Last October, I had the honor of speaking at the 2012 Pivot Con, a conference hosted by my dear friend and key social influencer Brian Solis. This conference held annually, is an affordable laid-back event built around intellectual conversation, without some of the more recent attendant pretense of, say, TED. Its more of a social business, social world focused conference with a technology bent and as a result of that, I got to hear some amazing stuff, and meet some amazing people and greet some wonderful friends. It’s not too shabby a deal. This conference has been on my bucket list for a long time so when I was asked to speak, and the circumstances worked out that I could, I did it, entirely at my own expense. Which is something I NEVER do – except if you happen to be a bucket list event of mine. And a friend named Brian Solis asks me if I would speak.
In any case, my topic was “Leadership in a Social Age” and I got to do it with Stowe Boyd, an eminence grise of the social world (meaning he’s a baby boomer with some golden thinking on the subject). I had met Stowe at Enterprise 2.0 a couple of years back and we got along just famously. That camaraderie continued when we re-met at Pivot.
To prepare for our 20 minutes on Leadership in a Social Age, which kicked off the conference, Stowe and I conversed for a while on how we each viewed it and on our thinking on each other’s views, which coincided without being identical. For example he had this concept of the “post-normal” (see both just below and the video of our presentation below for a more concise definition) – and I didn’t. I do know we were well received.
That discussion benefited me a great deal and has had me thinking ever since. So I’ve decided to publish some of what I said at the conference, what Stowe said at the conference, and what else I heard at the conference and what I’ve been thinking since the conference, simply because I think there is merit in it. At least for me, its been eye-opening and made me think beyond my customer-focused stage to a larger stage. If you watch the video and I hope that you do, you’ll realize that some of Stowe’s work is incorporated into this thinking, as are other things that we didn’t present or hear at the conference. You’ll also hear/see some of my more time honored concepts, but the context is a little different this time.
I’m not laying claim to any fabulously original thinking or breakthroughs on how to be a leader in the 21st century. I’m aggregating some of the better thinking and putting it into context and giving it a rudimentary container – I don’t want to call it a framework – so that it can make some sense, in part or in all.
Here we go:
Reasons for the Change
- For the last decade we have been engaged in a communications revolution – how we communicate has transformed – the devices we use, the expectations we have, the formats that now exist to communicate, who and how we trust.
- Our ability to communicate in a much broader way and with more choice in how we communicate and the technologies that we use to do it have triggered a transformation in now we create, distribute and consume information.
- The amount of information available to us is both growing and its value is shifting. We are at a stage where the velocity of the information is an important a characteristic as the volume. The value of the information is most often contextual and timely, not universal or generic.
This leads to a demand for insight, because people are expecting much more from the individuals and the institutions they communicate with. They expect more individualized treatment and their behavior is geared to getting that when it comes to the interactions they have with those individuals and institutions. - The difficulty for those institutions is that this is being done on a scale never before seen. So, in effect, Citigroup’s 250 million customers are each expecting personalized treatment. They want to be addressed as individuals, not demographics. They feel, because they are communicating with peers who they perceive are like them, that they can because that’s how they view those peers – even when they don’t know the individual they communicate with via the devices and channels they have.
- Thus, we are seeing one of those rare transformations of an era of human history. The digital era replaces the industrial era, which replaced the agricultural era. Technology becomes a driver almost as much as an enabler. IBM’s Institute for Business Value (IBV) in their 2012 Global CEO study: Leading Through Connections found that 71% of their 1700 respondents saw technological change as the most important external factor impacting their organizations for the next three to five years. That means IT of course, but also biotech, nanotech and other technologies that are disruptive to existing business models, organizational schemas, and operations. Social technologies also are top of mind. “The view that technology is a driver of efficiency is outdated; CEOs now see technology as an enabler of collaboration and relationships – those essential connections that fuel innovation and creativity.” This leads CEOs to see that the three most important areas for creating sustained economic value are (in order) human capital, customer relationships and products/services innovation. We are seeing the beginnings of more distributed organizations to handle these transformations.
- Stowe Boyd calls this era post-normal which he defines as an era of volatility, uncertainty, complexity and ambiguity (for more watch the video below).
- But even with all these changes, we haven’t seen the elimination of hierarchies in business nor will we. As long as companies are governed by public laws and regulations, there will be people who are responsible and accountable to see that their businesses are compliant with those laws. Also, while all humans are created equally, they don’t perform equally nor have the same specialties. Even Marx’s tenets acknowledged that not all are equal – “from each according to his ability; to each according to his needs.” Capitalism as it has evolved has provided the opportunity to either embrace that positively or exploit that negatively.
Principles of Leadership
This digital era requires new qualities of leadership and new approaches to leadership because expectations have changed, as have behaviors.
