A critical review of the Burke-Litwin model of leadership, change and performance

Abstract

This study proposes major changes to the Burke and Litwin (1992) leadership, change, and performance model against the background of significant changes in the external environment and new developments in business management. Improvements include, first, a more logical structuring without being subject to a specific leadership paradigm - a limitation that caused distortions in the original model. Second, by incorporating business processes reengineering, the strategy pillar of the adapted model has been significantly rationalised and strengthened. Third, culture is expanded to a fully-fledged pillar in the model, while human capital is included due to its growing contribution to organisational effectiveness and performance. Fourth, by modelling external contextual factors surrounding the adapted model, the new model systematically explores the interaction between leadership and the external environment. Understanding the impact of these dynamic factors is crucial in preventing well-functioning organisations from being affected by global financial disasters. Last, the reconfigured model extends the original model by adding a thorough discussion of the outcomes of leadership - namely, performance and effectiveness at the organisational, team, and individual levels. [PUBLICATION ABSTRACT]

Headnote

ABSTRACT

This study proposes major changes to the Burke and Litwin (1992) leadership, change, and performance model against the background of significant changes in the external environment and new developments in business management. Improvements include, first, a more logical structuring without being subject to a specific leadership paradigm - a limitation that caused distortions in the original model. Second, by incorporating business processes reengineering, the strategy pillar of the adapted model has been significantly rationalised and strengthened. Third, culture is expanded to a fully-fledged pillar in the model, while human capital is included due to its growing contribution to organisational effectiveness and performance. Fourth, by modelling external contextual factors surrounding the adapted model, the new model systematically explores the interaction between leadership and the external environment. Understanding the impact of these dynamic factors is crucial in preventing well-functioning organisations from being affected by global financial disasters. Last, the reconfigured model extends the original model by adding a thorough discussion of the outcomes of leadership - namely, performance and effectiveness at the organisational, team, and individual levels.

INTRODUCTION

In 1992 Burke and Litwin developed and published a leadership, change and performance model for diagnosing organisational effectiveness (see Figure 1). It was intended to be used as an organisation development (OD) instrument. Beckhard (1969), an OD practitioner and researcher, defines OD as an organisational intervention that is planned, takes place across the organisation or unit, is managed from the top, and increases organisational effectiveness and health by means of planned interventions in the organisation's processes based on behavioural science knowledge. The principles of OD are still used today (Martins and Coetzee, 2009; French, Bell and Zawacki, 2005; Waddell, Cummings and Worley, 2004).

The Burke-Litwin model predicts behaviour and performance outcomes within a cause-effect paradigm, with cause being oiganisational conditions and effect being results. This cause-effect model guides both organisational diagnosis and planned, managed change (Martins and Coetzee, 2009). Research furthermore confirms well-defined cause-effect relationships between the organisation's internal and external environments, linked to organisational effectiveness (Chawane, Van Vuuren and Roodt, 2003; Burke and Litwin, 1992). While the model is considered relatively complex, its contribution to the outcomes of the organisational diagnostic process in cross-cultural research settings is considered significant (Martins and Coetzee, 2009; Jones and Brazzel, 2006; Furnham and Gunter, 1993).

A major benefit of the model is its ability to explain the meaning of and distinction between transformational and transactional leadership. A clear exposition of the transformational-transactional paradigm facilitates a sound understanding of the difference between leadership and management (cf. Kinnear and Roodt, 1998). These differences are illustrated respectively by the yellow and green sections in Figure 1.

In addition to its holistic and causal nature, the model emphasises the importance of the impact of the external environment on the organisation. The model holds that "[organisational change, especially an overhaul of the company's business strategy, stems more from the environmental impact than from any other factor" (Burke and Litwin, 1992: 529). To emphasise its importance, the external environment is placed in a pivotal position at the top of the model. In fact, it forms the apex of the transformational triangle, with mission-strategy, leadership, and organisational culture forming the baseline of this triangle.

Under the umbrella of the external environment, leadership provides overall direction to the organisation, and co-ordinates the other two streams of mission-strategy and organisational culture to drive the organisation forward.

PROBLEM STATEMENT

The limitations of the current Burke-Litwin model are twofold. First, concern has been expressed that the model's relevance could be decreasing because, as far as the present authors could ascertain, it has not been adapted in any way since 1992. Second, the structuring of the model to incorporate the Bass and Avolio leadership model - consisting of transformational and transactional leadership - led to a problematic layout of the Burke-Litwin model (Bass and Avolio, 1994; Burke and Litwin, 1992; Bass, 1985).

Since the beginning of the 1990s, a noteworthy change has occurred in business management in the United States of America (USA) with the advent of business process reengineering (BPR) - a major change management tool that facilitates the implementation of strategy and organisational performance overall (Davenport and Short, 1990; Hammer, 1990). At a broader level, change management is increasingly seen as a permanent business function that can help improve productivity and profits by ensuring that organisations continuously adapt to the prevailing competitive environments (Metre, 2009). However, Burke and Litwin have neither incorporated a change lever such as BPR into their model of 1992, nor have they adapted the model since. This failure has rendered the model, and particularly its strategy component, less effective than it could have been.

Furthermore, serious and widespread corruption scandals in the USA since 2000, and particularly the 2008 - 2012 financial fall-outs that spilled over to Europe, shocked the world. These major external environmental developments call for fresh thinking about leadership and change models such as the Burke-Litwin model.

Problematic design of the Burke-Litwin model

A major concern with the model is that aspects of its pillars seem to be problematic. For example, the leadership and organisational culture pillars are intertwined: the work unit climate is positioned under leadership, although it logically belongs under organisational culture (Porter and McLaughlin, 2006). Furthermore, the systems component (policies and procedures), which those authors define as "standardised policies and mechanisms that facilitate work, primarily manifested in the organisation's reward system, management information systems (MIS), and in such control systems such as performance appraisal, goal and budget development, and human resource allocation" (Burke and Litwin, 1992: 532), is classified under organisational culture, whereas it naturally resides under the strategy pillar along with structure. It seems as if these positionings were created to accommodate transformational-transactional leadership, a leadership approach that became prominent at the end of the 1980s (Bass and Avolio, 1994; Burke and Litwin, 1992; Bass, 1985).

Another issue is the positioning of the external environment at the top of the model. This positioning may create the impression that the external environment controls organisational leaders. However, the 2008 - 2012 financial disaster in the USA and Europe and the international recession that followed were not simply the result of existing environmental conditions where leaders had been merely passive spectators. In fact, executives of large financial corporations took decisions that precipitated the subprime mortgage financial disaster (Nemchek, 2010). More importantly therefore, leaders - rather than the external environment - could and should determine how events unfold under given circumstances. Moreover, leaders have to transform organisational conditions and contribute materially to the creation of benevolent external business conditions.

