Leadership and distributing knowledge is the key to being successful today in a communication-heavy environment. The following is the first of three blogs that focus on developing leadership—the type of leadership that will allow your company to excel. The series will include first, how leadership is changing, then how knowledge management is changing and finally, what all of that means for you and your company.
Distributed Decision Power
In the past several years, a powerful nexus of forces: globalization, increasing capital flow, highly distributed and accessible global talent, increased communications flow and a dissolution of many competitive barriers to entry from open source communities and cloud based computing, have created a new hyper-competitive reality for businesses. This “Ecosystem of Innovation” as author Thomas Friedman called it, has fueled an imperative for a new type of leadership—one based on distributing institutional knowledge, value creation, strategy and decision accountability more broadly throughout the organization.
Leading the “Collective Creation” Process
Since the days of Alfred Sloan, old economy leaders saw themselves predominantly as arbiters and dispatchers of information and resources. This came largely from the constructs of factory work and reinforced by the concept of professional management that was fostered by MBA programs. Data flow was easily manipulated because the availability of important company information was either minimal or already constrained by hierarchical “client-server” systems, and organizational, architectures containing larger spans of control. Cultural management was mainly a function of establishing internal policies and procedures, then promoting from within to ensure sustained compliance; ultimately placing risk-reduction over seizing upside opportunity via innovation.
In this “command and control” structure, organizational learning, knowledge and decision making remained at the highest levels of the company, while the tactical components of execution were relegated to mid-level managers and to the rank and file, who functioned with far less of a preview into how their activities affected core strategic outcomes, much less the broader ecosystem.
But in response to changing environmental factors and the high risk of Schumpeterian disruption, many innovative leaders have shifted to creating learning-agile organizations where the collective intelligence of the whole organization becomes greater than the sum of its parts, making agility, and a culture of curiosity and knowledge curation the new unfair advantage over competition.
To facilitate this, business leadership has shifted dramatically from its traditional top-down sequence, to a focus on the “bottom-up” by building high-context leaders at every level in the organization. In this environment, effective leaders create a culture that values performance and responsibility and facilitate communication, experimentation, and action.
William Kilmer is a former managing director at Intel Capital and has been the CEO of several successful technology companies, most recently he led Public Engines, a cloud-based predictive analytics and data visualization software company that was acquired by Motorola. Kilmer stated, “Competitive organizations create cultures and supporting systems to nimbly assimilate new information from any source, disseminate it, and enable sound decisions and effective execution. Learning-agile leaders must be comfortable with distributing decision-making through the organization, which leads to greatly enhanced employee engagement.”
Social media has helped to usher the Economy of Innovation, fundamentally changing brand creation and management for both companies and individuals. The resume–the formerly-singular platform for employees to market and position themselves as capable experts in their craft–has been classically displaced by more scaleable and interactive social networks. In a “Me Inc.” world, one-to-many communications, brand-loyalty, and mass influence are no longer the exclusive currency of the corporation. With increasing pervasiveness individuals are leveraging the power of personal brand to globally position themselves as highly-specialized knowledge workers to both individual and corporate audiences.
The emergence and pervasiveness of the personal brand of individuals has also fundamentally changed how companies create and maintain an authentic culture. Today we see culture as the total sum of the collection of personal behaviors, beliefs, values, and personal brands of the employees in the organization. In this environment, the external brand of the business is not something merely contrived, or independent of, the company culture. Instead, the external brand is an inextricably-connected outcropping of the internal culture/brand.
John Bingham, the MBA Director at the Marriott School of Business and associate professor in the Department of Organizational Leadership and Strategy stated, “Today’s leadership requires people who have a strong sense of their values, their personal brand – and how it aligns with their company’s external brand – and who see themselves as knowledge workers, no matter their discipline. A reason why hiring and harnessing the capability the very best talent is one of the key ingredients in the new world of leadership.”
The idea of a learning organization has been around for decades, but Peter Senge helped to popularize the idea in his influential 1994 book, The 5th Discipline. It has taken more than a decade for companies to broadly adopt the notion and change the way they think about the collective intelligence of the organization—in some cases, to even acknowledge that it exists.
Yet simply existing as a learning organization is not sufficient. In an environment of rapidly-narrowing margins, driven by the increased total availability of information and global competition, learning agility has emerged as a necessary component of corporate sustainability and growth.
Leaders succeed when they build organizations that can “adapt, improvise, and overcome”. Managers need the capacity to experiment, constantly improve, look outside their boundaries, and try new things. When both leaders and organizations do that, they move forward and have greater capacity to make decisions that will create success. Managers should also develop the leadership and employees who are inquisitive and curious and demonstrate intellectual curiosity around how to improve things. This requires managers to wear two hats—the first hat being where the organization is at, and the other hat being what the organization should become.
As in any organization, there are challenges to this process. One of the most obvious challenges is that of distributing influence and decision making throughout the organization. It’s a known fact that people are imperfect and make mistakes. But the most successful companies create a cultural value of learning so when mistakes happen it is an opportunity to learn and make better decisions.