Dear World Leaders,

This relationship isn’t working out. Its time for us to explore other government opportunities. We’ve tried to make it work. But it’s not us — it’s you (really).

I’ve been thinking a lot about leadership lately. Specifically: why, today, when a wave of crises is sweeping the globe, does leadership seem to be almost totally absent?

The answer I’ve come to is, ironically enough, leadership itself. I’d like to advance a hypothesis: 20th century leadership is what’s stopping 21st century prosperity.

Let’s face it. The very word “leader” feels like a relic of 20th century thinking. And it just might be that the case that instead of aspiring to be (or train) more “leaders,” we should be seeking to reboot leadership. Why? When we examine the economics of leadership from a 21st century standpoint, we see that:

Leadership was built for 20th century economics. It’s a myth that leadership is a set of timeless skills. Is it? Abraham Zaleznik famously defined leadership as “using power to influence the thoughts and actions of other people.” Influence is the key word. The textbook skills of the “leader” — persuasion, delegation, coalition — aren’t universally applicable. Rather, they fit a very specific context best: the giant, evil, industrial-era organization.

Leaders don’t lead. How did this particular skillset emerge? Influence counts because the vast, Kafkaesque bureaucracies that managed 20th century prosperity, created, in turn, the need for “leaders”: people who could navigate the endlessly twisting politics at the heart of such organizations, and so ensure their survival. But leaders don’t create great organizations — the organization creates the leader. 20th century economics created a canonical model of organization — and “leadership” was built to fit it.

Leadership can be a bad. Organizations are just tools — and leaders are just more proficient users. When would a tool need a more proficient user — a leader — most? When the opportunity cost is greatest: exactly when that tool is about to be outcompeted by a better tool. Leaders are created when organizations are threatened to ensure organizational survival. But sometimes organizational death is the optimal outcome. That’s exactly what we see in the real world: leaders unleashing bailout after bailout, horse-trade after horse-trade, to ensure the survival of yesterday’s malfunctioning machines. The economics suggest that 20th century leadership lets dysfunctional organizations thrive at the expense of prosperity.

Here’s the problem in a nutshell. What leaders “lead” are yesterday’s organizations. But yesterday’s organizations — from carmakers, to investment banks, to the healthcare system, to the energy industry, to the Senate itself — are broken. Today’s biggest human challenge isn’t leading broken organizations slightly better. It’s building better organizations in the first place. It isn’t about leadership: it’s about “buildership”, or what I often refer to as Constructivism.

Leadership is the art of becoming, well, a leader. Constructivism, in contrast, is the art of becoming a builder — of new institutions. Like artistic Constructivism rejected “art for art’s sake,” so economic Constructivism rejects leadership for the organization’s sake — instead of for society’s.

Builders forge better building blocks to construct economies, polities, and societies. They’re the true prime movers, the fundamental causes of prosperity. They build the institutions that create new kinds of leaders — as well as managers, workers, and customers.

Who’s a Builder — and who’s just a leader? Here are some Builders contrasted with mere leaders:

Mahatma Gandhi vs Barack Obama. Keith Olbermann recently took Obama to task for “a lack of leadership”. Yet, on the contrary, Obama’s problem is that he’s too much of a leader — and not enough a Builder. He’s mastered the principles of leadership; the result is politics as usual, instead of political reform. Gandhi, in contrast, was no mere leader, but the most awesome kind of Builder. He built one of the most significant institutions in history: nonviolent resistance. Obama’s challenge isn’t just “leading” Congress, the Senate, or the Executive Branch, by horse-trading better — it’s reforming them, to build something even 1/1000th as significant.

Nelson Mandela vs Sarah Palin. Sarah Palin’s shaping up to be a great political leader, expert at applying the tenets of leadership, for example, via Facebook, to divide, demolish, and conquer. It is Mandela who is a Builder. His crowning achievement, that altered the very fabric of politics, was a new institution for governance: South Africa’s Truth and Reconciliation Commission.

