.5[5]

To further test the leadership motive pattern, McClelland and his associates distinguished
between three kinds of managers—institutional managers, affiliative managers, and personal
power managers:

*Institutional managers are high in power motivation, low in affiliation motivation, and high in
inhibition, that is, able to consciously inhibit their personal ego gratification in lieu of seeking
goals for the greater good.

4[4]
McClelland, D. C. and Boyatzis, R. E., Leadership motive pattern and long term success in management.
Journal of Applied Psychology, 1982, 67, 737-743.
5[5]
Winter, D. G. Navy leadership and management competencies: Convergence among tests, interviews, and
performance ratings. Boston: McBer, 1978.
*Affiliative managers have affiliation needs stronger than their need for power.

*Personal power managers have high needs for power, higher than their need for affiliation,
while their inhibition score is low.

In one of McClelland’s most illustrative studies, he examined a Sales Division of a large

company whose managers closely matched the three types above. By correlating the type of
manager with three different features of an organization’s effectiveness, a clear picture of the
efficiency of the institutional manager emerged.6[6]

Figure 7: Leadership Behavior: Develop Sense of Responsibility in Subordinates

Figure 8: Leadership Behavior: Develop Organizational Clarity

Figure 9: Leadership Behavior: Develop Team Spirit

By further studying the behaviors that institutional managers tend to exhibit, McClelland found
five characteristics that seem to distinguish them from the other types.

*They are more organization minded; they tend to join more organizations and feel
responsible for building them. They also tend to believe in the importance of centralized
authority.

*They report that they like to work—they like the discipline of work, and they like
getting things done in an orderly way.

*They are willing to sacrifice their own self-interest to meet the needs of the
organization. This is in contrast to the personal power manager whose own personal
interests tend to be paramount.

*They have a keen sense of justice. They believe in fairness and that people who work
hard and sacrifice for the good of the organization should get rewarded for their efforts.

6[6]
Ibid., p. 105.
 *They tend to be more mature—less egotistic, less defensive, and more willing to seek
advice from experts.

In summary, the above research seems to strongly suggest that, to be effective, a leader may
need to possess a high need for power directed toward the benefit of the organization as a
whole. Moreover, the need for power needs to be greater than his or her need for
affiliation. A leader with a high and dominant need for affiliation will have a tendency to want to
stay on good terms with all people and will likely make exceptions to corporate policies. In
addition, it is often easy to recognize the affiliation motive in their desire to avoid interpersonal
conflict. The desire to please will often result in an inability to provide focus and direction, and
thereby cause confusion and loss of confidence. In addition, in their effort to please employees,
they will likely apply policies differentially, causing mistrust on the part of others.

“to be effective, a leader may need to possess a

high need for power directed toward the
benefit of the organization as a whole”

To the undiscerning eye, these findings might be interpreted to conclude that to be an effective
leader, one must have a high need for power, and without it, you will likely be ineffective. This
would be an overstatement of the case. Rather, the findings suggest that power is
(unconsciously) a primary factor in most leaders’ effectiveness, and the effective and mature
expression of power is likely to yield positive results in many, if not most, leadership situations.

“…power is (unconsciously) a primary factor

in most leaders’ effectiveness, and the effective
and mature expression of power is likely to
yield positive results in many, if not most,
leadership situations.”

What If You Have a Low Power Motive?

If the need for power is not present in your motive pattern, and it is needed for you to be an
effective leader, the game is not lost. The challenge for you may be to consciously think more
about how to influence others, a thinking pattern that others high in nPow do more
subconsciously. This will enable you to cultivate your ability to express power more effectively
and thereby level the playing field in terms of producing more influence behaviors.
While McClelland’s findings clearly suggest that people with high nPow tend to be more
effective as leaders, the behaviors that are exhibited by high nPow individuals are paradoxically
often seen as undesirable in our society. As a society, we tend to have contradictory feelings
about power. We both want it, and yet don’t want to be affected by others who want it. We
respect people who get things accomplished, yet often resent their approach.

The distinction between personalized power and socialized power is particularly important here
because it sheds light on the paradox. People who are high in personalized power tend to see the
world as a win-lose game. “Survival of the fittest” is their credo, and they will do whatever it
takes to get ahead. They tend to like prestige and, in the extreme, tend to be impulsive in their
application of their power needs. This invites resistance to them and their goals.

In contrast, people who are high in their socialized power needs often exercise their power for
the benefit of others. They seek win-win solutions to conflict and tend to effectively suppress
their inner need for domination. Hence, they tend to be much more effective in their
organizational leadership than their personal power counterparts and exhibit behaviors that are,
more often than not, seen as socially desirable. This invites support to both them and their goals.

This distinction became particularly compelling to McClelland later in his research career when
he became interested in the question of whether and how power needs differ as people mature.
In exploring the question, he distinguished between four different stages of maturity as they
relate to power needs.

Figure 10: Relation of Power Motivation and Inhibition

to Maturity and Leadership Potential7[7]
Leadership
Leadership
Power Needs
Maturity
Tendencies
Level

Stage
Often I assertive
not
Low power enough
motivation

7[7]
McClelland, D.C. “Power Motivation and Organizational Leadership.” In Power: The Inner Experience, by D.
C. McClelland, New York: Irvington Publishers, 1975.
 Often overlyMotivation
High Power dominant
Stage II
(particularly with low nAff)
Low Inhibition

High Power Motivation

Often overly efficient
Stage III
High Inhibition
(particularly with low nAff)

High Power Motivation

Stage
Often IV
High Inhibition
selfless and efficient
High Stage IV scores

McClelland hypothesized that these stages, in effect, form a natural hierarchy of power, where
each stage represents a “more mature” approach to power and influence and will therefore
result in greater leadership capability. He formed his hypothesis by observing and comparing
people who used fundamentally different leadership styles and their relation to power.

Later, research on how people progress through different stages of ego maturity and their
relationship to power and influence strongly corroborated McClelland’s assertion. In each of the
studies described below, ego maturity is measured by the degree of complexity in ones thinking,
the ability to differentiate among multiple feelings, the ability to recognize and value differences
between ones view and that of others, and the ability to focus on the long term, rather than strive
solely to meet immediate needs.

In a study by S. Smith,8[8] she found that people with more mature egos tended to be less driven
by their needs for personal power and control and more by their need to focus on the needs of
others and the organization as a whole. In contrast, people with less developed egos tend to
exercise coercive power—that is the need to control others and their actions. As managers they
tend to prefer to enforce decisions rather than make them. They tend to think in terms of right or
wrong, and are often extremely rule bound.

In a similar study, H. Lasker9[9] found a clear relationship between ego maturity and motive
patterns. He found that managers at lower stages of ego maturity tend to have stronger personal
power drives while managers with greater ego maturity tend to be more driven by their needs for
achievement.

