Introduction

In today’s corporate climate we face a fast moving, increasingly global structure. This environment has caused companies to react to the situation they are currently faced with and that climate or situation may change as soon as the company adapts to the new challenge. Miller (1997) describes the successful organization of the future as a "chameleon," one that adapts to the environment as the environment changes. Miller (1997) further characterizes the organization of the future as one that has "great flexibility, commitment to the individual, superior use of teams, strong core competencies and a taste for diversity (p. 120)." Any organization that can successfully integrate all of these competencies will succeed in any business environment, past, present or future. The role of the leader and the qualities of leadership must be defined for all levels of an organization in order to accept the ever-changing role we all have in business today.

One of the reactions to the increasingly global economy and the new challenges of competitiveness is to reduce the levels of middle management. Efforts termed "streamlining", "work smarter, not harder", "do more with less", "downsizing", "right sizing" or "reengineering" all point in the same direction of a smaller, seemingly more efficient organization. With this smaller and organizationally flatter group, new and/or increased roles must be assumed by other employees. Specialists are becoming generalists with the understanding they are still specialists. However, these reorganization efforts must recognize the human elements involved. Reengineering, a process that redesigns a company’s processes from scratch, can have a profound effect on the overall bottom line of a company (Hammer & Champy, 1993; Wellins & Murphy, 1995). The effect however, may have a tremendous cost in terms of the human element. Jobs are lost and people are not replaced causing others to fill the roles vacated by those that left. A new contract must develop between the company and the individual. Miller (1997) suggests this contract needs to centered around the individual. Both the organization and the individual need to agree to the terms of the contract. The organization needs positive bottom line results from the efforts of the individual. The individual needs to be adequately compensated for his or hers efforts. This compensation goes beyond the paycheck to include work that is both rewarding and produces results they can see.

One of the key ideas of most restructuring or corporate reengineering efforts is the empowerment of employees. Employees need to be able to make their own decisions in the best interest of the company (Hammer & Champy, 1993). This concept is true whether the company is working in a traditional setting or a progressive self-directed work team. Champy and Hammer further suggest that empowerment is a necessary by-product of reengineering and a reengineered process will not work without empowerment. Wellins and Murphy (1995) point out that most failed reengineering attempts center around a management group that would not accept the transition from a traditional management setting to the new empowered culture. Training needs to be initiated for the management group and the working group. The concept of the business structure and the need for management support must be clearly presented to all groups.

In contrast to Hammer and Champy’s concept that a company must rely solely upon its core competency for success, Johnson (1998) and Miller (1997) offer the suggestion that for an organization to be successful in the future, the organization must be willing to adapt and change competencies as the situation requires. Any organization incorporating learning into its core competencies will enable its employees to obtain the necessary flexibility change will require of them. Johnson (1998) states that this increased flexibility will result in a "strategic competitive advantage" for the company which will result in a greater sense of security and satisfaction for the employee.

Leadership development, supervisory skills and teamwork training often rank as the most important and most frequently offered training topics in corporations (Training, March 1998). The United States Army has a history of successfully integrating a changing environment with a labor force existing with a large turnover rate. This success stems from the Army’s leadership training programs. With all the change that occurs within the military and in the world the military exists in, the desire to win and remain a leader in the world has never diminished (Reimer, 1998). In sharp contrast to the U.S. Army, its competitor, the Army of what used to be the Soviet Union, has suffered the consequences of not being able to adapt to the changing environment. The nation that emerged with the largest portion of the Soviet military structure, Russia, is seeing the ranks of their military’s middle management diminish. Officers are leaving the military for better jobs causing the military to shorten training cycles developing new leaders. These training periods are not adequate to properly develop the new officers. These new officers are experiencing job dissatisfaction which is leading to shorter enlistment periods thereby creating the need for more new officers (Ishchenko, 1998). Leadership training can be seen as the key to success as well as the key to failure in both instances. The United States military has a strong leadership development program and sense of total community.

The United States military instills a sense of value-based leadership into all of its troops. Leaders must lead by example and allow the individual solider the opportunity to do the same (Reimer, 1998). The Russian military is now shortening leadership (officer’s) training cycles to "turn out officers like hotcakes" which does not adequately prepare them for the challenges of leadership (Ishchenko, 1998). The idea of the United States Army’s leadership training program can be easily integrated into the business world. With the concept of a leadership training program extending to all levels of an organization, a more empowered workforce will emerge. The United States Army understands that to have a truly empowered cadre of leaders, those individuals must be trusted to make the right decision at the right time. The only method to provide that type of empowered leadership is to give individuals the information they need to make sound decisions and be as innovative as the situation warrants (Reimer, 1998).

