A conversation with Warren Bennis on leadership in the midst of downsizing

America's most respected guru on leadership argues that the positive effects of empowerment are being undermined by the psycho-logical malaise of restructuring and reengineering. It's impossible for a leader to maintain trust, commitment, and productivity from employees, says Bennis, when layoffs are imminent. The source of the problem, he believes, is that we have moved away from a broad stakeholder orientation to a narrow shareholder mind-set; the pressure to increase shareholder wealth overrides other actions that might be in the best interest of employees, the community, and other stakeholders. Today's ''value-based'' leaders must find ways of balancing the needs of the various stakeholder groups, even when those needs are in conflict. Specifically, Bennis cites the actions of Harman International. Rather than lay off employees, this manufacturer of high quality audio components has created new employee-run vendor companies and sales outlets (''insourcing'').