Successful businesses are no longer automatically seen as synonymous with big leaders, like the late Steve Jobs or Jack Welch. Simon Hayward, CEO of leadership consultancy Cirrus Connect, says it's about staying connected in a digital world.
Successful leadership in today’s complex and volatile environment is about being connected. Connected leadership marks a pronounced shift from the old model of hierarchical command and control to a new model of leading through influence. It relies on effective communication and connection across the organisation based on a consistent set of assumptions and beliefs.
Old models are breaking down
As a leader today you may well be feeling a sense of urgency and pressure, but also frustration. Do you see people in your organisation constantly busy juggling all sorts of projects, but get the feeling that not enough gets done? Do new initiatives too often become bogged down in bureaucracy and a lack of accountability? Are other people frustrated? Is there a lot of noise and not a lot of output? Do you sometimes wonder whether the customer is really front of mind?
You can see that your organisation has to change the way it works with customers and deals with the threats of competition, complexity, regulation, globalisation. But putting in place glossy new transformational programmes just doesn’t seem to work – they don’t translate into the genuine connections between people and among teams that will make a real difference and get things done.
You are by no means alone. Many senior executives are trying to figure out how to make their businesses more agile in an environment characterised by volatility, uncertainty and discontinuity. Additional pressure comes from the widespread erosion of trust and reputation in several industry sectors, including banking and finance, services and retail, while both customers and colleagues are demanding more transparency and accountability. For many this is rooted in the upheavals caused by the global financial crisis, the associated loss of trust in corporate and governmental institutions, and consumer empowerment.
Research from GlobeScan has found that public trust in global companies has fallen to its lowest point since they began tracking this in 2001. This has been further intensified by the pervasiveness of social connectivity and networking, as companies find everything they do is on global display. Customers want instant responses to complaints and questions – an immediacy that the hierarchical command- and-control models can rarely deliver.
The answer lies with us as leaders. Our role is to create organisations in which what we say and what we do is consistent, what happens internally is in line with what we write in our annual reports and what we promise to our customers is delivered. Our role is to embed an organisational ethos that encourages swift reactions to changing market conditions by inspiring everyone to act and adapt far more quickly than they have been used to.
Many of today’s leaders are well aware of what they need to do, highlighted by a research project among the leaders of FTSE 350 organisations (published in early 2015). In the research, conducted by Ipsos MORI and Cirrus, 65 per cent of respondents stated that their biggest priority was being more agile and 64 per cent said it was creating a stronger sense of shared direction.
So, where do you start? Today’s most successful leaders connect people across the organisation to strategic goals and to customers by developing a shared agenda through purpose, direction and values. They devolve decision-making responsibility and encourage a culture of collaboration and teamwork. They stimulate a high degree of empowerment and trust that each person and team will perform to the best of their ability. They increase agility through developing a learning culture that drives innovation and ruthless prioritisation. They are connected leaders.
A new style of leadership
The discussion about leadership has moved beyond the archetypal big personality who runs the company and is the embodiment of its values and culture – the so-called ‘hero’ leader.
Successful business renewal is no longer automatically seen as synonymous with leaders like the late Steve Jobs of Apple and Jack Welch of GE. The pronouncements and personalities of leaders like this seemed so integral to the success of their businesses that they often attracted as much attention as the products themselves.
Yes, powerful individuals can generate fresh energy and develop a new sense of purpose. However, this style can cause too much of a focus on the individual heroic leader who motivates others to ‘save the day’ based on charisma and personal appeal.
It might work for a time. The problem is that fissures can break open in the organisation once that leader goes, as happened at the UK retailer Tesco following CEO Terry Leahy’s departure. In fact, companies like Apple and GE have demonstrated the opposite, namely an ability to manage smooth leadership succession by developing leadership as an organisational capability rather than relying on the ‘hero’ at the top.
That is why, over the past 15 years, there has been more of an appreciation of the role of leadership as an act of shared influence to achieve collective objectives, which moves beyond a rigid hierarchical model. Leading research around the world points towards this shift, with growing recognition of the power of shared leadership to deal with the increasingly complex and networked world in which we live.