Against the background of these arguments, a substantial redesign of the Burke-Litwin model is proposed. The purpose is to empower leaders by enhancing their understanding of the future in terms of potential financial disasters, political upheavals, and major market swings. Amodel with such an approach may enable leaders to create and effectively manage the future to the benefit of the organisation, its people, and the external environment.

PURPOSE OF THE REVIEW

The purpose of this review is twofold: to analyse critically the Burke-Litwin model and its current usefulness in the light of changes in the external environment; and to identify and describe the outcomes of leadership. The first objective is thus to streamline the model by including key inputs from the external environment and new developments in contemporary business management. The second objective is to explore the outcomes of leadership, such as performance and effectiveness at the organisational, team, and individual levels. A proper understanding of the consequences of leadership and leadership behaviours is an important requisite for, and contributor to, the effectiveness of business leaders as well as for leaders in the public sector and non-profit organisations.

METHODOLOGY

Since this study is based on a review of the weaknesses of the Burke-Litwin model, and since it proposes significant changes to the model, more than one research methodology was used. In order to analyse the model, a thorough study of the relevant literature was conducted.

The Burke-Litwin model reflects causality - an approach that is replicated in this review. Jaccard and Jacoby (2010) describe six types of causal relationship between input and output. Two of these are relevant to the current study: the direct and the indirect causal types. In a direct causal relationship, a particular cause is assumed to have a direct impact on the outcome variable; while in an indirect causal relationship, a particular variable influences another variable indirectly through its impact on an intermediary variable. An example of the second mode is the positive impact of leadership on organisational performance through an intermediary dimension such as team cohesion (Michalisin, Karau and Tangpong, 2007).

Furthermore, model building is used in substantially redesigning the Burke-Litwin model. In the adapted model a new pillar, human capital, is added (see Figure 2) to replace two intertwined pillars in the original model: those of leadership and culture. In view of the importance of the outcomes of leadership, a comprehensive outcome component is also proposed (Jaccard and Jacoby, 2010).

Criteria for developing the adapted Burke-Litwin model

Because of the weaknesses of the Burke-Litwin model described above, it was decided to set criteria for the development and evaluation of potential elements for inclusion in the adapted model. The criteria are openness, adaptability, incorporation of futuristic leadership, comprehensiveness, and outcomes.

Openness

The first requirement is that the model should be structured in a manner that acknowledges that leaders have to interpret and report to the external environment. Openness may enable leaders and organisational members to identify financial threats and other danger signs timeously (Kipp, 2005).

Adaptability

Lingering geopolitical upheavals and macro-economic uncertainties that are likely to prevail may impact on organisations in ways that are not always predictable. The model should therefore be sufficiently adaptable to accommodate these and other developments that may necessitate changes to the model (Yukl, 2008; Porter and McLaughlin, 2006).

Incorporation of futuristic leadership

In view of the fluidity in the external environment described above, continuous vigilance and futuristic leadership (supported by an adaptive-innovative approach to visioning), and creation and implementation of strategy should be the main driving force of this model (Svensson and Wood, 2006; Veldsman, 1999).

Comprehensiveness

The model and its contents should be sufficiently comprehensive and holistic to form the basis of an independent OD instrument that could be used to assess the effectiveness of diverse organisations, including business, government, and non-governmental organisations.

Outcomes

Clear descriptions should be given of the outcomes of organisational, team, and individual performance and effectiveness. Understanding the outcomes of leadership may enable leaders to come to a better understanding of their own purpose, functioning, and effectiveness as leaders (Jing and Avery, 2008).

A BRIEF DESCRIPTION OF THE ADAPTED BURKE-LITWIN MODEL

The proposed adaptation of the Burke-Litwin model is graphically depicted in Figure 2. Input to this model consists of contextual factors from the external environment combined with internal contextual factors, while organisational, team, and individual performance and effectiveness represent the outcomes. The process aspect of the model consists of three levels: the strategic triangle (leadership, strategy, organisational culture, and human capital), the management level (managing structures and core organisational processes, organisational climate, and human talent), and the process efficiency, individual values and motivation, and individual talent level.

In Figure 2 feedback loops go down, up, and sideways. Arrows pointing in all directions express the open-system principle, where change in one component will eventually have an impact on all the others.

The revised model offers a fresh perspective on the prerequisites for organisational performance. It purposely moves beyond the transformational-transactional distinction made in the Burke-Litwin model. To realise organisational and people effectiveness and performance, leadership plays a pivotal role; but it also involves a much more intricate process than that acknowledged by the transformational-transactional paradigm (Spangenberg and Theron, 2002; Bass andAvolio, 1994).

Placing leadership at the apex of the model does not imply that leadership only has three dimensions or is built on only three pillars. Rather, the adapted model attempts to emphasise that leadership is a multidimensional process that is responsible for driving the three levers of performance illustrated by the model.

The adapted model is significantly more streamlined than the original model. At the top of the model, a changeoriented strategic triangle is driven by leadership; one step lower is the management level, geared to strategy implementation; while process efficiency, individual values and motivation, and individual talent comprise the third level.

With regard to the pillars, three congruent, compatible pillars represent major organisational drivers: strategy, organisational culture, and human capital. The novel inclusion of human capital in the model is supported by literature that shows the increasing contribution of human capital and talent in organisational performance and effectiveness (Yukl, 2008; Becker and Huselid, 2006; Youndt and Snell, 2004).

A CRITICAL REVIEW OF THE ADAPTED BURKE-LITWIN MODEL

The discussion of the impact of the external and internal contexts on leadership and organisational performance is structured around four themes (see Figure 2):

* the strategic triangle consisting of leadership at the helm; strategy; organisational culture; and human capital (leadership at the helm will be discussed first, followed by strategy, organisational culture, and human capital in a subsequent section);

* The management level;

* The process efficiency, individual values and motivation, and individual talent level; and

* The outcome level, comprising organisational, team, and individual performance and effectiveness measures.

The impact of context on leadership and organisational performance

The contextual issues that were considered are external and internal contextual factors, and their interrelations with leadership and performance.

Defining the organisational context

Schneider (1998) contends that, despite unpredictable external or internal interferences, leaders can create conditions that are conducive to individual and team effectiveness. Schneider describes such a condition as providing a context for performance - the circumstances that influence the ability of employees to contribute meaningfully to the achievement of organisational goals. In other words, leadership in organisations does not take place in a vacuum, but takes place in organisational contexts (Porter and McLaughlin, 2006).

Fiedler (1996:249) summarises the above views as follows:

Most serious researchers in the area agree that leadership success is the result of the characteristics and behaviour of the leader, the nature of the leadership situation as well as the interaction between the leader and the leadership situation.

