The Six Functions of Leadership

Derek and Dave talk about six distinct functions of leadership that every leader needs to understand.

Dave and Derek are at Unconstrained.

Full show notes are on the Essential Dynamics Wiki.

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Derek Hudson: 00:20

Welcome to Essential Dynamics. I'm Derek Hudson. I've got Dave Kane with me. Good morning, Dave.

Dave Kane: 00:26

How are you? Doing really well, Derek. How are you?

Derek Hudson: 00:29

You know, I'm doing fine, and I'm excited for our conversation today. So essential dynamics is a framework we've been working on to help us see through tricky situations and help people in organizations get to system flow. And the Essential Dynamics podcast is a way of exploring some of these ideas through deep conversations with interesting people. And so, Dave, today, I'm thinking that I wanna talk about leadership.

Dave Kane: 00:57

Okay. And I'm gonna let you start by saying I'm gonna let you define what you mean by leadership and in what context here.

Derek Hudson: 01:04

Well, that's that's great. So, Essential Dynamics has has come together as a way to think about systems. We use this idea of a quest that has a specific purpose and people moving down a path, and, you know, I've I've thought a lot about, well, where does essential dynamics fit with that? And and we'll talk about definitions of leadership. Early in my work on this stuff, I found a particular article that had 20 or so CEOs definitions of leadership, and I had to assemble the bunch more, and I put them together and analyzed them, color coded them, and came up with the fact that most definitions of leadership basically say the leader's job is to identify the purpose and then get the people down the path.

Derek Hudson: 01:56

And they said it in lots of lots of different ways and lots of different words. They said those things, and then the other thing, that came up, and it was actually surprisingly, low proportion, was that the leader has particularly, admirable characteristics for which they are an example. And that was, that was something that was not referred to as consistently. So one way to look at it is leadership is, taking responsibility for helping people come together to accomplish a purpose. That would be one way to look at.

Derek Hudson: 02:37

And then another thing, that you could add to that is is leadership is the responsibility to do that and to help other people, do well at that by looking and following your example.

Dave Kane: 02:51

That that all makes sense to me. That's sort of a traditional view. What were the the admirable characteristics that fascinated me? I haven't heard that side of leadership, but

Derek Hudson: 03:03

Well, there's just the idea that you can you can tell people what to do, or you can be an example of doing it Okay. Through yourself. So, you know, we can talk about the different characteristics, but the idea that a leader can lead by example or most effectively leads by example, then puts this responsibility on on a responsibility on a leader to actually sort of be the change that you wanna Right. You wanna be and, and, take personal responsibility. And that does tie into it.

Derek Hudson: 03:34

So if if that's if that's way of thinking about leadership, then when we think about this, people path and purpose, part of essential dynamics, I think and now I'm trying to figure out, well, which one of those, you know, places does leadership fit in? My sense is, well, leadership is conceiving of, designing, and operating the system, then it has to sit outside the system. So I'm I'm not saying that that leadership, doesn't have a place in essential dynamics, and in fact, in this episode, we're gonna discuss that, but it's not buried. Leadership is actually the active way of looking at a system and designing and operating a system for maximum effect, if I would put it that way. That way, we can we can think of it as a, is is not buried in the the different pieces of essential dynamics that we look at and that we talk about.

Dave Kane: 04:29

Okay. So sort of that outside of the system piece, because when we think of of leadership, you know, naturally, it's it's within the organization, and it's seen as helping achieve the outcomes. And so there's a bit of this balance in my mind, though, between leading within everybody along the journey versus being outside the system and seeing it holistically. So do you kinda break that up into some some structure, or am I mishearing this?

Derek Hudson: 04:58

No. No. No. That that's that's a fair question. And so, you know, we we talked about this broader definition of leadership, and as I dug into it, I've identified six different functions that are associated with leadership that are actually quite different and, you know, sort of take, different points of view or different places within or outside the system.

Derek Hudson: 05:19

And so I thought maybe we'd walk actually walk through those today. Okay.

