Leadership¶

Why This Matters¶

Leadership is the course that makes every other MBA course actionable. You can build the most elegant strategy, run the most precise financial model, and design the most efficient operation, but none of it matters if you cannot get people to execute. Strategy lives and dies in the hands of the people who must carry it out, and those people are not machines that respond predictably to inputs. They are complex, motivated by a tangled web of money, meaning, and mission, and they learn -- for better or worse -- from every interaction they have with their manager. The Leadership course teaches you how to understand, influence, and develop the people around you so that your organization actually works.

What makes the IESE approach distinctive is its insistence that leadership is not a personality trait or a set of charisma tricks. It is a learned discipline rooted in a specific conception of what organizations are and what people need. The course builds from Professor Juan Antonio Perez Lopez's anthropological model of management, which holds that organizations are not machines to be optimized or organisms to be kept happy, but institutions whose purpose is to help people grow while producing something genuinely useful for the world. This is not abstract philosophy. It has immediate, practical consequences for how you design incentive systems, handle a conflict with a peer, run a team meeting, or decide whether to fire someone.

The course unfolds across six modules -- Motivation, Power and Influence, Conflict Management, Teams, Talent Development, and Organizational Culture -- each building on the last. By the end, you should be able to diagnose why a team is underperforming, why a talented employee is disengaged, or why a well-intentioned policy is backfiring, and you should have a toolkit for fixing each of these problems without making them worse.

How It All Connects¶

The six modules form a logical progression that mirrors the real experience of managing people. You begin with motivation because everything starts there: before you can lead anyone, you must understand what drives them. The three types of motives -- extrinsic, intrinsic, and transcendent -- form the vocabulary you will use throughout the entire course.

Once you understand motivation, you encounter the question of power and influence: how do you actually get people to do things? The answer depends heavily on whether you rely on formal power (your position) or authority (the trust people have placed in you). This naturally leads to conflict management, because the exercise of influence inevitably produces friction. The conflict module teaches you to distinguish productive disagreement from destructive confrontation and gives you tools for navigating both.

With these individual-level skills in place, the course scales up to teams, where everything becomes more complex. Cultural differences, status dynamics, and decision-making norms all conspire to make group work harder than it should be. The talent development module then zooms back in, asking how you grow the individuals on your team through coaching and competence building. Finally, organizational culture ties everything together. Culture is what happens when your leadership practices become the water the organization swims in -- the unspoken assumptions, values, and habits that shape behavior long after any single manager has left the room.

Throughout all six modules, the same foundational ideas recur: the three types of motives, the distinction between power and authority, the trust model, and the anthropological view of the firm as an institution built on values. Mastering leadership means seeing how these ideas connect and applying them fluidly across very different situations.

Lesson 1: Introduction -- House of Money¶

The first session introduces the definition of leadership that will anchor the entire course: leadership is a process whereby an individual influences a group to achieve a common goal. Professor Maya Rossignac-Milon, who teaches the course, immediately complicates this simple definition by asking students to think about a leader they admire and articulate why. The exercise reveals that admired leaders are rarely those who merely hit their numbers. They are people who made others feel seen, developed, and connected to a purpose larger than themselves.

The session establishes a critical empirical finding: roughly 30 percent of leadership ability is "born" (rooted in personality traits and temperament), while approximately 70 percent is "made" through deliberate practice, reflection, and experience. This is both humbling and empowering. You are not doomed to be the leader you are today, but improving requires intentional work.

The House of Money case serves as a diagnostic sandbox, confronting students with a messy human problem that touches every module in the course: motivation, power dynamics, conflict, team coordination, talent management, and culture. Students must analyze Belinda Atkinson's situation with Jake, an aggressive city manager, without yet having the formal frameworks to do so. The case teaches by frustration -- you realize how much you do not yet know about why people behave as they do.

The session introduces the three paradigms of managing, a framework that maps the relationship between what employees give, what they receive, and what kind of leadership is required at each level. At the material level, employees give basic productivity in exchange for salary and incentives; this requires only formal power and achieves contract-level compliance. At the intellectual level, employees contribute initiative, ideas, and creativity in exchange for training, empowerment, and delegation; this requires idea-based leadership. At the affective level, employees offer identification, loyalty, and willingness to sacrifice in exchange for coaching, support, gratitude, and fairness; this requires care-based (or values-based) leadership and achieves identification-level influence, where people follow spontaneously and for the long term.

The crucial insight is that these paradigms are not interchangeable. You cannot buy loyalty with a bonus. You cannot purchase creativity with a salary increase. If you try to extract affective-level commitment using only material-level tools, you will fail -- and you will likely destroy whatever goodwill existed.

The session also introduces the distinction between formal power and leadership. Formal power produces short-term compliance and requires constant monitoring. Leadership produces long-term commitment and spontaneous followership. The rest of the course explains how to build the latter.

Finally, the session introduces Professor Rossignac-Milon's own research construct: Generalized Shared Reality, defined as the experience of sharing the same thoughts and feelings about the world with an interaction partner. Her research demonstrates that when managers and employees achieve this "merged minds" state, it significantly improves work meaningfulness, job satisfaction, and performance. This concept underpins the entire course's emphasis on genuine human connection as a leadership tool, not a nice-to-have.

Lesson 2: Motivation -- Sybila Borjesson at Catek¶

The second session moves from the introductory framework to a deep dive into motivation, using the Sybila Borjesson case at Catek to illustrate how a leader's understanding of motivation shapes every decision she makes. The session introduces the three types of motives that form the motivational vocabulary of the entire course.

Extrinsic motives are driven by external rewards associated with work -- bonuses, social recognition, promotions, or the avoidance of penalties. They are the most immediately powerful motivators but also the least durable. Once the bonus is spent, the motivation fades.

