For the past decade, academe has taken seriously - sometimes too seriously - the admonition to operate more like for-profit businesses. Despite some excesses, the overall result has been a salutary tightening of academe's financial ship. Yet, no organization lives by finance alone. Without effective leadership, all organizations eventually founder.

Beyond financial considerations, however, why should universities try to follow the command-and-control model of traditional business leadership, especially when such leaders are faltering seriously?

Over the last few years, a whole series of such leaders have been ousted from their executive suites, among them Westinghouse's John Marous; General Motors' Robert Stemple; IBM's John Akers; Time Warner Inc.'s Nicholas Nicholas, Jr.; Goodyear's Tom Barrett; Apple's John Sculley. Michael Spindler, and Gil Amelio; AT&T's Robert Alien; Digital Equipment's founder and CEO Kenneth Olsen; Tenneco's James Ketelsen; and Borden's Anthony D'Amato, along with many others. In fact, it is becoming clear that effective university leaders now may provide a better model for the new business world than such traditional, rugged individualists.

This is not to suggest that all academic leaders, as individuals, are exemplary. Many university presidents, too, have been forced out and burned out. Nor would I deny that some university leaders, like their business and political confreres, seek leadership positions more from egotistical, self-serving than institution-serving motives. (University leaders, however, probably suffer less than their non-academic counterparts from a selection process so flawed that it encourages and rewards the most neurotic and power-thirsty candidates.) Thus, the reasons for my contrarian advice must lie elsewhere.

Two overarching realities prompt me to suggest that business leaders would do well to look to their academic counterparts. The first is the changing nature of our times. We are caught in the escalating tensions of a new historical period-the Connective Era. In this emerging epoch, nations, communities, and organizations of every size and shape are being squeezed into a tight, global jigsaw puzzle. Decisions that business and political leaders make in one part of this far-flung system now reverberate throughout the global community.

In the Connective Era, a pair of powerful forces--diversity and interdependence--are pulling in opposite directions. Diversity sets us apart, focusing on our differences, our distinct individuality and independence. Diversity has set the traditional independent and competitive context for business organizations, whose mission statements emphasize their uniqueness.

Interdependence, by contrast, emphasizes mutuality and commonalities, driving us toward collaboration, networks, and alliances. It is the combination of diversity and interdependence that creates the special leadership conditions of the Connective Era.

Such an era calls for connective leaders, those with an eye for finding and then ethically exploiting the connections among diverse, often contentious groups. They recognize the groups' mutualities even while the parties themselves remain astigmatic. Connective leaders see the overlap between their own and others' visions and agendas.

These new leaders reject the authoritarian, command-and-control model valued in traditional businesses built for a diverse, but independent and competitive, world. They perceive, instead, that a much broader repertoire of leadership strategies will be required to deal with a world simultaneously driven by diversity and interdependence.

The second reality is the changing nature of business organizations in our new Connective Era. Almost imperceptibly, the internal structure, membership, and survival criteria of businesses have moved closer and closer to those of universities. By systematically examining various aspects of universities, businesses should be able to gain significant insights into effective leadership and organizational practices for the Connective Era. Here, however, we shall only be able to consider six general areas in which universities may offer business a useful model:

First, through mergers, acquisitions, joint ventures, and a host of other strategies, businesses increasingly house a host of diverse units, all under one organizational roof. These components, often representing different cultures, different histories, even vastly different products, all engage in bare-knuckled competition for markets and money in one global arena.

Business leaders have struggled mightily, but not well, with the new context of interdependence recently added to its more familiar and simpler context of diversity. Learning to manage those different, but interdependent, parts of the system, to merge divergent cultures, as well as to quell rivalries for resources and reputation, has been painfully difficult for both multinational corporations and smaller federations of businesses.

The prevailing authoritarian governance structure within business organizations has been singularly unsuccessful in coping with this central problem of the new Connective Era. Exhausted by years of culture wars, some new CEOs have simply jettisoned many of the divisions their predecessors acquired, finessing the problem by turning the troops back to their core business.

