Wednesday, May 22, 2013

Private Sector Faces the Same Leadership Challenges as Civil Society

This blog is a summary of the excellent video interview with Gary Hamel. (posted by Guy Janssen)

There are too few leaders in our current organisations.

If we want to build truly adaptable organizations (or societies), everybody has to become a leader and organisations (and societies) have to reward leadership. We live in a world of amazing complexity and complex organizations that just require too much from a few leaders at the top. They don’t have the intellectual diversity, the bandwidth, the time to really make all these critical decisions. By the time a small team at the top realizes there’s a need for fundamental change, it’s too late. We expect leaders to be confident and yet humble. We expect them to be very strong in themselves but open to being influenced. We expect them to be amazingly prescient, with great foresight, but to be practical as well, to be extremely bold and also prudent. There are too few leaders with all these qualities, yet we’ve built organizations where you almost need that caliber of person for them to run well if you locate so much of the decision-making authority in the top of the organization.

Bottom of the S-curve.
Step-by-step, organisations are going to catch up to this new economic reality. Value is created by rubbing up against customers, innovating, co-creation, on the periphery. But we still have these organizations where too much power and authority are reserved for people at the top of the pyramid. The structures, the compensation, the decision making must catch up with this new reality. Compensation, incentives and rewards need to change to be in line with the value added by each person rather than the formal position on the formal ladder.

Challenges and Principles are the Same in Private Sector and Civil Society.
The challenges are remarkably similar to those mentioned in the articles listed in No more waterfalls, only trial and learning.

  • What can we do to create more opportunities for leadership?
  • How can we teach people what it means to exercise leadership when you don’t have formal authority?
  • How do you mentor people?
  • How do you build a coalition?
  • How do you live in the future so other people want to follow you?
  • How do you become one of those connectors bringing ideas and talent and resources together?
The fundamental principles are: empowerment, transparency, meritocracy, natural leadership, information, and accountability.

The organisation needs to look at every single information process, resource-allocation process, planning process, hiring, promotion and say, “How do we start to embed those principles in every one of these processes?” So instead of moving decisions up to where people have expertise, we’re going to move expertise down to people close to the front lines. Everybody needs the information and the skills to be a leader, to make the right kind of choices and then be held accountable for those choices through a very short feedback cycle between your decisions and rewards.

Not Romantic.
This is not some romantic thing—you know, “let’s just give everybody more power” —because that’s probably chaos. But if we equip them, give them information, make them accountable to their peers, shorten the feedback cycles, then I think you can push a lot of that authority down in organizations.