Intrinsic motives are driven by the inherent satisfaction or enjoyment of the activity itself -- intellectual challenge, creative stimulation, the pleasure of learning, or the fun of the work. These are more durable than extrinsic motives but still center on the individual's own experience.

Altruistic (or transcendent) motives are driven by the positive benefits others receive from the action -- the team, the company, the customer, or the family. These are the most durable motives of all. A person who genuinely believes her work helps others can sustain effort long after the bonus has been forgotten and the intellectual novelty has worn off.

The session introduces a critical ordering: extrinsic motives have the most immediate effect, but altruistic motives have the most lasting effect. This has profound implications for incentive design. A compensation system that rewards only extrinsic outcomes will produce quick compliance but will systematically erode intrinsic and transcendent motivation over time -- a process the course materials call negative evaluative learning.

The session also introduces confirmation bias and its implications for leadership. We disproportionately attend to information that confirms our existing beliefs and dismiss contradicting information. This means that once a manager has formed an opinion about an employee's motivation or competence, she will unconsciously filter evidence to reinforce that opinion. The session offers practical countermeasures: slow down, activate the goal of being accurate rather than being right, check for evidence against your beliefs, play devil's advocate, create a personal "board of advisors," and be aware of your own motivational tendencies.

The Sybila Borjesson case forces students to apply these concepts to a real leadership challenge, analyzing what motivates the people in the case and how the leader's understanding (or misunderstanding) of those motives shapes the outcome. This is where students begin to see that motivation is not a single lever to be pulled but a complex system that the leader can either nurture or inadvertently destroy.

Lesson 3: Motivation -- Jose Bove¶

The Jose Bove case extends the motivation module by examining a situation where the standard extrinsic motivators are insufficient or even counterproductive. This session deepens students' understanding of intrinsic and transcendent motivation by presenting a protagonist whose actions cannot be explained by money, status, or career advancement alone.

The case connects back to the Business or Enterprise technical note (DPON-364-E), which presents three models of organizations and their corresponding views of human motivation. The mechanistic model sees the organization as a machine and assumes people work only for money. The psycho-sociological model sees the organization as a social organism and recognizes both extrinsic and intrinsic motives. The anthropological (or humanistic) model sees the organization as an institution with values and recognizes all three types of motives, including transcendent motivation.

The key insight is that the model you hold determines the decisions you make. If you believe people work only for money, you will design incentive systems that appeal only to extrinsic motives, and you will be baffled when talented employees leave for lower-paying jobs that offer more meaning. If you understand transcendent motivation, you will recognize that knowing your work is useful, appreciated, and needed is itself a significant motivational force.

The session introduces the concept of motivational quality. A person's motivational quality is determined by the range of motives they are capable of responding to. Someone who can only be moved by extrinsic motives has lower motivational quality than someone who also responds to intrinsic and transcendent motives. A salesman who wants to sell because he earns a commission, enjoys the challenge, and genuinely believes his product helps the customer has a richer motivational profile than one who cares only about the commission.

This concept has direct implications for hiring, retention, and culture. If your compensation system reinforces only extrinsic motives, you will attract and retain people whose motivational profiles are narrow. Worse, you may actually train employees to stop valuing intrinsic and transcendent motives -- a destructive process that degrades the organization's human capital over time.

Lesson 4: Motivation -- Frank Nash¶

The Frank Nash case pushes the motivation module into its most practical territory, requiring students to diagnose a specific employee's motivational profile and design an appropriate response. By this point in the course, students have the theoretical vocabulary -- extrinsic, intrinsic, transcendent motives; motivational profiles; evaluative learning -- and this session demands that they apply it.

The Basics in Work Motivation technical note (DPON-10-E) provides the theoretical backbone. It introduces the Outcome-Based Theory (OBT) of work motivation, which argues that an individual's action interacts dynamically with her environment and produces four types of consequences: the environment's reaction (extrinsic), the consequences for the individual from the action itself (intrinsic), the consequences for others (contributive/transcendent), and the consequences for the relationship between individual and environment (relational commitment).

The note critiques earlier motivation theories. Maslow's hierarchy of needs, though enormously popular, has failed to obtain empirical confirmation. Its rigid sequential ordering -- physiological needs must be satisfied before safety needs, which must be satisfied before belongingness, and so on -- does not match observed behavior. Herzberg's two-factor theory provides a more useful framework by distinguishing hygiene factors (company policies, pay, working conditions) from motivators (skill variety, task significance, autonomy, feedback). Hygiene factors do not motivate; when absent they cause dissatisfaction, but when present they merely create a neutral state. Only motivators -- which relate to the content of the work itself -- actually produce satisfaction and drive performance.

The session introduces two types of motivational learning. Calculative learning occurs when a person faces a choice between motives of the same type (for example, more money versus more free time) and refines her expectations based on the outcome. Evaluative learning is deeper and occurs when a person must choose between different types of motives (for example, a higher salary versus better training). Positive evaluative learning expands the range of motives a person considers, making her a richer and more resilient professional. Negative evaluative learning narrows that range, typically because a compensation system trains people to care only about money.

The practical lesson for managers is stark: your incentive system is not neutral. It is actively shaping the motivational profiles of your employees. A well-designed system fosters positive evaluative learning and helps people identify more closely with their work and the organization. A poorly designed system does the opposite.

Lesson 5: Motivation -- Discussion on Motivation¶

The fifth session serves as a capstone for the motivation module, bringing together all the frameworks introduced in the first four sessions for an integrative discussion. Students are expected to synthesize the three types of motives, the three models of organizations (mechanistic, psycho-sociological, anthropological), the Outcome-Based Theory, and the concepts of motivational profiles and evaluative learning into a coherent analytical framework.

The session also connects motivation to the broader themes of the course. Students begin to see that motivation is not just a topic for human resources departments; it is the foundation of every leadership challenge they will encounter. The way a manager understands motivation determines how she uses power (Lessons 6-7), how she handles conflict (Lesson 8), how she builds teams (Lessons 9-10), how she develops talent (Lessons 11-13), and how she shapes culture (Lessons 14-16).

