Leading the EU from Below

Finally, some praise for the EU’s choice of President and Foreign Minister of the EU.  The New York Times article on The EU’s New Leaders acknowledges that the choice of a Haiku-writing Belgian Prime Minister and a British baroness and EU Trade Commissioner was smart.

Why so smart? Well, because governance of a network cannot be based on pure hierarchical principles. For starters, because there is no clear hierarchy. Everything is alliances, soft power, give and take, symbolic gestures and horse trading.  Secondly, because hierarchy is not wanted. The EU is composed of 27 Member States each with their own idea of leadership. What they want is a negotiator, someone who can make the most of a near impossible situation.

Needless to say, this does not mean that top-down power will not be involved. The wonderfully strange thing about even such a surprising appointment is that it becomes power. In that sense, leadership from below is a very precarious state of affairs. It seldom happens, or rather, it happens quite often, but once it is recognized as such, it ceases to exist. Plain old leadership takes over. The disciple becomes the leader.

Another thing is that to Belgians, of course, the notion of their Prime Minister being an unknown figure is hard to fathom. This is another very interesting facet of leadership. It can actually be very local. Nobody is felt as more powerful than a tribal leader in a small community. Yet, his or her power seldom extends beyond a few hundred people and beyond a small physical territory. But to the locals, this does not matter.

The challenge with the EU has always been that its actions are slow to seep down to individuals. Even though the European policy debates are much more consequential than national policy debates, they are less talked about. The sociology of the whole thing is relatively straight forward. Whatever people think is real becomes real in its consequences. People refuse to believe that an organizational structure they do not understand and politicians and bureaucrats they do not know can have any power at all over themselves. However, if you have seen someone on TV, shaken their hand in a parade, and they talk about your top ten concerns (taxes, the economy, social benefits, safety, culture etc.), then you believe they really can affect change. Little do we consider the fact that politicians may well talk of things they cannot really deliver…

So, in a situation where the national scene is where heroes and villains are created, there is little scope for big Europe. And maybe that is the price we have to pay for real progress on policy issues.

The next few years will show whether this strategy works. I, for one, think that there is much to gain by testing the waters of networked leadership. The EU is the best example we have. The laboratory is a bunch of very much alive Europeans who are slowly recovering from a financial crisis. So, the stakes are high, but the results could be good, if not great. Not bad at all.

The Internet Redefines Power in the Workplace

Boston, Massachusetts, February 04, 2009 Business News: The Internet Redefines Power in the Workplace, says author of Leadership From Below in a press release today.

Globetrotter Trond Arne Undheim, Ph.D., has discovered that in the Internet age, you do not have to be a leader to lead. His recession-proof message is that effective leadership is about attitude, not position.

While researching his book Leadership from Below in places such as Silicon Valley, Scandinavia and Asia, he found that the Internet generation completely redefines leadership in the global workplace. Much of the management literature misses this point by still addressing CEOs instead of knowledge workers, he argues. Undheim, recently featured in a TV interview on Good Morning Connecticut, goes on a virtual book tour across the globe in March 2009.

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.

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