The School of Economics celebrated its 28th foundation day on August 15, 2021. To commemorate this event, we’re publishing online this article written by UA&P co-founder Dr. Bernardo M. Villegas from the January 2009 issue of Universitas.
Over 20 years ago, in my conversations with students in the Industrial Economics Program, it was appropriate for me to talk about the need for them to become development executives. What is a development executive? He is first and foremost a keen analyst of business and economic trends. As a result of exposure to theories and methods of research, he is able to explain scientifically the trends in the national economy and in various sectors and industries. He also knows what paths of progress can be open to various sectors, regions, industries and firms because he is thoroughly acquainted with the experiences of more developed countries. More important, he is concerned not only with “doing things in the right way” but also in “doing the right things.”
Today we have to go beyond the concept of a development executive. I want to introduce a new kind of executive that you in this generation should aspire to be—a development leader.
What is a leader? There are three criteria for leadership. First, a leader—as a manager—must be capable of defining strategies and producing economic value for the company. Second, he must have a certain level of interpersonal competencies to be able to communicate to subordinates the tasks to be accomplished and help them achieve their objectives. Third, he must be able to govern himself and manage his emotions, his learning, and his personal development.
It is in this light that you should value your three years of humanities course. To produce development leaders means equipping students with both the technical skills and, more important, the virtues: understanding what it means to be honest, humble and generous, by being taught philosophy and theology and being introduced to figures like Dante and St. Augustine. That is an investment that will last all your lives even if you live up to 100. So don’t underestimate the value of those three years as a foundation for your graduate program.
I am not saying that you will attain it overnight. This is a lifelong process but what UA&P can do is put the foundation. And you can be sure that those five years in UA&P are good enough for a foundation. It is up to you later on whether or not you will build on that foundation.
Let me tell you about the different types of leaders. One is a transactional leader. Transactional leadership is built on a relationship of economic influence. A transactional leader relies on rewards and punishments to motivate his subordinates; his ability to influence people depends on his ability to give or withhold incentives. To do that, he lays down clear rules and sets carefully designed objectives. His management style tends to be one of command-and-control with the accent on control and a robust use of formal power. He pays close attention to the short term and uses processes and resources efficiently.
A transactional leader is therefore a good manager who seeks continuous improvement through standardization, organization, and repetition of tried and tested processes. Good transactional leaders tend to be good negotiators. They are authoritarian, even aggressive in getting maximum benefit out of the relationship of economic influence they have created.
In UA&P, it would not be possible for one of our managers or deans or department heads to be authoritarian because, by definition, our corporate culture requires collective government. Every person who is a department chairman or a dean always involves other key people in decision making. He never makes a decision on his own. It can be apparently inefficient, because it takes time to consult other people. But over the long run, it is effective, because you get everyone to own the decision. The two most important features for success are trust and ownership of the mission or objective.
The second type of leadership is transformational leadership. It is based on a relationship of professional influence. In a professional relationship, the subordinate is interested not only in the salary and benefits but also in the job as such, the challenge it offers, the learning he gets from it, and its overall appeal. As the old psychologists would call it, it is the satisfaction that the person gets out of the work. These factors are closely related to transformational leadership.
The influence exerted by a transformational leader goes deeper than that of a transactional leader. A transformational leader is able to influence people not only through reward and punishments but also through an attractive job in which subordinates learn and commit to tasks.
He is usually non-conformist, visionary, and charismatic. He repeatedly questions the way things are done in the company and his followers’ aspirations and ideas. He is an excellent communicator. Effective communication—that is also what the three years of the humanities in UA&P where you study philosophy, theology, theatre arts, etc. help you to cultivate. You cannot be a transformational leader unless you are good in communication. Compelling and persuasive, a transformational leader has great faith in himself and his vision and pursues the changes he has decided upon with great determination and energy. The transformational leader is not necessarily opposed to the transactional leader. He is an enriched version of an effective manager.
And then finally, as identified in the research of professors at the IESE Business School of the University of Navarra, the third type of leader is the transcendental leader. Transcendental leadership is built on a relationship of personal influence.
In a personal relationship, employees are motivated to accomplish a worthwhile common mission not only by financial rewards and the inherent interest in their job but also by a personal commitment to the leader, who becomes like a role model because of the virtues that he has. He teaches by example. And so all the people working under him are not primarily motivated by money or even by the internal satisfaction. They may actually find it hard to do things that are against their own inclinations, but because they see a leader who is selfless, dedicated, etc., they are moved by his example to go against the grain.
And this is really transcendental. The influence extended by a transcendental leader is even deeper than that of a transformational leader because a transcendental leader is able to influence people not only by giving out rewards and punishments or interesting professional challenges but also by appealing to their awareness of how other people need them to do their job well out of a sense of mission.
The transcendental leader is strongly committed to a content-rich project and makes his subordinates realize how their work contributes to the completion of that project. In preaching by example, he enhances his credibility among his subordinates.
Lastly, he radiates a powerful sense of urgency and encourages his subordinates to accept leadership responsibilities so that they set themselves demanding and ambitious goals in the service of the corporate mission.
Your ambition should be:
I want to be a development leader. I don’t know whether or not I will manage people, but I want to lead and there is so much to be done in this country and so much that can be done by development leaders.
So, I would like to suggest that you aspire to be a transcendental leader in whatever career or profession you may pursue after your studies. Your ambition should be: I want to be a development leader. With your scientific knowledge of what it takes to achieve economic development for our country, you should go beyond being a transactional and transformational leader. You should be able to motivate the people with whom you work to work selflessly for the common good by the example of our own personal commitment. That is what it means to be a development leader.#
Banner photo by Rebrand Cities from Pexels.
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The School of Economics: Redefining Itself
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