The discussion typically surfaces a tension that will recur throughout the course: the gap between what most organizations actually do (treat motivation as primarily extrinsic) and what the evidence says they should do (attend to all three types of motives and design systems that foster positive evaluative learning). This tension is not academic. It is the daily reality of every manager who wants to do right by her people but operates within systems that reward short-term financial results.

The session draws on Clayton Christensen's "How Will You Measure Your Life" to extend the motivation framework beyond the workplace. Christensen argues, drawing on Herzberg's research, that the powerful motivator in our lives is not money but the opportunity to learn, grow in responsibilities, contribute to others, and be recognized for achievements. He urges students to apply the same strategic thinking to their personal lives that they apply to business, warning that people who are driven to excel have an unconscious propensity to underinvest in their families and overinvest in their careers. Management, he concludes, is the most noble of professions if practiced well, because no other occupation offers as many ways to help others learn, grow, and contribute. This framing elevates the entire motivation module from a set of management techniques to a philosophy of life.

Lesson 6: Power and Influence -- Bob Knowlton¶

Now that students understand motivation, the course turns to the mechanism by which leaders actually influence behavior: power. The Bob Knowlton case presents a protagonist who faces a classic power dilemma and must navigate the treacherous gap between formal authority and genuine influence.

The session draws heavily on the Trust in Boss-Subordinate Relationships technical note (DPON-12-E), which introduces the fundamental distinction between power (potestas) and authority (auctoritas). Power is the capacity to influence someone that comes from your position -- your title, your control over resources, your place in the information network. When you exercise power, people obey because they need something you control. Authority is the capacity to influence someone that comes from their free acceptance of your influence. Authority is not granted by rank; it is granted by the people who choose to follow you because they trust your judgment and believe you have their interests at heart.

This distinction has enormous practical consequences. Formal power can secure a minimum of cooperation -- the contractual baseline. But it cannot produce initiative, creativity, loyalty, or sacrifice. Only authority can demand the best of people. Managers who feel frustrated by their inability to get more than the bare minimum from their team often believe they need more power, when what they actually need is more authority.

The session introduces the three ways power can be misused, each of which destroys authority. First, not using power when it is needed: if a manager fails to enforce rules or make necessary decisions, she loses credibility. If a subordinate repeatedly violates working hours and the manager does nothing, the manager's authority erodes not just with that subordinate but with the entire team. Second, using power unnecessarily: micromanagement, refusal to delegate, and imposing arbitrary personal preferences all restrict subordinates' freedom without justification. Third, using power unjustly: abusing one's position for personal gain -- what in modern terms is called mobbing -- destroys not only authority but also the subordinate's respect.

The Bob Knowlton case allows students to analyze these dynamics in action, observing how a protagonist's relationship with power -- both his own and that of others around him -- shapes his decisions and their consequences. The case also introduces the political dimension of leadership: sometimes a manager must build a power base through networking and relationship-building with senior leaders in order to have enough formal power to do her job. Being a good politician is not a vice; it is a necessary skill for any manager who needs organizational support to lead effectively.

Cross-reference to Competitive Strategy: The distinction between formal power and authority parallels the distinction between structural advantages and dynamic capabilities. Just as a firm cannot rely solely on its market position and must continually build capabilities, a leader cannot rely solely on her title and must continually build trust.

Lesson 7: Power and Influence -- Norma Parker¶

The Norma Parker case extends the power and influence module by presenting a different type of power challenge, typically one where the protagonist must exercise influence without the benefit of clear hierarchical authority, or where the power dynamics are complicated by gender, seniority, or organizational politics.

The session deepens the trust model introduced in the previous lesson. Trust in boss-subordinate relationships is defined as a willingness to be vulnerable to the action of another person, based on positive expectations about that person's intentions and behavior. Trust has three elements: it is relational (it exists only in interaction with others), it includes vulnerability (reflecting the uncertainty inherent in any human relationship), and it is founded on positive expectations.

The determining factors for trust fall into two categories: personal factors and boss behavior. Personal factors include demographic similarity (people find it easier to trust those who are similar to them in age, gender, and background), propensity to trust (a personal trait shaped by past experience and culture), and the boss's professional competence (subordinates will not trust a boss they believe is incompetent, regardless of how personally likeable she is).

Boss behavior encompasses five critical dimensions. Consistency means predictable behavior over time -- not rigid repetition, but logical coherence that subordinates can understand and anticipate. Integrity means coherence between the boss's values, words, and actions -- telling the truth, keeping promises, being honest. Communication means both receptive listening (bottom-up) and transparent sharing of information (top-down). Delegation means involving subordinates in decision-making and giving them autonomy. Consideration means showing genuine interest in subordinates' well-being and needs.

These two dimensions -- personal factors and behavior -- form a trust matrix with four quadrants. When both are favorable, you have trust. When personal factors are favorable but behavior is poor, subordinates may respect the boss's competence but will not trust her. When behavior is favorable but personal factors are weak (for example, the boss is visibly incompetent), subordinates may respect her as a person but will not trust her professional judgment. When neither is favorable, you have distrust.

The trust relationship evolves through three stages. It begins as a relationship based on calculation, where cooperation is secured through contractual mechanisms and penalties. It develops into a relationship based on mutual knowledge, where honest, consistent interaction builds respect and reduces the need for coercion. It may eventually become a relationship based on identification, where the parties understand and genuinely care about each other's needs and priorities.

Trust can be destroyed much faster than it can be built. A single act of dishonesty can shatter years of accumulated trust. Once lost, rebuilding trust requires a long and consistent demonstration of trustworthy behavior.

