(FORTUNE Magazine) – ''Of the best leader, when he is gone, they will say: We did it ourselves.'' -- Chinese proverb

CORPORATE leadership used to be so simple. You had it, or you didn't. It was in the cut of your jib. And if you had it, you certainly didn't share it. The surest way to tell if you had it was to look behind you to see if anyone was following. If no one was, you fell back to flogging the chain of command. Because the buck stopped with you. Your ass was on the line. Your job was to kick ass and take names. These were the immutable truths of leadership that you learned as you progressed from the Boy Scouts to officer candidate school to the Harvard B-school, and they worked. God was in his heaven, and the ruling class . . . ruled. Then, of course, the world turned upside down. Global competition wrecked stable markets and whole industries. Information technology created ad hoc networks of power within corporations. Lightning-fast, innovative entrepreneurs blew past snoozing corporate giants. Middle managers disappeared, along with corporate loyalty. And one day you noticed that many of your employees, co-workers, and customers weren't exactly like you anymore, not English-speaking white males -- not even close. Some time after restructuring, but before reengineering and reinvention, you accepted the new dizzying truth: that the only constant in today's world is exponentially increasing change. The few corporate chiefs who saw all this coming declared themselves ''transformational'' and embraced such concepts as ''empowerment,'' ''workout,'' ''quality,'' and ''excellence.'' What they didn't do -- deep ! down inside -- was actually give up much control or abandon their fundamental beliefs about leadership. As James O'Toole, a professor and leadership expert, puts it, ''Ninety-five percent of American managers today say the right thing. Five percent actually do it.'' The pressure is building to walk the talk. Call it whatever you like: post- heroic leadership, servant leadership, distributed leadership, or, to suggest a tag, virtual leadership. But don't dismiss it as just another touchy-feely flavor of the month. It's real, it's radical, and it's challenging the very definition of corporate leadership for the 21st century. ''People realize now that they really must do it to survive,'' says management guru Tom Peters. Just ask the fired ex-heads of such companies as GM, IBM, Kodak, Digital Equipment, Westinghouse, and American Express, where the time-honored method of ordering up transformation -- maybe even stamping your foot for emphasis -- proved laughably ineffective. When companies derive their competitive advantage from creating intellectual capital, from attracting and developing knowledge workers, explains Warren Bennis, a widely read author on leadership, ''whips and chains are no longer an alternative. Leaders must learn to change the nature of power and how it's employed.'' IF THEY DON'T, technology will. Business already is moving to organize itself into virtual corporations: fungible modules built around information networks, flexible work forces, outsourcing, and webs of strategic partnerships. Virtual leadership is about keeping everyone focused as old structures, including old hierarchies, crumble. ''The effect of information technology is just beginning to be felt,'' says Edward Lawler, director of the University of Southern California's Center for Effective Organizations. ''It enables individuals to think of themselves as self-contained small businesses. So the challenge to corporate leadership becomes, 'Make me a case for why I should get excited about working for this company.' '' As the power of position continues to erode, corporate leaders are going to resemble not so much captains of ships as candidates running for office. They will face two fundamental tasks: first, to develop and articulate exactly what the company is trying to accomplish, and second, to create an environment in which employees can figure out what needs to be done and then do it well. Executives who rose in traditional systems often have trouble with both. The quantitative skills that got them to the heights don't help them communicate. And if their high intelligence, energy, ambition, and self- confidence are perceived as arrogance, it cuts them off from information, which makes the challenge of empowering the work force even more vexing. Post-heroic leaders don't expect to solve all the problems themselves. They realize no one person can deal with the emerging and colliding tyrannies of speed, quality, customer satisfaction, innovation, diversity, and technology. Virtual leaders just say no to their egos. They are confident enough in their vision to delegate true responsibility, both for the tedium of process and for the sweep of strategic planning. And they are careful to ''model,'' or live by, the values they espouse. In a distinction that has been around for a while but is now taking on new meaning, they are leaders, not managers. What's the difference? Management, says the Harvard business school's John Kotter, comprises activities that keep an organization running, and it tends to work well through hierarchy. Leadership involves getting things started and facilitating change. In the past, most corporations groomed and promoted managers into so-called positions of leadership, while they discouraged or ran off leaders. Back in the era of mass production, when companies could succeed merely by doing more of what they were already doing, hierarchy substituted adequately for leadership. A company could be just about leaderless but still very well run -- by middle managers, who operated by the numbers and by the book. When technology rendered them obsolete and competitive pressure made them an unaffordable luxury, corporations ''flattened'' their structures, pushing traditional management tasks down to the workers. Then upper management -- often to its surprise -- suddenly faced real leadership issues. Virtual leadership requires courage, confidence, and, well, a leader, or a bunch of them. But it works to great effect in a variety of businesses. It's working right now at Ortho Biotech, a biopharmaceutical company with a diverse work force. It's working for W.L. Gore & Associates, the maker of Gore-Tex, which proudly calls itself unmanaged. And it's working in the traditionally rough-and-tumble 19th-century garment industry at Levi Strauss & Co.