Leadership

Leadership has many definitions. A very good definition of leadership is the ability of a person to influence "human behavior in an environment of uncertainty (Sherman, 1995, pg. 90)." This ability to influence others varies from person to person and even in situations. A person may have excellent influencing skills, but lacks the environment to utilize these skills. An individual may be in a situation that requires this skill set but lacks the ability to influence. In both types of instances, frustration sets in from the inability to move ahead.

Definition of Leadership
The roles of leaders differ from setting to setting. A simplification of leadership roles can be broken down into two categories, the formal leader and the informal leader. The idea that a manager can lead and a leader can manage does not hold water in today’s business world. Management is a set of processes that allows an organization to function and managers coordinate those processes. Leaders allow for the advancement of ideas and the refinement and improvement of processes (Kotter, 1996). Bass (1990) defines leadership as a combination of many human processes including the exercise of influence, persuasion, power relation and interaction. Within a traditionally structured organization, this definition typically encompasses the job scope of a formal leader. This leader will be the decision maker, morale builder and the person who steers the course for the group (Senge, 1990). He equates this idea of the leader position in a traditional hierarchy as that of "heroes - great men who ‘rise to the fore’ in times of crises." Leaders can also be those that others look to for direction within an organization, but not necessarily a company decision maker. This position is that of the informal leader. The difference between the two positions is where they receive their span of control. A formal leader receives their power directly from the position they hold within the company. An informal leader receives their influence and power from the individual seeking direction. Common to both types of leadership is the thought that the leader reacts and behaves by what is expected of them by the group that empowers the leader (Bass, 1990). The success of a leader is directly related to the amount of competence the group believes the leader holds (Bass, 1990). An individual can be both an informal leader and a formal leader. The role is dependent upon the situation the individual is placed.

Formal Leaders
Formal leaders in industry are those that hold positions titled chief executive officer, vice president, management, superintendent, supervisor, foreman or team leader, to name a few. In the United States military, similar positions are titled General, Admiral, commissioned officer or non-commissioned officer, again, to name a few. These positions have common threads; persons reporting to them for task direction or responsibility for budgets or property. Management, in a traditional setting, maintains the role of leader. Managers are often selected by artificial requirements such as certain levels of education, experience or technical knowledge. Management is the official source of communication, vision and rule setting. In a traditional setting, formal leaders set the course for day to day operation of a company. The overall direction the company is following depends upon the direction the management team decides to take. This direction is based upon strategic planning, market assessments or advice from major stockholders or stakeholders. Input from employees outside the management ranks is not often sought by the management group in the traditional setting.

Empowerment
Empowerment, as a process, necessitates the training of a workforce to make decisions at the lowest levels of management as possible. Traditionally, this means that individuals take initiative and make things happen (Mohrman, Cohen, & Mohrman, 1995). For empowerment to successfully occur, leaders and followers must have the information necessary to make decisions (Reimer, 1998). Empowered work teams need not have a "hands-off" approach from management. Empowerment does not always equate to autonomous self-control. Empowered teams or work-groups still need direction and information to flow from the management team. Managers need to learn to relinquish control to help with empowerment (Mohrman, Cohen, & Mohrman, 1995). To help the process of empowerment, management must provide support to both the teams and the managers and supervisors that are transforming their positions from a direct, hands-on approach to a coaching or support role (Fisher, 1993). A new set of leaders can emerge that can take on an increased role of responsibility, the informal leaders.

Informal Leaders
For the purposes of this paper, individuals who find their base of power from individuals and receive no official recognition of position from management are "informal leaders". These individuals can be long-term employees with a wealth of process or technical information gained from experience or employees that display charismatic tendencies that cause others to look to them for direction. These individuals exert an influence on overall productivity of a company. This influence can be positive, or it can be negative. Those individuals with a positive impact on the company are the individuals we would naturally seek out to help improvement. The informal leaders that have an overall negative impact may actually be able to provide a company with a positive impact if they are approached in an agreeable manner and their contributions can be used by the company to help show improvement. It may just be a matter of communication, respect and training to help improve the impact these individuals have on the overall performance of the work group or company. Informal leaders are similar to popular leaders as described by Bass (1990).