Lesson 8: Conflict Management -- Exercise Collaboration¶

The conflict management session marks a turning point in the course. Students have now learned about motivation and power; this session explores what happens when those forces collide. The Conflict Management technical note (DPON-53-E) provides the framework, and the Exercise Collaboration puts students in a situation where they must practice the skills in real time.

The session begins with a reframing: conflict is not inherently bad. Sociologists from Max Weber to Lewis Coser have argued that disagreement is essential to the development of culture and that a certain amount of conflict is necessary for group vitality. The question is not whether conflict will arise, but how it will be managed.

The note introduces two dimensions of conflict: rational and emotional. Rational conflict is based on disagreement over objective issues and tends to be explicit. Emotional conflict operates on a personal level -- the parties feel hurt and the relationship itself is damaged. The interaction of these two planes produces four states. Unity is agreement on both planes. Discrepancy is rational disagreement without emotional conflict -- this is the productive, enriching kind of disagreement that stimulates creativity and problem-solving. Confrontation is disagreement on both planes -- when differences are taken personally and the parties become opponents. Conformity is superficial rational agreement that masks underlying emotional conflict -- the most insidious state, because it looks like peace but conceals festering resentment.

The healthy dynamic is unity-discrepancy-unity: you start in agreement, encounter a productive disagreement, resolve it, and arrive at a new, stronger agreement. The leader's job is to maintain a firewall between discrepancy and confrontation, ensuring that rational disagreements do not devolve into personal attacks. If they do, the leader must quickly convert confrontation back into discrepancy. Conformity is especially dangerous because the only path out of it runs through confrontation -- you must first acknowledge the emotional wound before you can address the rational disagreement.

The note identifies three categories of conflict causes. Personal differences include differences of gender, beliefs, values, culture, taste, personality type (the note references the four basic tendencies: rational, conceptual, sensitive, and emotional), education and experience, and needs and resources. Human tendencies that favor conflict include pride, envy, laziness, indifference, the tendency to judge others, and fear of confrontation. Contextual factors include organizational structure, meeting design, task and goal assignment, and states of mind.

For resolving rational conflict constructively, the note recommends stating differences and feelings without hostility, distinguishing between the ideal outcome and what would be acceptable, and negotiating. Negotiation can produce four outcomes: win/win (creative solutions where both sides gain), win/lose (sometimes necessary when authority requires a decision), lose/win (sacrifice as a long-term investment in the relationship), and lose/lose (to be avoided; seek mediation if deadlocked).

For resolving emotional conflict, the note introduces emotionally constructive feedback. The destructive pattern runs: "You are a [insult]" leads to "It's not my fault" leads to "I'll get you back" leads to "About time too." The constructive pattern runs: "I feel hurt" leads to "I'm sorry" leads to "Never mind" leads to "Thank you." If this process breaks down, outside help may be needed: mediation (consensus through a trusted third party), arbitration (formal mediation with binding rules), counseling, physical separation, or as a last resort, the courts.

Cross-reference to Analysis of Business Problems: The rational conflict resolution framework parallels the structured decision-making process taught in ABP -- both require defining the problem, generating alternatives, evaluating them against criteria, and choosing.

Lesson 9: Teams -- Rudi Gassner at BMG International¶

The teams module applies everything from the first eight sessions to the challenge of leading groups. The Rudi Gassner case at BMG International presents a leader managing an executive committee with strong, opinionated members who have different priorities and different views of the organization's direction.

Team leadership requires a deeper understanding of conflict dynamics because teams multiply the number of relationships -- and therefore the potential for both productive discrepancy and destructive confrontation. The leader of an executive team must cultivate the unity-discrepancy-unity dynamic across multiple simultaneous relationships while ensuring that the team's cognitive diversity (which is its greatest asset) does not degenerate into emotional warfare.

The session connects coaching and talent development concepts to the team context. When a coach helps employees see themselves not as mere subordinates or independent professionals, but as members of a team, they develop cooperative, interdependent talent. This is the highest form of professional development because it produces people who are proactive about contributing to the group's success, not just their own.

The Rudi Gassner case also introduces the challenge of leading people who may be more experienced, more knowledgeable, or more powerful in certain domains than the leader herself. This is where the distinction between power and authority becomes acute. A leader who tries to control an executive committee through formal power alone will provoke resistance and resentment. One who leads through authority -- demonstrated competence, consistent behavior, genuine consideration, and transparent communication -- can harness the committee's collective intelligence.

The session typically raises questions about decision-making in teams: When should the leader decide alone? When should she seek consensus? When should she delegate entirely? The answer depends on the trust level in the team and the nature of the decision. Strategic and ethical decisions may require the leader's final authority; operational decisions often benefit from delegation; and decisions that affect the entire team's direction usually require participation, even if not consensus.

Lesson 10: Teams -- Greg James at Sun Microsystems¶

The Greg James case shifts the teams module from executive committee dynamics to the challenge of managing a global, multicultural team. This session draws heavily on the Harvard Business Review article "Managing Multicultural Teams" (Brett, Behfar, and Kern), which identifies four cultural barriers to team effectiveness.

Direct versus indirect communication is the first barrier. Western cultures typically use direct, explicit communication where meaning sits on the surface. Many other cultures embed meaning in context, tone, and what is left unsaid. When a direct communicator sends a blunt email flagging problems, her indirect colleagues may interpret it as a violation of relational norms and respond by withdrawing access and information. The solution is not to abandon directness but to develop the skill of reading indirect signals and adjusting your communication style to the cultural context.

Trouble with accents and fluency is the second barrier. In global teams where English is the lingua franca, non-native speakers may be the most expert members but their difficulty communicating makes it hard for the team to recognize and utilize their expertise. Worse, teammates may unconsciously equate lack of fluency with lack of intelligence. This wastes the organization's investment in assembling a diverse team and creates deep frustration for sidelined members.