If you don't believe it, come to the little Appalachian town of Murphy, North Carolina. Turn right just past the new Wal-Mart, and head up the hill ( over the Valley River to the old red brick Levi sewing plant. Here you'll meet Tommye Jo Daves, a 58-year-old mountain-bred grandmother -- and the living incarnation of virtual management. She's responsible for the plant, which employs 385 workers and turns out some three million pairs of Levi's jeans a year. Not that she's forgotten the old way. In 1959, Daves hired on at Levi's Blue Ridge, Georgia, plant for 80 cents an hour because she needed a new washing machine. It was so cold inside the place that she wore gloves, and it was so leaky that buckets sat everywhere to catch rainwater. Her job was to top- stitch back pockets. Period. She became a supervisor and eventually a plant manager. One part of traditional management she still remembers is the night somebody unloaded both barrels of a shotgun into her car during a nasty labor dispute. But Daves prefers to talk about the personal invitation she received in the mail a few years ago from Levi CEO Robert Haas, great-great-grandnephew of Levi Strauss himself. Haas politely requested her presence in Santa Cruz, California, to attend something called Leadership Week. She accepted, having no idea what to expect.

''It was the most eye-opening experience of my life,'' she says. ''I learned for the first time how I was perceived by others.'' What she recalls best was a videotaped exercise in which everyone was organized into teams, blindfolded, and asked to work as a group to shape some rope into a square. They failed, but two lessons stuck with Daves: ''You can't lead a team by just barking orders, and you have to have a vision in your head of what you're trying to do.'' Many CEOs haven't learned either lesson yet. She and her line supervisors have since been converting their plant, first to a gain-sharing system in which workers' pay is linked directly to the plant's performance. Then, later, from the old ''check your brain at the door and sew pockets'' system to team management, in which teams of workers are cross-trained for 36 tasks instead of one or two and thrust into running the plant, from organizing supplies to setting production goals to making personnel policy. Now Daves and her mostly female management crew get lots of direction from the ranks but much less from above: The Levi policy manual has shrunk to 50 pages from 700. In the language of deep thinkers on leadership, controls are ''conceptual,'' not procedural.

