Beyond Leadership From Below

I recently spoke to a group of Product Marketing students at KU Leuven, the famous and ancient university in Belgium. Despite my warnings that they were taller, smarter, and funnier than me and that there was no reason to think that I should give them advice, rather the reverse, they actually listened to me for almost an hour.

The Leader Who Had No Title

Cover of "The Leader Who Had No Title: A ...

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Since I wrote Leadership From Below in 2008, there has been a steady flow of management books about bottom-up leadership. In The Leader Who Had No Title (2010), speaker Robin Sharma has put together a modern fable on success in business and in life. There are no revolutionary insights in this book, but its speaks to the frustrated, overworked American, which seems to be in the majority. Sharma also avoids being too patronizing. Instead of the traditional format he chooses a narrative form, which incidentally, means that instead of offering any kind of evidence, we are asked to trust the experience of the author indirectly.

We follow Blake, an uninspired worker who is presented with the chance to meet four somewhat unlikely leadership teachers in one day, a maid who is deeply passionate about her job, a surfer and skier who says to lean in on the steep slopes, seek out and face danger head on,  a former CEO now passionate about gardening who explains that business is all about relationships, and a shoe shiner who says you need to be a great person to be a great leader. All are lessons that ring true in the postmodern leadership scene where results only come if you balance your pursuits so that life and work mesh together.

The message might still be a bit radical for most people, although those who have thought about life and death more than once might agree at times:

All those things we believed were so important, things like titles, net worth and social position turn out to be so very unimportant.

As I predicted several years ago, it seems like the Zen of everyday life is becoming key to the western man and woman’s quest to reinvent reality.

But does that mean that hierarchies are going away? Or, does it mean that making a contribution as a team leader, a manager, a VP or a CEO does not matter anymore? Far from it, in my opinion.  The Forbes book reviewer and himself a leadership expert, SangeethVarghese, has it wrong, though, in dismissing the book in Everyone must be a leader. So What?:

Sharma seems to confuse leadership with mere exemplary work. He depicts leadership as a matter not of heading a team or directing change but simply of focusing on excellence in the work you do.

Rather, leadership from below, which is more an attitude to life regardless of your various roles, becomes important even as hierarchies matter. So, both Sangeeth and Robin are right: whatever you do, only take the lead if you mean it.

The Slow Birth of Entreprenocracy: Part III

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Taking forward the debate on Murray’s End of Management foray in WSJ recently, the new model is, in my view, not exactly Murray’s model.  Instead, it is simply a hybrid of bureaucracy and entrepreneurship. Let’s call it entreprenocracy.

A few weeks ago, I went to a wedding at Oriel College in Oxford, UK. We had a wonderful time and as in all weddings, I eventually had to explain what I do for a living. It was late, so I resorted to the explanation that I was a “persuader”. Needless to say, this prompted more questions. I ended up having to take them through the reality of strategy and public policy as it intersects with many fields but always has as its end game to enact some sort of conceptual change in your constituency and doing so as silently as possible.

In earlier days, when writing my Ph.D on What the Net Can’t do, I described the the process that underlies my own model of society’s work relevant knowledge flow as some type of “convincing” work. The fact that you constantly have to convince someone, your co-workers, your boss, your wife, your kids, your investors, your tax man, your police officer, in order to move on to the next thing in life, improve your lot, and avoid negative consequences of your actions, is actually the most salient characteristic of modern work. In enterprise terms, the new model that is emerging in the 21st century is precisely that, but occurring at all levels of action simultaneously. Even computer systems have to convince each other these days and the best one, the most flexible, wins.

Entrepreneurship is indeed fully dependent on having a persuasive founder, team, board, investor, and first customer. Bureaucracy is dependent on having a rational structure that makes sense to most of its participants, and one capable of organizing actions beyond the whims of individuals. Without sounding too much like the sociologist I once was, I simply put the two terms together and describe it as a new form of organizational governance.

What does entreprenocracy look and feel like? First of all, it is not currently the true and complete description of any organization I know of. All enterprises that survive the 21st century, however, will have entrepenocracy as its dominant logic.

