One chief executive is no longer enough. It’s time for organizations to make distributed leadership a reality
We know all too well that the pandemic has had a colossal impact on how we work. The issue of trust has been under the spotlight and there has been increased attention on employee wellbeing, flexible ways of working, asynchronous productivity and changing employee expectations.
These very visible effects make it easy to forget that there are longer-term disruptive forces at work. These transformational forces are not just going to blow through town and then disappear, leaving the dust to settle. They are ongoing, unremitting and ever-evolving challenges – or opportunities, depending on how they are viewed and tackled.
In short, the operating environment facing organizations has fundamentally changed. We face a perfect storm of factors, made up of what I call the five forces of operational transformation.
1 Adopting digitalization Enabling the business and its people with technologies that can transform the customer experience and protect the human touch, while accelerating efficient working practices, collaboration, hybrid working and more.
2 Evolving business models and organizational culture shift The modern workplace is digitally-fuelled and distributed. For many, there is a need to bring 20th-century organizations into the 21st century, with ways of working that are underpinned by values, behaviours and culture that are fit for purpose, people and profit.
3 Leadership readiness The rapid pace of change means some traditional leaders are falling behind the curve in terms of their speed, skills, adaptability and understanding of how ways of working are evolving.
4 Workforce shift We are seeing the rise of the empowered, blended workforce (formalizing the previously informal mix of permanent and independent workers), the hybrid office and new perspectives around workplaces and workspaces. At all levels, more empowered, skilled individual contributors are increasingly discerning about the types of organizations they are joining or working for. They value factors beyond remuneration, such as human-centred leadership practices and purpose, and the opportunity to actively contribute to society in ways that go beyond shareholder value.
5 Equity, diversity and inclusion With all the above comes the challenge, for some, of glueing together a more geographically dispersed, blended workforce in a way that embraces diversity and matches it not only with inclusion, but with a strongly principled and equitable approach.
I believe these challenges can be addressed holistically, in a way that leads to business success and advantage, through the principle of leadership at all levels. We need a bold new age of empowerment across organizations, whether they are large, medium or small; multinational or domestic; encompassing all industry sectors.
Thriving in this perfect storm demands that more people contribute to organizational success and growth, through a collective, collaborative and flattened approach to organizational leadership and business health. The rolling wave of innovation and creativity necessary for today’s fast-moving, highly complex environment demands a distributed approach to leadership that unleashes the potential within the many, not just the few – or the one. In other words, one chief executive is no longer enough. We need chief executives at all levels.
The in-role CEO
The notion of leadership at all levels is well-rehearsed, but remains uncommon in practice. Why? Emma Saxby has worked for major organizations such as Axa and DSM in learning and development and talent management, and now has a global coaching business. In my book, The Inner CEO: Unleashing Leaders at all Levels, she describes the challenge facing senior leaders: “To empower people, you need to trust them. The more enlightened leaders I have worked with have one thing in common: they have released their egos. They’ve opened up to the fact that other people can bring those leadership skills to their roles and contribute to the organization.”
When senior leaders admit that they do not know all the answers, they realize that they need others to contribute – to innovation, to the direction of the organization, strategy implementation, customer experience and more.
Achieving leadership at all levels requires two core components. First, the conditions must be in place at an organizational level to allow empowered working to thrive. It starts with mindset at executive leader level, and needs a structured approach throughout the business. Without this, it will fail before it gets started.
The second component is a culture shift, reinforced by appropriate systems, processes and support infrastructure, allowing individuals to grasp the opportunity of becoming leaders, regardless of their function, role or level. In my experience that demands a robust action plan of personal development, an organizational level learning path, and formalized coaching and mentoring support.
The ultimate aim is to create what I call ‘in-role CEOs’. This is not a badge, a new job title or a pay grade. It is a state of mind, that allows both executive leaders and individual contributors to embrace the spirit of leadership at all levels, and act upon it. There are five fundamental success factors for these in-role chief executives: attitude, culture, leadership, interpersonal skill, and performance – each of which comprises several traits common among those who thrive in an empowering culture. These factors can be used to identify individuals who would excel as in-role CEOs (see graphic).
While action is needed at an organizational level, there is also a need to engage individuals in the journey. When it comes to unleashing leadership at all levels, one size does not fit all. Assessment against the five success factors allows for two differentiated approaches to be taken: stepping out or stepping up.