Consider, now, the university's traditional structure: loosely coupled sets of diverse disciplines and departments, all interdependently dwelling under one institutional roof. These dissimilar groups and programs jostle with one another for resources and recognition. Even before the Connective Era, the very best of university leaders orchestrated and integrated this disparate set of stakeholders, who commonly focused more on mutual antagonisms than alliances.

Clearly, it is not that university leaders are necessarily endowed with special leadership gifts. Rather, the structures of their institutions have demanded what we now recognize as more connective styles of leadership. Moreover, the changing times bring the university's structure and culture into greater synch with the tensions of the contemporary world.

Today, the dramatis personae who act upon the university stage have multiplied, just as they have for businesses.

Universities have always had to deal with faculty, staff, students, trustees, townspeople, and alumni. Now, they also must deal with foundation and government representatives, other potential donors, political and social activists, as well as the media. Recent decades of diminishing resources have only heightened the drama, exacerbating the complex interactions with which university leaders must cope.

The leader's act of entrusting a vision or task to another represents a special gift:

the leader's confidence in that person's ability to perform the task.

Thus, academic leaders, who must perforce rely much less on authoritarian, competitive, individualistic leadership styles, offer us a useful paradigm for the Connective Era. Some business leaders, searching for effective strategies (like Mort Meyerson of Perot Systems and Robert Fisher, managing director of investment bankers Schroder & Co., Inc., Los Angeles), have increasingly found themselves drawn to the multifaceted, flexible repertoire of connective leaders.

In academe, excessive competition unravels the social fabric. While competition may spur a frenzy of activity, it also prevents the sharing of information and insights. Interdisciplinary collaboration, though difficult to achieve, is increasingly valued in the quest for solutions to ever more complex problems. Because so many diverse groups - each with its own concepts, values, methodologies, and histories - co-exist within the university, common ground is difficult to discern. The connective educational leader seeks out and identifies those commonalities, even the ones that the stakeholders, themselves, may not perceive.

A politics of commonalities, whereby leaders identify overlapping interests among diverse stakeholders, offers a potent tool for joint action, particularly in an environment of diminishing resources. The connective leader, rejecting consensus at the lowest common denominator, reaches instead for a higher and better integration of the goals sought by diverse groups. This connective strategy often yields a previously unimagined, more constructive synthesis.

In academe, this kind of connective leadership strategy has long had a home. In business, however, the tensions between entrenched competition and desperately needed collaboration still too often undermine effective performance.

In the Connective Era, the shared governance structure of academia, much maligned of late, offers an important alternative to traditional forms of business administration. Shared governance places two requirements on academic leaders. First, they must share decision-making with their faculties. Those who try to operate by faith ineluctably find themselves, like Gulliver, tied down and thwarted. University leaders must engage faculty in the governance of their institutions, primarily through plenary faculty groups, committees, and task forces. It is in those forums where the culture, values, and norms of the institution are forcefully articulated, debated, and honed-albeit in measured tempo.

Shared governance is a form of democracy, replete with its accompanying turbulence, messiness, inefficiency, and frustration. Like democracy writ large, some decisions are ceded to the president, the faculty senate, and the board. Properly conducted, shared governance also respects members and provides citizenship, just as democracy is intended to do. This form of government nurtures leaders at every level. It fits well with connective leadership, which seeks active constituents, not passive followers.

To ignore the tensions that traditionally exist between faculty and university leaders would be naive. Yet, those strains embody the informal checks and balances that a viable democracy demands. Moreover, the very best university leaders look beyond the stresses to seek other leaders among the faculty. Instead of discouraging, they groom faculty to help share the burdens of leadership.

When connective university leaders nurture constituents and prepare them for leadership, they are engaging in leadership through expectation. This subtle form of leadership entrusts the leader's vision, as well as his or her most important tasks, to others. The entrusting process is a complex psychosocial phenomenon that rests upon the universal principle of reciprocation. When a gift is not reciprocated with one of equal or greater value, an imbalance occurs in the relationship between donor and recipient.

