Expanding on our previous examination of the "good organisation" model, we operate on the premise that every aspect of an organization, spanning people, culture, and structures, mirrors its moral maturity. Implicitly, each organizational facet conveys messages about its identity, beliefs, and purpose - answering questions about its essence, priorities, motivations for work, and future direction. Together, these components coalesce to define the organization's actual "moral climate." This moral climate is maintained and continually reproduced by the organisations' employees, interacting with each other within the organisational context. Put another way, the organisational moral climate is interwoven with the company's "action logic", which shapes collective organisational behaviour.

Therefore, a true shift from "agility to excellence" (slide 1) must be rooted in the purposeful and "constitutional" reconfiguration of the organisational system. The "good organization" model incorporates specialized governance frameworks, known as micro-organisations and corporations, to actively manage the organizational components. These frameworks serve to acknowledge and reflect on the maturity of organizational entities and foster their development as needed. 

How can organisations evolve their "moral climate"? 

We believe that "virtuous" modifications within any of the organizational S-P-C entities can generate transformative power to alter an existing moral climate and amplify the potential of an organization. Introducing specific virtues (slide 3) can help communities to progress towards higher stages of moral climate and wisdom, e.g., social and ecosystemic virtues enhance moral sensitivity, while intellectual and civic virtues contribute to reasoning capacity and "political" participation. For instance:

• CULTURE- Changes to the organizational vision, purpose, values, success measures, language, symbols, and other communication elements to shape a more virtue-centric and purpose-driven narrative. Recognition of virtuous exemplars etc.
• SOCIAL STRUCTURES - Evolution of team management routines, systems, technology, operational processes to embed and foster virtuous principles and support positive organizational impact on customers.
  
• PEOPLE - Continuous betterment of Individuals and Relationships through learning and development, job crafting, community investment, people policies that take care of people in need and foster a culture of care and mutual support within and beyond the company
  

What does transformation imply?

However, while establishing governance routines is a crucial step, it alone falls short in driving genuine transformation. To truly evolve, organizations must enhance their reflexivity and cultivate a capacity for responsible action. This is where our transformative vision centers on nurturing and amplifying "practical wisdom," encompassing the organization's internal self-awareness and its steadfast dedication and capabilities to enact positive change for the collective good.

At the individual level, practical wisdom hinges on four specific competencies: moral sensitivity, moral judgment, moral imagination, and moral action, all anchored in a person's moral identity. Framing the development of wisdom at the organizational level, we could loosely align them to the S-P-C model:

• People: An organisation’s moral sensitivity, expressed as a capacity for mutual care and development and the continuous extension of the organisation's "moral circle"
• Social Structures: The organisation’s processes and routines that foster a capability for moral action and ensure steadfast ethical conduct even in challenging circumstances.
• Culture: The organizational vision, purpose, values, success measures, language, symbols, and other communication elements that shape the organisation’s moral imagination, motivation and identity. 

How can such wisdom be developed?  

In this context, we found Alasdair MacIntyre's work on professional practices, encapsulated in his Virtues-Practices-Institutions (VPI) model, particularly intriguing. He defines a practice as a social process inherently directed towards achieving the most essential "internal good" of the practices's activities. It involves cooperative and structured mechanisms to continually refine and develop the community of practitioners, traditions and shared standards of excellence, and a relevant body of knowledge. Embedded within the practice, apprentices acquire skills, develop wisdom and virtues, and evolve their identity over time.

Note: It is important to remember that virtues are not quite the same as values. While values might be in people's minds or on organisation's PowerPoints, virtues are always enacted. They are habits - like justice, courage, compassion and temperance - acquired through practice that connect individuals with their best selves as well as the greater good.

In summary, attaining organizational excellence necessitates a pivotal shift in the organizational "action logic." This shift hinges on the organization's ability to introspect, comprehending its essence, and to actualize its highest potential within its specific context through ongoing governance and moral experimentation.

What are the pre-requisites?

Such collective development requires individuals to step into more demanding interdependence with colleagues to co-create the shared identity and mutual commitment for the organisation. This is not easy in times of increasing individualism, suspicion and a mostly transactional understanding of the psychological contract between employee and company. It will take dedicated "constitutional" activity to create and continuously evolve a governance model whereby everybody has sufficient capacity to "co-own" the shared identity and character of the organisation, including the shared purpose and the basic structures, policies and principles that guide relationships between employees and between employees and managers (as corporate agents). The resulting organisation will give every member the freedom to contribute creatively to its evolution, while ensuring sufficient integration and coherence between all members to collectively pursue their shared goal effectively.