Inspired by these findings, W. Torbert found a strong correlation between ego maturity and
progression up the corporate ladder of success.10[10] In another study, W. Torbert and D. Fisher
found that leaders with higher ego development were far more capable of exercising socialized
power and leading organizational change efforts than their less mature counterparts.11[11]

8[8]
Smith, S., Development and the Problems of Power and Agreement in Organizations, Unpublished doctoral
dissertation, George Washington University, 1980.
9[9]
Lasker, H., Ego Development and Motivation: A Cross-Cultural Cognitive-Development Analysis of
Achievement, Unpublished doctoral dissertation, University of Chicago, 1978.
10[10]
Torbert, W., “Leading Organizational Transformation,” Research in Organizational Change and Development,
Vol. 3, pages 83-116, 1989, JAI Press Inc.
11[11]
Fisher, D. and Torbert, W., “Transforming Managerial Practice: Beyond the Achiever Stage,” Research in
Organizational Change and Development, Volume 5, pages 143-173, 1991, JAI Press Inc.
Daniel Goleman and his colleagues at the Consortium for Research on Emotional Intelligence in
Organizations at Rutgers University, have re-labeled nPower as “Social Skills,” in his Harvard
Business Review article. He defines this as “friendliness with a purpose, moving people in the
direction you desire.” This is as close to McClelland’s definition of Power as one can get.12[12]

The above research, while strong in their implications of which profile will likely result in more
effective leadership, does not suggest that only one motive pattern will yield leadership success
in all cases. Other motive profiles may also be more likely to be effective in different situations.
For example, the role of integrator is a critical organizational function, especially important in
organizations that require cross functional communication. In this case the integrative leader is
one who facilitates communication across organizational lines and helps groups work through
conflict. In a study by P. Lawrence and J. Lorsch, they found that effective integrators differed
from their less effective counterparts by their higher need for affiliation.13[13] They pay more
attention to others and their feelings, they try harder to establish friendly relationships in
meetings, and they take on more assignments that offer opportunities for interaction. In addition,
they tend to have average, but not high needs for achievement as well as average, but not high
needs for power. In other words, effective integrators have balanced motive profiles and their
affiliation needs are higher than those that are ineffective integrators. McClelland drew a similar
conclusion in a study of 96 Navy Human Relations officers, where the most successful ones
displayed moderate and balanced needs for Achievement, Affiliation, and Power. He called this
the integrator motive profile.14[14]

Power Is Great For Leaders, But What About Affiliation?

As organizations have become less hierarchical, it appears that the implications of McClelland’s
early research for today’s leadership may need to be revisited. While the ability to influence
others continues to be a critical source of leadership effectiveness, the ability to establish
collaborative relationships has become more and more important in the past decade. Hence,
some combination of socialized power with medium affiliation drives may be the profile needed
to succeed in many of today’s flatter, more collaborative environments. As leaders need to
become more facilitative rather than authoritative in their orientation, so too must their profile
change. This flies in the face of McClelland’s earlier assertion that in order to be effective, a
leader has to have need for power stronger than their need for affiliation. This may still be true,
yet a potent dose of nAff is extremely important to be a good facilitative manager.

So which is it? Does a good leader need to be low in affiliation needs relative to power, or does
he or she need a medium or even higher amount of nAff? And where do standards come from if
achievement is not high?

To shed light on this issue, R. Boyatzis, former President of McBer, the consulting firm founded
by David McClelland, made a distinction between two types of affiliation needs—affiliative

12[12]
Goleman, D., “What Makes a Leader,” Harvard Business Review, Nov.-Dec., 1998, pages 93-102.
13[13]
Lawrence, P. R. and Lorsch, J. W., “The New Management Job: The Integrator,” Harvard Business Review,
1967, 45, pp. 142-151.
14[14]
Winter, D. G. Navy leadership and management competencies: Convergence among tests, interviews, and
performance ratings. Boston: McBer, 1978.
assurance and affiliative interest. The need for affiliative assurance is based on the need to be
liked and approved by others and often results in behaviors designed to avoid rejection. The
need for affiliative interest, in contrast, is based on a genuine concern for others and their well
being and often results in “joining” behaviors such as being involved in teams, social clubs, etc.
One motive is self-focused (affiliative assurance), the second is other-focused (affiliative
interest).

In a working paper on the subject, Boyatzis hypothesized that the affiliative assurance manager
will likely behave in ways that are counterproductive to organizational needs.15[15] He would
make decisions seeking acceptance and approval from others rather than make tough decisions.
He would equate harmony with success rather than performance with success, and would feel
uncomfortable confronting others for fear that they would lose others’ approval. In contrast, a
manager driven by affiliative interest will likely be compassionate, yet direct in their decision-
making and less concerned about the consequences of making tough decisions.

While there is no direct research to date on the subject, C. Lafferty and his associates have for
many years been studying the relationship between 12 different personality traits and leadership
effectiveness. Their research has strongly corroborated Boyatzis’ hypothesis. Two of Lafferty’s
12 personality traits make the same distinction as Boyatzis, and in multiple studies, Lafferty
found that strong leaders exhibited low needs for approval, and high needs for affiliation—that
is, a high interest in and care for the needs of others. Moreover, they tended to express that
concern as a leader through coaching of others toward increased performance. 16[16] This is distinct
from coaching that is driven by the desire to maintain a relationship.

Conclusion – Motives and Leadership

When taken as a whole, the research on motives as it relates to leadership forms a compelling
guide. The research is telling us that people do have different needs, perceptions, and drives. At
a deep unconscious or pre-conscious level these form the basis for their leadership style. We
have come to refer to this as being on “automatic pilot.” While no style is perfect, and each style
can be effective in different situations, the task of a leader is quite clear: to get the most out of
ones people, and to sustain their performance over time. To do this, a leader must have
influence, and must think about the motives of his or her people, and how they will respond to
his or her leadership differently based on these motives. This influence must be directed toward
the greater good of the whole or people will resist it. Moreover, leaders’ attention to influence
must outweigh their need to be liked. If their need for approval is too strong they will not make
difficult decisions, ones that are unpopular. And these decisions sometimes have to be made for
the greater good of the whole. Finally, a leader has to have some achievement drive, which
produces the thinking patterns from which high standards emanate.

15[15] We haveMotivation:
Boyatsis, R. E., “Affiliation come toAreferReviewto andthis
a NewasPerspective.”
being onIn Human Motivation: A Book of
Readings, Edited by D. C. McClelland“automatic
and R. S. Steele.pilot.”
General Learning Press, Morristown, NJ 1973.
16[16]
For further information on the subject, contact Clayton Lafferty at Human Synergistics, Plymouth, Michigan.
These leadership principles do not stand alone. When applied in a mature fashion, a leader can
directly and significantly impact the climate of the organization as a whole. Certain leadership
styles impact the climate differently, which in turn affects and directs the attention of people in
the organization. In the following section, we will look at this relationship, and begin to see a
clear picture of the kind of leadership style that most powerfully affects and creates an
organizational climate for success.

Part II

THE LEADERSHIP CHAIN CONTINUED:

THE RELATIONSHIP BETWEEN STYLE

AND CULTURE
Organizations and their cultures do not just emerge overnight. They build and evolve over time. They
evolve as a result of the personality of the leaders, the environment in which the organization exists—
its geographical location, its industry, etc.-- and the key decisions it makes that determine its history.

We define “culture” as “the way we do things in this company in order to succeed.” As

previously stated, we are focusing on climate variables which we define as “the subset of
measurable variables in the culture that affect motivation.” These are the factors that influence an
organization’s effectiveness and its results over long periods of time.

Of all the factors that determine how and why a particular organizational culture emerges,
perhaps the most powerful impact is the style of the leader. The leader of an organization, by
virtue of his or her personality and behavior, makes an indelible mark on the organization’s
culture, either consciously or unconsciously. People in organizations are constantly adjusting to
the expectations of the leader. They are looking to the leader for signs of what is okay to do or
not to do, they pay attention to what the leader ignores and what the leader focuses on, and they
are following the example she provides. In other words, a leader cannot help but directly impact
the culture/climate of her organization.