LEVI, which is rolling out leadership training and team management worldwide, cites in its support significant improvements in quality, manufacturing costs, and quick response to customers' requests for product. At the Blue Ridge plant, ''seconds,'' or flawed jeans, have been reduced by a third, time between an order and shipment has fallen by ten days, and the time a pair of jeans spends in process at a plant has shrunk to one day from five. Even so, says Daves, ''sometimes it's real hard for me not to push back and say, 'You do this, you do that, and you do this.' Now I have to say, 'How do you want to do this?' I have to realize that their ideas may not be the way to go, but I have to let them learn that for themselves.'' The man behind the change, CEO Robert Haas, is an ideal candidate for corporate post-hero. His ticket punches include a White House Fellowship and an MBA from Harvard, as well as tours in the Peace Corps and as a McKinsey consultant. He led a family-driven LBO of the company in 1985. Skeptics of his radical changes have been quieted by five straight years of record profits. ''What we're trying to do around here is syndicate leadership throughout the organization,'' he says, exuding the soothing calm of some Bay Area therapist. ''In a command and control organization, people protect knowledge because it's their claim to distinction. But we share as much information as we possibly can throughout the company. Business literacy is a big issue in developing leadership. You cannot ask people to exercise broader judgment if their world is bounded by very narrow vision.'' For all the post-heroic inspiration to be found in the conversion of old industrial models like Levi, the most fascinating, radical examples of virtual leadership tend to appear at companies built from the start on fresh leadership ideas. Perhaps the most advanced, or extreme, among these is W.L. Gore & Associates of Newark, Delaware, famous for the Gore-Tex waterproof fabric found in spacesuits and expensive outdoor catalogues. In fact, the late Wilbert L. ''Bill'' Gore, who founded the company in 1958 at age 45, would be one of two leading candidates -- neck and neck with Herman Miller Chairman Max De Pree -- to be the first inductee into the post-heroic hall of fame. Before founding his company, Gore spent 17 years at Du Pont, where his last assignment as an R&D chemist was to find new commercial uses for Teflon. Fiddling around in his basement one night, he discovered a method for making computer ribbon cable insulation. After failing to persuade Du Pont to enter that business, he founded his company -- in the same basement. Bill Gore had a number of funny ideas, not least of which was letting almost a dozen of his company's first employees live in his house in lieu of wages. And like a number of executives back then, Gore became interested in Douglas McGregor's classic management book, The Human Side of Enterprise, which expounded Theory Y, very similar to what we now call empowerment. Gore founded his company on Theory Y, and it hasn't wavered since. Why should it? In 31 straight years of profitability it has grown into an enterprise with 5,600 associates (never ''employees''), 35 plants worldwide, and annual revenue just shy of a billion dollars. The company won't disclose its profit margins but notes that it has been able to finance its growth while maintaining a ''very strong cash position.'' In addition to Gore-Tex and cable insulation, the company's other Teflon products include vascular grafting material for surgical repair, industrial filters, and -- a recent offering -- a no-stick dental floss called Glide. Privately held W.L. Gore is built, unabashedly, on what it calls un- management. Forget hierarchy; this company has no organizational structure. No one holds titles, except, as required for incorporation purposes, the president and secretary-treasurer, who happen to be Bill Gore's son and widow (he died in 1986, hiking in Wyoming's Wind River range). Nobody gets hired until a company associate agrees to ''sponsor'' the person, which includes finding work for him or her.

This is how Gore operates. A ''product specialist'' takes responsibility for developing a product. As it progresses, he or she creates a team, recruiting members from here or there until the team might become a whole plant. By that point the team has broken up into multiple teams, or manufacturing cells. Each member, who can perform most manufacturing processes, commits to performing certain tasks. Each cell has a leader, who evolves from within that cell. The leader is not appointed but achieves the position by assuming leadership, which must be approved in a consensus reached through discussion -- not a vote. All this reflects several of Bill Gore's leadership homilies, such as ''Leadership is a verb, not a noun,'' or ''Leadership is defined by what you do, not who you are,'' or ''Leaders are those whom others follow.'' * No plant has more than 200 associates because Bill Gore thought people work best together when they know one another. Compensation is determined by a committee, which relies heavily on the evaluations of other associates. There are no budgets. All post-heroic companies have a common trait: a clearly stated, oft- repeated set of core values that guide everyone's decisions. Gore's values number four: -- Fairness. A dedication to maintaining it. -- Commitment. If you make one, you keep it. Everyone makes his or her own. -- Freedom. The company allows individuals the freedom to grow beyond what they're doing, and they are expected to use it. -- Water line. A hole above a ship's water line won't sink it, but one below it will. Certain decisions, say, building a new plant, demand consultation and agreement. Other