Dave Kane: 05:23

So of the six, where does it anchor? What's the story?

Derek Hudson: 05:26

So I like to think of leadership as kind of the the core integrating function. It's where the rubber hits the road between a vision or a purpose and actually getting it done. And pulling all that together. so I use the term leadership for that. So there's a broader leadership of all these things, and then...

Derek Hudson: 05:52

Yeah. Within it. Leadership. Yeah. The the leader is responsible for, you know, crafting the vision and then mobilizing the forces to accomplish it, something like that.

Derek Hudson: 06:01

That's that's probably one that I've seen. And so then, if if that's a significant function, that's not enough for a organization, for a group of people to come together and get the job done. And so the things that support a leader in that, and these would be more more in the organization, would be just this idea of management. And, where where management is about organizing the work, using the resources well, implementing, making sure that things happen, responding to feedback, and operating the system.

Dave Kane: 06:42

Okay. So that's your coordinating, your hitting your manage the business, the people keeping everything on task on time? Is it

Derek Hudson: 06:52

Yeah. Yeah. Okay. Yeah. And and, I I didn't say this at the outset, but to be clear, when I talk about these 6 functions, that's not necessarily 6 levels in an organization, or the jobs of 6 different people, or 6 different divisions or job titles or anything like that.

Derek Hudson: 07:08

But but the but the function of management is different than the function of leadership even if you're, like, a one man show.

Dave Kane: 07:15

Right. Right. And I and I think that that's, again, more to that traditional balance that a leader within an organization sort of deals with, right, is is that the the working side, the the being in the business, the getting the stuff done, and then the stepping back and working on the system or working on the people and the motivations. And, to me, that's a more traditional management leadership balance that people are looking for.

Derek Hudson: 07:46

That that's right. That's right. And so to to that, I would add inside the business, and maybe in a sense, this is really the only, aspect of leadership. It's the it's the foundational one, I guess, is the idea of self leadership. That, even all of these 6 functions we talk about all come to play in our own lives as we manage, you know, sort of our own productivity, our own self fulfillment, our responsibilities to our family and the community.

Dave Kane: 08:42

Right. Okay. So this dream is making sense to me. This is all what I would say in your introduction of what leadership is. It's a very simple and straightforward way of of looking at them separately.

Dave Kane: 08:59

K? So this makes sense. What are the next 3? Where are you taking me next?

Derek Hudson: 09:05

Yeah. Yeah. So so if I go back to leadership as the core then, now we're looking at ways that the leader gets supported to do the the leader responsibilities that we talked about. Because as much as we'd like to think, that if you, like, pick the right leader, then they will be all knowing and all wise and have, the highest standards of integrity, and then we just rely on them to take care of us. And, typically, it doesn't work that way.

Dave Kane: 09:38

That's a bit unrealistic. Yeah.

Derek Hudson: 09:39

There's a bit more to it than that. And so another function that is one of the 6, we could call it governance. And, and governance is less about doing or even maybe even sort of crafting a vision and and more about protecting the organization, protecting the stakeholders, setting the the boundaries, setting the ethical boundaries, dealing with risk, and the kinds of things that if you are actively doing your job as a leader, trying to grow an opportunity, grow an organization, that you can't be bothered to think about, because they kind of slow you down, but they're very important. And then of course, there's this idea that we have in, sort of our Western economy, where we separate ownership and management. So anyone who leads a large organization typically at some point, isn't the only stakeholder, doesn't own it, might not own any of it.

Derek Hudson: 10:45

It might be a not for profit or government and can't be owned, but yet they have this they have this responsibility. And so you now you need some kind of a stewardship function or accountability function. And so you can put governance on one side of the table and execution on the other side of the table. So governance, I think, is a is a reasonably clearly understood function that probably doesn't isn't used effectively in a lot of organizations.

Dave Kane: 11:12

Okay. So just playing this back to you because when you said governance originally, my mind goes to that that relationship of board to management and setting expectations and holding accountability. But what I'm sort of hearing is more within the context of what a leader is. There is some type of guardrail. There are some type of of, definitions out there that are sort of saying, this is how I operate.

