Mastery of applied organizational theory is as vital to the success of leadership as knowledge of the piano is to the accomplished pianist. Organizations are the medium in which men and women function in society – they are the playing fields of life and business.

Positive leaders understand organizations in all of their complexity and are accomplished artists in both macro- and micro-organizational theory. Most managers possess, or at least utilize, only a rudimentary understanding of organizations. They are like novice personal computer users. They can stumble their way through a few application programs but their lack of in-depth understanding of the computer and its software keeps them from using more than a fraction of the machine’s capability. Occasionally they actually threaten or damage the system by utilizing it improperly or counter-productively.

At the macro level the positive leader is a student of organizational theory and devotes a significant amount of time keeping up with the literature of the field. At the micro level he or she is intimately in tune with his or her own organization, with its mission and vision; its products and/or services and the specific customer needs that these products and services fulfill; with its people, its personality and subcultures; with its supply chain; its metrics; and, with its informal power structures. The leader spends a significant amount of time out in the organization, and with its supply chain partners, listening, talking, and getting involved with people.

When confronted with the decision of choosing future leaders, from among its talented individuals, organizations must often choose between men and women with demonstrated leadership skills versus those with great technical knowledge and with familiarity with the local organization. Many people have technical expertise and local experience while only select few possess demonstrated leadership ability. Further, although leadership skills can be taught, it’s much easier to teach the technical and local aspects of an organization.

Organizations would do well to choose managers and supervisors on the basis of their demonstrated leadership ability. Organizations are also well-advised to make significant investments in the leadership development of its talented men and women, early in their careers. That being said, the most talented leaders will not achieve their optimal potential unless they make a relentless commitment to become masters of organizational theory and application at both the macro and micro levels.

Organizations typically promote their best workers to leadership positions. Just because an employee is at the top of the list of technical performers does not mean that they would make good managers and supervisors unless the organization has made an effort to prepare them for not only the role of leader but also for the transition from technical expert to formal leader. Often, people appointed to leadership positions on the basis of their technical excellence become unhappy and disillusioned with their new role. They were happier in a role in which they were valued for their technical expertise but rarely are they able to walk away. Often such promotions are the only way to move up the compensation ladder in an organization. Walking away from the disappointing leadership role may mean relinquishing the raise as well as losing face because they were unsuccessful.

If the organization has made an investment in leadership development of their best people prior to promoting them they will have identified those who will and will not be both happy and successful in a leadership role. For that reason, in addition to a focus on leadership development, the most successful organizations find a way to elevate the compensation of their technical stars to levels comparable to what they might have earned had they been given leadership responsibility. There is no rule that says that technical stars must not earn as much or more than their supervisors and managers.

One the other side of the equation, it is imperative that people who are appointed to leadership positions because of their demonstrated leadership ability rather than technical expertise make a commitment to ongoing development of their technical knowledge. They may not have to perform technical tasks as well as their technically-accomplished employees but the need to understand the technical aspects of the work every bit as much. They must also be able to teach new employees how to become technically competent.