Roles played by Informal Leaders
Informal leaders have the ear of the rest of the workforce. In that role, management can utilize the informal leader without malicious manipulation. Informal leaders are often those individuals controlling an organization’s informal communications network. This network allows for the flow of information in any and all directions. This network can keep a manager or supervisor informed of the "pulse" of the workforce in a traditional setting. This network also allows for the flow of information from management to the workforce in an unofficial manner (Robbins, 1993). It is important to understand the flow of communication in the workplace. This flow shows the true lines of communication necessary to get a job done. This communication pattern may cross functionality lines, department lines or even company lines that have been drawn up by the management group.

Core Competencies of Leaders
Leaders are those individuals that are successful in "mobilizing" their companies to succeed (Rosen, 1997). These leaders encourage others to maximize their potential. Leaders also need to learn when to follow, when to listen and when to lead. The careful balancing of these competencies is crucial in the make-up of a good and effective leader. Feedback must be given from all directions, self, peer, subordinate, superior and customer (Reimer, 1998; Rosen, 1997). Improvement from feedback needs to occur in a positive manner. Within each leadership program, a system of integrating feedback needs to be established (Rosen, 1997; Sogunro, 1997). If this system is established we will develop better and more responsive leaders. Leaders are often characterized as those individuals of high morale character, visionary and excellent communicators (Bass, 1990). These characteristics are found in most leadership development courses offered by United States companies (Training and Development, August, 1995).

Money Spent on Management and Leadership Training
In 1998, over $60.7 billion was budgeted by companies in United States on formal training. The amount budgeted for managers was $14.1 billion. Professionals received $19 billion in budgeted training. All others received $19 billion in budgets (Training, October 1998). The Federal Government budgeted $524 million in 1998 to help improve learning in schools and the workplace and an overall budget of $6.8 billion for training and employment services (Budget of the United States, FY 1999). With the sums of money budgeted for training increasing every year and the marketplace becoming more global and competitive every year, it is imperative that the money spent on training is utilized to the fullest extent possible. Turnover rates in employment have increased over the years. Most companies understand that training is portable, that is, the knowledge imparted to employees will leave with the employee, benefiting another company. Employees hired into your organization bring with them the knowledge from the training programs of other companies. It is from this line of logic that a company must actively manage its training program to identify the skill sets needed to increase problem solving for the needs of the business as they exist at that time (Miller, 1997). Mohrman, Cohen, & Mohrman, (1995) suggests a core group of leaders exists at the hourly level in U.S corporations but at that level, little or no leadership training is provided.

Effectiveness of Management and Leadership Training
Sixty percent of companies responding to a 1995 survey indicated leadership development as a high priority for their training programs. In this same survey, less than twelve percent indicated leadership training as a low or non-existent priority within their respective organizations. The largest percentage of these training programs were aimed at middle level managers. The smallest percentage, eleven percent, offered leadership development to nonsupervisors (Training and Development August, 1995).

One study of the effectiveness of management training involved introducing bank branch managers to the concept of transformational leadership (Barling, Weber, & Kelloway, 1996). The managers were assessed before and after the training using a multilevel assessment tool. The trainees, their superiors and subordinates, were polled to determine the effectiveness of the training. This training was repeated in the form of refresher training for all managers participating. The overall findings in the study indicated that the perceptions of the managers’ leadership behaviors improved with the training (Smart, 1997).

A second study, conducted in Alberta, Canada, assessed the effectiveness of a leadership development program by polling graduates of the program (Sogunro, 1997). This study also showed a positive impact on leadership abilities of the participants after the training program. More importantly, this report also indicated that the effectiveness of the training program had long-term positive implications for those that attended the training (Sogunro, 1997).

Critical to the success of the United States Army’s training program is leadership training extended to most members of the services. The turnover rate in the military necessitates finding and developing new leaders on a continuous basis (Reimer, 1998). Sogunro (1997) suggests that leadership training be extended to all levels of employees with the assertion that all employees are potential leaders and need development. This thought process directly parallels that of the United States military, which has proven successful on a long-term basis. The leadership training provided needs to be current and those that have received training in the past need to have refresher training to update their knowledge, skills and abilities (KSAs) (Sogunro, 1997).

Finding Informal Leaders

Assessments. Finding the informal leaders in a work force is a challenge. Not all informal leaders have an active presence in the workforce, at least not one recognized by management. Assessments can be used to determine which employees fit personality types that may be indicative of future success in leadership. Evaluations by outside groups could be performed to determine who these individuals are, at a cost to the company. A better method might be to assess job performances and ask employees and supervisors who they believe the informal leaders are in their organization.