External contextual factors

The impact of contextual factors from the external environment has been addressed by various researchers. Yukl (2008) and Howell and Avolio (1993) emphasise the impact of high uncertainty and turbulence on leaders and leadership styles, while Gordon (1991) contends that stable versus dynamic markets moderate the effect of cultural traits on performance. Other enduring factors that may affect business effectiveness and performance are the state of the economy, market forces, politics, and labour unions (Mair, 2003; Burke andLitwin, 1992).

Possibly the most damaging external contextual influence on the world economy during the past decade was the subprime mortgage scandal, leading to the major global financial crisis referred to earlier. Three studies that have been conducted since then provide a sound understanding of the impact of this major crisis - initially on financial corporations in the USA, and later spilling over to financial institutions in Europe. Demyanyk and Von Hemert (2011) analysed the quality of subprime mortgage loans, and discovered that the upswing and downswing of the subprime mortgage market followed a typical situation of a lending boom that led to a bust scenario, where unjustifiable growth led to the market downfall. Second, Kregel (2008) contends that the crisis was the result of insufficient margins of safety criteria on how creditworthiness was assessed. The core of the problem was the under-evaluation and faulty pricing of risk by leaders responsible for managing the approval of mortgage loans. Third, according to Nemchek (2010), the poor judgement and decision-making by leaders and followers described above, combined with poor oversight and irregularities, caused the subprime mortgage debacle.

Considering the above catastrophe and the range of those involved who perpetrated it, it is clear that external contextual influences may pose a material threat to the performance of companies worldwide. Contextual influences may, furthermore, play a crucial role in the understanding of developments in the organisation's external environment.

Against this background, the adapted model positions external contextual factors as a sphere that surrounds the entire model. This positioning indicates that external contextual factors influence the organisation at all levels, from leadership at the helm down to various organisational levels, including team and individual outcomes. These external factors can also interact with processes, systems, and individuals at all organisational levels.

This 'overarching, hovering above and around' positioning of contextual factors allows leadership to be positioned where it belongs: at the top of the future-directed strategic triangle but within a dynamic contextual sphere that surrounds it. External contextual factors, combined with internal contextual factors, pervade the entire organisation. The inclusive, dynamic role of external and internal contextual influences is one of the proposed major changes to the Burke-Litwin model.

Internal contextual factors

In their extensive study of internal contextual factors and their influence on leadership, Porter and McLaughlin (2006) identified seven factors: organisational culture/climate, goals/purposes, people/composition, processes, state/condition, structure, and time. Contextual factors, with examples of each factor, are presented in Table 1. It is significant that Porter and McLaughlin's reference to contextual factors is consistent with the proposed adapted Burke-Litwin model. The strategy pillar of the model is confirmed by three contextual factors: goals/purposes, processes, and structure. The organisational culture and human capital pillars of the model are endorsed respectively by organisational culture/climate and people/composition. Ilie other two factors, state/condition and time, seem to be generic factors.

Porter and McLaughlin (2006: 574) also emphasise the dynamism of contextual factors:

In the future, we believe there is a strong need for the leadership field to focus on the dynamic aspects of organisational context relationships. In effect, there is a need to build more movies rather than just snapshots. Many current studies are static. At best, they reveal only simple, one-time pictures of the interplay of the organisational context with leadership in organisations.

The open-system nature of the proposed adapted BurkeLitwin model is geared toward uncluttered interactions among various components of the model, and its wide-open interactions with the external environment are consistent with the dynamic, interactive approach proposed by Porter and McLaughlin (2006).

The strategic triangle: Leadership at the helm

The strategic triangle will be discussed in two sections; 'Leadership at the helm', followed by a discussion of the base of the triangle under the headings 'Strategy', 'Organisational culture', and 'Humancapital'.

Leadership at the helm

The four components of the strategic triangle referred to above (leadership, strategy, organisational culture, and human capital) fonction in an interactive manner, since none of them can function effectively without the full support of the other three. The strategic triangle could in essence be seen as a strategic adaptive level, since it is oriented towards adaptation and bringing about change. In this role it is open to influences from external forces, and its four components together lead the organisation into the friture. At the same time, the strategic triangle is actionoriented and oversees the management of all internal facets ofthe organisation.

Leadership and the philosophy ofthe adapted model

The leadership philosophy of the adapted model differs from the Burke-Litwin model in some important ways. First, leadership serves as the main driving and inspirational force for each of the other three components. The positioning of leadership at the apex of the adapted model attests to its power. Furthermore leadership, rather than the external environment, serves as the main driving force of change in the organisation. Leaders are responsible for the creation of a vision-directed, high-performance organisational culture, with the appropriate strategy and suitably qualified, high-quality human capital required for implementing the vision and strategy (Barrasa, 2004; Yukl, Gordon and Taber, 2002; Appelbaum and Paese, undated). In the Burke-Litwin model, however, the external environment is positioned at the apex of the model, and Burke and Litwin (1992:530) state that

[o]ur point here is that for the most part organisation change is initiated by forces from the external environment (e.g. changes in the competitive environment, government regulations, technological breakthroughs).

* Leaders manage the future. While the Burke-Litwin model does not address the future in any way, the philosophy of the adapted model holds that leaders should take full responsibility for the current and future performance of the organisation. Top executives should not only be aware of what is happening in the external environment globally, but should also proactively study the future and develop farsightedness. Futuristic leadership has become increasingly important, while long-term visioning, forecasting, and planning will have to become priorities for business enterprises and government departments alike. O'Brien and Robertson (2009) are even more forceful: with rapid change and constant uncertainty, they argue, a reliance on leadership competencies resulting from earlier well-established beliefs, traditions, and practices will not suffice in the future. They argue that a changing business environment requires new leadership skills that are associated with the demands of the future.

* Leaders create openness. Positioned as a circle surrounding the model, external influences can interact with elements of the model at all levels: the strategic triangle, the management level, the process efficiency and individual level, and the outcomes level. This openness enables free and speedy communication with the outside world.

* Leaders should implement ethical, authentic leadership. Ethical leadership should be incorporated into the visioning, strategic planning, and implementation of strategy. While future-directed leadership may alert and enable organisations to respond promptly and appropriately to external threats that could have widespread consequences, strong ethics could ensure that leaders act appropriately and in an ethical manner. Business- and governmentrelated organisations should heed Spangenberg and Theron's (2005) suggestion of developing and implementing an ethical vision along with the organisation's business vision.

Interaction between leadership and context

The recent financial crisis that started in the USA clearly illustrates the interrelationship between leadership and the external environment. Awarding subprime loans that were irregular in the first place, then bundling them and putting the bundles up for sale, was not only poor judgement and decision-making, but also highly unethical behaviour (Nemchek, 2010). Thus, poor judgement and decision making - equalling poor leadership - created an unstable business environment in the USA that, in turn, became a very depressing business context for organisations and leaders thousands ofkilometres away.