Differing attitudes toward hierarchy is the third barrier. Teams are flat by design, but members from hierarchical cultures expect to be treated according to their organizational status. When these expectations are violated -- for example, when a junior American team member escalates directly to a senior Korean executive -- the resulting loss of face can nearly derail an entire project.

Conflicting decision-making norms is the fourth barrier. Cultures differ enormously in how quickly decisions should be made and how much analysis is required beforehand. American managers tend to decide quickly with relatively little analysis; managers from other cultures may want to see the big picture before committing to any detail. Neither approach is wrong, but the friction between them can be paralyzing.

The article presents four intervention strategies for addressing these barriers. Adaptation is the ideal: team members openly acknowledge cultural differences and figure out how to work around them. Because the team solves its own problem, it builds long-term capability. Structural intervention involves reorganizing the team to reduce interpersonal friction -- breaking large groups into smaller mixed subgroups, hiring a facilitator to run meetings, or reassigning tasks to reduce interdependence between conflicting members. Managerial intervention means stepping in to set norms, make final decisions, or bring in a higher-level manager. This can unblock a stalled team but does not teach the team to solve future problems itself. Exit -- removing a team member -- is a last resort used when emotions have run too high and too much face has been lost.

Cross-reference to Operations Strategy: The multicultural team challenges parallel the complexity of managing global supply chains -- both require adapting processes to local contexts while maintaining overall coherence, and both suffer when headquarters imposes a one-size-fits-all approach.

Lesson 11: Talent Development -- Felicity Wang¶

The talent development module shifts from leading teams to developing individuals. The Felicity Wang case presents a manager confronting the challenge of growing a specific employee, forcing students to move from theory to personalized coaching.

The Coaching in the Development of Professional Competences technical note (FHN-345-E) provides the framework. The note argues that the shift from management by objectives (MBO) to management by competences (MBC) is not a fad but a fundamental requirement for any competitive organization. MBO focuses on what gets done -- the results. MBC adds the how -- the behaviors and skills used to achieve results. The key implication is that managers must become coaches, not just bosses.

Competences are defined as observable, habitual conducts that enable a person to succeed in her role. The emphasis on habitual is crucial: a single flash of brilliance is not a competence. Competences are predictable patterns of behavior that can be relied upon. Because they are habits, they cannot be developed through reading alone; they require structured, on-the-job practice.

Developing a competence requires work in three areas. Knowledge (information) provides the theoretical understanding of what good performance looks like. Motivation (education) helps the individual understand why the new behavior is better than the old one. Skills (training) build the operational habits through repeated practice at increasing levels of difficulty.

The hardest part of competence development is managing the clash between rational motivation (what the person knows she should do) and affective motivation (what her emotions and established habits incline her to do). When a manager who has always micromanaged recognizes intellectually that she should delegate more, she still feels more comfortable controlling everything. Bridging this gap requires willpower -- the individual must force actions based on rational motivation until the new behavior becomes habitual and affective motivation aligns. The coach's primary job is maintaining the individual's commitment to learning during this frustrating transition.

The note distinguishes three types of talent that develop depending on how the employee sees herself. An employee who views herself as a mere subordinate develops reactive, dependent talent. An employee who views herself as an independent professional develops proactive, independent talent. An employee who views herself as a team member develops cooperative, interdependent talent. The coach can influence which type develops by shaping the employee's self-perception and the context in which she works.

Lesson 12: Talent Development -- Tessile Milano¶

The Tessile Milano case extends the talent development module into a more complex organizational setting, typically involving multiple employees at different stages of development and competing demands on the manager's coaching attention.

This session deepens the coaching framework by exploring the qualities of an effective coach. The note identifies four critical aptitudes. Vision: the good coach does not settle for mediocrity but looks for the maximum each individual can give, seeing possibilities that the person herself may not yet recognize. Skill in setting goals: the good coach designs an "inclined plane" of progressively demanding but achievable goals tailored to each individual's needs and pace. Discipline: the good coach sets clear rules and creates reliable expectations through consistency. Empathy: the good coach senses how people are feeling, enabling her to demand when demands are appropriate, understand when failure is explainable, and back off when the individual has reached her limits.

The note also identifies three critical attitudes. Honesty: the good coach says what she thinks, corrects without humiliating, and forgives without bearing grudges. Passion for others' growth: the good coach is genuinely excited about other people's progress and suffers when they struggle. Example-setting: the good coach leads the way in the requirements she imposes and is open to feedback and learning herself.

The session introduces the concept of metacompetences -- the foundational character habits that are necessary to acquire all other competences. These are mapped to the four classical virtues: prudence (which produces the metacompetence of decision-making), justice (which produces integrity), temperance (which produces emotional intelligence), and fortitude (which produces self-control). Without a certain level of these metacompetences, an individual lacks the character foundation to commit to any professional growth. This is why the note references the film Gladiator: Marcus Aurelius tells his son Commodus that he cannot be emperor because he lacks the four cardinal virtues, and without them, no other virtue can develop.

Cross-reference to Business Ethics: The metacompetences framework directly parallels the virtue ethics tradition covered in the Ethics course. Both emphasize that good action flows from good character, and that character is built through repeated practice, not through rules or incentives alone.

Lesson 13: Talent Development -- Workshop¶

The talent development workshop puts coaching skills into practice through structured exercises. Students move from analyzing cases to actually giving and receiving feedback, setting development goals, and designing coaching plans.

The workshop typically covers practical feedback models. The SBI framework (Situation-Behavior-Impact) provides a structure for delivering specific, actionable feedback: describe the exact situation, the observable behavior (not your interpretation of it), and the direct impact of that behavior on the team or project. The GROW model (Goal-Reality-Options-Will) provides a structure for coaching conversations: What do you want to achieve? Where are you now? What options do you have? What will you actually do, and when?