Witness the case of Southwest Airlines. As a company, its people are known for their enthusiasm
and playfulness, and unique way of operating. When you fly on one of their airplanes, its spirit is
palpable. Etched on the walls are its motto: “nourished by our people’s indomitable spirit,
boundless energy, immense goodwill and burning desire to excel.” Anyone who has ridden on a
Southwest Airlines plane knows what we mean here as they are treated to playful, humorous, and
often counter-industry comments of the flight attendant manning the microphone during takeoff
and landings. Not surprisingly, the organizational climate of Southwest Airlines mirrors the
personality of its leader—Herb Kelleher. Kelleher is known far and wide as a fun loving,
aggressive, hard drinking president, who is adulated by the people in the company for his good
heart, and playful leadership. Hence, in this example, and countless others throughout corporate
America, the quality of leadership and the character of an organization’s culture appear to be
inexorably linked.17[17]

In this, the second part of the article, we explore the second link of the leadership chain: namely
the relationship between a leader’s style and the climate of the organization. It is this link that
we are most familiar intuitively, yet at the same time, we fear. When we were at the individual
contributor level in the organization, we blamed upper management for what ails the corporation.
Now in the role of leader, we have no where to turn to blame the dysfunctional features of the
organization except ourselves.

17[17]
While linked, it does not follow that an organization’s culture is only driven by the leader’s style of leadership.
Factors such as the nature of the industry, the organization’s long term strategic philosophy, and its past history of
success, may be more critical to forming a successful culture.
While we use well known publicized case studies such as Southwest Airlines (Herb Kellerher),
WalMart (Joe Walton), IBM (Thomas Watson) and Microsoft (Bill Gates) to demonstrate the
forceful impact a personality has on the organization, it is often less clear in your system. That is
not because it is less impactful, but rather that it is hard to distinguish day to day behaviors we
become used to as seminal in the organic behavior of the entire system.

What the Research Shows

One of the earliest attempts to understand the linkage between leadership and organizational
climate was the research of two colleagues of McClelland’s: G. Litwin and R. Stringer. In their
work, Litwin and Stringer began with the assumption that the success of an organization is
dependent on the behaviors of its people, and that the most powerful determinant of those
behaviors is the degree to which people’s motives are aroused.

An aroused motive is like an itch that needs to be scratched. When a motive is aroused,
people behave to meet the needs of that motive. For example, if affiliation is aroused, then
people will want to be with others, to interact socially. If a power need is aroused, they will want
to control or influence others. If achievement is aroused, people will want to be more
productive, innovative, and goal directed—to achieve something of value. Of the three motives,
the achievement motive is most likely to be correlated with individual performance. In other
words, the more the achievement motive is aroused in individual contributors, the greater
the impact on organizational productivity.

Based on this aroused motive premise, Litwin and Stringer then hypothesized that certain
climates tend to stimulate or suppress certain motives and that different leadership styles
will create different climates. Their causal chain of logic – quite similar to that of the
Leadership Chain -- is explained in the following figure (figure 11).

Figure 11: The relationship between leadership style and results

To test their hypotheses, Litwin and Stringer began to experiment with a number of different
variables to measure organizational climate. They drew the conclusion there are a discreet set of
characteristics that are most critical to the productive functioning of an organization.18[18]

1. Conformity* (originally referred to as structure) - the feeling that employees have about the
constraints in the group, how many rules, regulations, procedures there are; is there an
emphasis on “red tape” and going through channels, or is there a loose and informal
atmosphere.
2. Responsibility - the feeling of being your own boss; not having to double-check all your
decisions; when you have a job to do, knowing that it is your job.
3. Reward - the feeling of being rewarded for a job well done; emphasizing positive rewards
rather than punishments; the perceived fairness of the pay and promotion policies.
18[18]
Litwin, G.H., and Stringer, R.A., Jr. Motivation and Organizational Climate. Boston: Harvard University,
Graduate School of Business Administration, Division Research, 1968. Page 81-82.
4. Risk - the sense of riskiness and challenge in the job and in the organization; is there an
emphasis on taking calculated risks, or is playing it safe the best way to operate.
5. Warmth - the feeling of general good fellowship that prevails in the work group atmosphere;
the emphasis on being well-liked; the prevalence of friendly and informal social groups.
6. Support - the perceived helpfulness of the managers and other employees in the group;
emphasis on mutual support from above and below.
7. Standards - the perceived importance of implicit and explicit goals and performance
standards; the emphasis on doing a good job; the challenge represented in personal and group
goals.
8. Conflict - the feeling that managers and other workers want to hear different opinions; the
emphasis placed on getting problems out in the open, rather than smoothing them over or
ignoring them.
9. Identity - the feeling that you belong to a company and you are a valuable member of a
working team; the importance placed on this kind of spirit.

They then determined that the best way to test the validity of these variables was to see whether
and to what extent different organizations differ along these variables. They found, for example,
that in the 13 research organizations they examined tended to be high in perceived conformity
(20.2) and low in risk taking (9.9). In contrast, the 12 production organizations were lower in
perceived conformity (17.6) and higher in risk tendencies (11.1). The following table depicts
their early results.19[19]

19[19]
Ibid., pg. 70.
Figure 12: Climate Differences in Four Industries

Military Researcha Sales Production

Climate Scale N=8 N=13 N=15 N=12

Conformity 23.4 20.2 19.1 17.6

Responsibility 13.1 15.4 16.4 16.4
Risk 8.9 9.9 10.5 11.1
Reward 21.0 26.3 27.5 26.1
Warmth and Support 17.0 20.3 21.4 19.0
Conflict 8.3 7.9 6.9 8.9
Expect Approval 25.2 21.9 24.0 24.2

To study the impact of organizational climate on the motive drives of people, they then studied
two sales organizations thought to be quite different in organizational climate. The first sales
consisted of 19 sales people from a computer sales company; the second organization consisted
of 35 sales representatives from an electronics components firm. While both organizations had
much in common in terms of the types of people who staffed them, the markets they served and
the salaries sales people earned, they differed considerably in terms of the climates that
characterized them. The computer time salesmen, for example, were managed in a way that
emphasized personal relations while the electronics components sales people were managed in a
way that encouraged aggressive selling techniques. Here then, are the differences in climate as
measured by the above climate variables:20[20]

Figure 13: A Comparison of Climates in Two Companies

Electronics
Computer Time Components
Climate Scale Sales (N=19) Sales (N=35) Difference
Conformity 18.7 21.0 2.3*
Responsibility 16.7 16.5 .2
Risk 11.4 11.9 .5
Reward 28.2 27.3 .9
Warmth and Support 21.8 20.4 1.4*
Conflict 7.4 7.7 .3
* Differences were statistically significant

While many climate characteristics were similar, the two climate scales demonstrably different
were Conformity and Warmth and Support. As you might predict, greater room to make choices
(lower conformity) combined with greater expression of support and care yielded a higher
achievement climate.

Figure 14: Mean Motivation Scores for Salesmen in Two Different Sales Organizations21[21]

20[20]
Ibid., Page 77.
21
 Electronics
Computer Time Components
Sales (N=19) Sales (N=35) Difference
n Achievement 10.9 9.2 1.7
n Power 7.7 8.3 .6
n Affiliation 5.3 5.1 .2
* Difference was statistically significant

Moreover, when asked to rate the success of the salesmen on a four-point scale, it became clear
that greater achievement motivation scores yielded higher success. This makes good sense, for
the quality and characteristics that describe nAch drives are also the same that are associated
with effective goal driven behavior.

Figure 15: Correlation of Motivation with Manager Ratings of Success in Two Different Sales
Organizations22[22]

Computer Time Electronics

Sales (N=19) Components Difference
Sales (N=35)
n Achievement
and Success +.25 --.23 .48*
n Power and
Success -.13 +.09 .22
n Affiliation and
Success +.08 .00 .08
* Differences are statistically significant

“the quality and characteristics that describe

nAch drives are also the same that are
associated with effective goal driven behavior”

To test the influence of leadership style on organizational climate, Litwin and Stringer then
created three simulated business operations (described as organizations A, B, & C) made up of
15 members, each headed by a president.

