“An employee owes no ‘loyalty,’ he owes no ‘love’ and no ‘attitudes’

— he owes performance and nothing else”

-Peter F. Drucker,

Management: Tasks, Responsibilities, and Practices

After last week’s lesson, I was thinking about the nature of leadership. Often we confuse rank with leadership, but that is often incorrect. In an ideal world, rank would indicate leadership, but this is not always the case.
rank vs. status
Leadership has multiple definitions. When we think of the designated leader’s ability to command, we think of rank (colonel, manager, teacher, etc.). We think of office or the role that that person plays, but office is only a starting point.
When we think of the function of leadership—the act of leading, we realize that it is an interpersonal activity. It is not about the organizational chart. A leader is a leader because he/she influences. Influence arises from, for lack of a better term, status.
Rank and status are not the same thing, but these two forces in combination, allow leaders to lead. Rank provides the leader with formal authority; status provides the leader with moral authority.


Formal authority sometimes tricks those designated with the role of leader into thinking that they are providing the function of leadership. Think of the manager that could not get workers to work without threats or that teacher from elementary school that you still do not like. They held the title of “leader,” but they could not function as leaders. They had rank but not status.


Now consider those who held no rank but were highly influential in your life: that friend who stood up for you on the playground, the peer who reached out to help you when you were struggling academically, or the co-worker who made you feel welcome. Ideally these are the actions that a formal leader takes, but anyone can act as a leader. Rank is not required.
These persons with status had moral authority even if they did not have formal authority. Gandhi had no formal authority but he generated enough moral authority (or status) to compel the British to free India. If you must be without rank or status, choose status.
Status arises from personal characteristics or actions. I do not mean charisma; charisma is not necessary. But you have to build status with expertise, demonstrating that you care, embodying the cause, or with a willingness to suffer for your beliefs. Those who do these things increase their status and status enables them to lead.
Some time ago I ran across this quote from Peter F. Drucker:
An employer has no business with a man’s personality. Employment is a specific contract calling for specific performance, and for nothing else. Any attempt of an employer to go beyond this is usurpation. It is immoral as well as illegal intrusion of privacy. It is abuse of power. An employee owes no ‘loyalty,’ he owes no ‘love’ and no ‘attitudes’— he owes performance and nothing else (Drucker, 1973, pp. 424-25).
That quote resonated with me. About the time I stumbled over this quote, an MBA student told me that he once worked for a manager who demanded that his employees like him. How absurd. You cannot order me to like you. You can be the kind of person that I would like, but to require that I like you is to abuse what formal authority you have.

Two Tracks

There are two tracks in leadership. The formal track allows command and it is concerned with performance. It is rank. The second is personal and it grows as you demonstrate that you are competent and that you care for those in your charge. It is status.  Performance is within the bounds of the formal track. As long as the boss is writing the check, he should have every expectation of performance.
But loyalty, as Drucker pointed out, is personal. It is given to a person, not an office. Loyalty is earned as trust is gained. This takes time.
If the person in charge leaves, you begin the process of rebuilding that loyalty with a new person in their legitimate office, but rank alone does not command admiration. All status has to be earned.
Those who do not understand this distinction often abuse their subordinates and wonder why performance has declined.  The reality is that rank is important but it is not sufficient to get the best from people. You know if you have rank, but how do you know if you have status? Those who have both rank and status can see it reflected in optimal performance of their people.

What About You?

If you are a leader, do you have rank or status? How do you know?