The Rise of China’s Good Old Ideas

We are about to discover China. When I say we I mean all non-Chinese plus those Chinese expats who might have forgotten some of their own finesse. When I say discover I don’t just mean the China displayed in Beijing Olympics 2008. That was just the beginning. Nor am I only thinking of China’s economic power. That is a given. No—the interesting part of China—the one it will take decades to discover and understand—is its cultural heritage. And with that comes culinary exploits, traditions, leadership theories—all of which will be mixed into the global reality that things need to be simple, trendy, and have mass appeal. Finally, when I say China, I actually mean the entire Chinese hemisphere—including Japan and Korea. Hence, in a few years, the Asian idea of Chi (sometimes spelled Qi or Ki in Japanese or Korean) will become commonplace. What will that mean?

The rise of Chi

Chi is Chinese for energy. Not the kind of thing we pay high Euro for in our houses to keep warm in winter, but the force that controls life itself. While it may sound strange to Westerners, even to diaspora Asians, the fact is that the Chinese have had a sophisticated civilization for several millennia, and that many of their ideas are timelessly important. Particularly that of Chi.  

Let us just enter into the logic of ki for a moment. The notion builds on the fact that you as a person constantly interact with others in a physical location. Furthermore, what we traditionally call social interaction consists of a mix of physical, social, and mental processes. These occur in and around your body, and comprise your presence. Becoming aware of ki, you can to some extent control or relay energy to where it is needed the most. However, there is no need to believe in the extreme variants of parapsychology in order to appreciate ki phenomena at their most basic levels. Gestalt psychology, a fairly established brain theory that emerged in the 1930s, holds that the whole is greater than its parts–directly in line with ki-sensitive thinking.

The rise of Chinese Medicine

One of the core ideas—one which is practiced in Chinese hospitals even today—is that healing your body has little to do with only medication. Painkillers in the traditional sense only numb the pain, they do not attack the root of the problem. The health of a person is governed by invisible energy flows inside the body, surrounding the body, and in a person’s surroundings. Hence, you treat the energy flows, not the person per se. Obviously, at a decent Chinese hospital they combine Western and Eastern healing—and many patients benefit from that.

The rise of Massage

Most people will have the sensation that foot massage affects other parts of the body. How is that possible? Well, even without accepting sophisticated and seemingly far-fetched theories like Yin and Yang and Meridians or Channels, we might have to concede there are things we yet do not understand. Many will already be familiar with some kind of Asian massage, whether it be Shiatsu, Acupressure, or any variant of Chinese massage. Asian massage is not the Swedish muscle-toned torture we know from Scandinavian massage, it is subtle pressure, often with far-reaching consequences way beyond the impacted body part. The Asian approach is to manipulate energy, although manipulate is a Western word. What actually happens is to release pressure, tension, and energy that is trapped—so the system restarts.

The rise of the Martial Arts

Chinese martial arts like Kung Fu as well as the Japanese Aikido all attempt to manipulate ki. The energy that flows inside you also likely is responsible for interpersonal dynamics – what we more commonly (in the West) call personal chemistry. In Aikido, all emphasis is on using the force of your opponent to your advantage, never adding your own negative force. Jiujitsu, another Japanese martial art, preaches the use of both positive and negative force. Martial Arts are part of global culture.

The rise of Chinese Leadership

The Chinese leadership model emphasizes connections, dignity, and trust, which are equally important for Western leaders. If you now assume I am thinking of Chinese Emperors, or even of the current head of the Communist party, Hu Jintao, or premier Wen Jiabao, you are partially right, but only partially. Chinese leadership is so much more. For one, it is in evidence every day the Chinese people make a consumer decision. Think of the consumer power of Chinese society. They will reshape post-credit crisis production and maybe transform the way we all business in the next decades. You might have guessed where this leads us: towards leadership from below.

Leadership from below, those of you who are following this blog will recall, is the view that leadership is more about attitude than position, more about peers than hierarchies. For more detail, consult my book, Leadership From Below (on Amazon.com). In any case, China is the perfect place to test the idea that leadership can indeed occur outside the establishment. If it can in China, among the most hierarchical, controlled countries on Earth, it can anywhere. Can we find examples of such things already happening in China? Sure.  Social entrepreneurs are slowly changing the makeup of Chinese society. Entrepreneurs are building companies with hybrid values—Chinese and global. But it will take time. 