The presidents were instructed regarding the leadership style they were to maintain so that
leadership style became the major variable input. All other factors were controlled as carefully
as possible. The physical locations were identical, the technology and essential tasks were the
same, and the members of the organizations were matched with respect to age, sex, background,

22[22]
Ibid., Page 79
motive patterns, and personality characteristics. The following description is drawn directly
from Litwin and Stringer:23[23]

Each simulated business operated in a 100-seat classroom. The work involved the
production of miniature construction models of radar towers and radar-controlled
guns of various kinds from “Erector Set” parts. A typical product was comprised
of from 30 to 50 parts. Innovations were called for, and none of the businesses
could afford to stand still.

15 subjects were assigned to each business including 13 men and 2 women. The
subjects ranged in age from 18 to 29 years. All were hired (at an average hourly
wage of $1.40) to participate in a study of “competitive business organizations.”
45 subjects were selected from an initial subject pool of 78 because they composed
the “best” matched groups. The dimensions along which the groups were matched
were: age, college major, business or other work experience, n Achievement, n
Affiliation, n Power scores, and California Psychological Inventory personality
profiles (particularly overall elevation, and elevation in the major areas). Attention
was given to careful matching with respect to initial motive score, since aroused
motivation was a major output measure.

The experiment was conducted over a two-week period, comprising eight actual
days of organizational life. The workday averaged about six hours. During the
course of the experiment, daily observations were made, and periodic readings
were taken using questionnaires and psychological tests. These data were used to
provide feedback to the presidents indicating to what extent they were achieving
the intended leadership styles.

The leader of Organization A was instructed to place strong emphasis on the

maintenance of a formal structure. The leader of Organization B was instructed to
create a loose, informal structure stressing friendly, cooperative teamwork. The
leader of Organization C was instructed to place high emphasis on productivity,
encouraging people to set their own goals and take personal responsibility for
results.

Litwin and Stringer hypothesized that the leadership style of leader A would create a climate that
stimulated the need for power while the need for achievement and for affiliation would be
reduced. Leader B would create a climate that would arouse the need for affiliation, while power
would be suppressed. And finally Leader C would create a climate that would arouse the need
for achievement while the need for affiliation and for power would be unaffected.

Not surprisingly, over the two week period, each organization developed distinct organizational
climates as a result of the different leadership styles. While not all of the initially hypotheses
were confirmed, the most salient result of the study was that the leadership style and its resulting
climate of Organization C far more than the other two aroused the achievement drives of the
people in the organization. At the same time power drives that tend to be counterproductive were
23[23]
Ibid. , pp. 94-96
stimulated by the leadership style of Leaders A and B. Affiliation drives were relatively
unaffected. As a result, profitability in organization C was far greater than A and B (explained
more fully in the third section of this article).

Figure 16: The Effect of Climate on Situationally Aroused Motivation24[24]

n Achievement n Power n Affiliation

high high high

low low low

week 1 week 2 week 1 week 2 week 1 week 2

Organization A
Organization B
Organization C

Tests of social motives administered several weeks later corroborated these findings, strongly
suggesting that not only does the leadership style affect the climate and therefore the aroused
needs of people, this affect can be long-lasting.

After several more studies on the relationship between corporate climate and success, Litwin
and Stringer modified their original set of climate variables, and eventually landed on the
following six as representing those variables that most impact long term organizational
performance. These six will be referred to for the remainder of this article.

The Six Leadership Behavior Styles

The following six distinct leadership behavior styles have the greatest impact on climate and thus
long term organization performance:

Domineering: Demands immediate compliance, controls tightly, gives corrective

negative feedback

Governing: Gives long-term direction and vision, accepts input, gives balanced
feedback
24[24]
Ibid., Page 122.
Placating: Promotes harmony, considers people’s feelings as strongly as the
task, gives inconsistent or exclusively positive feedback unrelated
to performance

Involving: Works for collaborative commitment, empowers others to act,

gives feedback for adequate performance rather than clearly
differentiating levels of performance

Soloing: Works to own high standard, ignores or micro-controls depending

on assessed quality of employee, gives no feedback, has trouble
delegating

Coaching: Develops employee for long term, empowers to learn and develop,
gives feedback on performance for improvement

These styles have as their origins the thought processes of the motives. The “raw style” from
nAch is Soloing, from nAff is Placating and from nPow is Domineering. The “learned style”
from nAch is Coaching, from nAff is Involving and from nPow is Governing. With few
exceptions the “learned” (adapted) style is more effective and appropriate than the raw style.

In a recent study, researchers at McBer found a strong relationship between specific leadership
styles and the six important organizational climate dimensions, further corroborating and
building on Litwin and Stringer’s findings.25[25] For this study they used a measure of managerial
style that distinguishes between six differing approaches.

An analysis of 3871 managers and executives of major international companies in 9 different

industries who rated their immediate supervisor between 1986-1992 found that domineering
and soloing styles of management tended to correlate with low achievement climates, while
the use of governing, placating, involving and coaching styles tended to correlate with
higher achievement climates. In particular, the data showed the following effects on climate
variables.

Figure 17: The Effect of Leadership Style on Organizational Climate

25[25]
Kelner, Stephen, P., Rivers, C. A., O’Connell, K. H., “Managerial Style as a Behavioral Predictor of
Organizational Climate,” 1994, McBer & Company.
 Leadership Behavior Styles
Pl In
Domineer Governi acating volvin Soloi Coachi
Organizati ing ng g ng ng
on
Climate
Dimensio
ns
Confor + - + - - -
mity
Responsibi - + + + 0 0
lity
Standards 0 + + + - +
Rewards - + + + - +
Clarity - + + + - +
Team Spirit - + + + - +

Equally as significant is the fact that differences in managerial style account for between 54%
and 72% of variance in climate. In other words, far more than any other factor, one’s
management style affects the climate of your immediate work group. This is particularly
interesting when one thinks about how often managers say they are powerless to affect their
organization and its results. They complain that their manager ties their hands, that the
company’s policy inhibits their performance, etc. This data shows, to the contrary, that their
ability to influence their organization lies squarely on their shoulders.
 Coercive Low

Authoritative High

Affiliative Medium

Democratic High

Pace-setting Low

Coaching High

Figure 8: General Preferred Leadership Style

To understand this relationship more fully, let’s look at a couple of actual leaders, each
demonstrating different leadership approaches.

Bill Toomey is the head of the Real Estate Department of a Fortune 500 electronics company.
For a long time he was highly successful as an individual contributor in the company, and was
eventually promoted to his position as manager of the department due to his individual skills and
enthusiasm. However, because he was so achievement driven, he tended to use a soloing style of
management. He would often show his direct reports how to best make real estate deals, and
interceded when he thought he could do it better. Moreover, he often criticized them when they
made mistakes, even minute ones. Because of his micro-management style, many of his direct
reports felt belittled by him. While Bill thought he was coaching, they felt judged and
undermined by his over-controlling presence. Interestingly, by his own admission, he “took
over” too much, but he could not help himself. He genuinely thought he could do it better, and
that by showing them the way, he was helping his direct reports become more effective. They,
on the other hand, felt like they had little room to maneuver, and little room to influence the
direction of the department or the key decisions. Moreover, when things got tight, Bill would
revert to a domineering style of management, thereby exacerbating the feeling of “no freedom to
move” and too much micro-managing.

