Theory X and Theory Y: How Do You Feel About People?

Over the long haul, truly effective leadership always starts and ends with a feeling for and about the people involved. Leadership always involves a group, a team, an organization, or a community – in other words, other people. Leaders never accomplish anything alone. Thus it stands to reason that leaders should pay close attention to the people they influence and the people who might be helped or hurt by their decisions and their actions.

Unfortunately, however, leaders can be distracted by two factors that characterize every leadership situation: the goals they seek and the power they wield. And every time the group, team, organization, or community gets too big for people to work directly face to face, leaders may have trouble resisting the lure of big-time goals or extraordinary power. In fact, while extraordinary personal power is one of the most attractive enticements for individual leaders, it is also one of the greatest dangers for everyone else.

Leadership is always about achieving goals, and sometimes people just have to get the job done regardless of how they feel about each other. On a battlefield or a sinking ship, for example, the way we feel about each other doesn’t matter nearly as much as our immediate need to survive. And, because leaders always have more power than other group members, it’s often easy for leaders to neglect other people and simply use their power for their own personal ends. Within families and other small groups where we mostly interact face to face, it’s obvious that our behavior often depends on the way we feel about the other people. But ever since human beings created large groups in cities, then nations, and now global enterprises, the power of top-level leaders has grown way beyond natural proportions. When leaders lose direct contact with followers and others who are touched by their decisions, they are easily corrupted by their own power, especially if they have received that power as a birthright without actually earning it.

For thousands of years after people learned how to grow food, tame animals, and build large social structures, power and wealth were organized and passed on largely in family groupings, bolstered by legal systems, political and economic institutions, and armed force. Where these family groups retained a healthy fellow feeling for others in their community, their leadership tended to be effective and functional, and sometimes their communities thrived. Where these family groups got carried away by the lure of inappropriate goals or unbounded power, their leadership sooner or later became dysfunctional and destructive, and their communities suffered.

The democratic revolutions of the last three centuries overturned or at least limited the dominance of powerful families and stressed the value of leadership by the most able, with the consent of the governed. In democratic cultures, the most important source of power became the power of widespread reliable knowledge rather than the power of brute force or manipulation of ignorance. If we are all to govern ourselves in a democratic community, then we must learn to trust each other as we generally do in small face-to-face groups and we must make sure that we all learn as much possible in order to make wise decisions together. In fact, it was not until the era of the democratic revolutions that the word “leadership” emerged in our language. In previous eras, people spoke of rulership, kingship, or dominance, but the word “leadership” did not appear in our language until we had become accustomed to thinking about the widespread participation of the governed.

After five or six generations of democratic practice, sometimes at the cost of considerable struggle, three developments had bolstered a new optimism about people in general. First, especially in the United States, our ideas about democracy had expanded to include people who were not included as full-fledged citizens in the original U.S. Constitution – African Americans and women. Second, research in the behavioral and social sciences had given us a much more positive view of human nature than we had previously recognized. And third, that research instigated a global mass movement toward self-improvement in virtually all aspects of the human experience. The leadership-development movement in general and the collaborative-leadership movement in particular may be the best examples. In important ways, the collaborative-leadership movement is a direct extension of the democratic spirit and the human capacity to learn, both individually and collectively. It recognizes the need for power and the importance of goal achievement, but it begins and ends with a simple and direct feeling for people – other people, and ultimately all people.

This idea really goes back thousands of years. It has been part of the wisdom of the great moral teachers who urged us to treat others as we wish to be treated and to love our neighbors as we love ourselves. Unhappily, those who have actually tried to practice what those prophets preached have all too often been cast as misguided idealists at best or as dangerous radicals at worst. From Socrates and Jesus to Abraham Lincoln, Mohandas Gandhi, and Martin Luther King, Jr., those who have actively preached compassion for and general faith in humanity have been violently scorned by many in their own time. It was not until the twentieth century, a century of spectacular violence and destruction, that the practical insights of popular opinion and scientific inquiry began to echo the truth of that ancient wisdom.

Since the 1950s, the work of many scholars in several disciplines has revealed that average, workaday human beings, under favorable conditions, are generally blessed with intelligence, willingness to work hard for relevant goals, an ample sense of responsibility, and potential for creativity. Until the twentieth century, only a small minority of human beings lived long enough and enjoyed sufficient leisure time to learn enough to demonstrate such potential. But by the middle of the twentieth century in the developed world, lots of people with advanced educations were living into their seventies and eighties and demonstrating that human potential is much greater than we ever realized before. Two students of human behavior during the second half of the twentieth century, Douglas McGregor and Robert K. Greenleaf, clearly demonstrate this development.