• Governance: A collective and overarching capacity for moral judgment within governance and decision-making approaches, and the capacity to appreciate the morality of organizational purpose, business and operating model. 

Successful organisational development or transformation hinges on the seamless integration of numerous small changes across organizational entities, approached holistically and purposefully. This is why we define organizational leadership as a systemic, generative, and intentional process of collective development aimed at unlocking an organization's full potential. In essence, leadership embodies an organization's collective capacity to shape its positive future.

But let us start with a provocation (Slide 4): Our perspective is that leadership has mostly failed, for two main reasons. Firstly, the ambiguity in defining leadership. Despite the wealth of efforts from consultants, researchers, and practitioners, there is a remarkable lack of consensus on what "leadership" truly entails, coupled with a surprising absence of reflection on its ethical foundations. Secondly, in terms of practice, we encounter a seemingly endless array of often-contradictory approaches, including recent calls for more participative leadership, agility, or sustainability—frequently lacking substantial empirical evidence. 

I can personally speak from the experience of my three-decade-long career: I've been requested to embody countless different leadership styles – from inspiring and controlling, to fostering empathy and coaching for performance, all while reducing costs and, of course, constant expectations to overdeliver. The diversity of discourses, theories, and frameworks depicted on the slide underscores this complexity. This pervasive confusion, perhaps paradoxically, has arguably led not to more but to less leadership. Focusing extensively on the myriad permutations of traits, styles, and behaviors of leaders, most businesses have ignored the crucial question of where they should lead in the first place. Consequently, by distracting from its ends and obsessing about its means, the discourse of leadership has potentially done more harm than good.

Hence, instead of approaching a leadership definition "bottom-up," our perspective starts "top down". We view a "leader" as an institutional role within an organizational system, accountable for facilitating a broader systemic leadership dynamic, in order to achieve organisational excellence and goodness. In this context, leaders are not merely individuals, styles or positions; rather, they are individuals stepping into roles conducive to supporting organizational transformation. In other words, setting aside the cacophony surrounding the "everybody is a leader" mantra, or the many fashionable notions of self-leadership, we suggest "leaders" only matter insofar as they take up specific roles endowed with organizational power for the purpose of increasing excellence within an organisational system.

How do leaders and leadership interlink?

As observed, conventional leadership theories frequently concentrate on personality traits, behavioral styles, or their amalgamation with contingent tasks. However, this approach overlooks both the systemic context and the essential alignment with an organization's direction. In our perspective, the essence of "leader development" lies in personal growth intricately linked to an individual's ability to optimally fulfill their roles in support of organizational transformation.

Sadly, this capacity is often constrained due to a widespread tendency among individuals in executive positions to cling to their personal power and identity, rather than fostering the transformative power necessary for organizational leadership. Yet, leaders can only guide an organization towards places they have been themselves. With Marshall Goldsmith's words: "what got you here won't bring you there."

To foster development, leaders need to cultivate the ability to "inquire in action" (Slide 5), blending self-awareness within the system with a conscientious consideration for an expanding set of stakeholders. Drawing on Bill Torbert’s framework, it's helpful to propose that leaders typically progress through a series of predominant "action logics" during their careers. Starting as diplomats, characterized by individualism and a focus on adhering to established norms, we evolve into experts—often taking on managerial or highly skilled practitioner roles—expanding our relationships within a chosen domain while adhering closely to practice norms. Eventually, as "achievers," we assume responsibility for the broader business, managing relationships across teams and driving ourselves ardently to succeed in the eyes of the executive. At each successive stage, we refine our mental maps and enhance our ability to delve into who we truly are, how we relate, and what holds significance for us.

What is the challenge in leader(ship) development?

To put it simply, a majority of leaders find themselves at the achiever stage (Slide 6). If you think this sounds a bit too theoretical, take a moment to consider some typical habits of achievers and see if they resonate. In essence, the biggest challenge for achievers is quite straightforward: we're trained to WIN, and we often win when we shouldn't. We tend to "add too much value". For example, when someone comes to present us an idea, rather than saying: that's great, go ahead. We, as achievers, often say, "That's a great idea; why don't you also add this?" Before we know it, the idea is dead. Why? Because effectiveness of execution is a combination of a) the quality of the idea and b) the commitment to deliver. When we add too much value, the commitment of those around us plummets. And the higher up we are, the worse it gets. In fact, it is very hard to learn for executives that at some stage they must operate on and not in the organisation.