When tested with a normed survey, the results showed that they felt they had to conform to Bill’s
rigid expectations, that they had little responsibility for the department and its results, they were
unclear about their roles and responsibilities, and team spirit was at an all time low.
Figure 18: Early Climate in the Real Estate Department

80

70

60
% of
norm 50

40

30

20

10

conformity standards clarity

responsibility rewards team spirit

In a workshop designed to learn about the leadership chain and the impact Bill had on his
organization and its results, Bill looked closely at how he was creating such an achievement
depressed climate and sought ways to change his leadership style to more positively impact the
climate. He quickly decided that, in spite of his own needs to drive toward personal excellence
by demanding compliance, in the long run results would improve if he increased: 1.) the degree
to which he gave others authority and autonomy to make decisions, 2.) the degree to which he
included them in the overall direction of the department and 3.) coached them towards increased
performance, rather than do it for them. As a result, in 6 months, the climate dramatically
improved. Conformity went down (due to less domineering leadership), standards, rewards,
clarity, and team spirit increased significantly.

Figure 19: Later Climate in the Real Estate Department

80

70

60
% of
norm 50

40

30

20

10

conformity standards clarity

responsibility rewards team spirit
While the overall performance results are not yet in, the improved climate of the organization as
a direct result of Bill’s shift in leadership has already paid off. One of his employees, for
example, just closed a major, multi-million dollar deal; the biggest he had ever done and the
most successful. Said the employee, “I felt I was over my head in the deal. I had never done
such a deal, and Bill gave me room to do it. I really rose to the occasion.” This would likely not
have occurred under Bill’s previous leadership style.

In our experience working with thousands of managers and executives, we have seen dramatic
results time and time again. The above early studies on leadership and organizational climate
keep showing us that not only does ones leadership make a difference, changes in leadership
style produce rapid and often significant improvement in its results. The key is knowing
specifically where and how to make the changes.

“far more than any other factor, ones

management style affects the climate of the
organization”

In related studies by other researchers, the relationship between leadership style and
organizational climate continues to show the same patterns. For example, in studies by Clayton
Lafferty (a student and colleague of McClelland’s), he and his associates have found a direct
correlation between leaders who care about their people, who establish challenging, yet
achievable goals, and who rarely use coercive means to achieve these results, are consistently
seen as more effective leaders than others. Moreover, they create climates that tend to perform
more consistently and effectively over long periods of time. Similarly, John Kotter has drawn
the same conclusion from his studies of the differences between leaders and managers. Their
long term focus, ability to invite and sustain organization change, and their powerful vision
distinguishes effective leaders from their less effective counterparts.

Conclusion
The second link on the leadership chain is now secured. It has shown us that while different
leadership styles work in different situations, there is a particular style that is likely to produce
greater goal attainment in most business situations. This style is visionary (governing),
involving, and encourages others to learn, grow, and achieve great results through coaching.
While variations do exist, few leaders will go wrong in adopting this approach.

Perhaps, even more significant is the compelling findings of the more recent McBer study that
shows that the leader’s style accounts for over 50% of the variance between climates. In other
words, as a manager, no longer can we blame the organization above us for the quality of the
organization below us. We can and do directly impact our organizations, our departments and
our teams by the kind of leader we are. If we want more results, and we want these results to
sustain, the most powerful lever for change is our leadership behavior.
Part III

THE RELATIONSHIP BETWEEN

ORGANIZATIONAL CLIMATE AND
PERFORMANCE

So far we have explored the relationships between the first three links on the leadership chain.
We have seen how the motive profile of a leader impacts his or her leadership style and that his
or her style influences the organization’s culture. In this third section, we will explore the
relationship between the third and fourth links on the leadership chain: namely the relationship
between an organization’s culture and its success.

As we have previously indicated, for the purposes of this article we will limit the discussions of
Dr. Schneider’s research on culture to the variables that impact motivation. This will focus us on
the subset of variables originally labeled “climate” by Litwin and Stringer. An extremely
important conclusion of Dr. Schneider is that each of the cultures that is “in balance”
(therefore effective and productive) has the same climate which we will refer to as
“achievement aroused.” While this makes sense in retrospect, it is a relatively new finding
with major implications, particularly for today’s knowledge based companies.

While claims abound about the relationship between an organization’s climate and its
performance there is surprisingly little published research evidence to support this claim.
Fortunately, the evidence that does exist is extremely compelling.

The Impact of Climate on Performance

In an early attempt to measure the impact of climate on performance, Litwin and Stringer
hypothesized that an achievement aroused climate will likely produce greater profits than an
affiliation or power aroused climate. Dr. Schneider would define these as major factors
contributing to a culture being “out of balance.” By “achievement aroused climate,” they meant
a climate that stimulates the thoughts and behaviors leading to the desire to perform at higher
levels of capability. To test this hypothesis they designed and studied a simulated organization
populated by University students described in detail in the second of this series of articles. In
their study, the achievement aroused company (organization C) produced far greater profits than
A and B, the power and affiliation aroused organizations.

Figure 20: The Effects of Climate on Performance in a Simulated Setting26[26]

Company A Company B Company C

Power Affiliation Achievement
Contracts Completed 6 6 8
Contracts in Process 4 3 3
No. of Contracts Worked On 10 9 11
No. of New Products 4 6 8
Total Revenue $948.20 $661.50 $619.80
Total Costs Charged to
Completed Contracts $940.50 $666.80 $547.50
Profit; ( ) = Loss $7.70 $(5.30) $72.30
% Profit; ( ) = Loss .81% (.80%) 11.7%
Materials-Saving Innovation $0.00 $25.10 $43.80
Units Rejected (requiring work) 0 1 4

This finding was profound in its implications for it pointed to a measurable variable that
predicted differentiated results. Moreover, at the time, this finding flew in the face of the popular
belief that performance often is at the cost of job satisfaction. In this study, job satisfaction was
measured as extremely high in C, as well as, the degree of innovation. Interestingly, job
satisfaction was also high in B (people felt good), but as an organization it failed miserably in
terms of performance.

“this finding flew in the face of the popular

belief that performance often is at the cost of
job satisfaction”

Climate Patterns
Litwin and Stringer went on to further test their hypotheses in a number of field studies, each of
which shed light on the powerful influence of climate on the motive patterns of employees and
the performance of the organization. In fact, just as with motives, climate variables align to
form climate patterns which are useful to predict outcomes. In one study of a service
department of a public utility, for example, they found the climate pattern looked as follows:

26[26]
Ibid., Page 139.
Figure 21: Climate Pattern in a Service Department27[27]

90

80

70
% of
norm 60

50

40

30

20

10
conformity standards clarity
responsibility rewards team spirit

As can be seen, these office workers perceived a very high degree of conformity and a relatively
high degree of standards (in their words—standards were “nothing short of perfection”) while at
the same time little responsibility, reward, and team spirit. While high expectations and
challenge can support achievement, without the concomitant support, encouragement and
rewards, such an environment can easily suppress achievement drives. This was indeed the case.
Employee motive patterns derived by the Thematic Apperception Test (an exercise that measures
motive patterns) revealed the following averages:
Figure 22: Motive patterns of Service Employees28[28]

90

80

70

60

50

40

30

20

10
n Achievement n Affiliation n Power

27[27]
Ibid., p. 149
28[28]
Ibid., p. 151
Not surprisingly, it was reported that service was generally average or below average and sales
performance considerably below average. Subsequent attempts to further tighten performance
standards were greeted with derision by the employees, and were therefore not successful.

In another study of two chemical plants, Litwin and Stringer found the climates of both
organizations to be similar in many respects, including conformity, standards, two climate
variables no longer measured-- support and conflict, scoring average on each. One of the
organizations, however, scored higher in responsibility, reward and morale. People in that
organization perceived the climate to be far more favorable than people in the other organization.