Job Performance. Not all informal leaders are going to have a positive impact on an organization. Some informal leaders will have the same effect on an operation that the "mob leader" may have on crowds (Bass, 1990). These informal leaders may not necessarily be the same individuals desired by management to receive further training. However, these same employees could have huge positive impacts if the training does make them more productive as employees. Sugonro (1997) suggests that all employees should be given leadership training to help all employees understand the leadership system. Job performance is one area of assessment that can help determine what the employee gives the company. What are the efficiencies associated with their area? What is the individual’s attendance rate? What is the employee’s disciplinary record? What is the perception of the individual’s supervisor? What is the performance evaluation history of the person? Positive rankings in these areas would be a good starting point for finding the informal leaders in an organization. The United States Army uses a multi-rater system to evaluate soldiers. This system involves feedback in all directions, from peers, subordinates and superiors to provide direction for the soldier being evaluated. This rating system gives the soldier a good assessment of their individual performance and how that performance is viewed by others (Reimer, 1998). This approach is similar to the evaluation utilized by Barling, Weber and Kelloway in their 1997 study of branch bank managers. This type of review will help to not only give a well-rounded evaluation, but also eliminate any biases a few people may have about the person being evaluated.

Peer Interviews. Who are considered leaders by the peer group? Within all layers of work groups, leaders emerge to assist in guiding their peers (Bass, 1990). Peer reviews or communication pattern assessments can be utilized to find the major conduits of information. Communication patterns that emerge from these studies will help to point out where the majority of information comes from. The sources within the peer group may help to establish who the informal leaders are and aid in the identification of true informal leaders. This will be true for any type of communications including unofficial "gossip" or the interpretation of company sponsored statements (Robbins, 1993).

Training Informal Leaders

Core Curriculum. Many studies covering a core curriculum for leadership development have been undertaken. From the study by Sogunro (1997), the following competencies were ranked high on the some improvement scale (3.75 or higher on a 1 to 5 scaling): verbal communication, respecting the abilities of others, listening skills, appreciating the abilities of others, providing leadership in a group, being active in meetings and displaying sensitivity to feelings of others after the completion of the training course (Sogunro, 1997 p. 726). These competencies are also in line with the attributes desired in senior management at KMPG Peat Marwick LLP (Brocksmith, 1997). If these topics are desirable in top management executives, they should be applied to the training of informal leaders, if we are to tap their potential as leaders. Given the idea that most informal leaders head up or are at least a major influence in the informal communications network, particular attention should be given to effective communication skills. Being an effective communicator is one of the traits often associated with the concept of effective leadership (Bass, 1990).

Key Responsibilities. The informal leader should be given additional responsibilities. In some settings, this can be as a production technician or similarly named position. The process knowledge the individual holds is valuable in the efficient operation of any company. The acknowledgment of the informal leader’s importance to the company should be displayed in an increased role in decision-making. The technical knowledge of the informal leader can be utilized in the role of mentor or "troubleshooter". Other responsibilities or roles can center on the informal leader’s experience within the company, the official and unofficial rules of the workplace. The imparting of this information to new employees can be valuable.

Mentoring. The process of mentoring can be used by a company to better utilize an informal leader, as well as to develop future leaders or the informal leader. Mentoring utilizing the informal leader as a peer mentor or as the mentor for a manager in training can be established. The use of the informal leader as a mentor for a manager in training allows a company the ability to use the skills and abilities the informal leader has learned throughout their career. The manager in training receives valuable insight to both the processes of the company as well as the workings of the hourly ranks of employees. The benefits from this relationship can be a win - win situation. The informal leader receives company recognition for their contributions and knowledge and the manager receives an education that cannot be put into a lesson plan. As a peer mentor, the informal leader can transfer process knowledge to the peer. This is usually done utilizing the on-the-job training method (Shea, 1994).

Retention

Job balance. With all of the restructuring taking place in the workforce, retention of good employees is difficult. Promotions to the ranks of management have declined. Management positions themselves have declined in number, making the competition for those slots very competitive. Payscales are based upon position within a company in most settings. Individual performance is not always an indicator of worth to a company. A company must focus on those employees that have substantial impact on the organization and find ways to retain them (Goldsmith, 1997). This recognition and reward system must also apply to the informal leader. Often times the impact of these employees is lost, because they do not hold a "position" within the structure of the company. A good system of evaluation needs to be effectively implemented. Not only does an individual’s contribution to the common cause need to be rewarded, so does the potential that person brings to the group (Wellins & Murphy, 1995).