In 1996, my old mentor, Manuel Castells, wrote a trilogy about the Network society. I was at first very fascinated with the concept. In fact, I still am. However, I quickly grew a scepticism towards the Castellsian notions that the network logic had somehow overtaken the former hierarchical and place based logic over a period of a small generation, because of the advances in microelectronics and software in Silicon Valley since the 1970s. The network, while powerful and capable of underpinning numerous innovations in the next decades as well, alone it is not. Rather, it complements and in some cases extends the reach of traditional bases of power, authority. Revenge of the Titans, so to speak. The giants on whose shoulders we stand, refuse to put us down. They start interfering in our affairs.

Leadership from below, the notion that attitude is more important than position in a hierarchy when you try to enact change, is my conceptual contribution to this debate. In my eponymous 2008 book on the subject, I explain how attitude, not position in a hierarchy, will determine whether you get something done or not. What I saw was similar to what Murray sees now. Change. Networks. Failure of top leadership across society. Inefficiencies in large organizations. Now, two years later, I am ready to admit the following: leadership from below is not enough. Leadership from the top is also needed. How? Why? What does that mean? And how is it related to WSJ’s Murray?

First, some formative experiences in my life include working for one of the largest and most complex public bureaucracies on the planet, the European Commission. As part of a 30K workforce from 27 member states, I was able to part take in the grand experiment of power sharing, project based identity and diplomacy that is the EU. Second, I now work for Oracle Corporation, with 105K, among the largest corporations on the planet, and also in its own way a complex bureaucracy. I have also started numerous non-profits, organized myself in action networks and earning absolutely nothing on the pursuit. Finally, early in my career, I ran my own start-up and gave advice to other start-up. In other words, I have experienced the entire value chain of organizational enterprises. What I have learned from this thoroughly multi sector life is the following: while no one size fits all, there are common approaches that work across context. A while back I published best practice advice on e-government in an article called Best practices in eGovernment: - on a knife-edge between success and failure. As I wrote back then, generic success factors exist, and lessons learned for practitioners include:

  • Achieve leadership buy-in
  • Keep technology as simple as possible
  • Get early stakeholder and user involvement
  • Gain momentum
  • Plan for sustainability

The lessons for today’s discussion on the supposed “End of Management” are similar, but there is the need to sharpen the organizational context of innovation:

  • Getting something done is always difficult
  • You cannot do it alone
  • Recruiting believers in what you are trying to do is essential. You cannot skip it regardless how good your idea is, what existing power base you may believe you possess
  • Initially, all initiatives appear to be without structure, but inevitably a structure forms

The theory of organizational ecosystems has tried to explain things like “emergence” in organic terms (see the work of the Society for Organizational Learning, SOL). However, in reality, change in social systems has nothing to do with ecosystems, because humans are infinitely more complex in their motivations than nature as such, although ecosystem could be as useful metaphor a metaphor as anything else, for lack of better ones.

Once entreprenocracy, the fusion of entrepreneurship and bureaucracy has been properly understood….these things will start to happen;

  • folks will be more realistic about organizational change
  • change makers will redouble their efforts to innovate within existing frameworks
  • the value and esteem of incremental innovation will increase
  • energy will be freed up to concentrate on innovation, wherever needed.

How can I say this with certainty? Hasn’t history proven that change is unpredictable? True, but some processes remain the same. The birth of entreprenocracy might be slow, but it is coming.

Beyond MacroWikinomics

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MacroWikinomics, the sequel to the bestselling book Wikinomics is out this week. Should we rejoice? Sadly, no. Sure, the book has raving pre-publication commentary. The topic is cool: the prospect that each and every one of us is changing the world. But unlike the more methodical vision of Bill Drayton’s Ashoka, where “everyone a changemaker” actually refers to taking real actions towards becoming social entrepreneurs in your everyday interactions with your local community, the Tapscott/Williams vision is mostly hyperbole, echoing the cliché that “we need to come together as global citizens”. Just listen to the sound of this phrase at the beginning of the book, taken from the BusinessWeek excerpt of MacroWikinomics:

there is now a historic opportunity to marshal human skill, ingenuity, and intelligence on a mass scale to reevaluate and reposition many of our institutions for the coming decades and for future generations. After all, the potential for new models of collaboration does not end with the production of software, media, entertainment, and culture. Why not open-source government, education, science, the production of energy, and even health care.

what follows is a populist criticism of virtually every institutional framework in existence:

…[M]any of our institutions are stalled, lacking vitality, leadership, and dynamism. It’s like every last ounce of oxygen has been squeezed out, leaving a mess of deflated expectations and chronically underutilized resources.