A summary of subsequent research on the relationship between each of the Litwin and Stringer
climate dimensions and organization performance shows the following correlations:

Figure 23: The Impact of Climate on Performance

Growth in Sales Return on Sales Growth in Waste/

Earnings Efficiency
Conformity -.50 -.50
Responsibility +.34 +.40
Standards +.35 +.40 +.57
Rewards +.42
Clarity +.40 +.48
Team Spirit +.59
Morale (Clarity + +.52
Team Spirit)
Total Climate
Index +.49 +.56 +.52

The Total Climate Index, in this case, is total of the climate variables when taken as a whole. As
can be seen, it correlates strongly with growth on sales, return on sales, and higher efficiency.

“the Total Climate Index …correlates strongly

with growth on sales, return on sales, and
higher efficiency”
The Hockey Stick
From the above research, a model of an ideal climate for high performance comes to sharp focus.
While no ideal can be applied to all situations, such a model points the direction for the kind of
climate that, in principle, more fully than any other, stimulates achievement motives in
employees. Time and again we have tested this model by asking people, both managers and
employees, to describe their ideal climate. Time and again, this same profile emerges. We call
this “the high performance” climate (see figure 24). Note the resemblance in shape to a
hockey stick; which is in fact used as a mnemonic for this achievement-arousing climate pattern.
Figure 24: The High Performance Climate

90

80

70
% of
norm 60

50

40

30

20

10
conformity standards clarity
responsibility rewards team spirit

Time and again we have tested this model by

asking people to describe their ideal climate.
Time and again, this same “hockey stick”
profile emerges.

To demonstrate in real life the relationship between climate and performance, let’s look at one
organization, whose dramatic change in climate produced a resultant change in performance.
Leadership Style, Climate, and Performance – A Case
Example
Ardent Insurance, Inc. is a large, well established insurance company, based primarily in the
Western part of the United States. For many years it was among the leading insurance
companies in the industry. About 8 or 9 years ago, however, it fell onto hard times and was
losing money and market share right and left, to the point of being on the brink of extinction. As
a result, a new CEO named John Swift, took over the company with a clear mandate to turn the
situation around (name of company and CEO changed to protect anonymity).

For the first couple of years of John’s tenure, he adopted a style of leadership that was hard
nosed and bottom line in nature. His was a “take no prisoners” style that, he believed, would
produce immediate results in a situation that required urgency and focus. As it relates to the
variables described in article #2 of this series, John’s leadership style, at the time, could be
characterized as highly domineering in nature, with a strong dose of soloing. He showed people
what he wanted, how he wanted it done, and if it did not get done the way he wanted it, he would
get extremely upset, so much so that people feared him. Here was his leadership style profile as
perceived by his direct reports (figure 25).

Figure 25: John Swift’s Early Leadership Style

100
90
80
70
Percentile 60
compared 50
to average 40
manager 30
20
10
0

Domineering Placating Soloing

Governing Involving Coaching

This leadership style was a natural outgrowth of John’s motive profile, which matched what we
call “the entrepreneurial V,” a style that defines and describes many entrepreneurs (figure 26).
Figure 26: John Swift’s Motive Pattern

90

80

70

60

50

40

30

20

10

n Achievement n Affiliation n Power

In what is fairly typical of leaders with this profile, his strong need for achievement in a situation
requiring immediate results led him to do a lot of soloing, while his strong need to influence
combined with a quick trigger finger led to a highly domineering tendency. As a result of his
style, as well as other factors including the bureaucratic nature of Ardent Insurance as it existed
at the time, the climate of the organization was in significant disarray. To many people, it was
considered a company wherein you had to watch your back at all times, and only say what was
politically expedient. Not surprisingly, while John thought he was providing strong standards for
success, people felt his standards were impossible to achieve. This caused much anger and
frustration, feelings that people were not able to express for fear they would be fired. In
addition, people had little hope that these conditions would change. Interestingly, contrary to
what you would expect, turnover was rather low. This was due, to a large extent to the fact that
they were in a recession where there were few jobs available. So while a few of the best people
left, the rest stayed, many of whom resented being there.

Although many stayed, John felt he needed to take drastic action. He identified people who he
wanted to keep, and laid off many of the rest. The company went from 6000 employees to 3200
employees in a two-year period. While the financial bleeding was stopped, the company
remained highly unstable in that it was at risk of losing its best employees. In short, while the
leadership decisions may have made sense given John’s motive profile and characteristics and
the financial crisis, it did little to inspire the workforce to give their best.
Here are the results of a climate survey done for the organization as a whole at the time (figure
27).

Figure 27: The Early Climate at Ardent Insurance

90

80

70
% of
norm 60

50

40

30

20

10

conformity standards clarity

responsibility rewards team spirit

When John looked at the company climate and saw how his style contributed to it, he was
surprised and troubled by the results and did a number of concrete things to change the situation.
He changed his style from domineering to governing in nature. As part of this, he set in motion a
series of steps to focus not so much on protecting the company from failure, but on creating a
vision for the future, one that was exciting and compelling. He also began delegating much more
responsibility to a few trusted direct reports and reduced his soloing tendencies. As a result, the
climate in the organization began to shift.

While not as comprehensive as the first (we only have data for part of the company), most
employees now report the company as clearer in its direction, less conformity driven, and where
people have a stronger sense of responsibility. Thus, they experience it as a more rewarding a
place to work (figure 28).
Figure 28: Recent Climate at Ardent Insurance

90

80

70
% of
norm 60

50

40

30

20

10

conformity standards clarity

responsibility rewards team spirit

Ardent Insurance is now the most successful insurance company in its industry segment. It is
highly profitable, the employee size has grown to 17,000 (with acquisitions), the stock has
outperformed its industry by a factor of 16 and the company no longer compares itself to similar
companies in the industry. Rather, they are aiming to be among the best companies in the world.
This is a far cry from a few years ago when it was on the brink of extinction.

Recent Research
Since the Litwin and Stringer study, the relationship between climate and performance has drawn
considerable attention. What has emerged by way of research is exciting and highly reinforcing
of Litwin and Stringer’s original studies.

In a recent study of the relationship between climate and performance, for example, Daniel
Denison found a number of climate factors that relate directly to organizational performance.
Drawing from a sample of 43,747 people who assessed the climate in 6,671 organizations,
groups, and companies, he found that companies which have well organized work systems
(related to clarity in Litwin and Stringer’s terms) perform on average far better than those
that don’t (see figure 29).29[29]

Figure 29: Organization of Work and Return on Investment30[30]

29[29]
Denison, Daniel R., Corporate Culture and Organizational Effectiveness. New York: John Wiley & Sons, 1990.
30[30]
Ibid., p. 62.
 20%

18%

Return on 14% high Clarity Organizations

Investment
12%

10%

8%

6%

4% Low Clarity Organizations

2%

0%

1 2 3 4 5
Years

Denison also found the same relationship between organization of work and return on
investment.

Probing the relationship between climate and performance further, Denison found clear
relationships between high involvement decision making practices and return on
investment and return on sales (see figure 30). By high involvement, he is referring to
decision making practices which are more participatory and collaborative. Interestingly, there
appears to be some lag time before the introduction and creation of high involvement decision
making climate yields significant results. This is to be expected for it often takes a while for a
high involvement decision making practice to take root. Once it does, experience and research
shows it often produces more long term results.
Figure 30: High Involvement Workplaces and Return on Investment31[31]

20%

18% High Involvement Organizations

Return on 14%
Investment
12%

10%

8%

6%

4%
Low Involvement Organizations
2%

0%

1 2 3 4 5
Years

Again, there is a similar relationship between high involvement workplaces and return on sales.

Some of the other climate variables Denison found to correlate with strong financial results were:

ϒΕ Interunit coordination
ϒΕ Strong supervisory leadership
ϒΕ Job rewards
ϒΕ Job clarity

These latter two are particularly interesting in that they corroborate and reinforce Litwin and
Stringer’s original research (rewards and clarity).