Incentives. The reward system to repay employees for their services needs to have some basis in the merit of the employee. This merit should include individual performance as well as the performance measures of the success of the group the individual works in. This will allow for the reward of individual performance as well as for the over-all success of the group. Profit sharing is a good example of a group reward. Companies need to establish recognition systems and let valued employees know they are appreciated and that the company desires to retain them (Goldsmith, 1997).

Summation

In all organizations, groups exist that are outside the roles and groups set up by the organization. Understanding the flow of information between these groups could lead to realignment of existing corporation structures. Within those structure changes, the importance of the informal leader emerges. Similar to the ideas of the United States Army and Sogunro, leadership training needs to be made available to all members of an organization. The awareness level of all individuals is raised through training and cross-training. The heightened awareness in leadership training can only help the understanding of decision-making by all employees. Miller (1997) also endorses the training of all individuals of a corporation in leadership development. An employee may find themselves in different roles on different teams. These teams may be official or unofficial. But the benefits of leadership training and development will be felt throughout the organization in a positive manner.

The importance of the informal leader cannot be overstated. These individuals often hold the reins to the communications network of a company and can influence the morale of the workplace by the expression of their feelings toward policy. The key to the amount of an organization’s success could be the proper use of the informal employee in decision making, planning and the day to day operation of the company. The effects of leadership training for informal leaders need to be investigated. The potential benefits for a company include a more empowered workforce, better decision-making and improved morale. These benefits should have a positive effect on the bottom-line of a company’s balance sheet. The next step in this process would be to bring leadership training to all employees. If the program has the desired effects with informal leaders, the same should be true if all employees are offered the same training.

References

Barling, J., Weber, T. & Kelloway, E. K. (1996). Effects of transformational leadership training on attitudinal and financial outcomes: a field experiment. Journal of Applied Psychology, 81, (6):827-832.

Bass, B. M. (1990). Bass & Stogdill’s handbook of leadership: Theory, research & managerial applications (3^rd ed.). New York: Free Press.

Brocksmith, J. G., Jr. (1997). Passing the baton: Preparing tomorrow’s leaders. In F. Hesselbein, M. Goldsmith, & R. Beckhard (Eds.), The organization of the future (pp. 251-258).

Budget of the United States Government, Fiscal Year 1999. Available http://www.access.gpo.gov/su_docs/budget99/.

Fisher, K. (1993). Leading self-directed work teams: A guide to developing new team leadership skills. New York: McGraw-Hill.

Goldsmith, M. (1997). Retaining your top performers. In F. Hesselbein, M. Goldsmith, & R. Beckhard (Eds.), The organization of the future (pp. 259-263).

Hammer, M. & Champy, J. (1993). Reengineering the corporation: a manifesto for business revolution. New York: HarperCollins.

Ishchenko, S. (1998, May 27). Turning out officers like hotcakes. Current Digest of the Soviet Press, 50, (17):18-19.

Johnson, J. R. (1998). Embracing change: a leadership model for the learning organisation. International Journal of Training and Development, 2, (2), 141-150.

Kotter, J. P. (1996). Leading change. Boston: Harvard Business School Press.

Mohrman, S. A., Cohen, S. G. & Mohrman, A. M., Jr. (1995). Designing team-based organizations. San Francisco: Jossey-Bass.

Miller, D. (1997). The future organization: A chameleon in all its glory. In F. Hesselbein, M. Goldsmith, & R. Beckhard (Eds.), The organization of the future (pp. 119-125). San Francisco: Jossey-Bass.

Reimer, D. J. (1998, January). Developing great leaders in turbulent times. Military Review, 78, (1), 5-12.

Robbins, S. P. (1993). Organizational behavior: Concepts, controversies and applications. Englewood Cliffs, N.J.: Prentice Hall.

Senge, P. M. (1990). The fifth discipline: The art and practice of the learning organization. New York: Doubleday.

Shea, Gordan F. (1994). Mentoring: Helping employees reach their full potential. New York: American Management Association Membership Publications Division.

Sherman, Stratford (1995, November 27). How tomorrow’s leaders are learning their stuff. Fortune, 132, (11), 90-102.

Smart, S. (1997). Leadership training can improve sales. Worklife Report, 10, (3):13.

Sogunro, O. A. (1997). Impact of training on leadership development: lessons from a leadership training program. Evaluation Review, 21, (6): 713-737.

Training. (1998, March). Measuring training’s contribution to intellectual capital. Training, 35, (3):14-15.

Training. (1998, October). Industry Report 1998. Training, 35, (10): 43-56.

Training and Development. (1995, August). Developing leaders. Training and Development, 49, (8):13.