The lesson here is that one person's leadership - or lack of it - may become another person's context - or woes. The authors contend that leadership and context are, in a sense, reciprocally related. High-powered executive leadership and external context may alternate as the main drivers of organisational action or reaction.

The role of vision

Vision has been defined as an idealised future goal state, as a plan for future goal achievement, and as an image of the future that articulates the values, purposes, and identity of followers (Strange and Mumford, 2005). The emphasis is placed on the composition of a distinct image of an organisation's future. Furthermore, vision involves a set of beliefs about how people should act and interact in order to create an idealised future state.

Both Strange and Mumford (2005) and Kantabutra (2006) emphasise the importance of meaningful content in a vision. The rationale is that without meaningful content, vision attributes alone may not be able to impact significantly on sustainability and business performance. Humphreys (2004) argues that vision should meet the requirements of a strategic management process. In this process, strategy can be described as a circular progression in which the starting and finishing line should be redrawn continually by a consistent, comprehensive examination of the various environments surrounding the organisation.

Applying futuristic leadership

In view of the leadership dynamics discussed above, the present authors contend that leaders are responsible for creating the near future and visioning the distant future. In order to create the future, they need to develop farsightedness to understand and interpret emeiging trends, both positive and negative. Leaders need to be so wellinformed and insightful that they can, to a degree, predict major shifts in the global economy, with particular emphasis on markets.

In the context described above, futuristic leadership becomes relevant. Svensson and Wood (2006: 528) state that

[futuristic leadership orientation refers to a derivation and focus on the organisational performance of tomorrow's decision-making and business behaviour.

With tomorrow's decision-making and organisational behaviour in mind, leadership effectiveness and its evaluation are firmly future-oriented, and take a futuristic view of the ways in which management and business practices are conducted. From a postmodern, futureoriented perspective, Veldsman (1999) believes that the future comprises the context that provides meaning and justification for leadership actions. Leaders must therefore have insight into and accept the nature of possible future scenarios and corresponding responses.

This exposition of futuristic leadership raises two questions: how to build the bridge to the future, and how to enable leaders to cross that bridge. Veldsman (1999) sheds light on building the bridge by listing the crucial issues: future challenges, associated opportunities, associated threats, and corresponding responses (see Table 2). For the purpose of this review, future challenges (with responses required) are portrayed because they provide a good idea of some of the major challenges that leaders face, as well as possible strategies to deal with them.

In order to deal with an elusive future, shifting contexts, and the resultant challenges, Veldsman (1999) promotes a change in style. He suggests a style by which leaders can respond to the individuals, groups, organisations, or communities that are being influenced. Furthermore, an appreciation of increasing organisational complexity is needed. Yukl (2008) identified a range of skills for handling different and complex situations that may be of value in this context. These research-based skills are cognitive complexity, systems thinking, situational awareness, ability to learn, social intelligence, emotional intelligence, and behavioural intelligence (Yukl, 2006; Boal and Hooijberg, 2000; Zaccaro, Gilbert, Thor and Mumford, 1991). Yukl (2008) also notes the importance of personality characteristics and values such as integrity, emotional maturity, and the socialised need for power, all of which are also required for effective ethical leadership.

The strategic triangle: Strategy, organisational culture, and human capital

While the previous section focused on the leadership aspect of the strategic triangle, the focus now shifts to the foundation of the triangle: strategy, organisational culture, and human capital.

Strategy

Kipp (2005) defines strategy as helping to mobilise an organisation's resources into a unique, viable position based on appropriate internal capabilities, anticipated changes in the environment, and the actions of clever competitors. Strategy formulation is facilitated by leadership behaviours such as monitoring the external environment and evaluating threats and opportunities. Bigler (2001) adds that the formulation and revision of competitive strategy act as a critical source of influence on organisational performance. Cravens, Greenley, Piercy and Slater (1998) contend that successful market-driven strategies are created by becoming market-oriented, finding superior customer value opportunities, handling value propositions with distinctive competence, creating strategic relationships, and bringing about organisational change as and when required. Cravens et al. (1998) furthermore propose that, in order to gain market leadership, an organisation must effectively combine the various dimensions of strategy into an integrated process of strategic analysis and action. Mair (2005) and Mintzberg (1994) consider strategy as a creative and proactive process that goes beyond making decisions. They concur that the problem with strategy is not a lack of planning or strategic thinking, but an inability to take strategic action.

Organisational culture

Gray, Densten and Sarros (2003) consider organisational culture as the way an organisation functions, for example by defining the core values, assumptions, interpretations, and approaches that characterise the organisation. Due to organisational culture's strong central position in the adapted model, it comprises much more than just 'the way we do things around here'. In view of the increasing importance of futuristic leadership described earlier, and the necessity of an adaptive-innovative organisational culture and approach to attain competitive advantage, a strong, dynamic cultural approach is considered apriority.

* Organisational effectiveness, productivity, performance, and performance-related outcomes

In a study of the impact of organisational culture on overall organisational effectiveness involving 169 organisations in the USA, Denison, Haaland and Goelzer (2004) found that all 12 organisational culture factors investigated were related to effectiveness. According to Kwantes and Boglarsky (2007), recent research in the USA clearly reveals a positive relationship between organisational culture and productivity. Earlier studies quoted by the same authors confirm that organisational culture is positively related to a number of other valued organisational outcomes such as overall performance (Sorenson, 2002; Denison andMishra, 1995), sales growth and profits (Sin and Tse, 2000), and quality (Fraser, Kick and Barber, 2002). Zostautienè and Vaiciulènaitè (2010) developed a coherence model demonstrating a positive relationship between marketing culture and marketing effectiveness.

* Employee effectiveness, productivity, performance, and morale

According to Schneider (1995), organisational culture strongly influences employee effectiveness. A collaborative organisational culture that emphasises harmony, affiliation, and teamwork encourages maximum involvement by employees. This involvement, in turn, engenders positive identification with the organisation. Furthermore, it creates a willingness to perform beyond normal work requirements, making a meaningful contribution to organisational goals.

Kwantes and Boglarsky (2007) confirm that organisational culture can have a strong impact on both employee personal effectiveness and productivity, particularly cultures that optimise employees' ability to approach their tasks in a constructive and self-fulfilling way. Employees who engage in these behaviours enhance their job performance, productivity, and job effectiveness. Several studies also reveal positive relationships between organisational culture and indices of personal fulfilment such as morale (Connell, 2001) and satisfaction (Fraser et al., 2002). To summarise, organisational cultures or styles that promote employee goal orientation, self-control, and trust, combined with using their abilities in a productive and self-fulfilling way, lead to meaningfulness and thus to a greater contribution and better performance by employees.