Dave Kane: 11:37

This is within the boundaries I stay. Maybe that's set through a an ownership expectation board process. But even if you're a sole proprietor owning it yourself, you have these boundaries, you have these policies. We don't spend a lot of time on them. But when you need when something goes wrong, where you get in a situation, you need to know they're back there, whether explicitly or implicitly, I guess.

Derek Hudson: 12:04

Yeah. So I would say it is an essential function of leadership to have a have a governance role. And if you're the owner and the only board of directors is one that's that has meetings in the minute book only, and you function in all roles as an individual, there needs to be a governance function to to keep you safe and to to optimize the opportunity. And there's lots of different ways that we we try to establish governance functions, and and boards of directors are are one of them. But it's but it's the I kinda wanna emphasize and focus on the the the function itself.

Derek Hudson: 12:46

I mean, I I think I know some owner managers where the governance role is actually their spouse.

Dave Kane: 12:54

Oh, yes. Yeah. Because that's where the conversations, and then and

Derek Hudson: 12:57

Right.

Dave Kane: 12:58

Yeah. Right. Happen. Yeah.

Derek Hudson: 12:59

Right. And, you know, I'm not sure if I should do this or not, and the and the spouse says, well, you know, what do you usually do in a situation like that, and and what principles I mean, they don't make maybe talk like us as guides, but that stuff comes out. And, and there's a bit of a chamber of sober second thought or something, and, and governance, takes its place and the leader moves forward. What's the

Dave Kane: 13:24

balance then with, because we're talking sort of like policies as the accountability structure. And, again, my mind went to that upward relationship. What's what's your thoughts on on how that comes down within the organization, though? Because those same principles and policies have to be owned throughout the organization, do they not? Or you can't just be the policeman bringing out the rule book when something goes wrong.

Derek Hudson: 13:48

Dave. Absolutely. And this is where this gets really interesting. I don't know how far we could even carry this today, but the 6 functions could happen at level any level of the organization. And in your world, whatever that is, you can look at, you know, what's the role of leadership, what's the role of governance, what about management, and that those could be 3 different things you do in a day, or it could be that you've got a governance structure set up for a particular kind of operation.

Derek Hudson: 14:25

And I'm thinking for example, a situation where you've got controlled quality assurance processes. And so the governance is the policies under which that operates. And if you wanna change one of those, then there's a process where you've got to take it up a few levels and have a discussion about the policy. That's a governance conversation. Even though that's the the board of directors is known nowhere near that conversation, that's still a governance conversation.

Dave Kane: 14:54

Okay. So it's it's this multi it's like 360 degrees or the whole sphere around of of, you know, the people you're working with, the people reporting to, the people reporting above, your customers, your suppliers. Like, these these should be applied in constant across all those spheres. Right?

Derek Hudson: 15:16

Sure. And and it's also kind of like a fractal that, that the the the pattern you see every time you go down another level, you see the same pattern. Right. And, I mean, a great example of that is how, you know, in some sense, galaxies and then solar systems and then even atoms have a, you know, a similar kind of structure.

Dave Kane: 15:39

Okay. So conversation for another day is how do you actually get that symmetry across the organization? But let's finish off with the 6 are here and see see where

Derek Hudson: 15:47

Yeah. Yeah. So we've we've got 4 right now. So there's the leader in the middle and working more in the businesses management and and individuals and their self leadership. And then moving outside from leadership, there's this idea of governance and the and the and the and the parameters and and and policies that kind of frame up and contain in some sense the the function of leadership.

Derek Hudson: 16:14

I'm gonna say, sort of almost like a same level, a companion to governance is what I'm calling guidance. And and that's where the leader has the the freedom, the responsibility, and the opportunity to get help about their leadership responsibility. So it's, it's not like leaders have opportunities to get help in doing stuff, like, you know, there's like a delegation and assigning tasks out and stuff like that. But this is about helping the leader with the responsibility, which they cannot delegate, which is, is to have that, you know, integrating function and they don't know everything. And so they, they need to have an opportunity to, to learn from those who, those who can help.

