Book Leadershift

Leaders Are Changing

During the past few decades, the business world has become increasingly collaborative. Professionals working together with no formal leadership develop open-source software that anyone can download for free. Using wikis, large numbers of people jointly create Web site content. In crowdsourcing, firms assign projects they formerly handled internally to external groups.

“Our role is not to guess what happens next or try to foresee the future. Our role as leaders is to decide what we want this future to be.”

As collaboration increases, leadership must change. Modern leaders do not set their companies’ direction. That arises from the community. People look to leaders not for instruction but rather for valuable contributions.

Leadership has given way to “leadershift,” in which leaders are members of nonhierarchical groups. Their leadership consists of promoting collaboration and facilitating those groups’ development of “a narrative that builds and sustains a valuable and co-created outcome.” Four kinds of trends are responsible for this change: “demographic, expertise, attention and democratic.”

“The Demographic Trend”

Today’s corporate offices do not resemble those of decades past. They include people of many different races, ethnicities and sociocultural backgrounds. Women are nearly as visible in the workplace as men, and they don’t perform only secretarial or clerical functions. The labor force includes people who range in age from their 20s through their 60s and beyond.

“By 2015 the working population of ‘advanced’ economies will have shrunk by 65 million.”

Thus, office workers have a wide variety of attitudes, experiences, ideas and interests. A 22-year-old female Dominican receptionist has different beliefs and values than a 55-year-old white male senior executive – or a 43-year-old black female secretarial supervisor. As a leader, the experiences and ideas that shaped you are probably irrelevant to those you lead. If you rely on these shaping attitudes and experiences to sustain your leadership, you will become obsolete.

“The Expertise Trend”

One of the primary strengths of corporations used to be their ability to provide specialized expertise. However, as businesses become more collaborative, this is no longer true. Using the Internet, you can leverage the power of masses of people to secure expertise without going through organizations. For example, you can now conduct market research using online “prediction markets,” which compile the “collective judgments of a large group of people.” In fact, such findings are more accurate than those of individual experts.

“If you try to be all things to all people, your message becomes so diluted that it loses capability to stand out above the noise.”

Organizations once existed to reduce transaction costs. However, transaction costs have significantly decreased: You can go online and secure products and services at a 10th of the price they used to cost. You also can tap into “distributed co-creation” – “the bringing together of talent from numerous sources outside the organizational boundaries” – for little or no cost. Think Wikipedia.

“The transient nature of employment is making it a lot harder for leaders to have an enforceable psychological contract with their employees.”

Since people no longer need to turn to organizations for certain types of expertise, such organizations’ reason for being is coming into question – and with it, that of organizational leadership.

“The Attention Trend”

News and information sources relentlessly barrage people with data. For example, the typical e-mail user receives 65,000 messages every year. Reading a newspaper is a gargantuan task. A typical issue of The New York Times contains more information than the average 17th-century English person would have encountered in an entire lifetime. Each year, all sources around the globe create 40 exabytes (4 x 1019) of information. This is more than all the information the world produced in the past 5,000 years.

“Our trends are directing us toward organizations where structures and control are no longer possible.”

Most people deal with information overload by paying attention only to information that interests them and ignoring the rest – which often includes the messages of traditional business leaders. In the past, when information creation was less frenzied, those leaders’ organizations were active components of the “network of attention,” but now various “social and informational networks” have replaced them. Thus, such leaders are often pointlessly baying at the moon when they try to communicate with their constituents in outdated ways.

“The Democratic Trend”

IKEA customers perform numerous tasks that retailers usually handle. They transport and assemble the company’s products. The world of work is turning into one big IKEA showroom. Traditional employee roles are vanishing. Full-time workers, who used to be the norm, are becoming outmoded. Instead, businesses depend on freelance contractors, and part-time and temporary workers. Workers constantly move from job to job.

“Organizations have become complex to the point of distraction if not destruction.”

For these reasons, modern business executives have a difficult time securing the loyalty and support of their employees, many of whom are either coming or going. “Free agents” have no reason to pay attention to workplace leaders. The organizations for which these “peripheral employees” work are not fully committed to them, so why should they be fully committed to the organizations? They don’t care about leaders’ “positional power,” or place on the organizational chart, when they themselves don’t even appear on that chart. Since they’re only partially engaged with the companies where they work, they tune them out. After all, the operative word in “free agent” is “free.” These workers can “choose whom to follow.” Peripheral workers are outside of executives’ “span of control.” This makes them tough to lead, at least in a traditional manner.

Why Leadershift Works

In 1968, the ecologist Garrett James Hardin published a paper describing what he called the “tragedy of the commons.” When the entire community owns an asset, such as a common field where farmers can graze their cattle, overuse will eventually destroy it unless the community either divides the common into private plots or creates a strong government that regulates and maintains the asset.