Perhaps one of the most exciting pieces of research to date linking climate with organizational
performance is a study which began in 1993 by the Hay Group who teamed up with the Life
Office Management Association to investigate what outstanding life insurance CEOs actually do
to succeed.32[32] In their research, they studied 28 CEOs and senior executives--overseeing more
than $194 billion in assets--from top performing life insurance companies in North America. Of
the 28 CEOs and executives, 19 underwent systematic individual and organizational assessment.

In their study, the pool of subjects were split into two groups of performers (outstanding and
good) based on their company’s financial performance. The outstanding performers were, on
average, in the 75th percentile of their industry in Total Capital and Surplus Growth, while the
good performers were in the 25th percentile. The goal of the study was to determine what
differentiated outstanding leaders from others.

31[31]
Ibid., p. 63.
32[32]
Newsbreak Bulletin, August, 1995, published by Hay McBer Innovation and Resource Center.
Consistent with earlier research and our leadership chain theory, the leadership style of
outstanding CEOs had organizational climates that matched our high performance profile. Their
total organizational climate scores averaged at the 75th percentile, in contrast with good CEOs
whose total climate scores averaged just below the 50th percentile (figure 31).
Figure 31: Differences in climate between outstanding and good performers

90

80 Outstanding CEOs

70
% of
norm 60

50

40 Good CEOs

30

20

10

conformity standards clarity total climate

responsibility rewards team spirit

Note the “hockey stick” pattern evident in the “Outstanding CEO” climate.

Interestingly, in addition to creating a high performance climate, the outstanding CEOs also
created climates wherein the gap between the actual climate of the organization and the
climate that people desired was rather small (22% average gap) while the gap in the less
productive organizations was 45%.

In short, the relationship between climate and performance is clear and unequivocal: high
performance climates clearly yield high financial results (figure 32).
 Figure 13: Organization Climate and Financial Success in the Life Insurance Industry

Outstanding CEOs
75%

50%

Good CEOs
25%

25% 50% 75%

Financial Success
(total capital surplus growth over four years)
What caused such a clear difference in climate and performance? While all leaders drew upon
authoritative, democratic, and pace setting styles of leadership, the very best CEOs used
the coaching and involving style significantly more than their counterparts. Interestingly,
none of the CEOs in the study exhibited a strong domineering style of leadership. Underlying
the strong coaching and involving style are a set of competencies that seemed to distinguish
outstanding CEOs from good ones. The leadership study found that over 80% of the outstanding
CEOs (and only 9% of the rest) were strong in at least 4 of the following 6 competencies:

1. Socialized Power: finding personal satisfaction from seeing others learn,

grow, and improve their performance.
2. Need to Achieve: continuously improving and taking entrepreneurial risks.
3. Change leadership: delivering a message of change; empowering others to
change.
4. Curiosity and Information Seeking: probing for information; searching
widely for useful ideas and new opportunities.
5. Developing and Empowering: providing long-term encouragement and
coaching.
6. Listening and Responding: hearing people’s personal concerns and being
aware of their unspoken thoughts and feelings.

“the relationship between climate and

performance is clear and unequivocal: high
performance climates clearly yield high
financial results”
This study adds to the model by including the variable of competencies and reinforces the
research that is overwhelming and quite clear. The links on the chain are strong connections,
binding leadership competencies to coaching driven leadership style to high performance climate
to superior financial results.

THE LEADERSHIP CHAIN SECURED

We have now come full circle. We have explored how motive patterns in leaders directly impact
their leadership style. We have seen how different styles affect the climate of an organization
and which leadership style seems to have the most positive impact in most situations. We have
explored how climate impacts performance, and the kind of climate that will stimulate the
greatest achievement drives in employees and therefore the greatest results. The leadership chain
is now complete. From motive drives to leadership to climate to performance. If any link on the
chain is broken, the results are not predictable. Most importantly, since the beginning link starts
off the chain reaction, then if that link is weak, performance is inevitably impaired.

Most mediocre leaders have difficulty accepting this final proposition. They would rather blame
the lack of results of the organization on factors outside their control. The problem is the
business environment, or product timing, or poor employees, or other companies and their unfair
competitive practices. Strong leaders, however, know this is not the case. All companies face
similar challenges. The ones that rise to the top see that the one variable they affect more than
any other is the climate in their organization. And they see that for the climate to produce
significant and enduring results, it is up to them to learn how to lead the organization to success.
Any other focus is doomed to failure.
Addendum to
The Leadership Chain

Part IV

AN ORGANIZATIONAL ALIGNMENT
MODEL
As described earlier in this article, organizational culture is a composite of climate and many
other variables. Climate refers to” a set of measurable variables in the culture that directly affect
motivation.” What we have not emphasized is the business strategy. Strategy is the combination
of specific forces designed to provide (sustainable) competitive advantage. When individual
motives are aligned to the organizational culture which is in turn aligned to business strategy, the
building blocks of success are in place. Success becomes most likely when leadership style
successfully arouses the motives necessary to meet organizational needs. Analyzing the
“connect” – or the disconnect – between climate and business strategy in today’s businesses can
provide revealing insights into organizational successes or failures.

While these articles are focused on motivation, no amount of behavioral sciences research or
other “magic” can make up for a poor strategy. You must start with strategy in this model and
work backwards. Simply put, find out why customers will beat your doors down demanding to
buy product from you and then build on that. A great strategy poorly executed often yields better
results than a poor strategy brilliantly carried out. Fortunately, one must not be forced between
these Hobson’s choices.
The basis for building the organizational alignment model comes from connecting several pieces
of recent organizational research and applying them to contemporary organizations. Dr. William
Schneider’s33[33] construct of organization effectiveness actually starts with David McClelland’s
work on motives. His research suggests that effective organizations are in alignment; i.e.: the
motive lines up with the appropriate culture (by definition therefore the climate variables are also
in alignment) and the cultures are lined up with the appropriate strategy. It all becomes clearer in
the following diagram:

What does this all mean? At the risk of oversimplifying, what this model indicates is that
companies like Dell, Amazon, etc. are successful because their organizational strategies are right
and their organizational strategies, their core cultures, and internal motive patterns are aligned.
Dell succeeds because its core philosophy is “operational excellence.” That strategy is best
achieved through a culture and leadership style of “control,” which is in turn best achieved
through a governing style. Control costs, gain market share, control the market – that’s what Dell
is all about, and they have consciously and unconsciously created a culture to achieve those ends.

On the other hand, companies like Cisco get and keep customers through the strategy (value
proposition) of “product leadership.” This is best supported by the culture labeled “competency,”
which is most successful when the achievement motive is aroused. Hence, that becomes the
leadership style. And finally – though the affiliative, collaborative style seems less effective in
most situations, it can be very effective when the customer relationship -- customer intimacy -- is
the strategy that drives competitive advantage.

“Alignment” occurs when the chosen strategy is backed up by the appropriate culture and the
executives have the appropriate motives to unconsciously drive the style to support the culture.
Thus if Wal-Mart chooses a cost leadership (operational excellence) strategy, in order to be in
alignment the best culture for them is “control” and the best style “governing” which is
automatic pilot from socialized power. This is rowing with the current. If the strategy were
operational excellence but the culture were collaborative and the styles of the executives
“Soloing,” it would be like rowing against a strong current and soon the organization would wear
down with relatively less progress. Not only is this a product of research, but it is common sense
-- which is an added bonus!

Note that no amount of “organizational alignment” will compensate for a poorly conceived
strategy. If the strategy is wrong in the first place, it doesn’t help to lead in that direction. But the
right strategy with inappropriate leadership approaches will invariably lead to underperforming
systems.

