DISTRIBUTED LEADERSHIP: THE CHANGING LEADERSHIP LANDSCAPE
The most successful companies know that leadership should rest with whoever is best positioned to exercise it, regardless of job title
Numerous companies have attempted versions of Distributed Leadership but few have succeeded in an enduring sense. This is not from want of trying to free up bureaucratic drag, speed up decision making, inspire entrepreneurial spirit and create a more compelling customer experience. Much of this patchy success has to do with the failure to approach this as a culture change challenge. In many ways this has to do with an ‘under-socialised’ view of what leadership is and the inability to let go of the ‘heroic’ models of leadership that continue to dominate business writing.
Distributed Leadership is not simply a conceptual framework without any practical relevance. The successful embedding of its principles in a number of notable cases has been a practical antidote to the grinding effects of hierarchy on initiative, the information ‘stove pipes’ that impact speed and over-dependence on the notion of the omniscient, omnipresent leader at the top of the pyramid assumed to hold the key to organisational success. These cases have offered a genuine alternative to more effectively mobilising the collective intelligence, motivations and talents of its people.
Numerous companies have attempted versions of Distributed Leadership: decentralised decision making, delayered structures, blended top down and bottom up planning cycles and other similar efforts. More recently some companies have adopted Agile - practices that have had their genesis in project management methodologies used by software development companies. These efforts have been built on the hope that processes such as the Scrum, an iterative, incremental approach to solving complex user problems, might build more nimble cultures. However such process or workflow changes per se are not sufficient for deep behavioural change. However, there are some lasting success stories we can learn from.
Among these success stories are companies as diverse as Whole Foods, Parc (Xerox’s R&D Company), W L Gore, Eileen Fisher, John Lewis Partnership, Google, Microsoft (in its current reincarnation under Satya Nadella) and several more. They have succeeded in embedding a different way of working, challenging the very assumptions about how best to structure work and where decisions are best made. Their cultures are characterised by speedier decision making, freer information flows and inspired experimentation. They have unleashed greater levels of individual initiative, retained talent and delivered sustained levels of customer satisfaction. What do they understand leadership to be and how do they nurture and develop it?
At the heart of Distributed Leadership is the notion that leadership is neither a role or an individual characteristic. It assumes that leadership is any task or activity that is core to the organisation. It exists throughout the organisational hierarchy wherever expertise, vision, new ideas and commitment are found for solutions to the markets that need serving, the financial return that needs delivering and or the resources that need deploying. Leadership in these companies is understood as a process, a system involving a network of leaders who at various times can assume leadership for particular tasks for which their configuration of talents, skills and perspectives are best suited. In other words, responsibility and initiative are distributed more widely.
Organisations may have a better chance of getting there if they are starting afresh to build the organisation from ground up. But few have that opportunity to do so other than start-ups. However, incumbent companies keen to ‘free up’ their cultures should first recognise that the challenges of embedding Distributed Leadership are largely related to shifting mindsets and belief systems. Making changes to business or operational process is not going to create the deeper change that is required. A range of people policies will also need a rethink. For instance, traditional reward systems that pay for job size and for individual effort is no longer fit for purpose in this new model of leadership.
Incumbent companies will not only have to unlearn many of the habits that have shackled today’s organisations. Importantly they will need to confront the fact that the most important challenges we face today are interdependent. This is especially difficult in national cultures in which belief systems are largely individualistic in nature. Our most important challenges can only be solved by engaging in sensemaking and collaborating across boundaries, sometimes even beyond the organisation’s own boundaries – new ways of bringing groups together and yes new approaches to leading. It requires pushing against the many boundaries that exist in organisations today – vertical, horizontal, stakeholder, demographic and geographic. These companies recognise that real innovation emerges from the intersection of boundaries and the developing and nurturing of boundary spanning skills in every member of the organisation is key to success. For example some of the named companies hold customer dreaming sessions during which they co-create their strategies with trusted customers who have experienced the best and worst of their services/products. Crowdsourcing methods of generating and harvesting ideas both inside and outside the ‘system’ is a way of life.
It also requires full transparency such that every member knows the shared rules by which the organisation plays. Rules of engagement often enshrined in their culture codes become the decision guiderails, implicitly managing seen or unseen risks along the way. They make decision rights explicit, holding the company purpose tightly while holding agendas lightly. By using the culture code as a touchstone for all decisions that are made anywhere in the organisation, peers know if someone amongst them may be inadvertently exposing the organisation to unacceptable risks. When agendas compete, the code allows them the legitimacy, wherever they sit in the organisation at that time, to push back. Everyone has permission to ask powerful questions. Not just advocate their positions but use thought provoking inquiries to unlock different values and assumptions that may need surfacing to move forward. They habitually cross-shadow i.e. have ‘groups’ trade members who shadow one another to share insights and learning from different vantage points in the organisation. Peer to peer learning is the thing, boundaries are suspended and new relationships built. All this requires significant cultural and behavioural rewiring.