As FT reviewer Richard Waters writes in his book review of MacroWikinomics, entitled “How the web will save the world”:

The difficulty with books such as MacroWikinomics is that they take interesting phenomena like these, then apply a heavy dose of messianic fervour to produce an absolutist view of the future.

The problem, however, does not lie in messianic fervour. Fervour is exciting, and sometimes warranted, depending on the cause. The issue is the lack of a deeper analysis. You cannot just dismiss all current governments, companies, industries and individuals and say open source collective collaboration through the web will change the world for the better. Where is the evidence? How do you know? What is the better world you are looking for? The problem with most “collective” problems is that each and every one of us has a different view of what the problem is not to mention what the solution would be. This is only one reason why collective innovation runs into problems.

Every decade or so, the visionary discourse of how globalization and technology will change the world seems to gain intensity. Unfortunately, in this case, the visionary talk is cyclical and repetitive. In 1999-2000, the vision every trend watcher was talking about was the “nomadic worker” who would be able to work anywhere, anytime. In my Ph.D, What the Net Can’t Do (2002), I showed through fieldwork that even in such a conspicuous place such as Silicon Valley, nobody really, really believed their own hype or had any plans of acting on it. Venture capitalists told me they would never invest in a company that was further away than a short car ride before lunch. Marketeers and engineers alike admitted they did not themselves use the Internet and its applications the way their advertisements said people would.

In reality, only workers who are willing to accept a rapidly descending status and relevance in the workplace, and who previously have worked up quite a reputation in some relevant sphere, can afford to go off the grid. Even for them, every minute counts. Every minute away from bosses, customers, markets, cities and inspiration, or from friends and family for that matter, takes away from your presence, relevance, and engagement with those who do tend to stay in one place or at least meet up face-to-face on a regular basis. In short, quantity time is still more valuable than quality time. Presence is still more valuable than virtualized co-presence.

In 2010, the visions are even grander. Now, the web will save the world, apparently. Fine, maybe it will, after a while and together with a bunch of interrelated and non related phenomena. However, and regardless, one cannot just assume that most institutional frameworks, indeed anything that is not related to individual expression, lacks legitimacy. The age-old visions of direct democracy share the deficiency that hampers any such vision of change: the lack of awareness of how human motivation works. I do not discount that the web has facilitated and indeed spurred many ongoing experiments in mass collaboration. It is not unlikely that a few of them will change the world as we know it, or at least alter important aspects of our world. However, social change is complex.

First of all, in all honesty, many institutions, governments, and collective actors are alive and well. Sure, there are many things wrong with any given healthcare plan, school or public agency, but the alternative is not so clear. Individualism is great, for sure, but will, arguably, never completely outgrow community. The two seem to build on each other, even complement each other. Society will always fight back.

Or, maybe we should start with something a bit more basic: society exists. When will the visionary, absolutist, determinist, technocrats realize this? Their arguments are quite stunning, really. All in the name of progress. Progress from what? To what? This reminds me about a long standing discussion I have with a dear friend about whether progress actually exists. He claims all of civilization, all advances in societies and markets and capital show progress. On what grounds do people tend to claim progress? What is the measure? For him, of course, with the frame of reference being the “great civilizations” of Greece, Rome, and the British Empire, it is simple. Wealth, art, industry was created and some of it is timeless and important. Well. Yes. However, every time we claim to progress, the counterargument can be made, some (other) people are worse off. So, for instance, the surplus of the colonies created palaces and industry in Europe. Conversely, it set Africa on a path of perennial decline for centuries. Or, as Richard Waters writes:

It would be nice to believe that Tapscott and Williams have history on their side, and that projects such as Linux foretell a world where anyone with an internet connection and an hour to kill will give generously of their cognitive surplus.