The leader's act of entrusting a vision or task to another represents a special gift: the leader's confidence in that person's ability to perform the task. Only by meeting or exceeding the leader's expectations can the recipient of that most valued bequest restore balance to the relationship.

Leadership by expectation is far more likely than micro-management to yield results exceeding both the leader's and the entrusted individual's expectations. It is the surest way to enable others, to prompt them to reach down into their deepest personal reserves to meet their leader's expectations.

Second, business leaders are charged with turning a profit through the work of their employees. To achieve this goal, business has been chanting the mantras of "empowerment" and "ownership" of responsibilities without quite knowing exactly how to make them happen. Yet, that is precisely what connective leaders achieve when they reach out to constituents, treat them like leaders, and entrust them to share burdens and enhance the leader's vision. Those employees who gain some measure of economic ownership, through mechanisms like profit-sharing and stock options, may become considerably more involved; however, those financial arrangements often simultaneously constrain employees' freedom.

Businesses have been hard pressed to manage the rising tide of "knowledge workers" - employees who carry their tools in their heads and the overload in their computers. Peter Drucker argues that knowledge workers are "woefully unproductive" and that business needs to learn how to "clear the path for knowledge workers to do important work."

Knowledge workers tend to invest more of their loyalty in their occupation, profession, or discipline, than in their employer. For businesses to prosper, gaining the loyalty of knowledge workers, particularly those on the cutting edge, is perhaps far more important than the leaders of "lean and mean" businesses have previously recognized.

By contrast, the mission of university leaders focuses on educating the next generation and creating new knowledge. Historically, profit has been a secondary interest of universities. That, however, is shifting through the prodding of legislatures and boards drawn largely from corporate ranks. The underlying assumption, nevertheless, is that the faculty are key to the university's mission. To succeed, university leaders must facilitate the work of faculty, rather than show a fat profit or magnify their own power.

The role of the educational leader is to guard the space between reality and aspirations.

In the Connective Era, managing the tension in that space allows creative conflict to culminate in innovation, rather than degradation and annihilation.

University faculty have always been knowledge workers. As with most other knowledge workers, the loyalty of faculty does not attach fundamentally to their university, but to their discipline or profession. While that primary commitment fosters their intellectual and professional growth, it does not at all preclude loyalty to the university. In fact, many faculty are quite stubbornly faithful to their institutions.

Faculty do not consider themselves employees, despite the paradoxical fact that some have lifetime tenure. One eloquent defense of faculty's non-employee status was put forth a half century ago, during the McCarthy hearings, by Professor E. K. Kantorowicz, a renowned medieval historian at the University of California. Kantorowicz refused to sign the loyalty oath first demanded of faculty and then of all university employees. He refused, however, not because he opposed the oath, but because he insisted that faculty were not employees.

There are three professions which are entitled to wear the gown: the judge, the priest and the scholar. This garment stands for its bearer's maturity of mind, his (her) independence of judgment, and his (her) direct responsibility to his (her) conscience and his (her) god.

It signifies the inner sovereignty of those three interrelated professions: they should be the very last to allow themselves to act under duress and yield to pressure....the judges are the court, the ministers together with the faithful are the church, and the professors together with the students are the university...they are those institutions themselves, and therefore have prerogative rights to and within their institution....

Unlike traditional employees, university faculty do not work within a 9-to-5 time frame, and despite frequent misconceptions by legislators, academic work fills every waking hour. Like Kantorowicz, they do not consider themselves employees reporting to an organization's CEO. As special knowledge workers, faculty perceive that their basic responsibility is to students and to truth.

Henry Rosovsky elaborates on this distinctive role of faculty, with whom university leaders must engage in consultation and shared governance.

We professors have the income of civil servants but the freedom of artists. This imposes certain obligations....We do practice our profession as a calling, considering ourselves not employees but shareholders of the university: A group of owners.

