End of the imperial corporate leader; CEOs have to trust staff to get on with the job

November 18, 2013 4:26 pm

End of the imperial corporate leader

By Andrew Hill

CEOs have to trust staff to get on with the job

Not much unites Franz-Joseph I of Austria-Hungary and a flock of starlings. But when Don Tapscott, the business thinker, used film of murmurations of flocking starlings  to conclude a presentation about managing complexity in Vienna last week, the mesmerising images unfolded alongside the forbidding presence of the old emperor, staring down from a gilt-framed portrait. The coincidence underlined Prof Tapscott’s point. Starlings, somehow organising themselves en masse to see off predators, are at the opposite end of the leadership spectrum from the all-powerful arch-bureaucrat, imposing his system on a highly complex empire.The idea that organisations will simply shed their leaders and evolve organically to tackle complex problems is beguiling: it is a welcome challenge to the ossified bureaucracies that dominate corporate and political life and, as a gratifying side-effect, the question “do you really need a CEO?” frightens the wits out of smug executives. But in fact, self-governing networks are about as likely to make leaders redundant as they are to restore the Habsburgs to power.

Old-fashioned leaders have the means and motivation to cling on to power, of course. But a better reason for the persistence of leaders is that they are still necessary, as even Prof Tapscott acknowledges. They are there to “curate” the conditions from which solutions emerge, he says.

How, though? As Julian Birkinshaw of London Business School put it later at last week’s Global Drucker Forum, inspired by the ideas of Vienna-born management writer Peter Drucker: “We love the notion that as leaders we can create [the] conditions in which order happens . . . equivalent to the starlings flocking: it happens, but not as often as we would like it to.” By merely letting individuals organise themselves, companies risk ending up like Enron, whose talented staff were encouraged to “run around the world looking for sexy businesses”, in Prof Birkinshaw’s words, while the original core values of the company went into meltdown.

Enlightened corporate leaders have many ways to perform their role without relinquishing the reins altogether. Rick Goings, who runs Tupperware Brands, oversees a sales force of 3m independent contractors. He says he holds the network together with a shared sense of purpose – but at the same time, he decides which things truly matter for the group. Natarajan Chandrasekaran, chief executive of Tata Consultancy Services, taps the intellectual power of the many high-achieving engineers in his company by providing a social media platform that has, to his surprise, turned out to be largely self-regulating.

Leaders still need to choose the individuals to carry out the work, even if those individuals then decide who is best qualified to manage it. One discussion in Vienna last week, about the management of complex projects, yielded the insight that sometimes a project manager recognises that other members of the team are better equipped to head it. Either the nature of the task has changed or it has reached a stage that requires a different approach.

Finally, having set priorities, picked the right people, established a platform for communication and granted staff the resources and support to do the job, CEOs have to trust them to get on with it. Harvey Wheaton, studio director of Supermassive Games, a computer game developer, is a disciple of “agile management”, a highly flexible technique for project management that works on these principles. He says it is not easy for managers, who can feel threatened by employees’ autonomy. Their first reaction is: “You aren’t doing what you were told. Go back to where you were on my spreadsheet.”

To cope, business leaders require an attitude that may be closer to that of public policy makers and civil servants, whose formal powers to dictate what should be done are often weaker. Michael Hallsworth, a senior policy adviser to the UK Cabinet Office’s “nudge” unit on behavioural insights, summarised the approach as setting goals, making sense of what is emerging, and steering and signalling, rather than directing. In other words, modern leaders need to stand as far apart from their Habsburg forebears as possible: they must be adaptable, open, and sometimes as anonymous as a starling in mid-murmuration. But as for the notion that they should abdicate their role altogether, that is strictly for the birds.