Yet, merely enhancing relational capacities or reducing egocentrism is insufficient. We must also cultivate the ability to scrutinize our own role within the system (Slide 7). It's crucial to recognize that leadership roles are often shaped by both organizational narratives and unconscious and conscious relational expectations. As leaders, we gradually internalize the specific meaning of leadership within our organization, symbolically embodying the narratives, hopes, and needs of our group. In essence, we become a manifestation of the institution. As we progress toward leadership mastery, it becomes imperative to learn to release our internalized concept of leadership and transcend the very institutions that support us. This is a challenging endeavor because our identity is intricately linked to these institutions.

In fact, if leaders manage to progress further, it's often through a turbulent and traumatic transformation. As leaders gain a deeper understanding of both the contextual power of the environment and the moral ambiguity inherent in their roles, they come to recognize the limitations of the "Achiever logic." This logic fails to allow them to authentically express the entirety of who they are as individuals, nor does it embrace a broader sense of interdependence and morality beyond the confines of the institution. From being perfectionists and power-conscious, leaders gradually let go, becoming "imperfectionists" and reflective. From "identifying with their role", they start to become "whole". Mature leaders, suggests Manfred Kets de Vries, are not only born but “twice born” through painful “individuation”.

Leadership is (ethical) commitment

Once we operate from the freedom of deep self-knowledge, profound connection, and caring, with the ability to see life beyond our own ego, it becomes crucial to understand how to utilize that new freedom. Indeed, "Socrates was mistaken: it’s not the unexamined life that is not worth living; it’s the uncommitted life." Ultimately, excellence in leadership is synonymous with ethics—it revolves around our commitment to act intentionally for the greater good. This encapsulates the essence of practical wisdom—the ability to make decisions in conditions of uncertainty and complexity, driven by a steadfast commitment to bring about the greatest good. Through our continuous development as leaders, we contribute to the flourishing of all organizational stakeholders, society, and the ecosystem. Leadership, fundamentally, is not about us individually but entails collaboratively elevating the energy across the system to a higher level.

What are the core competences of good leaders?

In practical terms, effective organizational leaders must not only enhance personal, relational, and institutional competencies but also attain elevated levels of personal (identity) maturity by deliberately cultivating moral character and identity. Grounded in this understanding, we can construct a comprehensive capability framework for developing good leaders. Our model integrates the capabilities needed for fostering practical wisdom and character at the individual level with the qualifications essential for institution-building to implement "nodal changes" within the organizational system, strategically positioned to propel the organization to a higher level of energy and moral climate.

a) Personal competences

Drawing from both developmental and moral psychology, leadership encompasses a high level of competency across all dimensions of practical wisdom:

1. Moral Sensitivity: Love for the Good in Every Living Being

•  Empathy and listening, relationship and conflict management, diversity, and inclusion.
•  Ability to perceive interconnected wholes and sense interdependent ecologies.
•  Cultivation of organizational community through deep curiosity and care for transformative relationships.

•  Synthesis and evaluation of complex information.
•  Perspective-taking and critical thinking.
•  Ethical literacy and the ability to understand multiple and long-term perspectives
•  Mastery of deliberative processes that integrate across diversity for the greater common good.

•  Mature self-awareness and reflective capacity to see self within roles and systems.
•  Holding space for ambivalence, emergence, and mutual transformation.
•  Embracing integration of self, others, and nature without losing one's essence.
•  Willingness to “serve life’s calling” and being part of a living dynamic towards an essential good

•  Initiative-taking, ethical efficacy, and perseverance.
•  Problem-solving and political stakeholder management.
•  Moral persuasion and commitment to protect social flourishing.
•  Seasoned expertise and competence to nurture the firm's higher purpose and foster interdependence across the ecosystem.