This academic algorithm of knowledge work, dedication, ownership, and autonomy is frequently unfathomable to boards of trustees. Drawn largely from the ranks of corporate leaders, board members commonly expect the university president to issue orders to the faculty. When that strategy predictably backfires, boards tend to ascribe the failure to the shortcomings of both faculty and president.

Yet, as corporate CEOs, these board members might do well to consider how the shared governance and consultation prevalent in the university might increase the sense of autonomy, empowerment, ownership, and true dedication among their own organization's knowledge workers.

Third, the competitive advantage of business organizations flows largely from creativity and innovation. Creativity and innovation fuel the powerful engines of business in the Connective Era as never before. Afflicted with quarterly myopia, business leaders have had great difficulty building and nourishing cultures of creativity in their organizations.

To become creative, organizations must foster learning, as MIT's Peter Senge has been urging. In fact, Ray Stata, of Analog Devices, argues that "the rate at which organizations learn may become the only sustainable source of competitive advantage." The leaders of businesses that Senge describes as "learning organizations" differ markedly from "our traditional view of leaders--as special people who set the direction, make the key decisions, and energize the troops." Instead, he argues, leaders in learning organizations are "designers, teachers, and stewards....(They) are responsible...for learning." Universities have always promoted creativity in a setting that respected the criteria for its propagation. Great university leaders, like Robert Maynard Hutchins, James Bryant Conant, and Clark Kerr, have understood and patiently promoted creativity and innovation, expressed via the generation and transmission of knowledge. These university giants and their educational heirs developed the art of maintaining the spaces of creative tension and disagreement within and between fields, where new knowledge is generated.

Without the educational leader's help, the fruits of individual creativity can easily get lost. Mihaly Csikszentmihalyi describes two major danger points. The first occurs as the individual's creative product seeks acceptance in its own special field. The second critical juncture takes place at the point where that innovation must gain broader cultural recognition.

It is the connective leader's responsibility to build covered bridges over these hazardous transition points. In the university, effective leaders build bridges within and between departments and disciplines, encouraging the integration of knowledge at levels that exceed what any single discipline could contribute.

Connective leaders understand the connections between individual creativity, the barriers within and between fields, and the resistance of a complex, contemporary culture. Leaders-in education and business alike--have serious responsibilities here. In both arenas, leaders must connect the various parts of the system, from individual, to organization, to discipline/ field, to society.

Without securing those connections, important creative ideas and products are less likely to be identified, accepted, and implemented as the innovations that stoke organizational fires. Educational leaders' valuable experience in sustaining creativity and promoting learning organizations represents a tutorial wellspring that business leaders might do well to tap.

Fourth, businesses, particularly those that conceive of themselves as exemplars of Peter Senge's learning organizations, feel the creative tension between their reality and their aspiration.

Leadership in a learning organization starts with the principle of creative tension. Creative tension comes from seeing clearly where we want to be, our 'vision,' and telling the truth about where we are, our 'current reality.

While business leaders worldwide are warming to Senge's concepts, few have looked to universities as their model. Yet, that is precisely where they will find a long tradition of dealing with creative tensions, where the disparity between the quotidian realities of life and the university's loftier aspirations gives rise to conflicts.

President Diana Chapman Walsh of Wellesley College suggests that the role of the educational leader is to guard the space between reality and aspirations. In the Connective Era, managing the tension in that space allows creative conflict to culminate in innovation, rather than degradation and annihilation. Managing tensions, not to stifle but to encourage debate, is an important challenge for educational leaders. Protecting that space helps even the most diverse, iconoclastic members feel included, respected, and needed as they work in our interdependent world. In business and political environments, where cynicism and disrespect so often corrode workers' commitment and creativity, such a modus operandi could prove a welcome elixir.

The academic tradition of tenure, under renewed attack, offers us the fifth important aspect of university life that promises relevance for business organizations. Tenure, as Henry Rosovsky eloquently argues, provides faculty with two important conditions for creative work: security and freedom. Those conditions promote the unfettered thinking that can lead to new ideas and innovative products. Those same conditions keep the most talented individuals reasonably content and productively committed to academia. They provide the university with stability despite the lure of greener economic pastures that may beckon members of certain disciplines.

