Taking a fresh approach to leadership

THERE are disruptive changes everywhere – be they in the form of a global financial crisis, floods, earthquakes or epidemics.

The imperative for people (and organisations) to collaborate is stronger than ever. Inversely, the cost of inaction, or ineffective action, is higher than ever.

For decades, management practice has focused on providing employees with the capacity to act, with little attention paid to an individual’s willingness to act or follow direction.

With the additional constraint of a growing shortage of talent and employees feeling that, post-GFC, the power has shifted back to them, CEOs are facing a challenging new reality in which to lead.

CEOs and executive teams, in general, have sophisticated tools and techniques required for strategy formulation. The biggest failure is around effective execution of that strategy.

One of the most common mistakes is to overlook the fact that collective power is the sum total of individual action. In other words, if you can’t convince individuals to act then there is no collective power.

But how do leaders and their followers get on the same page? How does collective commitment emerge in large groups? Why is it so difficult to win the hearts and minds of people? Most leaders are aware of this organisational friction that limits their success, but they lack a solid point of view on how to address it.

What if this perennial subjective problem could be addressed in an objective, practical, and accurate manner? What if we could measure and thus influence the choices of organisations and leaders to move collectively toward their goals?

During the past two years, intensive research undertaken by Deloitte (and recently published in a new book As One: Individual Action, Collective Power) analysed the ways collective action emerges in large groups.

The research consisted of an academic review of hundreds of perspectives on collaboration and collective leadership drawn from a range of disciplines. The team also created a set of 60 detailed case studies – spanning 19 industries and many locations – that analysed successful examples of ‘As One’ behaviour in corporations, government agencies and non-profit organisations.

The project has resulted in a new approach to measuring the presence of the key factors needed for successful collective action and to define effective, practical interventions (collective leadership).

The research identified three factors that most commonly underlie successful collective leadership.

• First, people need to earnestly view themselves as part of the larger organisation, not just as members of a subgroup or as outsiders. A high sense of ‘shared identity’ encourages people to act to achieve organisational goals.

• Second, strategies succeed when large numbers of people personally commit to undertake the specific actions that the strategy demands. High levels of ‘directional intensity’ (DI) mean people are willing to make the contributions sought by leaders.

• Third, people who collaborate productively have to share an understanding of how work is supposed to get done. The extent to which people have a ‘common interpretation’ (CI) of how to work together determines the success of the collaboration.

The issue is, most organisations do not explicitly measure or apply the three key factors of shared identity, directional intensity or common interpretation or their compounded impact on the ability of leaders to lead because, until now, there has been no reliable way of measuring them. Employee engagement is frequently measured but that score represents the overall affinity to an organisation, not commitment to execute its strategic agenda or understanding how employees want to be led.

Taking the element of shared identity (SI) as an example, the multitude of overlapping structures and layers that make up a modern organisation makes it critical to know which parts of an organisation people feel a part of the most, because those are the parts of an organisation whose success will matter to people. Knowing that staff do not strongly identify with the global organisation, for example, leaders can choose to communicate their strategy at the level that is more likely to resonate, such as the regional or divisional level.

Supplemented by insights gained from DI, often indicating a significant ‘undecided’ group of people, and understanding how people want to be led (CI) allow leaders to define and shape effective collective execution and programs of deliberate and targeted interventions to help leadership achieve its goals.

Importantly, the findings of this research have broadened the leadership discourse beyond traditional command-and-control and collaborative models by demonstrating that a variety of different leadership styles, as manifested in eight distinct archetypes (see diagram) can be applied in different circumstances to achieve desired results.

The eight archetypes are described around two primary dimensions:

• the vertical axis describes whether direction is set from the top down or the bottom up; and

• the horizontal axis conveys whether tasks are highly scripted and uniform or highly creative.

Understanding these archetypes in your organisation provides a granular understanding and common language for executing strategy faster, with greater impact and less risk.

For instance, Deloitte has a predominant ‘architect & builder’ archetype, with architect-leaders mapping out the strategic blueprints and builder-followers finding creative and often ingenious ways to make it a reality.

While the architect & builder model was generally successful, Deloitte observed that it did not work for innovation that did not receive the expected levels of commitment and support. What the analysis told Deloitte was that more effective innovation required a more bottom-up approach, which aligned better to the ‘senator & citizen’ model (a model where the citizen-followers have greater say in developing the strategy).

This understanding allowed Deloitte to adjust its approach to innovation in a number of ways. For example, the creation of small seed funds enabled anyone with an idea to develop a conceptual prototype. People actively added their own discretionary time to the seed funding commitment from the firm to develop innovative ideas and the innovation strategy went from being the least supported to the most supported strategic initiative.

The same principles became evident in applying the ‘As One’ principles to a large wealth management company (‘Wealthco’) that attempted to get more than 2,000 financial advisers to replicate each other’s best practices. Wealthco also preferred an architect and builder style, which was directly in conflict with the ‘community organiser and volunteer’ style the financial advisers responded to. By overlaying some community organiser techniques (like highlighting the ‘why’, emphasising personal benefits and breaking tasks down into smaller chunks), Wealthco is now well on track on achieving the collective action it was hoping for.

Leaders are more than ever accountable for outcomes. Hope is not a good strategy. Through the development of eight distinct archetypes, the ‘As One’ approach attempts to provide more granularity and depth in addressing the diversity of today’s successful organisations and acknowledges that there is a rich taxonomy for how people can work together that can be understood. This will help to enable leaders to lead by understanding their people.

• Gerhard Vorster is chief strategy officer, Deloitte Australia, and co-author of As One.