The problem is, most people’s cognitive surplus is quite limited, measured and must be applied sparingly to only the most important projects at hand. So, I might get involved in my kids’ school, a charity or two, a local political debate, or in global debates in my field of expertise. But, I will not get involved in everyone’s schools, all charities, all political debates and in global debates across the globe. We are all situated actors with our own bounded, focused frame of mind. We cannot focus everywhere. We cannot spend all of our energies on all good things. We must choose and we do. Daily. Ruthlessly. Most of us do it based on an analysis of what means the most to us. What we care the most about. Most of all, we make the decision based on where we are. Place making is difficult. Only with labour do we make the world our own. And when we do, we celebrate that, try to enjoy it, rather than look elsewhere. Psychologically, that is also the sane attitude. If you walk around trying to engage in anything, anywhere, you are delusional, and most likely, ineffective.

Empowering citizens is a great aim. I believe it can happen. I believe it does happen. It just does not happen all the time, and the web is not the cause of it. And, we need institutions to organize ourselves. Every time a problem is complex, recurring, or demands fair solutions, an institutional arrangement seems a quite fruitful way to go. Also, there is nothing morally wrong with organizing human societies in representative arrangements, governments, bureaucracies, and corporations. This is not to say that checks and balances are not needed and that the web is not useful in this regard.

In 2008, I wrote the book Leadership From Below. I argued that leadership is more about attitude than position. My intention was not to say that formal leadership will disappear or has disappeared. Rather, what I was pointing out is that influencing others demands that you acquire followers, or even better, that you simply channel the energies that are latent in the group you are working with. For instance, you will be more successful at innovation if you work with other people’s ideas, shaping them together rather than always asking people to work on your ideas. This applies almost always, and even if your idea is better. Psychoanalysis has brought forward this insight, although it must have been known to man (and especially women) for centuries. My grandmother knew. My mom, my wife, and my daughter all know this. I merely write about their insight and sometimes discover their plot as an afterthought.

MacroWikinomics is a nice phrase and will likely sell quite well. Its ideas, however, are shallow. There is nothing wrong with collaborative innovation but it is not at all new or completely web related. It would be nice to believe that every problem requires a given amount of resources, say 1, 10, 100 or 1000 man months. But this is not true in practice. A problem can get solved just like that, if an innovative idea comes forward. A team might be astonishingly inefficient or very efficient, depending on what happens in their group process. A huge problem might actually require an enormous amount of energy to resolve, but the exact quantity needed can seldom be determined beforehand.

Arguing against the limitless opportunities of the web sometimes feels like being against fighting climate change, aids, or corruption. In short, it is perceived as being against progress, against the politically correct, against reason itself. However, my cause is not to try to stop positive change. But naïve faith in the impossible: namely the belief that everyone we will change the world for the better simply by taking part in online collaboration surely is also damaging to the intellect, and possibly to society.

Information technology is good for many things. However, whereas IT excels at underpinning efficiency and effectiveness of relatively well framed challenges, its track record in underpinning boundless innovation in any given area is shorter, and less distinguished. We simply do not know enough. Could the web be essential to solving the world’s most pressing problems? Possibly. Could it at least help. Sure, but saying that is so trivial that one does not need to write a book about it.

Instead, what we need is a cognitive framework for what each of us can do where we are, and an awareness about what has been done by those we are surrounded by. The old phrase “on the shoulders of giants” used to mean that we all build on our ancestors. The new phrase might become “on each other’s shoulders”, but I just would not bet on it yet. It is absurd to purport an absolute faith in the wisdom of contemporaries. History shows that societies that do so, only do so at their own peril. Look at the latter parts of the Greek, Roman, British Soviet or US empires. They all became completely paralysed by the obsession with running themselves. They stopped caring about anything outside themselves. Obsessing over their own inventions, they thought themselves invincible. From this perspective, the web might be the last innovation of the West? Who knows?

Mass collaboration by individuals, whether or not they are connected, co-located, know each other or not, has obvious limits related to the inefficiency and psychological complexity of masses. The old crowd psychologists, from Gustave LeBon onwards, were sceptical of the masses. Tapscott and Williams seem overly optimistic. The truth is somewhere in between. The web is a platform, a very efficient platform for innovation. However, it is not a panacea. In itself, it does not solve anything. Only humans do. Sometimes.