* Adaptive culture

Nadler, Shaw, Walton and Associates (1995) emphasise the importance of adapting to changes in the external environment in order to function effectively. In a study of the impact of transformational leadership and organisational culture on business performance, Xenikou and Simosi (2006) found that achievement orientation had a significant, direct effect on business unit performance. This means that work environments that encourage goal setting along with the achievement of goals and high performance contribute to improved performance.

In their study of the research prevalence of contextual factors, Porter and McLaughlin (2006) concluded that, in both conceptual and empirical research, organisational cultures supportive of innovation and change emerged as the most frequently considered organisational culture types. Successful adaptation often requires innovative changes rather than incremental adjustments to traditional practices. Innovation in delivering products or rendering services is facilitated by strong cultural values of creativity, flexibility, tolerance of mistakes, product quality, and customer service.

Yukl (2008) puts these findings and views in a broader context when he concludes that innovative adaptation is essential in a dynamic, uncertain external environment that experiences rapid technological change, combined with fast-changing customer demands, intense competition, and political and economic uncertainty. In view of these developments, it seems that an adaptive-innovative organisational culture may be a critical lever in promoting futuristic leadership and organisational performance.

Human capital

Hitt and Ireland (2002) define human capital in terms of the degree to which an organisation's staff complement has the competence and motivation to function effectively. International research indicates that human capital has a strong impact on organisational performance (Yukl, 2008; Bowen and Ostroff, 2004; Youndt and Snell, 2004; Gelade and Ivery, 2003). This view is supported by an empirical study involving a sample of 50 autonomous business units within the same organisation (Wright, Gardner and Moynihan, 2003). Their results indicate that human capital practices and organisational commitment are significantly related to organisational performance measures as well as operational costs and profits before tax.

Furthermore, there are signs that during the past decade the management of human capital (also called strategic human resource management [SHRM]) has moved from focusing only on sound human capital management to include a concern for the strategic position of the organisation, and how this strategic positioning should be managed. Some human capital managers are concerned about how to design and implement a human capital system that effectively supports the implementation of strategy (Becker and Huseled, 2006). Those authors, in a recent involvement in strategy literature, suggest a renewed emphasis on strategy implementation as the focal mediating construct in SHRM.

Specifically, we argue that it is the fit between the HR architecture and the strategic capabilities and business processes that implement strategy, that is the basis of HR's contribution to competitive advantage (Becker and Huseled, 2006:900).

Also considering human capital as a source of competitive advantage, research by Campbell, Coff and Kryscynski (2012) suggests that diverse approaches can be used to create human capital-based competitive advantages. These approaches include compensation design, employee selection, and job design.

Intellectual capital - a critical requirement of adaptiveness and innovativeness for futuristic leadership - is a major facet of human capital. Youndt and Snell (2004) conceptualise intellectual capital as having three distinct components: human, social, and organisational capital. In order not to confuse human capital with the human capital pillar of the model, it will be called human capital (competence). Human capital (competence) is defined as an individual employee's knowledge, skills, and expertise. Organisational capital is the institutionalised knowledge and experience captured and stored in databases, manuals, and other structures. Youndt and Snell (2004) suggest that social capital is located in neither of the individual or organisational levels. Adler and Kwon (2002) and Nabapiet andGhoshal (1998:339) consider social capital as

an intermediary form of intellectual capital that consists of knowledge resources that are embedded within, available through, and derived from networks of relationships.

Based on the results of an empirical study, Youndt and Snell (2004) conclude that intellectual capital correlated significantly with organisational performance. More specifically, their research indicated that in the intellectual capital-performance regression model, each of the three kinds of intellectual capital correlated significantly with increased organisational performance. In their model, social capital was by far the strongest predictor of performance. A clear link between social capital and performance supports the contention that knowledge tied up in relationships among employees, customers, suppliers, associates, and so forth tends to lead, inter alia, to process and product innovations and better problem solving. These enhanced capabilities, in turn, lead to increased production and service delivery efficiencies, as well as the resultant customer satisfaction.

Findings about the human capital (competence)performance link lend support to the general view that talented people are probably the most critical factor in developing and delivering superior products and services. Both Youndt and Snell (2004) and Pfeffer (1994) note that researchers and practitioners have argued for quite some time that many of the fastest-growing companies in recent decades achieved their remarkable growth and competitive advantage through their talented employees.

In view of the proven significance of human capital, its position as one of the strategic drivers of organisational performance in the adapted Burke-Litwin model is well justified.

The management level

While the strategic level is about visioning and creating strategy regarding the future of the organisation, the organisational culture, and the people, management is about implementing the vision and strategy and running the organisation on a daily basis. The management level concerns itself with managing structures and core organisational processes, creating and sustaining a supportive unit or team climate, and managing human talent.

Managing structures and core organisational processes

With the changing of competition in business from cost and quality to flexibility and speedy reaction, the usefulness of process management is gradually being recognised (Herzog, Polajnar and Tonchia, 2007). Herzog et al. describe the contribution of process management in creating sustainable competitive advantage as business process reengineering (BPR). The advent of BPR in 1990 was a major development, since it is only through fully functioning core organisational processes that an organisation can perform effectively and produce the desired financial returns (Tonchia and Tramontano, 2004; Davenport and Short, 1990; Hammer, 1990).

Senior leaders and middle managers have the strongest influence on the implementation of organisational strategy and plans, as well as on the creation of formal business structures and processes. Referring to the implementation of strategy, Edwards and Peppard (1998; 1994) consider BPR as a natural link to organisational strategy, and suggest that it can help to bridge the gap between strategy formulation and implementation. In this context, BPR defines the business architecture that allows the organisation to focus more clearly on customer needs.

In a comprehensive study that tested three different change initiatives - continuous improvement, BPR, and benchmarking - it was found that BPR had the greatest impact on performance (Lok, Hung, Walsh, Wang and Crawford, 2005). The study furthermore identified three core requirements for effective operation:

* Executive commitment;

* Strategic alignment, which was the major influence on the success rate of both re-engineering and other continuous improvement programmes; and

* Employee empowerment.

Another survey-based study of BPR involving 73 mediumand large-sized Slovenian manufacturing companies (Herzog et al, 2007) identified several crucial factors that must be taken into account to enhance the prospects of success. Some of the factors are related to the Lok et al. (2005) study. Crucial factors identified are:

* Education and training, teamwork and employee cooperation;

* Information technology support;

* Process orientation, need for organisational changes, and value of BPR implementation; and

* Levers and results (i.e. tools and techniques, and results orientation).

The crucial importance of some of the factors that strongly influence the implementation of BPR and related change initiatives also emerged from these two studies. These were: top management commitment, strategic alignment, process orientation, and employee empowerment and commitment.

Managing organisational climate

Burke and Litwin (1992) contend that climate has to do with impressions, expectations, and feelings of employees about how the local work unit is managed and how effectively they and their colleagues work together every day. The key concern is the immediate group or unit. Spangenberg and Theron (2004) describe work unit climate as a global perception of the psychological environment of the unit. It comprises working atmosphere, teamwork and work group cohesion, consensus on the vision and core values, achievement orientation, and commitment to the unit.