In addition to a deep understanding of and sensemaking of the whole as a collective activity, and the systematised transparency described above, successful Distributed Leadership cultures are also characterised by another important attribute. Members enjoy the freedom to act in new ways to contribute and shape that whole. Introducing new practices alone will not result in the desired culture. Autonomy and devolved decision making requires humility and a propensity to trust. If the local market has the knowhow to pursue growth in that market, why would you centralised that knowledge and not trust local market leaders? Cultures that practice Distributed Leadership ask what makes sense to centralise and what does not. What will benefit from ground-level experimentation and what does not. Furthermore these are decisions that are collectively shaped, rather than unilaterally made by a omniscient leader sitting at the top of the pyramid.
So what might the leadership structure look like in such a fluid world? At risk of over-synthesising we see three groups that are interchangeable in dynamic ways:
Creators and Advocates at the coal face with ground level exposure to external customers/users. They are passionate customer advocates and have responsibility for creating the promised end user experience. In every workplace daily and weekly charts adorn walls and screen savers as a reminder of how teams are tracking. They have self-belief, and a willingness to act - continually sensing and seizing the opportunities to develop new ways of responding to customers’ met and unmet needs and course-correct as new evidence emerges. To do this they are given a constant stream of MI that alerts them at any time as to what UX performance metrics are revealing about fulfilling the brand promise. They join and leave teams in organic ways based on where the biggest customer issues are. Despite being at the coal face, they deeply understand why the organisation exists i.e. its purpose, and can speak in sophisticated ways about the business model. They think about what they are seeing and how things are shifting continually asking “does this product do what it says it does”.
Enablers and Coaches have more experience than those above them in the flattened hierarchy. The help teams to navigate organisational hurdles, coaching and mentoring teams and individuals asking the right questions rather than jumping in to take over or solve problems. Rather than saying ‘I will speak to X for you’, they suggest X may be helpful, coaching the individual or team about how best to frame the opportunity or challenge and how to galvanise support from X. They deeply understand that real innovation in the UX comes from the intersection of boundaries and facilitate creative collisions by enabling connections that may not otherwise happen inside or outside the organisation. They link teams that have shared or complementary objectives ensuring that one part of the organisation always knows exactly what the other is doing. They take steps to reinforce the vision and values as decision guardrails.
Architects and Curators stay with big picture issues, they scan the environment for major shifts and trends alerting the organization to threats it may not be prepared for. They deeply understand the connective tissue that holds the organisation together. They continually oversee any gaps between promised value and delivered value and galvanise action on gap bridging efforts by leveraging the wisdom of enablers and advocates. They ensure that information ‘stove pipes’ are reconfigured so that information flows horizontally not just vertically and the speed in which people get the information they need to be empowered to act is assured. They manage large capital and resource allocation decisions, approving all big bet decisions, leaving small bet decisions to the other two groups. They retain responsibility for high level strategy, monitor culture, and act as custodians of the brand
Together all of these role holders consider themselves as leaders and hold the shared belief that leadership should rest with whoever is best able to solve that particular challenge or pursue that particular opportunity. It recognises the dynamic interaction between leaders, followers, knowing when to step up and when to step down. Stepping up and stepping down is the norm and assumes that everyone knows when they should step up and lead and when they should step down and enable someone else to do so. For instance an enabler/coach may in different situations step into the role of an architect/curator and so on. This requires humility and respect but it also requires courage and confidence, something the introduction of a new operational process or workflow technique is unlikely to guarantee. Each one is prepared to see themselves as incomplete and needing the others to complete them. It is a self-repairing system where “taking leadership” is what everyone does not only those with leader in their role title. Individuals reporting a problem are empowered to solve it – to investigate it, recommend and find solutions. I co-own this place and what happens here is MY responsibility. The 70-20-10 norm applied to time allocation of organisational members (70% of time devoted to budgeted for projects that are core to the business, 20% on off-budget projects related to the core and 10% to pursue ideas based on personal interest and competencies) is an example of unleashing creative talent. There are generous rewards for seeing through innovative ideas. Development or growth is no longer associated with upward promotion – because you develop where you are. Every role is enriched and enlarged through this model of leadership, leading to greater engagement, involvement and ownership and in turn greater organisational agility and speed. Even in sectors where attrition is customarily high, these companies have been shown to buck the trend.
But how do such systems balance this freedom with control? How do they ensure freedom with collective responsibility becomes the operating model? These organisations limit the number of rules they have because shared cultural norms take the place of rules and become self-regulating:
A shared culture code acts as an operating rule book that provides the team with decision guiderails
The collective vetting or peer review processes that characterises Distributed Leadership ensures that only the best growth ideas get up and the work of the team is not determined by a senior leaders’ pet projects
The focus on small bets creates an internal idea prediction market in which the best bets get the funding and ensures that no single bet that goes wrong can pull the whole business down
In summary, companies considering this journey to free their cultures of bureaucratic drag will need to consider carefully if this is the journey for them. They have to consider how prepared they are to let go of current paradigms of how work is best structured and the organisation best designed.
To succeed in shifting the paradigm companies embarking on this journey will need a combination of strong design thinking skills and organisation development knowhow to develop an adaptive, open system capable of delivering on its stated purpose and brand in an increasingly volatile, uncertain, complex and ambiguous environment.