The Slow Birth of Entreprenocracy: Part II

Pročitano u 2005. godini

Continuing the debate on Murray’s End of Management foray in WSJ recently, I would say that the true changes brought about by openness have been here all along. Whether we have put them to use depends on the culture. In Norway, an egalitarian country, health informatics is not just something the IT industry tries to push on doctors. The Oslo Innovation Clinic Offers Treatment for Ideas, writes Gaurav Bhalla in a Harvard Business Review guest blog:

The first-of-its-kind Clinic of Innovation at Oslo University Hospital works a lot like an outpatient health clinic, but treats ideas rather than patients. Ideas walk in, are diagnosed, and are treated or referred; some are sent home with a prescription for further development, and an appointment for a follow-up visit.

The underlying solution, developed by the up-and-coming Norwegian IT company Induct, is brilliantly simple. Anybody can submit an idea or a challenge which goes onto their service-based platform that allows companies to easily practice true “open innovation” through the creation of corporate Innovation Communities.

Creating structures that motivate and inspire workers is correctly pointed out by Murray as a contemporary challenge for any corporation. However, knowing how to inspire is a challenge equally huge in the cases of Wikipedia or Linux. When it comes to motivating the next generations of volunteer programmers to contribute to Linux or individual hobbyist online lexicographers to contribute to Wikipedia, this is not easy. A very slim percentage of the online population is actually an online participant or creator in a significant way, the largely self-serving web 2.0 crowd included.

Where Murray excels is in providing a summary of the elements of the “new model” that he feels has to emerge. Truthfully, though, the new model is emerging as we speak even without him. But let’s give him the benefit of the doubt: he has described some valid trends. These are things like fostering entrepreneurial spirit in all work, delegating authority, culling ideas from outside the company, increasing the importance of team work and peer relationships, and making investments in the welfare of workers in their workplace. So far, such initiatives have often boiled down to providing services like food, cleaning, or massage for free or subsidized as part of the work day.

However, clearly, all organizations will constantly need to get more creative in trying to retain their skilled labor force, whether or not they are for profit, not for profit, or part of the new phenomenon Ashoka‘s Bill Drayton has coined, that is, hybrid value chains where profit and non profit is intermeshed.

Murray’s thoughts are interesting but not as carefully worded as they should have been, perhaps. For instance, he ends on the observation that “ The old methods won’t last much longer”. However, calling management a “method” is fine when referring to Peter Drucker‘s version of management science. It is not fine when it applies, as it does, to the practice of managing people as such. I would be willing to bet that need will never go away.

Management is, perhaps, becoming less important, or it at least appears so. Certainly, leadership is becoming more important, that is, if we define management as handling tasks and leadership as handling people. Management, in that view, is purely the aspect of efficient resource allocation, whereas leadership is related to motivating individuals to actually carry out the tasks needed. However, even this simplistic definition of these two terms leaves Murray with conceptual problems. It is actually better to say that management lives on, and leadership challenges increase at the same time.

However, leadership has its own limitations as a concept. The new model Murray talks about would will have to reinvent leadership, too. For instance, the thought that there would be a particular group of people who could provide vision and others who would follow or get inspired by that vision is profoundly shaken and stirred.

In the age of web 2.0., inspiration comes from many places. Yet, the very process of inspiring somebody follows the model aptly described by Seth Godin as “recruiting your tribe”. Whether you work in a corporation, in government, for a non profit, or simply act on something from your own living room as a consumer, a parent, or some other type of social role, you do need to do the very same thing. You need to let your voice be heard, enlist allies, and build some kind of consensus in a relevant social group.

You might need to build momentum with new people on ad hoc basis, or you may need to take into account existing groups and navigate their interests. However, you cannot change anything alone. Not even the internet provides you with that opportunity.

Toddlers become Leaders

A PlantSim toddler.