The workshop also connects coaching back to the trust model from Lessons 6-7. Effective coaching requires a foundation of deep trust between coach and coached. The coached person must perceive both competence and genuine concern in the coach before she can truly accept help. This is why the coaching relationship often starts with a degree of coolness or even mistrust -- a good coach is demanding, and the coached person may initially resist. As the coached person experiences the coach's aptitudes and attitudes over time, the relationship strengthens and openness increases.

The workshop reinforces that a manager who does not coach will lose human capital and eventually become less competitive. Coaching is not a separate activity from managing; it is managing, done properly. Every interaction with a subordinate is an opportunity to develop a competence, reinforce a value, or model the behavior you want to see.

Lesson 14: Organizational Culture -- Arie's AI Co-leadership¶

The organizational culture module begins with a deliberately provocative case: the Arie's AI Co-leadership dilemma, which forces students to confront how culture is disrupted when artificial intelligence enters the leadership equation. This case is timely and unusual because it challenges students to think about what happens to the human elements of leadership -- trust, empathy, shared reality, transcendent motivation -- when some leadership functions are performed by machines.

The session establishes the foundational definition of organizational culture: the set of informal norms, narratives, values, and symbols that establish behavioral expectations and foster a sense of belonging. Culture provides significant advantages -- it attracts the right people, retains them, and guides their professional growth, enabling collaboration and creativity beyond the scope of formal structures. But culture also has dark sides: it can create cognitive blindness (the inability to see problems that violate cultural assumptions), resist necessary change, exclude individuals or groups unfairly, and create ambiguity in information.

The session introduces Edgar Schein's model of culture formation, also reflected in Clayton Christensen's "How Will You Measure Your Life." Culture is not built through mission statements or values posters. It is built through repeated, successful problem-solving. When employees use specific methods to address recurrent tasks and experience success, consensus forms. Eventually, they stop consciously evaluating whether their methods are optimal and begin following them by instinct and assumption. At that point, the methods have become culture.

The anthropological model of the firm, introduced in the motivation module, comes into full focus here. In this model, the organization is an institution that embodies concrete values. Those values are not what leaders say they believe; they are the criteria actually used in daily decision-making and the way people are actually treated. Management values, external mission (serving customers' real needs), internal mission (developing employees' intrinsic and transcendent motivation), and management style (communication and participation in decision-making) all interact to define the organization's culture.

The Arie's AI case tests whether these fundamentally human processes can survive or adapt when AI takes on leadership responsibilities. It asks students to consider what is lost when the "setting an example" requirement of leadership -- the most powerful mechanism for building authority and culture -- is performed by a system that has no motives, no vulnerability, and no capacity for transcendent concern.

Lesson 15: Organizational Culture -- Bridgewater Associates¶

The Bridgewater Associates case ("A Perpetual Motion Machine") presents perhaps the most extreme organizational culture students will encounter in their MBA. Ray Dalio's hedge fund is built on a culture of radical transparency, where every meeting is recorded, every opinion is expected to be voiced directly, and employees are rated publicly on dozens of attributes.

This case is a stress test for the course's frameworks. On one hand, Bridgewater's culture exemplifies many of the principles the course teaches: it values honesty (a key coaching attitude), it demands intellectual discrepancy (productive rational conflict), and it attempts to eliminate conformity (the dangerous state where surface agreement masks emotional conflict). On the other hand, the culture raises serious questions about whether radical transparency can coexist with the consideration and empathy that the trust model identifies as essential for building authority.

Students must evaluate Bridgewater's culture against the trust matrix. Bridgewater emphasizes two of the five trust-building behaviors -- consistency and integrity -- while potentially undermining a third -- consideration. The case asks whether an organization can sustain trust and commitment when its culture prioritizes brutal honesty over emotional safety, and whether the resulting culture attracts only people with specific personality types while systematically excluding others.

The case also connects to the conflict management framework. Bridgewater's culture essentially tries to institutionalize discrepancy and eliminate conformity. But the conflict note warns that disagreements must not be allowed to escalate into confrontation, and the line between productive challenge and personal attack depends heavily on the emotional resilience and cultural norms of the individuals involved.

Lesson 16: Organizational Culture -- Rijk Zwaan (Remote Work)¶

The Rijk Zwaan case ("To Continue or Not to Continue Remote Work?") brings the organizational culture module into the post-pandemic reality. The case asks whether an organization can maintain its culture -- its sense of belonging, its informal norms, its spontaneous interactions -- when employees are physically dispersed.

This case connects directly to the Generalized Shared Reality construct introduced in Session 1. If shared reality -- the experience of sharing the same thoughts and feelings about the world with an interaction partner -- is a critical catalyst for forging interpersonal connections, what happens when interactions are mediated by screens rather than face-to-face? Professor Rossignac-Milon's research suggests that shared reality requires rich, reciprocal interaction. Remote work may maintain the exchange of information but degrade the subtle, often non-verbal cues that create the "merged minds" experience.

The case also tests the nine elements of sustainable business from the anthropological model. The formal structure and formal systems of an organization can be maintained remotely -- org charts, compensation systems, and strategy documents do not require physical proximity. But the actual structure (the specific people and their cognitive and motivational qualities), management style (communication and participation), and management values (expressed through how people are treated) may all be degraded by distance. When you cannot observe how a manager treats her team in the hallway, during lunch, or in the moments before and after a meeting, you lose the most powerful mechanism for cultural transmission: the daily example.

The session asks students to weigh the efficiency benefits of remote work (reduced commuting, flexible schedules, access to a global talent pool) against the potential costs to attractiveness (the informal interactions that make work enjoyable) and unity (the shared identity and values that inspire commitment beyond contract). This maps directly onto the three organizational dimensions from the anthropological model: efficiency, attractiveness, and unity.

Lesson 17: Workshop -- Leaving a Legacy¶

The Leaving a Legacy workshop is the course's integrative capstone before final presentations. It asks students to step back from the analytical frameworks and confront a deeply personal question: what kind of leader do you want to be, and what will you leave behind?

