The shortcomings of command-and-control management are becoming ever more apparent. The hierarchy of bosses organized into ranks, with each superior exercising authority over subordinates who do exactly what their boss wants, has long been the dominant form of corporate organization. But recognizing that they are handicapped by their current systems, many companies are now questioning the way they manage themselves. They are striving for greater effectiveness and flexibility to cope with and capitalize on the fast-moving, ever-changing competitive conditions they see just ahead.

I believe that the old command system must be replaced. Fixing it is not good enough. My view is that authority should be replaced by leadership. By that, I don’t mean that a business should be run by a single leader, but that it should be run by a network of leaders positioned right through the organization. Leaders and leadership teams working together will, I suggest, run a business more effectively than a hierarchical, command-and-control structure.

What makes a leader?

Leadership scholars define a leader as a person who sets attractive goals and has the ability to attract followers, or constituents, who share those goals. Above all, a leader must be trusted and respected. Trust between...