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There is a growing trend to use toddlers as a model for positive (and negative) leadership traits.  This is not lost on FT’s Lucy Kellaway who in the FT Business Life On Work column on 13 September 2010 describes Nicholas Brann’s theory of leadership:

● Toddlers are full of energy and enthusiasm. You can’t beat a toddler who is really into something and going for it 100 per cent.

● Toddlers are natural risk-takers. They throw themselves into climbing down the banisters in the boldest, bravest fashion.

● Toddlers are persistent. When told not to smear jam on a DVD, they will wait a couple of minutes and then do it again.

● Toddlers are inquisitive. They will not be fobbed off with a stock reply but go on asking “why? why? why?”

● Toddlers are creative. Their felt-tip drawings on walls and sofas betray the liveliest imagination.

● Toddlers have great interpersonal skills. They are good at thawing the hardest heart with hugs and sloppy kisses.

Leadership from below takes some getting used to.  Toddler leaders can be exhausting, demanding, and unreasonable. But they are effective. The interesting thing to start paying more attention to, is what happens in a group of toddlers. Think a toddler birthday party. There will be plenty material for new theories, books, and challenges to the initial theorem.

Bottom-up lessons from European CEO magazine

President George W. Bush, left center, joins f...

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European CEO magazine is currently running a story called: What’s missing from this picture? Oliver Mack, head of learning at Common Purpose writes:

“MBAs…left managers in a bubble…eventually we all need to step outside of our team or department where our position makes us the boss”.

The reason is that the problems we need to solve typically take place outside of our formal sphere of influence.  Mack continues to argue for education based on challenging leaders in “real life situations that shake them up” rather than relying on tutorials, leadership models, and Powerpoints from MBA professors.

Despite the obvious need to somehow involve professors, one could wonder what puts MBA programmes at such a disadvantage in terms of providing case study experience.   Also, Mack’s alternative to an MBA is a two day workshop, hardly a substitute, I would say.   However, Mack is essentially spot on: leadership from below is a significant source of power in the network society and knowledge handled top down won’t cut it.

So how can we all learn more self awareness?  Based on recent experience, I suggest keeping a job, having kids, remaining happily married, and living to tell the tale.   None of those situations really involve top down authority of any sort.  Only that there are very few hours to sleep should you choose to pursue that multi-tasking approach.  I would gladly take an MBA instead, if I thought it would help.  Mack’s two day workshop seems to be an easy way out, even if he will shake me up.

Cultivating Leadership

ASCII to Binary encoding of the word "Wik...

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- The leadership I want to explore here has nothing to do with position or authority; it is about influence and responsibility, it’s about leadership from below or from within, writes Patrick Bridgeman, in a new article on Cultivating Leadership in this Fall’s Positive Life.  Bridgeman is Editor of Positive Life, an Irish publication which aim to deliver uplifting, informative articles and information designed to enhance the quality of readers’ lives.  He continues:

I want to equate leadership not with being in charge but rather with the ability to inspire initiative and new thinking in those around us. At the core of this approach is the capacity to navigate new paths, build teams and broker between different points of view…

Sounds good to me! Although, I would not say that there is a contradiction between being in charge and being perceived to be in charge, nor between inspiring and actually being responsible for inspiring others.

The important thing is to maintain one’s grounding and facilitate other people’s growth, whilst still being able to focus your activity on the targets you have set for yourself and others.

So, what we need is a fusion between position based and place based authority, which is very different from believing the world is now unleashing an unbound process of wiki leadership as advocated by MacroWikinomics.  More about that later.

Nomadic Dreams and Business Realities

In a typical Fortune 500 company, on any given day, only half percent of the workforce reports to a traditional office. The rest work from home, at client sites, or are constantly in transit. Studies of economic activities between world cities like New York, London, Tokyo, Frankfurt, or Singapore over the last decade show increased inter-organizational activity and networking.

Being nomadic is today’s condition, but it is not at all that glamorous. Neither is it all that fun. I remember sitting in my room in the basement in a small suburb of an even smaller town in central Norway thinking: “wouldn’t it be great to travel and work globally. I would see so many people and places and still get paid for it”. Well, now I do, and it is not entirely without its problems. For instance, I am not a good sleeper, and being without sleep when travelling is a significant deterrent to long journeys. Secondly, I have a horribly inflexible biological clock, so any time difference takes me weeks to make up for. This pretty much rules out a seamless transition between the US and Europe, just to give an example of a trajectory I often follow. Thirdly, I have a family. I also happen to like my wife and kids, so I see no particular benefit in being away from them (apart from getting more work done).

