By Russ Banham
A dozen years ago, before the financial crisis erupted, before the first iPhone, before human-machine partnerships, and before teams became the predominant way of putting business strategy into action, Harvard Business Review published “In Praise of the Incomplete Leader.”
At the time, the article was much discussed for its revolutionary ideas, chief among them the assertion that the autocratic, hierarchical, and bureaucratic business leadership model was no longer an effective way to guide a company. As the four authors of the article stated, in the rapidly changing world of 2007, “No one person could possibly stay on top of everything.”
Nevertheless, many boards of directors continue to oversee companies led by strong-willed CEOs who favor a classic command-and-control management structure. What has changed in the interim is that the rapidly evolving world of 2007 moved at a snail’s pace compared with today’s business environment. The “myth of the complete leader” has persisted, despite the blistering pace of technological change.
This paradigm appears to be collapsing, with many companies beginning to adhere to the distributed leadership model advocated by the authors. This model calls for CEOs and leaders of business divisions, functions, and departments to acknowledge their incompleteness by way of distributing leadership to teams whose members are empowered to be autonomous. What seemed radical in 2007 is fast becoming a preferred way for companies to become more nimble, agile, and innovative. “Looking back, the work was ahead of its time,” says Deborah Ancona, founder of the MIT Leadership Center and one of the article’s authors, along with Thomas Malone, Wanda Orlikowski, and Peter Senge, all with the MIT Sloan School of Management at the time.
Back then, Ancona and her co-authors were intrigued by the importance of rising interconnectivity, which was present but not omnipresent at the time. Questions abounded: Would it provide a way to bridge bureaucracies for organizations to become agile distributed networks of learning? Would it allow for greater interdependence across groups of people? Would it encourage leaders to be more dependent on a broader ecosystem and not just internally focused on business processes? The answers in all cases appeared to be yes.
The impediment was the traditional hierarchical command-and-control structure in many businesses, in which decisions at the top were delegated down the corporate ladder for fulfillment. As much as this leadership model was an impediment then, today it is a towering obstacle.
“There was no way we could ever imagine the exponential speed at which information flows today, with technical data alone doubling every two years,” says Ancona. “Everything from market gyrations to political unrest happens so much faster, making yesterday’s assumptions unreliable today. To think a business leader or anyone for that matter has all the answers is irrational.”
Strengths and Weaknesses
In the authors’ six-year study of organizational hierarchies, it became clear that no CEO or any other executive had the intellectual capacity to make sense of the world’s increasingly complex business challenges. Many leaders lacked the creativity needed to articulate a vision that would motivate a workforce of thousands of employees and the operational depth to transform a strategic plan into specific tactics. Yet, all these capabilities were required to lead an organization effectively.
“The sooner leaders stop trying to be all things to all people, the better off their organizations will be,” the authors stated.
They proposed a new leadership model, in which leaders cultivated and coordinated the skills and actions of others to make up for their own shortfalls, distributing leadership across the enterprise wherever this expertise, ideas and commitment resided.
Future leaders, the authors suggested, would need to possess four capabilities:
1.Sensemaking, understanding the context in which a company and its people operate
2.Relating, building relationships within and across organizations
3.Visioning, creating a compelling picture of the future
4.Inventing, developing new ways to achieve the vision
Ancona believes these attributes are beginning to inform today’s business leaders. “If you ask executives what makes for a great leader, they will immediately say `vision,’” she says. “Most would not mention `sensemaking,’ but take a look at the changes being made today in how many organizations operate, via teams, and you realize there’s a huge amount of ‘sensemaking’ going on.”
With regard to “relating,” she points to the growing reliance upon networks both inside and outside companies. “In the pharmaceutical industry, you have these pivotal engagements and collaborations with external universities, biotech firms, think tanks, test organizations, and research centers, in addition to tighter connectivity with patients offering learning opportunities. Surviving entirely on your own internal research and development has given way to network-building.”
Of the four capabilities, the one that strikes the deepest against the “complete” leadership model is “inventing.” Even famously autocratic CEOs like Jack Welch relied upon the skill sets of others to realize his strategy. “You build the best team, you win,” Welch said at the 2012 World Business Forum.
However, this assumes the CEO gives team members free rein to express their ideas and innovations, Ancona said. “In our studies of companies with a long history of innovation, we found that autonomy is incredibly important,” she explained.
Such organizations are composed of three types of leaders: entrepreneurial, enabling, and architecting. Entrepreneurial leaders concentrated at the lower levels of the organization examine a strategic goal or a problem, and come up with a variety of ideas and solutions. Enabling leaders effectively coach these teams, helping them winnow their ideas and solutions into the one most apt to win in today’s rapidly changing business climate. Architecting leaders near the top of the organization ensure that a culture of innovation and continuous learning is in place.
“By having these three leader types in place, organizations can become self-managing, with employees feeling empowered to define and even choose their work assignments,” says Ancona. “In turn, this reduces the bureaucratic rigidity that impedes innovation and invention.”
This method of running a business is what the authors meant by “distributed leadership” in 2007. One person cannot take on this gargantuan task, make all the decisions, and simply delegate the tasks down the corporate ladder. Everyone in the organization has to step up to assume a leadership role, as their backgrounds, experiences, and specific expertise engender the different points of view needed for innovation to flourish. “The more power is pushed down lower into the organization, the more innovative it will be,” Ancona says.
The best teams are what Ancona and her colleagues call X-Teams. Such groups are externally oriented, as opposed to focused entirely on internal business processes. The team members build connections inside and outside the organization with diverse experts to help them solve business problems and sustain competitive traction. To receive feedback on novel ideas and new initiatives, members reach out across their networks.
This empowered autonomy is increasingly crucial to business success. “Leaders who architect a system that lets entrepreneurial people thrive will have the fastest and surest answers to problems,” explains Ancona. “It’s not the leader’s job to dictate; their job is to enable and facilitate, which is a very different role. You need new ideas constantly permeating the organization, even as you are executing. These are the leaders of the future.”
When asked for an example of such a leader today, Ancona points to Microsoft CEO Satya Nadella, who assumed the top job at the faltering technology giant in 2014 and has since rebuilt its culture and market value.
“The best engineers were leaving Microsoft and there was this sense was that it had lost its mojo,” Ancona says. “Nadella came in as an architect and spent a year in sensemaking mode. He is known for his empathy and ability to relate to people. He wanted to know why people were leaving, what they were thinking, and what motivated them. He had a vision of the future and it involved cloud computing and artificial intelligence. He’s also externally active, very interested in establishing partnerships and learning from customers and mistakes to figure out the next steps. He invented the idea of being a learning organization to generate ideas.”
In effect, Nadella demonstrated the four distributed leadership capabilities Ancona and her co-authors described a dozen years ago. This model of leadership is needed now more than ever before, she asserts. “We’ve added `building credibility’ not as a fifth capability but as something we see as very important in today’s climate of toxic leadership,” Aocona says. “Building credibility is about leading with integrity and empathy, doing what you say you will do, and working for the good of all, as opposed to making it all about yourself.”
Nobody has all it takes to steer the corporate battleship forward through the shoals. Autocratic leadership limits the opportunity to become a nimble learning organization enriched by autonomous leaders constantly innovating. “You want every person in the organization to look in the mirror every day and ask, `What do I want to bring to this world today?’” Ancona says.
Then you need to let them bring it.
Russ Banham is a Pulitzer-nominated financial journalist and best-selling author.