Effective management of the business (strategy) combined with sound management of people (human capital) in an affirmative organisational culture places the leader in a favourable position to create a positive organisational climate. Such a climate, in turn, may contribute to an overall adaptive, performance-related orientation.

Issues discussed below include climate drivers such as employee involvement (EI) and the influence of team cohesion on performance, followed by the impact of climate on innovation and performance.

In a study of the impact of EI on organisational outcome measures, Riordan, Vandenberg and Richardson (2005) found that employee involvement was related to increased financial performance and reduced employee turnover. Furthermore, a climate perceived to be favourable to EI was found to be related to increased employee loyalty and organisational commitment. This finding implies that an El-friendly climate is a powerful intervening factor that could improve competitive advantage.

A study by Michalisin et al. (2007) of the influence of team cohesion on organisational performance indicated that leadership was not directly related to superior performance. It was, however, significantly associated with team cohesion which, in turn, was significantly associated with superior performance. These results suggest that effective leadership may strengthen performance indirectly by influencing key group process mechanisms. Furthermore, the findings also suggest that leader behaviour, thanks to its positive impact on the development of team cohesion, can yield superior organisational performance.

In their study of the impact of contextual factors on leadership, Porter and McLaughlin (2006) cited studies that confirmed the role of climate in the stimulation of innovation in organisations. In a survey of 32 Taiwanese companies, Jung, Chow and Wu (2003) found that a climate that supported innovation increased a transformational leader's positive effect on organisational innovation. In a study of willingness to lead involving multiple organisations, Morrison and Phelps (1999) found that an employee's willingness to lead and take charge was directly related to management's openness to change, and to an overall climate that supported innovation and change.

In a study of perceptions of organisational effectiveness in which adaptability emerged as the core of organisational effectiveness, the second major finding was the central role played by organisational climate (Nicholson and Brenner, 1994). Climate stood out both as a predictor of perceived future success, and as an intervening variable. Nicholson and Brenner (1994) therefore consider climate as essential for understanding organisational performance. A favourable attitudinal climate seems to be a precondition for the continued effectiveness of an excellent, marketclient-driven organisation.

The reviewed research evidence of the impact of organisational climate on employee psychological health and performance, and its positive, sometimes direct, impact on organisational performance, confirms its standing as an independent component in the adapted model.

Managing human talent

Effective management of human talent by means of sound human resource processes should enable employees to develop sufficient competence to perform well, contribute to unit or group effectiveness, and experience personal satisfaction. Key functions of human talent management are the identification of talent and productive deployment of employees. The starting point of this broad process is the identification of those factors that constitute effective work performance. Campbell, McCloy, Oppler and Sager (1993) identified eight distinct dimensions of job performance (see Table 3).

The eight dimensions of job performance could be regarded as sufficient to explain the structure of performance at a general level. However, in view of the significant changes occurring in contemporary organisations, Pulakos, Arad, Donovan and Plamondon (2000) contend that the need for adaptive workers has become increasingly important. Based on intensive literature studies and empirical research, Pulakos et al. identified eight dimensions of adaptive performance, which are set out in Table 4.

The changing nature of work verifies the adapted BurkeLitwin model's emphasis on future-directed leadership and the facilitative role of an adaptive approach to leadership, management, and work. Since the external environment, and often also the internal organisational environment, may be uncertain for some time, it would also be wise to develop sufficient competence in the dimensions required for adaptive work performance.

The process efficiency, individual values and motivation, and individual talent level

The process efficiency, individual values and motivation, and individual talent level not only receives inputs from the strategic and management levels, but also provides these upper levels with the proficiencies and human capabilities required for effective functioning. In fact, an organisational vision can only be implemented effectively when leadership successfully implements corporate strategy, with the help of substantive human capabilities and effective organisational processes. Metaphorically speaking, this level serves as a talent reservoir that provides critical input to higher levels as well as lower down to the output levels.

Process efficiency

Appropriate efficiencies are required for the effective functioning of the key organisational processes. Efficiency is generally considered to be the degree to which the organisation curtails the cost of finances, operations, and human capital in pursuit of effective organisational functioning. Yukl (2008) suggests measures such as costs as a percentage of revenue, costs relative to those of competitors, and employee labour productivity. Yukl also adds the critical issue of process reliability, which he considers to be one of the three most important determinants of organisational effectiveness. In their major empirical study of BPR, Herzog et al. (2007) listed related issues such as cost reduction and decreased response times by using automation, as well as the degree of recognition the employee received for his or her contribution to improved process operation.

Individual values and motivation

The three main forces of the proposed adapted BurkeLitwin model - strategy, organisational culture, and human capital utilisation - may influence the individual in a collective way For example, these forces may impact on the individual's values, motivation, and commitment. In turn, individual needs, values, and motivation are intrapersonal drivers that lead a person to achieve both work success and personal satisfaction.

Giving attention to the needs of employees is therefore a major management priority. Pillay and Meindl (1998) believe that leadership associated with creating collectivistic values in work groups, along with an increased sense of community, may be beneficial. It is generally accepted that leaders can influence mutual cooperation and organisational commitment. Today's better-educated employees aspire to more than just equitable remuneration (Gibson, Ivansevich and Donnelly, 1994). They want a sense of involvement and sharing in the organisation's vision. They also want to be comfortable with the organisation's culture and to experience a sense of belonging.

Individual talent

At the strategic triangle level, human capital significantly impacts on organisational performance. At the management level, human determinants of work performance (including the increasing need for adaptive workers) do the same. At the efficiency level, the emphasis is on individual talent and skills.

It is generally accepted that work talent consists of appropriate task-related skills, knowledge, experience, and education of employees (Burke and Litwin, 1992). The value of talented employees with high levels of competence and motivation is based on the fact that they may be more productive than other employees because they will work faster and smarter. Research indicates that talented employees can improve both process efficiency and process reliability (Hatch and Dyer, 2004). Furthermore, talented employees can stimulate change and adaptation by their involvement in the development of more innovative products or services, by marketing these effectively, and by providing excellent customer service (Vermeulen, Jong and O'Shaughnessy, 2005; Baer and Frese, 2003). It is not surprising, therefore, to find that talented employees with superior knowledge and skills are increasingly being seen as a valuable asset and a basis for competitive advantage.

OUTCOME MEASURES

The purpose of outcome measures is to assess whether the performance of an organisation is satisfactory and sustainable, particularly if it is a business organisation. However, some concerns can be raised about the validity of organisational performance outcome measures. Leadership research is often criticised for relying excessively on subjective measures (for example, the quality of superior-subordinate relationships) in studying the effect of leadership on organisational performance (De Hoogh, Den Hartog, Koopman, Berg, Van den Berg, Van der Weide and Wilderom, 2004). In this process, other functions that leaders are expected to fUlfil may be neglected.