This session draws directly on Christensen's "How Will You Measure Your Life." Christensen urges students to define the metric by which their lives will be judged and to live every day accordingly. He argues that the metric is not dollars, publications, or promotions, but the individual people whose lives you have touched. The best leaders are not those who built the biggest organizations but those who helped the most people become better versions of themselves.

The session also connects to the concept of the "best leader" from the Business or Enterprise note: the one who uses his power to help people in such a way that they eventually cease to need him. True leadership, in this framing, is a fundamentally paradoxical act of building others up to the point where your own authority is no longer necessary.

The workshop typically involves a reflective exercise where students articulate their personal leadership mission -- connecting the course's frameworks to their own values, experiences, and aspirations. This is where the intellectual content of the course becomes personal, and where students begin to see that leadership development is not something that happens in a classroom but a lifelong process of learning, failing, reflecting, and trying again.

Lesson 19: Integration -- Ricardo Semler¶

The Ricardo Semler case ("A Revolutionary Model of Leadership") serves as the course's ultimate integration case, challenging students to evaluate a leadership approach that violates many conventional assumptions while embodying many of the course's deepest principles.

Semler's approach at Semco -- radical decentralization, employee-set salaries, minimal hierarchy, democratic decision-making -- can be analyzed through every module in the course. From a motivation perspective, Semler's system appeals primarily to intrinsic and transcendent motives, treating employees as adults who are capable of self-direction. From a power perspective, Semler deliberately minimizes formal power and relies almost entirely on authority, pushing the distinction to its logical extreme. From a conflict perspective, Semler's participatory approach institutionalizes discrepancy by making disagreement a normal part of organizational decision-making. From a teams perspective, Semler's small, autonomous units create the conditions for interdependent talent development. From a talent perspective, the system demands metacompetences -- particularly self-control, decision-making, and integrity -- because there is no hierarchical boss to impose discipline from above. From a culture perspective, Semco is a near-perfect illustration of the anthropological model: an institution whose values permeate every decision and whose culture enables thousands of employees to act autonomously but cohesively.

The case asks students to evaluate both the power and the limits of Semler's approach. Can it work in every industry? Does it scale? What happens when employees lack the metacompetences that the system requires? What is the role of formal power in an organization that has deliberately abandoned most of it? These questions do not have clean answers, and the course does not provide them. Instead, the case forces students to synthesize everything they have learned and form their own judgment -- which is, after all, what leadership requires.

Quick Reference¶

1. Three Types of Motives: Extrinsic (external rewards), Intrinsic (satisfaction from the activity), Transcendent/Altruistic (benefits to others). Immediacy: Extrinsic > Intrinsic > Altruistic. Durability: Altruistic > Intrinsic > Extrinsic.

2. Three Models of Organizations: Mechanistic (machine, efficiency only, carrot and stick), Psycho-sociological (social organism, efficiency + attractiveness), Anthropological (institution with values, efficiency + attractiveness + unity).

3. Three Paradigms of Managing: Material (salary for productivity, formal power), Intellectual (training for ideas, idea-based leadership), Affective (coaching/fairness for loyalty, care-based leadership).

4. Power vs. Authority: Power (potestas) comes from position; Authority (auctoritas) comes from freely granted trust. Power secures contract-level compliance; Authority secures identification-level commitment.

5. Trust Model: Determined by personal factors (competence, propensity to trust, demographic similarity) and boss behavior (consistency, integrity, communication, delegation, consideration). Trust matrix: 2x2 of personal factors and behavior.

6. Three Stages of Trust: Calculation-based (contractual compliance), Knowledge-based (mutual respect from honest interaction), Identification-based (genuine concern for each other's needs).

7. Three Misuses of Power: Not using it when needed (losing credibility), Using it unnecessarily (micromanaging), Using it unjustly (abuse/mobbing).

8. Conflict Dynamics: Rational vs. Emotional dimensions produce four states: Unity, Discrepancy (productive), Confrontation (destructive), Conformity (hidden conflict). Goal: unity-discrepancy-unity cycle.

9. Four Multicultural Team Interventions: Adaptation (team solves its own cultural challenges), Structural intervention (reorganize to reduce friction), Managerial intervention (set norms or make decisions), Exit (remove a member as last resort).

10. Coaching Framework: Competences = observable habitual conducts. Development requires Knowledge (information), Motivation (education), Skills (training). Coach must manage the rational-vs-affective motivation gap.

11. Metacompetences: Decision-making (from prudence), Integrity (from justice), Emotional intelligence (from temperance), Self-control (from fortitude). Required foundation for all other competence development.

12. Organizational Culture Formation (Schein): Culture = methods adopted by assumption rather than conscious decision, formed through repeated successful problem-solving.

13. Motivational Learning: Calculative (same-type motive trade-offs), Evaluative (cross-type motive trade-offs). Positive evaluative learning expands motivational range; negative evaluative learning narrows it.

14. Generalized Shared Reality (Rossignac-Milon): The experience of sharing the same thoughts and feelings with an interaction partner. Critical catalyst for interpersonal connection, work meaningfulness, and performance.

15. Christensen's Life Strategy: Apply business frameworks to personal life. Define your purpose. Allocate resources to what matters most. Avoid the "marginal costs" trap of compromising principles "just this once." Humility = esteem for others.

Glossary¶

Affective Motivation: The emotional impulse that drives behavior based on habit and feeling, as opposed to rational motivation which is based on reasoned evaluation. The clash between affective and rational motivation is the central challenge of competence development.

Anthropological Model: The most complete model of organizations in IESE's framework. Views the firm as an institution with values whose purpose is efficiency, attractiveness, and unity. Recognizes all three types of motives and requires all three managerial dimensions (strategist, executive, leader).