The Spanish sociologist Manuel Castells has described the last decades as an evolution into a “network society.” This society has ever more computerized work processes. Employees travel more. Electronic flows enable the exchange of information through and between large cities. Information goes through the Internet, but also through corporate Intranets and other elite information networks. These enable access, communication, and action across great geographical distance.

If nomads float on the top, they lose influence. Their managers, meanwhile, struggle to hold teams, projects and companies together. Leadership From Below, Chapter 1: Finding Your Place of Impact, page 11.

The flipside of a nomadic workforce is a lack of influence over matters that require sustained interaction in one location. If nomads float on the top, they lose that influence. Meanwhile, their managers struggle to hold together teams, projects, and companies.
How should you manage your mobility to be most efficient as a leader? You need to be where it is strategically most important to be. If you cannot be there for some legitimate reason, you need to compensate, maybe with more frequent emails, phonecalls or action through proxies like colleagues, friends, gifts, or other indirect means of influence. Whatever you do, don’t assume that power resides on the surface. You are not powerful because you have frequent flier status on ten different carriers – you are powerful because you get your company’s view across. Leadership is almost always more forcefully expressed in the more mundane actions like remembering your contacts by sending them a Facebook message when their birthday comes up, or doublechecking to confirm that a speaker is indeed coming to the right address. The contemporary leader has in many ways become his or her own secretary. We cannot affort office support anymore. Moreover, we are not in the office, so there is nobody there to support. The mundane tasks, however, persist, and may lead to an unprecedented new level of boredom. Or, you may choose to embrace it.

To every bottom-up leader out there, whether you are a CEO or a clerk. Live a little. Have some wine by the computer! Those big board decisions will come, too. But your moment responding to an e-vite about the five-year birthday of a colleague’s son might be your smartest business move this year. Or, it may just make someone else happy. Both would be worth it.

7 Reasons Why the Credit Crisis calls for Leadership From Below

So, a few Wall Street investment banks such as Lehman Brothers, the world’s largest insurer and 18th biggest company in the world, AIG, Alan Greenspan, Northern Rock, the largest mortgage and private savings provider in the UK, HBOS, and the country of Iceland are history. By history, I of course mean that they are gone. Well, not literally. By gone I mean that they do not exist in our minds, in financial districts, and pockets like they did before. However, they are all still physically there, so all is not lost. But we have all gone from subprime mortgage crisis to credit crunch to credit crisis to full meltdown. How did this happen? What now for leadership? Surely, we should not look for it among our leaders?

1. From the blame game to the trust game.

Predictably, the blame game has already started. U.S Congress, SEC, national oversight bodies across the globe, they all want to find the guilty party. Surely, somebody is responsible? Well, really? Isn’t this the point. Nobody were responsible because we didn’t let them. While many individual investment decisions as well as collective phenomena like the globalization of risk contributed to the credit crisis, one could argue that a credit crisis is essentially a leadership crisis. Credit is only given when there is trust. Trust is an intangible bond between actors in a market. While all market actors contribute to the overall trust of the market itself, leaders have traditionally been thought of as responsible if havoc occurs. Thus, we have seen calls for executives to resign and for Heads of State to act. Trust, unfortunately is a game, too. Trust is a gamble, a calculated risk. You cannot always know. So, while blame might be a necessary exercise, it will not solve the trust issue. Trusting less will not solve it either. Neither will risking less. But the understanding of what trust is, will.

2. From trust in the market to trust in people

In reality, the credit crisis happened because we – the market – consumers – financial actors – everyone – put our trust in the idea that there was something abstract, rational, even holy called the market, an invisible hand that pushed everything forward. We woke up to discover it was only us. We were desacralized, so to speak, left naked. According to a New York Times article yesterday even Alan Greenspan has conceded to the House Committee on Oversight and Government Reform that he has misunderstood the way markets work. In reality, markets are always built by people. In The Architecture of Markets, brilliant UC Berkeley sociologist Neil Fliegstein made that point already in 2001:

markets are social constructions that require extensive institutional support.

