Good Morning Connecticut TV Interview

TV interview with Trond Arne Undheim on WTNH (Channel 8, New Haven, CT, USA) on Leadership From Below. The hardback is available on Amazon.com and the paperback is available on Lulu.com).

Can President Obama Exhibit Leadership From Below?

So Obama won, McCain lost. Republicans are out. Democrats are in.  What now? Obama has campaigned on change, on being the challenger, on being different. He has deployed a web savvy campaign strategy focused on micro contributions from hoards in addition to, not instead of, large donations. All of this is very trendy, very smart and very well known by now. See, for instance, Eric Legale’s blog on Obama as the President of the Internet Generation.

What few have pointed out is that Candidate Obama preached and practiced Leadership From Below. For a quick tutorial, check my post on What my Daughter Taught me about Leadership. But how can a President Obama exhibit Leadership From Below? Isn’t that a contradiction in terms? After all, it is arguably the most powerful position in the world. Why would the President need Leadership From Below?

In fact, there are five reasons why Obama still needs the bottom-up perspective:

1. Formal power if fine, but not enough

Leadership from below does not mean that you cannot have formal power. It does not mean that you need to be the underdog. It does not mean begging to lead or begging people to support you. Rather, it simply says: to enact change, I need to inspire followership. The recent book Followership: How Followers Are Creating Change and Changing Leaders by Harvard Kennedy School’s Barbara Kellerman is right on. You can only lead when you are allowing people around you to voice their concerns. Leadership From Below means never assuming you are the only voice in the room, even if you always have the last word.

2.Macchiavelli is out of date

Macchiavelli, who has been the elite’s unchallenged management guru since the 15th century said it is better to be feared than to be loved. The reason is that when you are loved, you can still be fooled, but when you are feared any challenger is a fool. The trouble with fear is that it is very unpredictable. It was ok to be a feared dictator in the Italian Renaissance, it is not ok to be a feared President in 2009. Public perception is volatile. When markets operate in fear, they collapse. When people are afraid, they turn to terror. When co-workers fear you, they simply change employer. In short, Machiavelli is out of date. Leaders should recognize that centuries have passed and complexity has increased. Not by much, I would say, but enough that it is safer to be loved than feared.

3. The US has a complex constituency

Being President does not only mean being the President of a country. You are also a global actor. The case could be made that there are more Obama supporters who did not have the right to vote than did, if you count 2/3 of citizens in Europe, and many, many across the world. Seldom has a campaign invigorated so many non voting parties, people, and pundits. While the US President does have formal power over the US mainland, his powers over the world are severely limited. Well, his powers are limited unless he plays his cards well. I believe the George W. Bush era slogan was “if you are not with us you are against us”. It didn’t play so well. Leadership from below is the way to go when you are building partnerships, trying to enlist opponents, working through intermediaries, in short, when engaging in diplomacy.

4. To enact change, a leader must be consistent

Leaders without formal authority need tech savvy, listening skills, social antennas, and a good pitch. With these you can master any situation. Many Presidents have had at least the latter two, but have let all of these skills go when they took office. But Obama will need to maintain them. The credibility of his message depends on staying open, approachable, and diplomatic. The formal authority of a Presidential office might stay largely the same when a new President takes office, but what he or she makes of it does not.

5. Military and financial crises demand buy-in

It would be easy to think that the military and the financial sector are best governed top-down. After all, employees in both sectors are well used to taking orders from above. However, it seems clear to most people that this approach has not worked and will not work, at least not now. The US is slowly coming to terms with a world where followership is more important than leadership. In his new book Tribes, marketing guru Seth Godin talks about the renewed importance of the tribal type of leadership in contemporary society. We want a leader, but we want a stake in where we are being led and why. When the military spends most of its time winning hearts and minds instead of firing bullets, and the largest banks suddenly are state owned, the model is about to change. Stakeholder leadership is suddenly in fashion. As citizens we have bought ourselves a share in the the financial meltdown. As citizens of the world, we have a stake in reducing terror and unrest. A President that does not see it as his first priority to win buy in for his views, will fail. Unilateralism is out. Multilateralism is in. Buyout is out. Buyin is in.

May Obama and his advisers read this blog and have a great day. Enjoy the first day as President elect. Best wishes, and, my advice is, stay the underdog!

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 18^th 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 18^th 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!

The Best of my 102 Footnotes

I was, initially, only vaguely aware of the vast management literature on leadership and only occasionally dove into it, hunting for insight. In fact, I feel most of it misses the point. It simply talks to leaders about how to lead. That is the wrong audience. Leaders think they know how to lead. Good luck trying to teach them otherwise! They only read management books to feel good about what they are already doing. Or to do some self-flagellation. Or to bear a long flight.

However, scan through my new book’s 102 footnotes and you will find some decent, eclectic reads that will really help you in your pursuit to lead whenever leadership feels good or necessary. My footnotes cover fiction design, programming, management, sociology, psychology, speed reading, and body language, including titles like Peopleware, The Psychology of Persuasion, Shibumi, and The Making and Breaking of Affectional Bonds. 

My best footnote might be number 37. It is long. It is complicated. It is partly Korean. In short, it is an accomplishment. Check it out…