The real challenge of leadership is to develop all four of these often-contradictory modes of thinking and behaving at once. Leaders tend to operate on two dimensions at most -- which has more to do with a lack of insight into human nature than with corrupt intent. Reality dominates, and the second-most-common attribute is ethics: Consider the statement "People are our most important asset." Unfortunately, those are often empty words -- not just because too few people make the connection between profits and human values, but also because there is no adequate understanding of what it means to be a human being in a brutally competitive environment. "Vision" might be one of the most overused words in business, but in fact vision -- in the sense of honing great thinking and fostering the capacity for ongoing inventiveness -- is rarely practiced. And courage is demonstrated even more rarely.

When we talk about courage, we usually mean having guts or taking risks. But you talk about courage as if it were an almost mythic quality -- one that lies at the heart of leadership success.

It goes back to the beginning of our discussion. Aristotle believed, correctly, that courage is the first of the human virtues, because it makes the others possible. Courage begins with the decision to face the ultimate truth about existence: the dirty little secret that we are free. It requires an understanding of free will at the archetypal level -- an understanding that we are free to define who we are at every moment. We are not what society and randomness have made us; we are what we have chosen to be from the depth of our being. We are a product of our will. We are self-made in the deepest sense.

One of the gravest problems in life is self-limitation: We create defense mechanisms to protect us from the anxiety that comes with freedom. We refuse to fulfill our potential. We live only marginally. This was Freud's definition of psychoneurosis: We limit how we live so that we can limit the amount of anxiety that we experience. We end up tranquilizing many of life's functions. We shut down the centers of entrepreneurial and creative thinking; in effect, we halt progress and growth. But no significant decision -- personal or organizational -- has ever been undertaken without being attended by an existential crisis, or without a commitment to wade through anxiety, uncertainty, and guilt.

That's what we mean by transformation. You can't just change how you think or the way that you act -- you must change the way that you will. You must gain control over the patterns that govern your mind: your worldview, your beliefs about what you deserve and about what's possible. That's the zone of fundamental change, strength, and energy -- and the true meaning of courage.

Does developing the will to transform mean that you can actually will others to change?

Taking personal responsibility for getting others to implement strategy is the leader's key polarity. It's the existential paradox of holding yourself 100% responsible for the fate of your organization, on the one hand, and assuming absolutely no responsibility for the choices made by other people, on the other hand. That applies to your children too. You are 100% responsible for how your children turn out. And you accomplish that by teaching them that they are 100% responsible for how they turn out.

So how do you motivate people? Not with techniques, but by risking yourself with a personal, lifelong commitment to greatness -- by demonstrating courage. You don't teach it so much as challenge it into existence. You cannot choose for others. All you can do is inform them that you cannot choose for them. In most cases, that in itself will be a strong motivator for the people whom you want to cultivate. The leader's role is less to heal or to help than to enlarge the capacity for responsible freedom.

Some people are more talented than others. Some are more educationally privileged than others. But we all have the capacity to be great. Greatness comes with recognizing that your potential is limited only by how you choose, how you use your freedom, how resolute you are, how persistent you are -- in short, by your attitude. And we are all free to choose our attitude.

Polly LaBarre, a Fast Company senior editor, is based in New York City. Contact Peter Koestenbaum by email (pkipeter@ix.netcom.com) or on the Web (www.pib.net).

Sidebar: Fear and Trembling in the New Economy

You don't need a philosopher to tell you that anxiety is one by-product of what Peter Koestenbaum calls "the brutality and promise" of the new economy. But you do need a philosopher to explain how anxiety rules the human condition -- and how it can serve as a powerful, productive force in your life. The best thinker for the job, says Koestenbaum, is Soren Kierkegaard, a Danish philosopher who did as much for the analysis of anxiety as Freud did for the analysis of the subconscious. Here's a short course from Koestenbaum on the value of anxiety.