• Developing People: Investing in community building, nurturing high-quality connections, ensuring effective leadership development, fostering team consciousness and co-elevation, enabling job crafting, and role modelling virtues and practical wisdom.
• Developing Micro-Organizations: Emancipating management practices, creating space for development, participation and deeper reflection, driving agility and learning, fostering innovation and experimentation, and integrating development and learning across and beyond the organization to grow corporate “commons”.
• Developing Corporation: Legitimizing a good organizational purpose, ensuring ethical governance and decision-making, challenging unhealthy practices and dynamics, promoting stakeholder engagement and corporate citizenship, and encouraging the continuous evolution of institutions to support collective ownership, wisdom, and co-elevation

In practical terms, as mentioned earlier, effective leaders operate both "in the system" by nurturing individual and team excellence and "on the system" by intentionally evolving organizational practices and institutions to protect and enable the greater purpose of the firm. In doing so, they create conditions that allow new ways of working to emerge. On a daily basis, this involves delicately balancing a focus on organizational performance and long-term viability, prioritizing the integral development of all stakeholders by recognizing and addressing diverse needs within the organization, and upholding the integrity of the collective good that the organization contributes to the broader world.

This sheds light on how the role of leaders evolves with increasing influence and "reach" (Slide 9). As leaders conscientiously embrace their role, they first cultivate individual excellence in themselves and others. Then they become catalysts for organizational transformation, serving as "guardians of the institution." With growing seniority, they transition into "community development partners," and eventually, in a statesmanship role, they contribute to fostering a good society through public interventions within communities of enterprises and collaborations with wider societal partners.

What about the “source”? What is the “difference that makes the difference”?

What propels individuals to undergo transformation? What drives leaders to redefine their role within an organizational system, aiming to unlock the potential of the entire system? Is it an internal energy or a primordial spirit that they hold on behalf of the community?

We propose that it might be the latter. Leaders often express that they don't own the ideals guiding them but rather hold them on behalf of the community. Rather than being the leaders, they are the "first followers" of something transcendent. Thus, in good organizations, there may be an underlying generative flame, an essence or spirit that manifests in receptive individuals and permeates the entire organization. Hegel spoke about the "geist", while Aristotle referred to it as "telos," a potent force within us pulling us toward the true and good, provided we are willing to embrace it. If such a force exists, nurturing and fostering it might be critical to illuminate our organizations for the greater good. 

A final (metaphysical) word on source: Plato and the essential spirit of organisational transformation

Paraphrasing Plato's famous assertion, genuine transformation within organizations is unachievable unless philosophers become leaders and leaders adopt a philosophical mindset. Why?

According to Plato, philosophers control their passions, in order to delve deeper into the exploration of reality. Within this reality, they uncover the forms—ideals that imbue things in our world with qualities such as goodness, beauty, or justice. Forms transcend mere common qualities; they represent essential reality, not created but only recognized by the human mind. As we learn to discern forms, knowledge transforms into wisdom. Forms begin to serve as standards against which we assess our lives, and act as deep sources of inspiration, compelling us to strive toward excellence. Plato suggests that by practicing wisdom, we not only lead good lives individually but also contribute to society. Humans are inherently social beings and genuine excellence is always the excellence of a social creature—the excellence of the citizen.

Ergo, if we want our organizations to embody worthy ideals, leaders within these organizations must turn to philosophy. Goodness and justice can only manifest themselves if they are imminent in the lives of leaders. Wise leaders strive not only for self-improvement to reach their full potential but also shape their organizations to enable every member to live a good life according to their capacity.

Herein lies a common misunderstanding of Plato's Republic. Good leadership is never pursued for the sake of the leader but for the good of the organization. When leaders deviate from reason to fulfill personal desires, especially the pursuit of power, they transform into tyrants. According to Plato, power is finite, and its pursuit as an end invariably leads to its accumulation through force by a few over the many. Conversely, wisdom and knowledge are infinite - there's a shared recognition that the more wisdom a community possesses, the more it flourishes. Hence, for Plato's philosopher-kings, there are only two ends: the understanding of the forms and their realization in the structures, routines, and life of the community. True practical wisdom consists in bringing these two ends together.

This also might serve as an appropriate reminder to all those passionately advocating for a shift from scarcity to abundance "mindsets" as a solution to our current troubles. Firstly, what truly matters is not the abundance of resources, opportunities, or successes but the abundance of wisdom. Secondly, the key to successful transformation is not merely mindset but actual practice!

(Based on C.E.M. Joad, Philosophy)