33[33]
Schneider, W.E., The Reengineering Alternative, A Plan for Making Your Current Culture Work, McGraw Hill,
1994
 Part V

REVIEW AND SUMMARY

CONCLUSIONS
REVIEW AND SUMMARY CONCLUSIONS
ϒΕ A motive is a recurrent concern for a goal state (measured in fantasy) which drives,
directs, or selects a person’s behavior.

ϒΕ The three “Social Motives” are achievement (nAch), affiliation (nAff) and power
(nPow).

ϒΕ People can (and do) possess more than one motive, but usually one is dominant.

ϒΕ The leadership chain connects motives, leadership style, organizational climate and
performance.

ϒΕ While other factors certainly impact an organization’s climate, the most potent
impact is the behavioral style of leadership of the immediate manager.

ϒΕ Your motive pattern combined with your ability to express those motives maturely
and effectively has a direct impact on your leadership style.

ϒΕ Your leadership style directly impacts the organization climate you create, which in
turn affects the degree to which people desire to achieve and perform in your
organization.

ϒΕ This desire translates into “discretionary effort” and collaboration.

ϒΕ Discretionary effort and collaboration improve results.

APPENDIX: A Brief History of McClelland (1917—1998)
And His Research
McClelland began his research just after World War II when he discovered the work of
Henry Murray. At the time, Murray was one of the foremost experts in the field of
psychology and the study of human motives. The study of motives began when scientists
sought to understand why people behave the way they do. If we can understand the
“why” behind behavior, then we can predict and even impact people’s behavior.

Dr. Henry Murray understood the relationship between motives and patterned
behavior well and sought to measure these underlying drives or motives. Murray
believed the underlying pattern of thinking or motives would be best discovered by
analyzing people’s responses to particular situations and events. To help discover
patterns in people’s responses, he developed what is known as the Thematic
Apperception Test, or TAT for short. The TAT is a series of illustrations designed to
measure motives as revealed by a person’s spontaneous responses to the picture. The
person is shown these pictures and asked to tell stories about them. The stories, when
analyzed by experts using the exact same metrics, reveal the underlying concerns or
thought patterns of the story teller. Based on this premise and subsequent studies,
Murray discovered and defined numerous measurable motive patterns. They included
such motives as the need for dominance, the need to avoid harm, the need for
achievement, as well as many others. (See table below)

Examples of Murray’s Original Motives

Abasement Achievement Affiliation Aggression

Autonomy Counteraction Defendance Deference
Dominance Exhibition Harm Avoidance Order
Humiliation Avoidance Nurturance Sex
Play Rejection Sentience

As a result of these and subsequent efforts, there is an extremely large data base of
information gathered and thoroughly analyzed regarding motives both clinical and
social.

Early in his career in the 1950s, McClelland was fascinated by the ability of the TAT to
ascertain people’s underlying motives and chose to focus on the three motives that
research has shown to be prevalent in social activity (i.e.—those motives that would help
us understand why people behave the way they do while working with others or engaged
in social interaction).
They were: the need for achievement, for affiliation, and for power. In shorthand, these
are referred to as nAch, nAff, and nPow, the “n” referring to a “need.” This particular
focus occurred just before his appointment as the Chairman of the School of Social
Psychology at Harvard University. This prestigious platform afforded him the
opportunity to continue his research interests with ample financing and manpower in the
form of doctoral students seeking to add to his growing knowledge base.

During his time at Harvard, McClelland modified the TAT to best bring out the three
primary social motives. One TAT picture, for example, depicts a man sitting at a desk
with a picture of his family in front of him. He appears to be peering at the picture in a
thoughtful manner. Another depicts two people engaged in work in what appears to be a
chemical laboratory or a medical laboratory. The set of six TAT pictures tend to invoke
responses that reveal a person’s social motives and the relative strength of these motives
compared with one another.

In one of the first applications of his focus of study, McClelland demonstrated that a high
achievement motivation in students (high n Ach), as measured by the TAT, corresponded
with a higher tendency to perform certain tasks and puzzles quickly and successfully.
This as well as similar studies culminated in his first book—The Achievement Motive.34[34]

Tackling an even more ambitious subject, by studying the primary messages in children’s
stories of different countries, he and his associates were able to demonstrate that the
amount of achievement-related messages in these stories directly correlated with the
average annual per capita consumption of coal usage, which is a direct measure of
economic performance. Published in his seminal book—The Achieving Society35[35]— he
elaborated on this research and successfully accounted for the rise and fall of entire
economies by identifying fluctuations in achievement motives. In effect, economies grew
when their achievement levels were high, and they declined when achievement levels
were low.

In the 1960s, challenging some fundamental beliefs of his contemporary psychologists

that motives are fixed and firm in people, and therefore cannot be altered, McClelland
became interested in finding ways to arouse the achievement motives. To accomplish
this, he and his associates developed and offered a training program to 16 executives of
AT&T. The program lasted a week and was designed to teach the executives about the
achievement motive, the research underlying it, and how to think, act and perceive the
world as someone with high achievement needs. A follow up study two years later
showed conclusively that those who attended the course had been promoted faster than
the average executive in the company, thereby reinforcing the value of such a training.

The Distinction between Needs and Values

34[34]
McClelland, D. C., Atkinson, J. W., Clark, R. A., and Lowell, E. L. The Achievement Motive. Appleton-Century-
Crofts, New York, 1953.
35[35]
McClelland, D. C., The Achieving Society, Van Nostrand, New York, 1961.
 Later research by McClelland and others has distinguished
between “needs” and “values.” Needs are underlying patterns
that are not conscious in nature. We all have them, and our
behavior is driven to meet them. We also have values. Values are
principles of thought and behavior we deem important. Values are
more often than not conscious and learned through social
reinforcement. Like needs, they also affect our behavior, but they
are usually conscious. Since they are often learned, they can be
unlearned, and therefore are much more changeable than motives
or needs.

A remarkable finding. Based on this initial success, McClelland and his associates
then offered the training course in a number of small cities in India where the cultural
habits of people seemed to suppress achievement needs. In one particular controlled
study, McClelland compared two economically and socially similar cities in India:
Kinkinada and Rajamundi using the latter as a control group and the former as a test
group. In the test group, a 10 day achievement need stimulation program was able to
raise the achievement needs in 52 participants of the training. The training helped
participants feel strong, competent, and effective. As a result, 2/3 of the participants of
the training became unusually active in business, much more than they had before.
Examples of high business activity were: starting a new business, expanding an old
business, greatly increasing profits, or taking active steps to generate new products.
Prior to the training, only 1/3 of the participants were active in business. Overall, the
results of the training stimulated significant economic activity in Kinkinada. This was in
contrast to the control city which had no appreciable increase in economic activity.
Prior to these findings, the economic growth in both cities had been the same for 3200
years.

In another test program in Bombay, as a result of the same 10-day training, participants
demonstrated an unusually high amount of entrepreneurial activity, resulting in new
business starts and efforts that earned significant salary increases. These and other
studies have strongly confirmed two of McClelland’s hypothesis—that the achievement
need can indeed be stimulated and that raises in achievement drives clearly results in
measurable increases in economic growth for individuals, groups, and organizations.

McClelland passed away in March of 1998, but his numerous students continue their
research into motives and their impact on behavior. Together, McClelland, his associates
and students began a legacy of learning that continues to this day. More importantly, as
his research evolved, his interests started to move toward the subject of leadership and
organizational performance. Going against society’s often unstated discomfort with
power, he learned that power and leadership are inextricably linked and that the need for
power is a far greater predictor of leadership effectiveness than any other singular
motive. The results of his more recent interests in leadership and power have proven one
more contribution of this giant and stimulating thought leader.