Derek Hudson: 17:08

You know, if you think about essential dynamics based on this idea of a quest, often the hero who is typically, humble and doesn't consider themself up for the task to which they've been called, has a mentor figure or more than 1 mentor figure. And, we certainly see in, in business these days the idea of having a guide, a mentor, or a coach, or an advisory board, or something like that, external, consultants who are experts in some particular areas, all feeding perspective, information, context, tools, and sometimes advice into the leader, where they still have the responsibility. And I want to, to be clear that we wanna distinguish, the guidance function from the governance function.

Dave Kane: 18:16

Okay. Because I mean, guidance makes set pardon me. The governance makes sense as as the guardrails. The guidance is is oversimplistic to say it's that voice or or the conversation you can have that is outside of, the daily activity of this? They're they're sort of that they have the experience, but they don't have the consequences within your organization.

Dave Kane: 18:47

Do do they need to be that independent piece? Or

Derek Hudson: 18:50

Well, in independence certainly is is part of it because, you know, the the leader is going to do better if they get a good dose of reality, and not every organization is set up so that you can get reality from people that, report to a leader, particularly if the leader has blind spots they're protecting. But there's also expertise that doesn't lie in the organization, and the and the the function of a leader, for example, as a CEO, nobody knows how to do that job in the organization. They haven't they haven't done it, typically, and, and even if you have done it, the context of a particular leader, particular time is different. So there's an outside voice, a voice of independence, but also a voice of experience, wisdom, ones that have pers particular perspectives, ways of thinking about things. All of that, you know, is there's you have access to it as a leader, and you and you don't pursue that kind of wisdom that's available to you at your peril.

Derek Hudson: 20:02

Okay. So it's yeah. It's

Dave Kane: 20:04

not a sounding board. It's not just someone you can articulate things out loud and help you think through it. It's that experience, having having gone through it. And it's different than a coach who listens and then tells you what they think the answer or the direction you should go in. It's it's helping you work through it.

Derek Hudson: 20:22

Well, let's not let's not release the leader from their responsibilities. Right. Put it that way. So the leader has a responsibility. They have to make the call.

Derek Hudson: 20:29

They should get the best advice possible. They don't it doesn't always need to come in the form of advice. Sometimes a leader can understand a principle or see a parallel that's brought to them. Sometimes it might just be a question, or identification of, something that's not been addressed, and the leader can some get some value to that. So I should I should carry on though, and, I wanna reiterate not only that there is there a difference between governance and guidance, but at some point, the the functions can be incompatible.

Derek Hudson: 21:01

And so a lot of times, an organization, particularly, a young one is looking for a board of directors, and, the first mistake they make is they want a board of directors that's people who can actually work in management and and individual operations. So we want someone on the board that's good at sales. We want someone at the board that's, that's good at integrating technologies. But but if they sit on the board in a corporate capacity, they have a fiduciary responsibility of oversight, and it's very difficult to oversee work that you're doing. Like, you can't criticize that relationship.

Derek Hudson: 21:38

It's different. Yeah. You can't criticize the sales plan that you're actually driving. Yeah. So now either you get good governance of, you know, lesser execution or you get execution and no governance.

Derek Hudson: 21:51

And so you have to think about that, but as well, when you go to the board and say to the board, here's my problem, and the board starts, taking on the the guide role, and the leader works with them and gets to a point where they say, well, I think, I think I'm hearing you, and this is what I need to do. And the leader goes and does that, and it doesn't work. It's hard for the governor to come back and say, well, you shouldn't have done that.

Dave Kane: 22:21

And Yeah. I've seen that. But I think it's also

Derek Hudson: 22:25

Of course, we've seen that. Yeah.