decisions, say, launching a new product, don't. This value substitutes for budgets. LIKE ANY SYSTEM, Gore's has its downside -- decentralization causes communications problems, exporting the Gore culture overseas is difficult, and not all workers like it. ''You have to take a lot of responsibility to work here, and not everybody is willing to do that,'' says Bert Chase, an associate. ''This place is for people with bound wings who want to fly.'' Other corporations may love to study W.L. Gore, but hardly anyone is predicting a proliferation of its system. ''The hierarchical organization isn't going to disappear like our academic friends think,'' argues Walter Ulmer Jr., a retired U.S. Army general and CEO of the Center for Creative Leadership in Greensboro, North Carolina. ''We shouldn't waste too much intellectual energy on organizational structures that are never going to come about. We should work instead on making hierarchical organizations more humane, more productive, and more responsive to society's demands.'' Bill Gore might not have disagreed. Associates say he always preached that it would be impossible to convert an existing organization to his kind of system. The larger point is this: Gore was a leader who created an organization under which other people's leadership blossomed, and in turn it achieved its mission -- ''To make money and have fun.'' Hierarchy isn't always the issue anyway. Increasingly, the crucial challenge facing the would-be post-heroic leader is less about how to structure a company than about how to get people who are truly not like you, or even each other, to pull in the same direction. ^ Dennis Longstreet, the 48-year-old president of Ortho Biotech, faced just such a challenge in 1986 when Johnson & Johnson asked him to head up the biotech pharmaceutical division of its Ortho Pharmaceutical subsidiary. Says he: ''The first thing you learn is that you can't start a biotechnology company by hiring a bunch of white males from New Jersey. If you want the best people in the field, you're hiring people from universities and small biotech companies -- women, Asians, African Americans, very few of whom have ever worked in a corporate environment.'' Longstreet, a 24-year veteran of J&J, felt that to succeed in this fast- moving field -- marketing products to replace blood transfusions or seven- day treatments for hairy-cell leukemia -- he needed a company unlike any he had seen, one with intense teamwork, commitment, and flexibility. But in 1990, while spinning the company off into a separate subsidiary, he learned from meetings with employees that many felt hindered by barriers tied to their differences. So Ortho made managing diversity a top priority. ''People walk around with prejudices, and you have to get past them if you want to build an effective team,'' says Andrea Zintz, Ortho's human resources vice president. Ortho tries to do that through intense, organized communication. Longstreet, for example, meets regularly with a number of so- called affinity groups -- African American men; gay, lesbian, and bisexual men and women; white men; secretaries; single people. Horrified by the idea of bowing to pressure from that many constituencies? Not to worry, says Longstreet: ''This isn't about designing a customized approach for every group and every issue. It's about listening to people -- their problems and their aspirations. It's amazing how unaware you can be of the impact you have on people different from you. It's very easy for people to start feeling excluded because of artificial barriers.'' Once he committed to listening, of course, Longstreet realized he had to change everything about the way he managed. ''You start asking them to describe their ideal productive workplace, and you give up a lot of control,'' he says. ''I was used to standing up on a stage behind a podium with slides and rehearsed scripts and saying, 'This is our policy. Thank you. Goodbye.' Now everything is done in a town-meeting fashion, with them doing most of the talking and me doing the listening.'' Like other post-heroic leaders, Longstreet warns of the risks involved. $ ''When you start something like this, you give up a lot of ability to make firm, hard decisions, and you take a chance that employees may lead you someplace you don't want to go. But then you learn that most of them want the same things you want. Everyone wants to succeed.'' That seems to be the focus at Ortho. The company has increased sales 50% but head count just 15% in each of the past two years. Employee turnover is down about 8%. WHAT WORKS for Dennis Longstreet might well create total havoc at your company. Levi has a long tradition of company values stronger than those on which most organizations can fall back, as well as the support of an enlightened family owner. And almost nobody out there has the guts of a Wilbert Gore -- and probably shouldn't. But none of these disclaimers negates the importance of understanding what post-heroic leadership is all about. It still requires many of the attributes that have always distinguished the best leaders -- intelligence, commitment, energy, courage of conviction, integrity. But here's the big difference: It expects those qualities of just about everyone in the organization. The time when a few rational managers could run everything with rational numbers, it seems, was just an anomaly, or part of an era very different from the fast-paced, continually shifting present. Now we're back to the real, self-reliant, democratic stuff of the kind envisioned by Jefferson and his friends when they were trying to craft a new reality out of chaos and change. As in that era, those who cling to the past are in danger of losing their way, while the pioneers who forge ahead are most likely to claim the future.