McGregor went on to suggest a different business leadership theory, which he named "Theory Y." Based on the then novel idea that, to get the best from workers, you had to trust, coach and encourage them, this theory has grown in popularity.
Empowering workers involves giving them the authority to make decisions - including decisions that were once the sole preserve of managers. Although allied to the practice of delegation, the key concept behind empowerment is trusting workers to make decisions that will help their organization to prosper.
Richard Lowe, director of HR specialist Hewlett Rand, says, "Leaders breed the culture they deserve - empowering or disempowering" but guess which one most people want to work for! Although Theories X and Y might be simplistic, they're a useful starting point for a discussion at your next management meeting."
Nick Hindley, head of learning and development at Marshall Aerospace and Defence Group, believes that, "Empowerment happens when people feel confident both about what they're being expected to do and the consequences - what happens if it goes wrong or right.
"Of course, effective empowerment needs defined limits. Not imposing limits increases the likelihood of failure - even calamity. If that occurs, further empowerment opportunities will stop.
"Moreover, if people don't feel confident about the new areas in which they're being invited to operate, they'll give up. So they may require additional training to embrace the opportunities that empowerment brings."
While empowerment has many supporters -especially among workers, who enjoy being trusted - it can be challenging for business leaders, who may need convincing that adopting Theory Y won't drain away any authority and organizational status they could have enjoyed.
Erik Hiep, an associate professor at the Financial Times IE Business School Corporate Learning Alliance, believes that, to build a winning organizational culture, you need to:
- Have - and communicate - clear vision, mission and values.
- Develop and communicate your strategy to everyone in the organization.
- Combine business challenges with people development.
- Unleash the potential in your organization's people, leadership and culture.
- Adjust performance metrics and steering as necessary.
- Focus on quality in people - which means investing in coaching and developing them.
Speaking at the Online Educa conference in Berlin, Germany, he said, "Companies want strong results, in terms of profits, revenue and market share. All these results are couched in terms of numbers - but companies can only achieve these numbers if they have a strong client relationship. Achieving that involves people, not numbers.
"To build this strong organization, you need a strong team - and establishing a strong team requires developing trust, mutual understanding, an understanding of the 'big picture,' co-operation to create consensus, strong communication skills, the ability to deal effectively with conflicts, and a feeling of personal autonomy even though you're part of the team."
These things are key components in empowerment and each component involves some degree of ongoing change. Hindley observes, "Like any change, empowerment should be linked to a clear outcome. So, if people are empowered, there's a clearly defined set of outcomes that should follow."
Lowe advises, "Empowering staff in decision making and then coaching their performance capabilities can only benefit the client experience - whether internal or external. Perhaps the two most significant ways to create empowering leadership in today's fast-paced business environment are to allocate time to this practice and make it a priority.
"Analyze and develop empowering leadership attributes, skills and behaviors. Prioritize empowerment as a strategic imperative above operational issues and distractions to strengthen empowering capabilities.
"Developing an empowering leadership culture can be complex. Leaders are influenced by factors including the external environment, strategic ambitions, challenges, individual personalities and capabilities, team dynamics, and so on. These factors are interwoven and need to be clarified and understood- to identify opportunities and obstacles preventing an empowering culture.
"You only have to read Jim Collins' book, 'Good to Great,' to understand how empowering leaders brings about transformational long-term sustainable financial and people results. There's also Patrick Lencioni's 'Five Dysfunctions of a Team,' which reveals that, without trust, you don't have open communication and that leads to less commitment, a lack of accountability, a disempowering culture, and poor results."
In Hiep's view, "The key to all of this is 'trust.' Trust is the oil and the glue of the team - and, indeed, of the whole organization."
In exploring the issue of trust in building strong people, teams and organizations, Hiep believes that there are three levels of trust in organizations. This involves developing:
- Self-trust and trust in the team.
- The alignment of the organization's various teams.
- Reputation (for delivering on promises, for example).
"We all want to be trusted," he says, "and, when that happens, we trust others in return“ and concerted progress can be made.
"To build a strong team, you need strong people. Strong people need self-confidence - and building this is a 'super-dynamic' process."
This makes it a difficult process to manage - not least because there's a fine line between self-confidence and arrogance.
Developing and managing self-confidence in an organization's workforce poses a problem for business leaders and L&D professionals alike. As L&D professionals know, the style and quality of business leadership can build - or destroy - individuals' self-confidence, and people with low levels of self-confidence are only going to perform averagely at best.
On the other hand, empowering leadership tends to build strong people. In turn, these build strong teams, strong organizations and, then, strong results.
"Using this 'strong results' model - of 'build the person, build the team, build the organization' - to help their organization be successful, L&D professionals need to ask the question, 'Where does it hurt?', so they can then pinpoint the area in the business that needs changing," Hiep concludes.