Also excluded are organisational and environmental factors that play a major role in mediating the leadershipperformance relationship (House and Aditya, 1997). These authors also differentiate between micro-level research that focuses on the leader and his or her followers, and macrolevel research that has a much wider focus, including the organisation and its environment.

De Hoogh et al. (2004) and Den Hartog, Van Muijen and Koopman (1997) add that the relationship between leadership and organisational outcome indicators is often fairly indirect. The same authors further contend that measures of organisational performance are largely dependent on environmental constraints that reflect influences outside the jurisdiction ofthe leader.

In view of the limitations of various performance criteria and the multidimensionality of performance discussed above, Jing and Avery (2008) propose the use of multiple performance criteria that are obtained by different methods. For example, a number of studies reveal positive relations between employee satisfaction, customer satisfaction, and an organisation's financial performance (Schneider, White and Paul, 1998; Johnson, 1996; Schmitt and Allscheid, 1995). Based on this, it seems fair to conclude that positive changes in employee and customer satisfaction lead to positive changes in organisational performance.

Outcome measures in the proposed adapted Burke-Litwin model will be discussed in terms of organisational, team, and individual performance, and effectiveness.

Organisational performance and effectiveness measures

Financial performance

A number of quantifiable criteria are proposed for effective financial performance of organisations. Mair (2003) stresses the importance of profit growth as a measure of organisational performance over time. The significance of profit growth lies in the fact that it integrates growth and profitability - two cornerstones of financial performance. In measuring the performance of two business units, Xenikou and Simosi (2006) used two objective financial measures, both of which used the percentage of the annual performance goal that was met by each business unit.

Niven (2002), however, notes that financial measures of organisational performance reflect the impact of leaders' past behaviour concerning organisational performance, and that these measures have no futuristic predictive power. Nonetheless, Kantabutra (2006) includes financial outcomes in his model as an indicator of organisational performance, combined with employee and customer satisfaction measures.

Organisational effectiveness

Yukl (2008) defines an organisation's effectiveness in terms of realising its mission and survival, as well as maintaining favourable earnings, sufficient financial resources, and asset value. Porter and McLaughlin (2006) suggest an organisational state that includes stability, availability of resources, and organisational health (e.g. finances and reputation). In a study of Chinese companies in transition, Chen (2008) found that the relationship between internal employee communication and organisational effectiveness was more significant than was previously believed. In fact, the integration of employee internal communication into managerial structures and practices was vital, resulting in prominent corporate communication leaders becoming part of the organisation's dominant coalition. Communication excellence was ensured in this way, leading to overall organisational effectiveness.

Market standing

According to Spangenberg and Theron (2004), market standing includes market share (if applicable), competitiveness and market-directed diversity of products or services, customer satisfaction, and reputation for adding value to the organisation. Kaiser, Hogan and Craig (2008) concur with regard to market share, and also emphasise the importance of customer-related issues such as customer retention and growth.

Productivity

Productivity is the quantity and quality of production or services, and efficiency in transforming inputs into outputs (Kaiser et al., 2008), while production and efficiency consist of outputs such as meeting goals, quantity, quality, cost-effectiveness, and task performance (Kwantes and Boglarsky, 2007; Spangenberg and Theron, 2004).

Customer satisfaction

Customer satisfaction has been quoted frequently as a vital, non-financial strategic performance measure (Gates, 2000; Bird, 1995); Seiders, Voss, Grewal and Godfrey (2005), and Fornell (1992) consider customer satisfaction as a vital precursor of loyalty to the organisation, as reflected by repurchase. They also list related issues such as protection of present customers from the competition, reduced costs of future transactions, lower costs of attracting new customers, and an improved reputation for the company. These trends are confirmed by a more recent major study using longitudinal analyses of large-scale secondary data obtained from multiple sources (Luo and Homburg, 2007). Those authors found that customer satisfaction increased the efficiency of future investments in advertising and promotion. This finding is explained by the possibility that customer satisfaction creates free word-of-mouth advertising, thereby saving marketing costs.

Future growth

Future growth comprises an overall index of projected fiiture performance, and includes profits and market share (if applicable), capital investment, staff levels, and expansion of the unit (Spangenberg and Theron, 2004).

Team and individual performance and effectiveness measures

Team performance and effectiveness

Based on a process perspective on leadership and team development, Sheard and Kakabadse (2004) list some major attributes and outcomes of team effectiveness. Probably the most important effectiveness issue is the management of opposites, which requires the ability to adopt different approaches in different situations. This, in turn, calls for a second competence, that of context sensitivity, where the leader and team adapt to the changing operational context together. A third effectiveness dimension that is critical to the team's performance is the excellence of its interpersonal relationships.

Further evidence of the impact of teams on organisational outcomes is supplied through a meta-analysis of teamwork processes (Lepine, Piccolo and Jackson, 2008). Those authors found that three first-order teamwork-oriented process dimensions - transition, action, and interpersonal - showed a positive association with team performance and member satisfaction. In a supplementary analysis, teamwork processes were positively related to team cohesion (attraction and commitment to the team, members, and task) and team potency (a shared belief in the team's effectiveness).

Individual performance

In addition to the well-known production-oriented employee performance criteria of quantity, quality, cost-effectiveness, and timeliness, a more comprehensive performance model developed and used by the University of Rhode Island is presented in this text (Scholl, 2003). The performance criteria are effort-motivation, ability, skills and competence, role perception, and availability of resources.

* Effort-motivation

If working conditions are consistent, the more effort an employee puts into his or her work, the more positive the performance outcomes will be.

* Ability, skills and competencies

Employees will only realise the agreed-upon goals if they develop the necessary task-related skills, supported by supplementary skills such as analytical, conceptual, writing, and computer skills.

* Role perception

To meet the performance expectations of one's superior, one has to clearly understand his or her expectations. Only effort and ability used in the right direction will produce high performance.

* Resources

The final component required for excellent performance is the availability of the necessary equipment, information, and qualified staff.

Individual effectiveness

Kwantes and Boglarsky (2007) describe personal effectiveness in terms of goal-oriented behaviours and a sense of direction, beliefs about control over what happens to an individual, degree of trust in others, and a person's general view of the future. These aspects reflect both productivity and psychological well-being, which are considered essential elements of employee effectiveness.

Individual satisfaction

Individual satisfaction centres on satisfaction with the task and work context, with empowerment and career progress, and with the outcomes of leadership, such as trust in and respect for the leader and acceptance of the leader's influence (Spangenberg and Theron, 2004). Van Dyck (1996) considers employee satisfaction as a key performance measure for business organisations.