Two quite interesting, and opposing forces are active in Chinese society—the force of Chi and the force of the Communist Party. The Rise of China’s Good Old Ideas will require one of them to cede. But whichever wins in China might not matter to the rest of the world (I said might). Clearly, the world has already chosen Chi—and that trend can be seen way beyond Chinatown in New York, London, or San Francisco. Just think of that when you buy your local potion of Ginseng, see your massage therapist, get acupuncture, eat your weekly ration of Asian food, or send your son to Martial Arts classes. We are all de facto believers in something so elusive that we prefer not to think about it too much. Chi—the word and the lifestyle will not go away. It signals a time where leaders must be in tune with their surroundings if they are going to lead at all. Not such a bad idea, one might say.

Leadership From Below: Lesson #9:

Successful leaders combine Eastern life principles and Western management principles. Charismatic leaders have a strong presence, are aware of how energy flows through human encounters. Energy (ki) is they key to health, intuition, as well as innovation. Discovering China’s good old ideas is worth it–regardless your ethic origin.

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From me to we

While teams can be an effective way to organize, not all teams are effective. Leadership is always a shared commodity in a team, since nobody fully controls a team process. While discipline is crucial, if you want to succeed, social aspects cannot be overlooked.

Team members share roles and responsibilities crucial to their task’s success. In one project, you may be the formal leader but depend on others for key insights. In another project, you watch others excel but may have unique experience in a vital area. If you are very outspoken, you can rally people to support you when there is time to make a decision. You may be the social leader in the group. The important thing: You must think and lead simultaneously.

In the last decade, business has been seen rapid innovation. Those who fail to innovate die — unless they operate a monopoly. (And eventually, monopolies also die, due to government regulations or because an ever-changing business environment.) Innovation grows in importance. Fresh perspectives are held in high regard but cannot possibly come from the insiders alone. And while insiders are important, one person alone cannot change much. What matters: Look around yourself, and work with what you have. Within any organization, there are insiders and outsiders. A team has a great deal of knowledge that is inaccessible those not on the team. This holds true even for colleagues who have been part of a company for 20 years.

Jon R. Katzenbach and Douglas K. Smith’s 1993 classic The Wisdom of Teams posits that corporate teams must be small, diverse, and accountable. Their follow up tome, 2001’s The Discipline of Teams, indicated that successful teams depend not so much on bonding, togetherness, and empowerment but, rather, on discipline — all of which is true. But there is more: Meetings, for instance, must be issue-driven. You have to allow time to solve the issue. Do not stick strictly to project plans. Effective teams, wrote Katzenbach and Smith, alternate leaders even when completing one task. All members are mutually accountable.

A Hollywood soundstage or a large public-sector consulting project, are both examples of team settings. A team is a small group of people, usually twelve or less, working together for a limited time to achieve common goals. If the team is larger, additional people perform marginal roles or act as subcontractors to the main delivery. A successful team is a group whose elements (e.g., people, process, leadership, and resources) lead to deliveries that match or exceed initial expectations.

Teams command a set of resources and are affected by several factors specific to their task, the individuals on their team, the setting, and the sector. Other factors may intervene.

Successful teams believe in their task and command sufficient resources to reach their goal. They have a social leader, as well as a task leader (neither of which may be the assigned project leader), and they spend considerable time face to face. When forced to meet online, they are aware of the current limitations; communicate carefully and do not spend too much time on controversial issues.

The bulk of existing research on teams indicates that while all teams are working on a task or task, most teams devote equal time to maintaining the social relationships within the team.

Teams differ in degree of complexity, and you need to know which factors come into play in your own team. Even more importantly, as we will see, every team must become a “we” before anything useful can happen.

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 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!

Five things My Daughter Taught me about Leadership

I have a two year old daughter to whom I dedicated Leadership From Below. I believe she embodies the principle. She has absolutely no formal power, she is clearly a small thing who has a lot to learn about life. One would think she lacked the size, experience, or economic resources to pursue great things. On the other hand, I have discovered that she very often gets her way. Why is that?

