Bottom-up lessons from European CEO magazine

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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

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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!

Effective Leadership Beyond the Hierarchy

Effective leadership has little or nothing to do with hierarchy and formal position. Rather, soon it will be entirely project based. Those who excel at being aware, sharing, and pooling knowledge, win. Once this is a reality, the workplace will be changed forever. I don’t mean that once you work project-based for a while you are part of this trend. In fact, a project here and there is not what this is about. I envision that hierarchy as we know it will disappear altogether. It won’t be needed and will have no function. Instead, a new hierarchy will appear: one purely based on knowledge and networks. This is a much more unstable situation. In effect, a given situation can determine who is in charge and e a hot topic can make an expert surface immediately. Whoever knows, and puts his or her knowledge to use, is in power. Given that some of this is happening already, why is it that hierarchy even still exists?

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