The Leadership System: Definition

Basic structure of a leadership system

The definition of a leadership system is: a systematic understanding of leadership that comprehensively designs how key organizational resources interact to achieve a desirable purpose.

This definition builds on the classic definition provided by Donella Meadows, (Thinking in Systems, a Premier), David Peter Stroh, (Systems Thinking for Social Change), and Peter Senge (The Fifth Discipline).

There are both structural elements and attributes to a designed leadership system. When combined, an organization can exponentially compound the organization’s individual talent to create real sustainable elite-level performance.

There are three parts to this definition:
1) Key organizational resources.
2) The interaction or interconnections of these resources, and
3) A desirable and measurable purpose

Begin with the Most Critical Part of any System – the Purpose or Outcome

System purpose

This definition of a leadership system recognizes that every system, including the leadership system, delivers a purpose or outcome. It might be intended or unintended, but there is always an outcome. Every human body has eleven systems. Each system has a purpose that maintains the whole system, which itself has a purpose called life.

Systems Create 1+1=10

A leadership system’s purpose is different from the larger organization’s purpose, but it does support it. Research indicates that the leadership system has a strong connection to the experience of the workforce. This makes sense because leadership dictates the experience of the workforce. Intentionally designing the purpose will leverage one of the critical attributes of a leadership system. The system will create more value than the sum of the parts. In short, a well-designed leadership system, beginning with its purpose or outcome, will take the talent of average leaders and leverage it for elite performance.

The Leadership System will Drive the Ship

As Meadows states, The least obvious part of the system, its function or purpose, is often the most crucial determinant of the system’s behavior.

Therefore, metaphorically, an iceberg is like the leadership system’s purpose. However, the purpose is the mass that lies below the waterline. Consequently, it lies below the waterline that governs its course and speed as it drifts on the ocean’s currents.
Conventional wisdom says that the organizational mission and vision will inspire the workforce. Mission and vision will work in the short-term. However, if the workforce’s experience is one of fear, intimidation, ridicule, and disempowerment, the workforce will disengage no matter how majestic the organization’s purpose or mission is. Disengagement because of a toxic work environment is especially true for millennials. In the end, the experience of the workforce will also determine the level of employee engagement.

The Power of Designing the Leadership System


In his book, Turn the Ship Around, Captain and author David Marquet described a new leadership system’s design. Upon taking command of the USS Santa Fe, a nuclear-powered Los Angeles Class Attack submarine, Captain Marquet discovered that the traditional leadership system would not work. To replace it, he designed a new system because the crew knew more about the submarine than he did. Instead of one Captain telling 134 sailors what to do, he created a leadership system that unleashed all sailors’ intelligence and creativity. He did this by giving them a different experience. The old system required sailors to be told what to do before taking any action. The new system respected their training and passion for operating submarines. He turned the ship around by turning around the experience of the workforce.

Key organizational resources

This definition of a leadership system recognizes that every organization has three resources that turn raw materials into marketable products and services:

1) People.
2) Money (in the broadest sense), and
3) Knowledge and information.

In researching high performing organizations, the critical difference between high performance and average performance is developing a culture of value creation. Average organizations see people, money, and knowledge as assets that require managing. High performing organizations see people, money, and knowledge as resources to develop for ever-increasing value. Realizing these resources’ full value across the enterprise requires a designed, integrated, and comprehensive leadership system.

Interactions of the key organizational resources

All organizations have rules, routines & rituals, and behaviors. This definition of a leadership system creates a unique genetic code to produce long-term and sustainable performance. Ideally, mission, vision, and values
drive the design of the genetic code.

Aligning core values with behaviors in the Leadership system

High performing organizations institutionalize into a leadership system their values into rules, routines, and behaviors. For example, many organizations will have core values, but the workers see them for what they are, aspirational values that have little relevance to the workplace. However, research demonstrates that organizations that link core values to foundational behaviors achieve the highest employee engagement, growth, and profitability.