1. Be persistent.

When I dedicated my book to her, I admit I was thinking of her qualities like persistence, dedication, stubbornness, and willingness to go to extreme measures. All of these are important to bottom-up leadership where you do not have a lot of formal power, such as in team work, when working with competitors, or in any kind of partnership. Management books and managers had better take notice soon – and knowledge workers are using these principles daily. So, let’s turn to my daughter, who is two. For instance, if she has indicated she wants something, say a peanut butter and jelly sandwich, she will pursue her idea until it gets there, even if there are very good reasons why she would not get one, such as she just ate, we are in the car without easy access to food, or we are making something else for that meal. Resisting leadership from below occurs at great peril, if you are dealing with passionate believers. They will simply not give up. Persistence is largely a good quality in life. You can accomplish more if you are prepared to work at it, even if the environment initially is hostile to your ideas or you do not see immediate results. However, not everyone is persistent, and not all persistence does in the end lead to success. So, there must be more to her shrewdness. Maybe persistence only pays off if you…

2. Build an unbreakable bond.

Having reflected on this a bit more, I found something even more important: the leverage she has through the unbreakable bond she has created between herself and her significant others, indeed everyone who spends time with her. For example, she is her uncle’s favorite, he refuses to discipline her and leaves the room when she is sad, to avoid being associated with causing any pain. He explores the good side of the little princess and lets her parents handle the rest. What that bond does is that it creates an unbreakable allegiance to her, her actions, opinions, viewpoints, and desires, even the ones that are clearly counterproductive, cause things to break, or are really painful. This week, for instance, my daughter decided to put our telephone in the toilet. We scolded her a bit for it, but it is now just a good story. Also, for some inexplicable reason, after we dried out it, it is now working again. Does her bond extend to objects, too?

3. Make your way the natural way.

My point is this, leadership is about building relationships, only then can you have influence. Trying to push your will through without strong relationships with people around you will only cause resentment. However, if you have a unique position built on repeated interactions where you have shown you care about others, where you show that despite your strong will you also give back, your commands will be carried out. The even stranger thing is, it will not feel like a command. In fact, it might feel like the natural thing to do.

4. Push your point, but move on.

Even more impressively, if I have been coerced to accept one of her whims, even if making her happy has been at the expense of my good night’s sleep, sending the report my boss is waiting for, or has taken every minute of my valuable talking time with my wife that evening, it is soon forgotten. By both of us. Life goes on, there are new challenges ahead. This happens even if there have been seemingly unsurmountable obstacles to peace, maybe I slept for only an hour combined throughout the whole night. She will simply smile at me and say something like: “Daddy read?” How does she do it?

5. See yourself as an equal

My daughter, who only just turned two, had an almost innate feeling of the peer-to-peer principle which is so immensely important in contemporary society, and is every day exploited by practitioners of leadership from below. She simply sees herself as an equal. She has no fear. She will likely approach royalty, CEOs, tax men, bosses, or teachers she will meet on her way in the same fashion she approaches her parents: as an opportunity to explore life, present her position, and share her world view with others. May that attitude become more prevalent in business, too. Having an effective leadership style is not about age, experience, or formal power. It is largely an attidude and a set of skills you hone through practice. I say, look at the two-year olds around you, and learn.

A Slight Dislike of Hierarchies

I developed my notion of leadership from below as a counterweight to traditional top-down leadership. Usually, leaders tell people what to do based on a position of authority within a hierarchical structure. A non-hierarchical, bottom-up leadership perspective is far from unique. However, I developed my own view, and I wrote it down. One could say it is based on my fieldwork in the US, Norway and Italy, on eclectic reading, on my experience from starting up businesses, from founding a think tank, and from having opinions about a great many things in fields where I at the outset had no reason to be particularly authoritative.

No, wait, let me give you the real impetus – I spent a year in the Norwegian Army. I recall being bossed around. I didn’t like it (but I loved it when I got my NAIS medal for markmanship). My colonel once brought me to his office to say that my attitude was fine if I was a general, but not fine for a private. He then said he recognized the attitude – he had been the same way. Then he scolded me for being as dumb as him. His advice was to just do what people told me to do. To fit in. To accept decisions that were wrong because it was the right thing to do. I guess this book, Leadership from below, I mean, is my revenge.

In short, for the good part of my youth I have been an opinionated bastard, or as the euphemism goes, an intellectual of sorts. However, I have always been an ideas-to-action kind of guy. Mere speculation and endless research was never enough. This is probably why I needed a break from university (I have spent time in a few, such as NTNU, the University of Naples Federico II, University of Liege, and UC Berkeley). Life as a researcher was too monotonous. I wanted more. I wanted to make an impact. Leadership from below starts there – with the wish to make an impact.

I will give some more explanation about how my own background quite nicely demonstrates that leadership from below works in a later post.

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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