CONCLUSIONS AND MANAGERIAL IMPLICATIONS

This discussion offers a brief review of the extent to which the adapted model meets the development criteria set at the beginning of the article, followed by a discussion of some of the major issues emanating from the adaptation of the Burke-Litwin model.

Degree to which the adapted model meets the initial development criteria

Openness

The positioning of the external environment as a sphere surrounding the model, and the free flow of information to and from the external environment involving all organisational levels, processes, systems, and individuals, attest to the openness of the model.

Adaptability

In view of macro-economic and political uncertainties that are likely to continue, the adapted model is designed to be sufficiently adaptable - and open - to accommodate these and other external forces that may necessitate changes to the model.

Futuristic leadership

Fluidity and frequent instability in the external environment take a heavy toll on forward thinking and planning. Futuristic leadership, supported by an adaptive-innovative approach, is therefore the main driving force of this model.

Comprehensiveness

The adapted model, which has three congruent, independent pillars and extensive outcome measures, is more comprehensive than the Burke-Litwin model, and forms the basis of an independent OD instrument that can be used to assess the performance and effectiveness of a variety of medium to large private or public organisations and work units.

Outcomes of the model

Wide-ranging outcome measures - organisational, team, and individual performance and effectiveness measures - provide leaders with additional insights into leadership, its outcomes, and its consequences.

Major issues emanating from the adaptation of the Burke-Litwin model

The first issue that arises from the adaptation of the Burke-Litwin model is the changes required to 'open up' the model to enable a freer information flow to and from the external environment. The second issue relates to being aware of future challenges, accepting responsibility for future performance, and developing the required skills to deal with organisational and environmental complexity. The third issue is the growing importance of an adaptive-innovative organisational culture in dealing with futuristic leadership and organisational performance. The fourth issue is the increasing role of human capital as one of the most important contributors to effective organisational performance.

More comprehensive interaction with external contextual factors proposed

The first major difference between the Burke-Litwin model and the adapted model is the two models' distinctive views of the influence of external contextual factors. The Burke-Litwin model positions the external environment at the top of the model, with direct contact downwards towards the mission and strategy, leadership, and organisational culture level. Furthermore, it has direct contact with individual and organisational performance.

In contrast, the adapted model acknowledges and emphasises the pervasive, expansive nature of external contextual factors, and positions them in the form of a sphere that surrounds the entire model. The significance of this design is that external contextual factors not only exert influence on the organisation by interacting with the strategic triangle and performance (outcomes) as in the Burke-Litwin model; but also interact with the management and the process efficiency and individual talent levels. Thus, they impact directly on the model everywhere along and inside the circle.

The openness of the adapted model described above enables direct interaction between the external environments and, for example, core processes, systems, and employees at all levels. This wide, open, unrestricted, and speedy flow of information may assist leaders to deal timeously with major changes in business, the economy, and socio-political developments, as well as with potentially harmful financial developments in the external environment. Thus leaders, rather than the environment, should determine how events unfold under given circumstances. Clearly, an organisation in which all employees have access to information from the external environment is more empowered and, therefore, in a more favourable position to perform effectively. Moreover, leaders have to transform external organisational conditions and contribute materially to the creation of benevolent external business conditions.

These highly interactive relations among elements of the adapted model and external contextual factors may represent something of what Porter and McLaughlin (2006) mean when they call for the building of more movies than snapshots.

The adapted model, futuristic leadership, and handling of organisational complexity

The second major difference between the models is the adapted model's emphasis on futuristic leadership. Since the external contextual factors surround the entire adapted model, they allow leadership (rather than the external environment) to be positioned at the top of the model, from where it directs the strategic triangle and collectively leads the entire organisation into the future. This positioning requires insight from the leader into shaping the nature of the future, as well as acceptance of this responsibility. Futuristic leadership has become an imperative, with leaders taking full responsibility for the current and future performance ofthe organisation.

Lessons from the 2010-2012 recession require top executives to appreciate fully the impact of events in the global external environment. Therefore, leaders must proactively study the future and actively appraise current and future challenges. Direct liaison with a reputable institute involved in futures research can assist leaders in many ways - for example, in obtaining a picture of expected future developments, understanding a progressively more difficult external environment, and - as far as the corporation is concerned - developing an increased understanding of organisational complexity. Yukl's (2008) research-based strategic leadership capabilities for handling diverse, complex situations discussed earlier are relevant here, together with ethical leadership dimensions such as integrity, emotional maturity, and a well-balanced need for power.

Increasing need for an adaptive-innovative organisational culture

Both models acknowledge the importance of organisational culture in the leadership-change process. While the Burke-Litwin model accentuates transformational leadership, the adapted model emphasises innovation and adaptation. Yukl (2008) considers an adaptive-innovative organisational culture to be indispensable for fostering future-directed leadership and organisational performance. It is also significant that Porter and McLaughlin's (2006) major study of organisational culture concluded that organisational cultures that supported innovation and change emerged as the most prominent organisational culture types.

Growing importance of human capital

The inclusion of human capital in the adapted model is due to its increasing importance as a lever in bringing about organisational effectiveness and performance. During the last decade it has begun to function more broadly than its traditional human resources role. Today it plays an increasingly important facilitating role in the building of strategic organisational processes and capabilities. This capacity, in turn, facilitates the implementation of strategy that contributes materially to the organisation's competitive advantage (Campbell et al., 2012; Becker and Huselid, 2006).

At a human capital (competence) level, there is an increasing understanding of how human talent influences an organisation to bring about superior performance. For example, in a study of the impact of intellectual capital on performance, Youndt and Snell (2004) found that both social capital and human capital (competence) had a strong impact on performance. This finding on the role of social capital has major implications for organisations, as it confirms the value of the sound distribution of knowledge and information among staff and closely-related external associates. With regard to human capital (competence), recent studies confirm the importance of human talent in developing and delivering superior products and services (Kehinde, 2012; Collings and Mellahi, 2009).

In conclusion, the purpose of this critical review was to sensitise leaders and managers to the important role of the future, the external environment, and particularly to the unexpected impact these forces may have on the organisation. The danger of these forces is exacerbated by the impact of changing markets and competition. To handle these challenges, there should be a strong emphasis on developing an adaptive-innovative organisational culture. The strategic triangle of the adapted model is strengthened with the inclusion of human capital. During the past decade many human capital managers have become much more directly involved with the development and implementation of corporate strategy. The inclusion of human capital provides the model with three strong, congruent pillars - strategy, culture, and human capital - driven by future-oriented, adaptive leadership. In order to protect the organisation from major financial fallouts and unacceptable internal behaviour, organisational culture should be strengthened by placing more emphasis on ethical leadership. In fact, the present authors suggest that an organisation's business vision should be complemented with a collaboratively conceived and developed ethical vision and strategy.

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