McGregor was an industrial psychologist and a college president who observed thousands of executives and managers in action. In The Human Side of Enterprise, published in 1966, McGregor concluded that all of the executives and managers he studied generally subscribed to one of two distinct attitudes about normal average human beings. He called these two attitudes Theory X and Theory Y. Theory X managers tended to believe that most people are self-centered, childish, lazy, not very intelligent, not creative, and not very willing to accept responsibility of any sort. Theory X managers believed that only a small fraction of the human population has what it takes to be leaders, and that this small fraction were born with the inherent traits needed to be leaders. In other words, they believed that leadership skills are not learned but are always born into those people we call leaders. Theory X managers have very little faith in people other than their own circle of family members and associates. Their management strategies are not really about leadership at all, but rather about the need to control, coerce, and manipulate people. To a large extent, Theory X managers resisted the central principles of democratic self-governance based on faith in average people. McGregor’s name for Theory X management was “management by control.”

If we look over the whole sweep of human history, we can identify Theory X attitudes in lots of times and places, especially before the democratic spirit arose. All slave systems were essentially Theory X in that they failed to see anything in run-of-the-mill humanity other than a brute pack animal. One key to the Theory X mentality is that it interprets most other people as a means to one’s own ends or as a tool to achieve one’s own goals rather than as ends in themselves. Thus goals and power take priority over concern for people, and workers become interchangeable or disposable. To be fair, it’s easy enough to find evidence supporting Theory X over most of human history. Where most of the world’s work is physical, dirty, and disagreeable, and where virtually everyone is thoroughly ignorant, people who were forced to do all that dirty work probably behaved like pack animals or self-centered, lazy, irresponsible children – at least in the eyes of those who made them do that work. Even today, the dirtiest jobs are generally performed by the people with the least education and the least opportunity for better work, and it is hard to manage or motivate people in such situations without some measure of coercion, manipulation, and control.

McGregor also described a growing number of managers who practiced what he called Theory Y management or “management by objectives.” These managers tended to see the upside of human nature, the potential for creative work and responsible decision-making. Such managers believe that average people are reasonably intelligent, potentially creative, willing to work for goals which relate to their own welfare, and eager to accept responsibility for things they feel are important. Theory Y is not just a reverse image of Theory X. Where Theory X managers see a lack of intelligence, Theory Y managers recognize that intelligence comes in various forms and that different people are smart in different ways. They also recognize that creativity comes in different packages. As for a work ethic and a sense of responsibility, Theory Y managers recognize that people should not be expected to work hard or to take responsibility purely for somebody else’s benefit – which is what Theory X was always about. According to a Theory Y perspective, people will naturally seek responsibility for their own welfare and the welfare of people they care about. Theory Y managers don’t threaten punishment or rely strictly on promises of reward; instead, they draw out the intelligence, creativity, and commitment of group members by helping them clarify their shared objectives and by supporting them in their work to achieve those objectives. In other words, Theory Y managers and leaders help people collaborate. Historically, the move from Theory X to Theory Y is a move from traditional top-down authoritarian leadership to collaborative leadership.

We can find hints of Theory Y sprinkled throughout the human record, though, as we’ve seen, Theory Y has traditionally been associated with radical idealism and unrealistic wimpiness. The message of the world’s major religions to love each other and recognize our universal kinship is a Theory Y idea. Political and social democracy is a Theory Y idea – if we really think that people should govern themselves, then we must trust people to be intelligent, responsible, and creative. Thus the best thinking has always been Theory Y, but we haven’t been able to realize that until recently, after lots of people reach a stage of relative prosperity, adequate leisure, and advanced education. The new industries which depend very heavily on education and creativity – e.g. the computer industry and the education industry itself – require the encouragement of individual responsibility, creativity, and teamwork. For a couple of generations now, economists and social scientists have agreed that the most important economic resource is no longer land or money, but widely distributed knowledge that can be put to use in networks of collaboration.

When all is said and done, Theory X and Theory Y are both “self-fulfilling prophecies.” In other words, they both become true precisely because one believes they are true. For example, the stock market rises when people believe it will rise (thus motivating them to buy stock, which actually causes stock prices to rise). And the stock market falls when people believe it will fall (thus motivating them to sell their stock, which automatically depresses the price). Similarly, people behave in Theory X or Theory Y ways depending on how we expect them to behave (and thus how we treat them). The classic research on this came about through an accident in a British school system. A teacher was mistakenly told that her elementary students were backward and came from homes where education was not valued. The teacher tried to be a good teacher, but she unwittingly treated the students as if this description were true. On subsequent test scores, the children did poorly. Then somebody realized the mistake and told the teacher that her students were actually quite bright and that their families supported their learning. The teacher started treating the students as if they were bright and eager and OOPS they all brightened up and got eager. On the next round of tests, they scored quite well. Good parents, good teachers, and good managers know that people respond in kind to the way they are treated.

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