Designing the right rules

Designing rules for the leadership system

Thomas Edison famously said, “Hell, there are no rules here – we’re trying to accomplish something.” All due respect to the famous scientist, his statement about rules is a rule. However, it is not the absence of rules by the design of the correct rules. When the U.S. Marine Corp establishes a rule that the highest-ranking officer eats last, it sets a fundamental relationship between leaders and subordinates. Leaders serve those they lead.


Too many rules inhibit creativity and innovation. They put a straight jacket on the workforce. Furthermore, too many rules undermine the essential rules because employees will ignore them if too many are nonsensical. In contrast, rules should unleash the workforce and create a culture of innovation. For example, when one of the nation’s best hospitals establishes a rule that leaders do NOT solve problems for their staff, it establishes a practice that says those closest to a problem are best suited to solve the problem. Furthermore, it empowers the workforce to become problem solvers. Colin Powell echoed this same rule when he said, “The commander in the field is always right, and the rear echelon is wrong unless proved otherwise.” In the same way, retired 4_Star General Barry McCaffrey told me during an interview that several times he has been in the White House Situation Room watching a military operation through the magic of satellite communications. He said, “We had virtually as much information as the soldiers on the ground and could have given orders to the commanding officer.” Yet the rule is the soldier closest to the mission makes the decisions. He said, “If you want to really screw up a mission, take the decision-making power away from the soldier who is on the ground.” (Actually, his language was way more colorful.)
However, it is not just the design of rules. It is also who has the power of design. As Meadows states, rules “are high leverage points. Power over the rules is real power.”

Designing the rituals of routines

The power of habit

Routines create institutional muscle memory. Routines are what Charles Duhigg, author of the
bestseller, The Power of Habit, calls “keystone habits.” Organizations are as driven by their routines as people. In their book, Evolutionary Theory of Economic Change, Yale professors Richard Nelson and Sidney Winter concluded that organizations were creatures of routines. Their routines would determine their behavior over time. They state: “In our evolutionary [organizational] theory, these routines play the role that genes play in biological evolutionary theory. They are a persistent feature of the organism [or enterprise] and determine its possible behavior.”

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Therefore, if routines will determine organizational behavior over time, design them into the leadership system rather than evolve. For example, many organizations utilize Lean, Lean Six-Sigma, and Kaizen to improve their internal processes. However, they treat these tools as techniques in manufacturing or improving team performance. However, these tools’ real power is when they become so routine that anyone knows how to conduct kaizen. Furthermore, when every leader and manager is trained in them and can mentor a subordinate through the designed process, they work as intended.

Leveraging System Attributes

This definition of a leadership system also recognizes that systems have several attributes. When applied to a system of leadership, there are two that three particularly critical.

1) Systems always create more value than the sum of their parts. For example, the basic elements of human DNA are phosphate and sugar. Virtually every household kitchen has these elements in a pantry. However, the way these elements interact at a molecular level is the foundation of all human life. A leadership system does the same. A well-designed system can take leaders of average talent and multiply their impact.

2) Systems always have a measurable output. The same is true for a system of leadership. However, conventional wisdom suggests financial indicators are a measure of the leadership system. The reality is different. The best measure of the leadership system is the level of engagement of the workforce. When the employees are engaged, the financial indicators will take care of themselves.

3) When well-designed leadership system is fully integrated with other organizational systems. For example, by measuring employee engagement as a tool to evaluate the effectiveness of leadership, the system becomes fully integrated with the HR system. Similarly, when the leadership system establishes routines such as genba, rounding, kaizen, and Lean, the leadership system is integrated with process improvement systems.

When combined and integrated with the structural elements even leaders of average natural ability will be able to shine.


About the Author

Daniel B Edds, MBA is the author of this article as well as Leveraging the Genetics of Leadership, cracking the code of sustainable team performance. This book is the first book ever written that documents how high impact organizations are designing their own unique system of leadership. Case studies come from manufacturing, healthcare, education, and the U.S. Military. For more information, feel free to contact me through the connect form, or if you wish, just call my personal number at (425) 269-8854.

  2 comments for “The Leadership System: Definition

  1. Anonymous
    December 10, 2020 at 9:03 pm

    Great graphic!

    • Dan Edds
      December 21, 2020 at 9:25 am

      thank you so much!

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