An individual’s leadership can be enhanced in their current role without necessarily going beyond the boundaries of their team or function. It means being more productive and efficient every day. It’s about being unleashed to make decisions without going to a manager, problem-solving independently and/or with others, ideas generation, team implementation, and new ways of collaborating.
Those with potential for a greater stretch – executive leaders-in-waiting – can be involved in special projects that require something extra. They might attend senior management meetings and contribute more strategically to the business. This stretch must be balanced so as not to jeopardize deliverables in their core role.
Enabling individuals to step out or step up requires a culture and attitude shift at senior levels. Executive leaders need to model it from the very top, embracing a growth mindset and supporting the journey with repurposed line management. This will allow individuals to truly embrace the opportunity, releasing them to experiment and experience controlled failure – as important for development as more formalized coaching. This isn’t always comfortable for organizations, of course, as it can mean giving up a measure of control at both executive leader and line management levels.
Johanna Bolin Tingvall, global head of learning and development at Spotify, describes a great example of how people from different parts of the organization come together to innovate and lead work based on “bets”, or “an informed guess”. These bets rely on different functions and teams working together. As Tingvall explains: “We get people from different parts of the organization to form a bets team… It’s truly empowering and engaging. It’s a great way to remove yourself from the day-to-day role and become part of a different coalition. This helps to unleash your inner CEO.”
The tone struck by senior leaders matters enormously. Even the most motivated individuals need to know, definitively, that leading at all levels is actively encouraged: they must be supported by an evolved organizational culture where line managers adopt a coaching approach, guiding individuals through a structured and highly personalized programme. An environment of psychological safety must be nurtured, so that experimentation, creativity and innovation can flourish.
How leaders at all levels emerge and thrive
When I was researching and writing The Inner CEO, I sought advice from leaders and experts who were already living and breathing the concept. I asked what makes the difference between success and failure in creating an empowered workforce. Their insights point to eight must-have success factors:
- A new, empowering leadership mindset at board and executive leadership level Leaders need to set a clear direction towards creating a truly empowered workforce, and establish a management structure to underpin it.
- Reshaping culture with behaviours and values Once the leadership mindset and structure are in place, the organization culture can be reshaped around behaviours and values that are consistent with leadership at all levels.
- A can-do mindset throughout the organization Whether stepping out or up, people need to go beyond their job roles.
- A re-imagined, flatter organizational structure Remove layers of management, red tape, politics and bureaucracy.
- Repurposed line management support Develop a growth mindset and adopt a strong coaching-led approach.
- A climate that supports experimentation Learn from failure and rapidly adopt new practices.
- A bold learning and development plan This should provide the strategic and operational knowledge, skills and behaviours required for leaders at all levels to be effective.
- A platform of psychological safety Everyone should be able to step up, question and experiment without being judged.
This may require a root-and-branch rethink of current leadership and HR practices. It demands reflection on critical elements such as how success will be measured, and how the business can ‘catch people doing it right’ with a fit-for-purpose recognition and reward structure. Line managers are likely to need to stretch themselves too, shifting from a performance management mentality to a growth mindset and coaching-led approach.
Reaping the benefits
The benefits of unleashing in-role chief executives include greater innovation at all levels, increased employee engagement and retention, better employer branding, a stronger organization culture and improvements in employee wellbeing. Steen Puggaard, co-founder and former chief executive of Singapore-based food business 4Fingers Crispy Chicken, says: “I use the costs of attrition to create a budget for salary increases and loyalty bonuses to reward the people who consistently contribute. It creates a positive buzz and reduces the cost of attrition. The longer people stay, the more productive they are, which means a more consistent experience and service for customers.”
Speed of change, action and ideas represent competitive advantage. In the modern workplace, they should be realized by the many – it is far more difficult if they are left in the hands of the few. Philippe Bonnet, vice-president, global head of learning and organizational development and HR business partner at France-based ophthalmic optics manufacturer Essilor International, underlines the urgency: “A traditional leader cannot adapt quickly and must mobilize the power of curated leadership… This has to happen fast because speed changes a lot of things, such as how we think about our businesses, how we structure them and how we have to continually adapt.”
It is time to make leading at all levels a reality in our organizations. In the face of all the challenges and opportunities of business model transformation and new ways of working, empowering leaders at all levels has become a must-do rather than a nice-to-do. What could a true age of empowerment look like in your organization? The benefits are dramatic – and can be realized more quickly than you might think.