People create trust. Products are the results of that trust, but they cannot themselves be trusted. You can only trust a product from people you trust. The credit crisis happened because too many trusted the products, trends, graphs, institutions, and technologies that were sustaining the growth cycle. Nobody stopped to ask: who is behind this, can I trust him or her? Needless to say, we should have questioned institutions in the same way that we question people. But for simplicity’s sake let’s stick to people for now.

3. From power to responsibility

The credit crisis is a crisis of power. We can no longer trust the powers we did before. We read stories of people who walk down to their bank and scream at their personal banker for being incompetent. They vent long pent up anger at the system that made them feel powerless, weak, insignificant and incompetent. Instead, we want responsibility. We want corporate bonuses to be cut in banks who have received rescue packages. Not because we envy bankers per se. We do, but that is another question. No, the bonus is paid out within a rationale of power as opposed to a rationale of responsibility. With power comes great responsibility, the adage goes. Now we can say with resonance, sanctioned by the State, which represents us all: with responsibility comes power.

4. From top-down to bottom-up power

The traditional top-down leadership model is based on the Weberian notion of legal-rational authority, power vested in people who possess positions of power – irrespective of that person’s personal qualities. Weber also wrote about two other types of power, the charismatic and the traditional, where the quick examples would be Hitler and the Pope. Charismatic power is sustained by a convincing, overwhelmingly vibrant personality Leaving aside coercion, which Weber snuffed at, since it had no legitimacy in his eyes, what Weber from his 18th century perspective was unable to conceive of is a fourth source of power, which I in my eponymous management book from 2008 call “leadership from below”. Where does its legitimacy come from? From the very relationships that sustain it.

5. From networking to Zen

Rather than network power in the sense of “who you know in a powerful position” or who can recommend you or your actions, leadership from below is not manipulative. It actually emanates from the social bond that is created between individuals who work together. Japanese philosophy, more specifically the scholar Kitaro Nishida, speaks of this force as Ba, an indigenous word for “shared social space”. Simply put, without going into significant detail, Ba can only happen between people who trust each other. Now, it seems obvious that the contemporary market actor also seems to trust things, techniques, and trends. The problem with this kind of extension is that it introduces an element of unpredictability. Yes, technologies have effects of their own, but mostly the effects that people want it to have. Technologies have built-in designs that act like compulsory manuscripts. You cannot avoid them if you want to use them. The popular term for spiritual balance among alternatively minded westerners is Zen. There is nothing wrong with the term, but Zen depends on Ba, and Ba has less complex connotations. Unfortunately, it is less in fashion, but that is another issue. Anyway, you can never manipulate networks to create Zen. Balance fosters balance. There is give and take.

6. From clubs to the piazza

The fact that governments now have significant ownership in banks, and financial markets are in turmoil can actually be fruitful. It will serve to re-focus people’s attention on what a market is, and how trust can, should and should not be created. Large, unhampered markets cannot continue to allow the exchange of complex club goods. If they do, they fail. Leadership From Below is the perspective that, no matter where you come from, what you bring to the table must always be judged by the people present. The situation is what counts. Past and future is not relevant to the leadership that is being carried out in the present. Whatever problem presents itself must have a solution there and then. The power of now is stronger than the power of later. But the now must be accessible to all. We cannot bury important financial decisions in financial lingo. At least not when politicians make the decisions. Simplicity is king. Time to resurrect the Italian piazza where things are openly discussed. As Neil Fliegstein writes about markets and firms, shareholders are not the only stakeholders.

7. From positions to attitude

While not necessarily implying that powerful leaders cannot practice bottom-up leadership, Leadership From Below introduces a certain modesty. You can never be sure to be the leader. The group will always make up their own mind about that. You may go into the situation thinking you have a good chance of influencing others. But if you don’t, you cannot blame your weak negotiating position. Positions are created, and need to be sustained every time. This is radical social construction. And quite true. It’s all in the attitude. Spin that!

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