Mohammad Yunus vs Ben Bernanke. Time’s person of the year, Ben Bernanke, bailed out yesterday’s financial institutions with a vengeance. What he didn’t do was build better ones — like Muhammad Yunus, the microfinancial pioneer, did.

Matt Taibbi & Nick Kristof vs Tom Friedman & Maureen Dowd. Tom and MoDo are textbook examples of leaders in journalism; churning out column after column that challenge the conventional wisdom and set the agenda. Yet, that’s not nearly enough to save journalism — let alone the New York Times. Matt and Nick, in contrast, are (re)building the institution of journalism for the 21st century, by utilizing the power of the Internet to reconstruct relationships with readers, publishers, and sources.

Jacqueline Novogratz vs Wall Street. Wall Street’s leaders spearheaded an assault on staid banking as usual: the future, it was said, lay in slicing, dicing, and trading. But they never built new institutions to ensure their trades were socially useful. Jacqueline Novogratz did: her Acumen Fund is a new type of investor entirely, built from the ground up to invest for the common good.

Evan Williams vs Bill Gates. Ev isn’t just a serial entrepreneur — he’s a serial Builder. First, he spearheaded the building not just of Blogger, the company, but of blogging, an entirely new medium. Today, he’s spearheading the creation not just of Twitter, the company, but of microblogging — yet another new medium. Both are new institutions that have changed how the world interacts. Bill Gates, in contrast, was just a leader. He led just another run-of-the-mill corporation to yet another monopoly — a total black hole of Buildership. Today, ironically enough, Gates is trying to redress the balance, by sparking a debate about how to (wait for it) build a better capitalism.

Elinor Ostrom vs Econ 101. Ostrom — winner of last year’s Economics Nobel Prize — wasn’t just a leading theorist, like, for example, Ben Bernanke. While most leading economists improved canonical models, Ostrom built a new way to study econ: by hitting the field and understanding how people actually manage resources locally. It was her methodology that led to her profound — and profoundly challenging — insights.

Today’s builders are igniting the distant grandchild of yesterday’s industrial revolution: an institutional revolution for a post-industrial world. They are forging the new building blocks — from ethical investment, to deep journalism, to socially useful finance, to universally accessible communication — that a rusting economy, society, and polity so urgently demand.

The 21st century doesn’t need more leaders – nor more leadership. Only Builders can kickstart the chain reaction of a better, more authentic kind of prosperity.

How can you become one? Here are the ten principles of Constructivism (contrasted with these principles of leadership).

The boss drives group members; the leader coaches them. The Builder learns from them. The boss depends upon authority; the leader on good will. The Builder depends on good. The boss inspires fear; the leader inspires enthusiasm. The Builder is inspired — by changing the world. The boss says “I”; the leader says “we”. The Builder says “all” — people, communities, and society. The boss assigns the task, the leader sets the pace. The Builder sees the outcome. The boss says, “Get there on time;” the leader gets there ahead of time. The Builder makes sure “getting there” matters. The boss fixes the blame for the breakdown; the leader fixes the breakdown. The Builder prevents the breakdown. The boss knows how; the leader shows how. The Builder shows why. The boss makes work a drudgery; the leader makes work a game. The Builder organizes love, not work. The boss says, “Go;” the leader says, “Let’s go.” The Builder says: “come.”





They’re not the only principles, and perhaps not even the best ones. But they begin to help us think constructively about how to build a better tomorrow. And that is, ultimately, what it’s all about.

Builders put the “Constructive” in Constructive Capitalism. Constructive doesn’t just mean “to improve on yesterday.” It also means “to build for tomorrow.”

So the question is this: are you merely managing an organization, just leading an organization — or are you building an institution? 99.9% of the world’s leaders are, well, just leaders. But today, leadership alone can’t get you from the 20th century to the 21st.

Of course, everyone has their own definition of leadership — and that’s why it’s a tricky subject to discuss. The “leadership” I’m challenging is of the orthodox, B-school 101 one, that has to do with motivation, influence, and power. But your take on leadership might be closer to my definition of Constructivism. Have a think about that before you comment. And fire away with your own examples of Builders — or comments, thoughts, and questions.