From a relatively centralised approach to power in the 1950s we saw the rise of the inspirational ‘heroic’ leader of the 1980s and 1990s, and then the emergence of ‘post-heroic’ leadership in the 2000s in the forms of authentic and servant leadership. Distributed leadership and complexity leadership theories in the 2000s took this to a further level of sharing power. I have created a coherent model that enables us to understand how the various theories have evolved and how they complement each other in responding to the needs of the networked unpredictable environment in which we now operate.
One of the earlier influential leadership theories was Theory X and Theory Y put forward by Douglas McGregor in 1957, based on two assumptions managers make about employees. Theory X suggests managers assume employees are inherently lazy and need close supervision, while with Theory Y managers are open to seeing employees as inherently self-motivating and seeking responsibility, so requiring involvement and trust to perform at their best. Connected leadership is consistent with Theory Y.
Transactional leadership focuses on how process and reward influence what followers actually do at work. In 1978, James MacGregor Burns described how the leader has the power to reward or punish the team’s performance and to train and manage when members are underperforming. This emphasis on the recognition and reward process is reflected in the emphasis on performance management in today’s HR culture. This emphasis is being questioned by some commentators as being too ‘transactional’ when there should be greater emphasis on having quality discussions to maximise motivation and performance. Connected leadership is certainly consistent with the emphasis on dialogue rather than a mechanistic connection between reward and performance.
In the 1970s, 1980s and 1990s, transformational leadership, with its emphasis on the charismatic leader who inspires others to do great deeds, became fashionable. There is much value in the transformational approach, with its emphasis on setting and communicating a vision, as well as giving attention and managing one’s behaviour to engage followers in the leader’s direction.
In connected leadership I echo the importance of these things, but with one key difference: it is less about the heroic leader and more about the shared process of leadership that really makes organisations successful in a sustainable way.
Similarly, connected leadership draws on aspects of LMX theory (leader–member exchange), which developed our appreciation of the importance of the quality of relationship between the leader and their team members. This line management relationship is certainly a critical influence on the level of engagement and resulting discretionary effort of followers, and the more connected each line manager is with the organisation’s purpose, direction and values, the more joined up the enterprise will be.
Authentic and ethical leadership both reflect the increased emphasis on values and behaviour in the 1990s. Connected leadership draws heavily on authentic leadership in particular, as personal and collective authenticity is a pre-requisite for the quality of trust that is required for connected relationships to work in practice.
Authentic leadership suggests that leaders need to have high levels of self-awareness, a strong moral compass, the ability to make sense of information in a balanced way, and open and transparent relationships. Servant leadership is also very consistent with connected leadership, reflecting the shift from the leader as hero to being the enabler of others.
In the 21st century research into leadership has shifted to challenge the heroic model of the individual saviour riding to the rescue in favour of a more shared approach where many people can lead others across the organisation on a day-to-day basis to achieve higher levels of overall performance. Distributed leadership is a way of describing this in a practical way, with shared decision making within an overall framework of coordinated activity.
Complexity leadership theory takes this further, by recognising that in the unpredictable world in which we now operate we need to create organisations that can adapt to changing conditions while retaining strong core processes.
Connected leadership draws on both, as an integrated leadership approach based on the best research and in tune with the networked society in which we and our consumers live. It also draws on shared leadership theory, which emphasises team leadership and the shared nature of leadership as a process of influence, and on adaptive leadership, which emphasises the need for systemic change leadership in order to thrive in the complex world in which we operate.
Connected leadership also reflects much of the thinking in the service profit chain, a business model that emerged from research into retail performance in the 1980s and which established relationships between profitability, customer loyalty and employee satisfaction. It also reflects more recent research which shows the relationship between customer experience and corporate reputation and how leaders collectively create the environment for success for colleagues and customers alike.
Understanding connected leadership
Developing the connected organisation starts with you as the leader and how you influence others to establish and nurture the critical connections, both at the strategic level and locally in every team across the organisation. A leader cannot act in isolation. I believe we have to work with our colleagues to create a delicate balance between distributing power while retaining a strong core structure. If everyone is working with a consistent set of assumptions about ‘what great looks like’, they can in turn make the right decisions for customers, which drives loyalty and advocacy in the marketplace.
Connected Leadership: How to build a more agile, customer-driven business By Dr Simon Hayward is published by FT Publishing, part of Pearson Education. The book is available to buy on Amazon.