Authority (Auctoritas): The capacity to influence another person that comes from their free acceptance of your influence, based on trust. Distinguished from formal power. Built through exemplary behavior; destroyed by misuse of power.

Calculative Learning: The process of refining expectations when choosing between motives of the same type (for example, more money versus more free time).

Care-Based Leadership: The highest paradigm of managing, where the leader provides coaching, support, gratitude, and fairness in exchange for identification, loyalty, and sacrifice from employees.

Competences: Observable, habitual conducts that enable a person to succeed in her role. Distinguished from sporadic behaviors or one-time achievements.

Confirmation Bias: The tendency to attend disproportionately to information that confirms existing beliefs while dismissing contradicting information.

Conformity: A state of superficial rational agreement that masks underlying emotional conflict. The most dangerous state in the conflict framework because it conceals festering resentment.

Confrontation: A state of both rational and emotional disagreement. Unstable and stressful; must be converted back to discrepancy or resolved through outside help.

Contributive Motivation: See Transcendent Motivation.

Discrepancy: Rational disagreement without emotional conflict. The productive, enriching form of disagreement that stimulates creativity and problem-solving.

Distinctive Competence: What an organization is able to do well. Closely related to intrinsic and transcendent motives of its members. Degraded by opportunistic adaptive strategies.

Evaluative Learning: The process of changing one's motivational profile when choosing between motives of different types (for example, money versus training). Can be positive (expanding motivational range) or negative (narrowing it).

Extrinsic Motivation: Willingness to act based on rewards expected from others -- pay, bonuses, promotions, social recognition, or avoidance of punishment. Most immediate but least durable type of motive.

External Mission: The real needs of external customers that the organization seeks to satisfy with its products and services.

Formal Power (Potestas): The capacity to influence another that comes from one's position in the hierarchy, control over resources, or place in the information network. Sufficient for contractual compliance; insufficient for high performance.

Generalized Shared Reality: The experience of sharing the same thoughts and feelings about the world with an interaction partner. A construct introduced by Professor Rossignac-Milon that serves as a catalyst for interpersonal connection and improved organizational outcomes.

Hygiene Factors (Herzberg): Aspects of the work environment (company policies, pay, working conditions) that do not motivate but whose absence causes dissatisfaction.

Idea-Based Leadership: The middle paradigm of managing, where the leader provides training, empowerment, and delegation in exchange for initiative, ideas, and creativity from employees.

Inclined Plane: A coaching technique of setting progressively demanding but achievable goals, tailored to each individual's pace and development needs.

Internal Mission: The real needs that the organization seeks to satisfy in its members as producers, particularly through developing intrinsic and transcendent motivation.

Intrinsic Motivation: Willingness to act based on the satisfaction experienced from performing the activity itself -- learning, enjoyment, creative challenge. More durable than extrinsic motivation but less durable than transcendent.

Management by Competences (MBC): A management paradigm that evaluates and develops both the "whats" (results) and the "hows" (behaviors and skills). Replaces management by objectives.

Management Style: The way operations are conducted and decisions are made, defined by two processes: communication (explaining why) and participation (involving people in decision stages).

Management Values: The criteria actually used in decision-making and the way people are actually treated. Distinguished from stated values.

Mechanistic Model: The simplest model of organizations. Views the firm as a machine, recognizes only extrinsic motivation, and seeks only efficiency. The "carrot and stick" approach.

Metacompetences: The foundational habits of self-leadership required to develop all other competences. Include decision-making (prudence), integrity (justice), emotional intelligence (temperance), and self-control (fortitude).

Motivational Profile: The specific combination and weighting of extrinsic, intrinsic, contributive, and relational motives that a person applies in any given situation. Dynamic -- it changes through experience and learning.

Motivational Quality: The breadth of motives a person is capable of responding to. Higher quality means responding to extrinsic, intrinsic, and transcendent motives; lower quality means responding primarily to extrinsic motives.

Motivators (Herzberg): Features of the work itself (skill variety, task significance, autonomy, feedback) that actively produce satisfaction and drive performance. Distinguished from hygiene factors.

Negative Evaluative Learning: A destructive process in which compensation systems or managerial practices train employees to stop valuing intrinsic and transcendent motives, narrowing their motivational profiles.

Outcome-Based Theory (OBT): A theory of work motivation developed by Perez Lopez and elaborated by Cardona and Espejo. Analyzes motivation in terms of four types of consequences of an individual's interaction with her environment.

Positive Evaluative Learning: A constructive process in which individuals learn to consider a wider range of motives in their decisions, developing richer motivational profiles.

Power (Potestas): See Formal Power.

Psycho-Sociological Model: The middle model of organizations. Views the firm as a social organism, recognizes extrinsic and intrinsic motives, and seeks efficiency and attractiveness.

Relational Commitment: Willingness to act based on the expected impact on one's future relationship with the environment. In the work context, equivalent to organizational commitment (continuance, affective, or normative).

Three Managerial Dimensions: The strategist (discovers business opportunities, achieves efficiency), the executive (discovers talents, designs appealing tasks, achieves attractiveness), and the leader (develops people's full potential, cultivates unity through transcendent motivation).

Transcendent Motivation: Willingness to act based on the benefits others will experience as a consequence of the action. Also called contributive or altruistic motivation. The most durable type of motive. The defining concern of true leadership.

Trust: Willingness to be vulnerable to another person's actions, based on positive expectations about their intentions and behavior. Relational, involves vulnerability, and is founded on positive expectations.

Trust Matrix: A 2x2 framework mapping personal factors (vertical) against boss behavior (horizontal). Favorable on both = trust. Favorable personal factors + poor behavior = respect without trust. Poor personal factors + favorable behavior = respect without professional trust. Both unfavorable = distrust.

Unity: The organizational dimension achieved when members identify with the organization and its mission. The highest goal in the anthropological model, beyond efficiency and attractiveness.