Much of the argument against tenure is based on the erroneous belief that it generates terminal "deadwooditis." This rarely turns out to be the case, as Dean Rosovsky attests, largely because the process for granting tenure is - and should be exquisitely meticulous. The offer of lifetime tenure represents significant fixed costs, financial, social, and psychological. Thus, it is undertaken with painstaking care.

When the choice is right, the institution benefits from the tenure decision as much or more than the individual does. Tenure for talented individuals increases the likelihood that their long term work not only will be sustained, but will yield important results redounding both to the university's and the individual's credit. Beyond enhancing the institution's reputation, exemplary achievements of tenured faculty attract new students, valued researchers, proud "alums," and additional resources.

Contemporary businesses, by contrast, have been at great pains to dampen workers' expectations for lifetime service. It is with a collective sigh of relief that many business leaders cut the bonds and fixed costs of long-time employees. Yet, I am suggesting that businesses should, for a select set of employees, do just the opposite. Specifically, they should consider conferring tenure on a relatively small cadre of talented people whose work is central to their long-term mission. The serious, penetrating selection process, by itself, would offer businesses significant competitive advantages.

Of course, some prescient corporations have long offered a form of tenure to their most valuable people. IBM's fellows and Stanford Research Institute's senior scientists offer useful examples. Tenured stars in business, as in academia, would act as magnets for attracting other first-rate talent. They set the standards for creativity, innovation, and productivity while enhancing both the organization's reputation and its bottom line.

Sixth, despite business leaders' yearning for a "lean and mean" organization, they, nonetheless, want those remaining to work with commitment. Since tenure is neither possible nor desirable for all organizational members, either in businesses or universities, commitment must be sparked through other measures. Here, too, the leaders of universities offer a pertinent example.

The most effective university leaders provide a context for commitment. Some would argue that the most sacred task of the university president is to inspire faculty to devote themselves to a cause greater than themselves--the education of their students and the creation of knowledge. Others would insist that faculty are intrinsically motivated and need no external prodding. Whatever the source, the context for commitment is critical to a university's productivity. And few astute observers would deny that intrinsic dedication is all too often obstructed, even quenched, in toxic organizational environments.

Educational leaders must build universities where faculty can dedicate themselves energetically and altruistically, in the absence of extraordinary financial incentives and often without tenure. They do so by building educational enterprises whose mission transcends their members' own narrow self interest: the transformation of people and society through knowledge.

Through this dedication to a cause larger than themselves, faculty create "meaning" in the lives of their students and the society, and also in their own lives. This commitment to something greater than one's own wealth, power, or fame is, sui generis, a transforming and ennobling act. As faculty create meaning in their own and others' lives, they ennoble themselves and enable others to benefit from their contributions.

Educational leaders have had unusual opportunities to create enterprises in which participants can gain a sense of ennoblement, through dedication and sacrifice to important causes. Creating opportunities for ennoblement lies at the heart of connective leadership. That model, adapted to business organizations, would go far toward instilling a sense of ennoblement and meaning so sorely needed in a world careening along unfamiliar and often perilous roads.

Admittedly, university leaders have not always measured up to their tasks. Still, there have been impressive historical examples in higher education. Today, too, some outstanding individuals are grappling effectively in the complicated and rapidly changing times of the Connective Era.

When university leaders do succeed, they build organizations where diversity and interdependence potentiate one another. They foster institutions where creativity and innovation can grow, where people feel a sense of meaning in their lives, and where their dedication to a cause larger than themselves ennobles them and enables others. When university leaders succeed, democracy flourishes and leadership is shared by those who grow through freedom and security. In such institutions, governance is shared and autonomy heightened.

When university leaders succeed, reality and aspirations meet. The remarkable results spark creativity, high motivation, excitement, dedication beyond measure, and a sense of mission fused in a heady and fruitful environment. Not a bad example for a business or any other organization to emulate!