“An organization’s brand is the main incarnation of its narrative.”

Thus, traditional leaders assume that responsibility ultimately requires a command-and-control governance structure. However, Hardin was not quite correct. The commons does not inevitably deteriorate, for two reasons: Community members want “acceptance” and they fear “exclusion.” They know the social penalties for destroying community property will be severe. Thus, “community-derived rules” are what really motivate employees to take responsibility. Community members, in effect, govern themselves. This is why “open, self-directed systems,” such as Wikipedia, work.

“In mass collaboration no one seems to be in control.”

Within such open systems, which thrive on mass collaboration, leadership can seem pointless. However, savvy leaders know how to remain relevant – and it’s not because of their great knowledge, expertise, perspicacity and experience. These and related factors don’t mean much in the modern workplace. Leaders now earn respect because of the valuable contributions they can make to the group.

“When we look to create a sense of accountability in others, we invariably try to influence their behavior by manipulating the environment in which they work.”

What they do and say helps make the community viable and strong. Communities that function well have these attributes:

• “Engagement” – People want to belong.
• “Alignment” – People work toward shared goals.
• “Accountability” – People take responsibility for their actions.
• “Commitment” – People pull together.

“Conflict between the role we are required to play and the role we are looking to fulfill is the source of many of the social dysfunctions we are starting to experience in the workplace.”

Of course, these are also the attributes of traditional leaders. However, in a world that increasingly operates according to the principle of mass collaboration, leaders’ path to these goals must change. Previous cultures were what Stanford University Professor Lawrence Lessig calls “read only,” or command-and-control. Today, he says, culture is “read-write.” It is “communal and co-creative.”

“What saves a man is to take a step. Then another step. It is always the same step, but you have to take it.” (author Antoine de Saint-Exupéry)

In such a world, the old boundaries that separated leaders and followers no longer apply. Instead, leadership is a “two-way relationship” in which leaders are “familiar strangers” – experimental psychologist Stanley Milgram’s term for individuals whom you see routinely, for example, on the subway, at the supermarket or at church, but with whom you do not interact. Nevertheless, familiarity creates a bond. Leadershift takes advantage of such bonds. It depends on social rather than positional power.

“With the election of Barack Obama, ‘leadershift’ won its first election.”

The change from leadership to leadershift takes place along four dimensions.

“Shift 1 – From Clarity to Simplicity”

Leaders justify their positions by making their communities viable. Complexity – a common problem today – can kill any sense of connection to a community and, thus, the community itself. To eliminate complexity, simplify “processes, products, reporting lines and channels,” providing coherence and rationality in what might otherwise be a bewildering environment. Leaders help their communities “articulate the problems they are looking to solve.” They indicate decision points where the community must stop to determine its identity and direction.

“Shift 2 – From Plans to Narratives”

Plans are vestiges of the old command-and-control leadership structure. Leaders need to get out of the planning business and into the “narrative business.” They must help their communities develop stories that summarize the community’s identity and provide the necessary “social alignment” of all those who work within the organization.

Indeed, leaders must create “narrative environments,” that is, “places where stories unfold.” Such stories engage people. Examples of engaging narratives include “We are a highly efficient organization” and “Our firm is all about excellence.” Contrast these with plans, which take the form “Do A so we can get to B, which will lead us to C.” Unlike plans, stories do not direct. Instead, they inspire and motivate. To form a narrative, focus on these three questions that relate to your organization: “Who are we?” “Where are we going?” and “Why are we going there?”

“Shift 3 – From Roles to Tasks”

Instead of trying to persuade employees to fulfill their roles within the organization, leaders should “focus on clear task definition.” Tasks create the all-important narrative. People who understand which tasks are vital will work together to achieve them. You see this phenomenon whenever you organize a special project. In such an environment, team members focus on the tasks they need to do to complete the project. Indeed, goal-oriented task completion enables workers to “fulfill their self-images.” Organizations cannot function without role assignments. But tasks, not roles, are what drive workers. As a leader, conduct a dialogue about tasks to engage team members. When you do, people will feel accountable.

“Shift 4 – From Money to Love”

Leaders must achieve commitment from their followers or they won’t be leaders for long. To inspire others, take these steps:

1. “Love what [you] do” – And make sure you show it. No one will commit to something that you are not committed to yourself.
2. Create a “social incentive” – This transcends and even replaces the traditional “economic incentive.” Money is a nice reward. But it won’t deliver commitment. Indeed, “money destroys the moral obligation at the heart of commitment,” because it turns every interaction into an economic one. It can motivate only to a point. Love works a lot better. People will walk through fire for organizations they love.

How can leaders promote love for the organization among their employees? Ironically, the answer is not to focus on the individual workers. Instead, concentrate on the community. Work hard every day to make it one that inspires pride in its members. Follow the example of leaders at Wikipedia, eBay and other self-directed organizations and communities.