Dave Kane: 22:26

It's also really hard for the for a board in a guidance role because in theory, the board is supposed to speak with a unanimous voice. And this is the direction I'm gonna give you through emotion or direction or those types of things. Seeking guidance from individuals on the board, a little bit different, but, technically, the board isn't it is a single object.

Derek Hudson: 22:52

That's right. That's the board has one voice, and that's that is principle that's not does not not tend to be understood very well. And and then if you if you break someone out of their board role, to be an expert advisor, then that compromises their their governance rule to some degree. So so, you know, ideally, you and when you have a situation, you understand what you need from governance and what you need for guidance, and you, as a leader, get have access to all of those in you know? So it's

Dave Kane: 23:28

just so when in my mind, I'm breaking out these 5 between in the business, on the business almost. Mhmm. And, certainly, the management, the coordinated execution is in the business. The leadership has a a foot in both. Governance is very much more well, actually, it is both because it's it's the 360 piece.

Dave Kane: 23:51

It's in the business. It's how it's how in the business functions or is I don't know, within the within the expectation in the guardrails, I guess. Well, maybe it's just like guidance is on the business and management in the business and the rest are mess side. I'm struggling with how to take this and put it into how I function as a leader each day.

Derek Hudson: 24:18

Well well, let's let's, let's let's go corporate for a second because that's one, manifestation of it that we're familiar with. There's a board of directors and a CEO. And ideally, the CEO has access to guidance as well. So they've got a trusted advisor, consultant guide, some of it's not the board, the board knows they have it, and, and they're triangulating that kind of arrangement, and that's on the business. And then they have their team in the business, which is executing as management and frontline staff.

Derek Hudson: 24:53

We'll get to number 6 in a minute. So that's 1, but then let's say you're a middle manager, and a huge corporation, but you have a huge responsibility. You could have a $100,000,000 budget you're responsible for, and you're a middle manager. So you have your boss, and you have to then understand your boss. Is your boss a governor, or is this is your boss a guide?

Derek Hudson: 25:17

It might be a combination of both, and then you might have to be clear in different conversations, which is which. I know in professional services firms these days, it's where I came from, You can have a mentor and then a a line supervisor. The line supervisor approves which projects you go on, and your mentor helps you become a better consultant or whatever. So so you but you're clear about those, and then you have a management function, which you might do yourself, or you might have an EA and a lead hand or something like that to take a management function, and then you have the front line, but then as an individual, you've got yourself to manage as well, no matter what level you're in. So you have the corporations all organized, but then each of our own worlds, we have to rely on those 6 6 levels and get distinct between them so that we, can look at our work, and then we can we can do our work, and we can step back and look at our work as a as a separate system.

Derek Hudson: 26:22

I see that we're kinda on time though, and we gotta get to number 6 at Well,

Dave Kane: 26:25

that's what I was gonna say. Busiest yet. You referenced the 6th. So what's what's

Derek Hudson: 26:30

Yeah. So so the way I look at

Dave Kane: 26:32

this one.

Derek Hudson: 26:33

The way I look at the 6th, and this might warrant to her own episode is that, I I believe that the 6th is I'm I'm calling it right now, ultimate power. That, you know, as humans, we have limited knowledge and capacity, and we stumble along in our organizations, and we we, you know, work through these functions, but we have access to ultimate truth. And depending on your philosophical background or in inclination towards, more of, religious thought, you can you can go as high up there as you want, whether it's, you know, ultimate nature and truth, whether it's it's a divine being, whether it's, you know, God the creator of the universe. I believe the, the great leaders, many believe, and the whole concept of the quest is all kind of set on this. There is opportunity to get providence, divine aid, supernatural help.

Derek Hudson: 27:44

I I did some reading, got some great examples of people like Abraham Lincoln, Lincoln, scientists, who said, I was studying this problem, and the answer came to me. That was not my answer. I did not know this, and then I came to know it. I tested it out, it worked. And so, I think it's a level in the leadership is that you can ask an advisor, you can ask a mentor, but sometimes you have to go to your conscience, or what you know is true, or some outside source or principles that you already hold onto to get the answers, for what you need.

