Leadership

What happens when reputation-based networked leadership comes up against hierarchical institutions and competitive market forces? In the short-term, it looks like it loses, as was the case of Greece’s finance minister, Yanis Varoufakis.

“So what Varoufakis is doing here is harnessing the capacities of communication technologies to support transparency and genuinely intelligent policy debate, and thus empower the polity. Alas, the opposite of both of those trends is the dominant norm in the political use of the mass media and communication technologies.” – Open Democracy

But it may be the winning strategy for the long-term.

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We believe technology is changing culture everywhere in the world, leading to the emergence of a new model of leadership.

Employees are now more confident, more mobile, more demanding, more idealistic in some cases, and less willing to be company people. Employees, more than ever, are individualists.

Leaders, in response, are learning to be less the visionary, less the sage, less the objective-setter, and more the shaper, the connector, the questioner. And yet at times, they also need to intervene, to insist, to control. It’s a fluid role, its shape not yet clear.

What is clear, as leaders forge their own new models, is that the old ways no longer work. CEOs can’t fall back on best practice. They have to be original. Leadership, more than ever, needs creativity. And achieving the impossible needs the most radical kind of creativity. – Wolff Olins Report 2015

Leadership in networks is exercised through reputation, not positional authority. Having influence in multiple networks, not just the organization, makes a leader even more effective. The ability to span networks becomes important as organizational lifespans decrease and worker mobility increases. To remain connected to the changes in their networks, good leaders are curious and promote experimentation, but do not need to control it. Leadership in networks is helping the network make better decisions, and this requires a focus on the best organizational design to meet the changing situations. Strong networks, combined with temporary and negotiated hierarchies to get work done, become the simple building blocks for an organization in a state of perpetual beta.

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I had a conversation with a flight attendant on a long overnight trip last year. Most of the passengers were sleeping and we had time for a nice chat. We swapped a few stories. I’m always interested in how organizations are viewed by the people nearer the bottom than the top of the hierarchical pyramid. You can learn a lot about the culture.

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I doubt that students at Stanford thought they would become sadistic prison guards when they entered that university, primed for higher learning.

I doubt that the teacher who gave electric shocks to a “student” had planned that as part of her day.

I doubt that when budding physicians enter medical school, any plan on torturing people through rectal feeding.

Why do good people do bad things? In most cases, it’s the system.

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Power and Leadership

The TIMN [Tribes + Institutions + Markets + Networks] model shows how society grew from a collection of tribes, added institutions, and later developed markets. These aligned with revolutions in communications: from oral, to written, to print. The network era began with the advent of electric communications, though it is by no means completely established.

Each type of societal structure has required different types of leadership. Alexander the Great was probably one of the best tribal leaders. He led his armies from the front and created an enormous empire. After his death, some of his generals created long-lasting institutions not based on military tactics. Ptolemy’s library at Alexandria is one example. Later, institutions like the Catholic Church dominated more through soft institutional power, rather than wielding swords. Others did that for them when necessary. As a market society developed, new types of power were exercised by the Fuggers and the Hanseatic League. Later, captains of industry such as Andrew Carnegie, would dominate in their markets, often circumventing institutional power.

As we enter the network era, we see companies like Apple dominating, often ignoring Wall Street pundits. With network effects, Google can control the online advertising market, making market competition almost irrelevant. Power shifts as a society’s organizing principles change.

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