Derek Hudson: 28:26

Now, the thing is, is that if we want to close the circle off, that kind of practice really is individual. And and so self leadership also, suggests the opportunity to tap into higher principles or higher powers.

Dave Kane: 28:41

I think they're all they're all integrated in some of them. Because even your your governance, whether it's a corporate or a personal governance, is going to be intertwined with those same belief systems or or ethical peace inside of you?

Derek Hudson: 28:58

Absolutely. And and in fact, when, you know, Western law was established, it it was based on, you know, the rule of law, which was which is based on, you know, things like, you know, god given inalienable rights or responsibilities and stuff like that. And, so so, yeah, they're all the the principles are all interconnected, and, you know, we talk about natural law as one of the assumptions. And if you get into management, you know, if you apply a manager to the natural law is, how does this thing work? How do we make it work better?

Derek Hudson: 29:34

And whether it's machinery or working with people, you you look to serve these foundational principles. If you talk about governance, these foundational ethical principles, and if you have them, then, at some point, you just you just use them to be a good governor, and you don't have to take the responsibility of these moral choices because it's kind of you know, there's a code that's already been established in a sense.

Dave Kane: 29:56

Yeah. And I like keeping it sort of in that discussion with the governance and the guidance in this piece because, that influences your management, but I don't think that becomes the basis of your management.

Derek Hudson: 30:11

No. So No. No. So so there's a bit of a hierarchy, but it's it's more interconnected to that, and there's this sort of fractal view for in any any place you are in a system, you have all of these roles to to draw upon.

Dave Kane: 30:25

Okay. So we're coming to the end here. We've got these 6 pieces. Can you just sort of quickly wrap that up into, leadership or being a leader and in sort of this essential dynamics piece of how do you take and live with these 6?

Derek Hudson: 30:41

Well, it's to be to be the essential dynamics leader. I would say fundamentally, the essential dynamics leader recognizes that, there's a system that's separate from them. And, wherever, you know, whatever system is, you know, within sort of the bounds of their influence, it has a purpose, and, it involves people making choices and working together. And if you take responsibility for that as a leader, then you will be well served if you can appreciate this idea of your personal responsibility as a leader to to manage yourself and live to those principles and be an example of them, to be an effective manager of the resources that you've got access to, to be a leader that connects the purpose with the work that's done and the and connects the people to the work that's done, and then to be subject to this the governance of, you know, parameters that protect and the people in the organization to be open to wiser people who have experience that you can learn from, and then to be both subject to and and searching for, like, higher levels of truth with which to to draw and to be a better leader.

Derek Hudson: 32:01

So I I think it's a it's a whole integrated responsibility. And when you think about this idea of leadership in in every place, then it's not something that you ever can hand off to someone and walk away from and say, well, they're in charge, so I don't have to think. We always have these responsibilities.

Dave Kane: 32:19

Okay. So that that's a lot. That's a lot.

Derek Hudson: 32:24

That's a lot. This was a and I'll just have to say as I finish, David, this is something I have discovered in this format over the last only few weeks. A lot of these pieces, but it coming together has only been over the last few weeks, and I feel quite liberated that I we have this language now. So I hope it's helpful to other people.

Dave Kane: 32:47

It is, and I think that the pieces are that it's at all levels, and it's everywhere. And so as we talk about value creation systems and getting unstuck and all the things we do at the Essential Dynamics, there is this key underlying requirement of these elements of leadership throughout the organization, and that's what's gonna help lead to the successes. Right? So I think it's it's important to understand and explore, and I think we'll probably do more of that in the coming years. So

Derek Hudson: 33:16

We we will, we will continue to have this conversation. So so, Dave, thanks very much for all the all the questions and insights that you had. It's good to it's good to work with you. Brynn Griffiths, thanks very much for for your help as well. And, to everyone, if you're, if you're on a quest, you're a leader in some way.

Derek Hudson: 33:35

So consider your quest.