The Leadership Perspective: “Stubborn on the Vision, Flexible on the Details”
From the standpoint of the longest view of a company, Jeff Bezos, CEO and founder of Amazon says it best. The success of Amazon is due to the fact that Amazon has been “stubborn on the vision and flexible on the details.” This is a leadership perspective that is defined by both a profound idea on the direction and character of a company that is unbending, but at the same times retains flexibility because of the leader’s knowledge that the world and circumstances are always changing and require new and different approaches – though the long term outcome is never altered. This has been the hallmark of salesforce.com’s focus for well over a decade. They started with the idea that they were going to be the platform upon which all “your” business apps would be run. The changes in the world and circumstance dictated a change in the form that this would take i.e. a social business but the original vision never changed.
Customer Focused at all Levels
A.G. Lafley, the wildly successful now-retired CEO and Chairman of Procter and Gamble made a clear point that while there is a link between the inside and the outside, the results come from outside. So, a leader has to define what he called “the meaningful outside.” His mantra for that was “Consumer is Boss.” Twenty-first century leaders who are cognizant of the era that we are now in are aware that the customer both impacts and is impacted by business decisions and thus their conversations have to be around how that impact works in all domains of the business. The participation of the customer at multiple levels of the business is the mandate of those providing real leadership.
For example, Lafley created the structures at P&G that allowed customers to not only be an intimate part of the business processes of at the company but to co-market and co-create new initiatives with the company. He also required all aspects of the enterprise value chain of P&G to be “customer centered.” So for example, there were customer-centered supply chain KPIs such as pricing from the shelf back. There are customer communities such as VocalPoint, a community of connected alpha moms (each with a social network of other moms) that participated in P&G’s research. It has been so successful that is was spun off as a private company that now does the social research for many companies. There also is the Connect and Develop program for those customer and other innovators who wanted to collaborate with P&G on research issues and problems and even beyond that, there is FutureWorks (now called P&G Corporate Platforms – a program for customers and others to co-create new initiatives, and if they are good enough, take them to market. That is what I mean by leadership that takes customer-focus to the core of business.
Value….and Values: Leadership Predicated on Mutuality
One of my mantras for the last nearly decade I’ve labeled the first law of CRM but it also reflects the approach of a 21st century leader. It goes:
“Value and values are given and in return, value and values are received.”
What it means is that the basis for value for a company: revenues, profitability and pleasing the stockholder and the basis for value for customers - feeling valued, while the basis for value to a company and its customers, is not enough. A leader has to provide a set of values to the company that permeates everything it does at the primal level – imbued in the individual employee and “felt” by the individual customer.
Wichian Mektrarken, the CEO of AIS puts it this way – “its important for the employees to see the company’s values as a reflection of their own. Values are at the core of the social contract between the company and the employee” But in this post normal era, the values have to provide a foundational stability to the individual employees and customers in a time that is uncertain and volatile. In effect, the leader has to be the embodiment of those values and see that whatever infrastructure is needed to support those values is provided.
But so far, what I’m speaking about can be a content-empty vessel. Remember, the values have to be in response to the era that the company operates in. The lack of a value system at the company can be disastrous. The values need to reflect the requirements of the times.
For example, one of the most important components of 21st century business – and one of the most talked about is transparency. We constantly hear and say that the customer is demanding transparency – which I’ve always defined as the providing enough information to make an intelligent decision on how someone wants to deal with an institution. But there is an inherent emotional aspect to this – doing this makes the company a trustworthy company – one that you are willing to deal with because you can trust them. Trust is the key currency for the 21st century leader.
For example, Sandvik, an equipment manufacturer based in Sweden has been voted the most trusted company in Europe more than once. They are given that honor because they have something called the Power of Sandvik.
The Power of Sandvik is a value statement that is embedded into the deepest part of Sandvik’s DNA. It is not only a mission and vision statement, but it is a code of conduct and system of values that has specific operational and rules-based actions that are part of everything that Sandvik does for every single person who touches the company in any way, whether they are customers or not. At its most fundamental it is a leadership screed that says, we will be fundamentally visible to all persons and honest to a fault in all our dealings with anyone whatever. The leadership of Sandvik is driven by this and subject to it as well. So for example if you care to see what kind of money an executive is making and how they got to that – its available to you. Fundamental, straightforward transparency carried down through time by the leadership of the company and fairly distributed and openly available.
If you think this kind of credo and code don’t have a business benefit, think again. Sandvik has been one of the most profitable companies in Europe for years and during the midst of the recession, doubled their sales.
The role of leadership in this because it is such an important and mature part of the operations of the company is to in a way not only propagate this but enforce it.
Leaders have and create partners
There has been a well documented and certainly constantly intoned refrain about entrepreneurs – they are unable to give up any control of their businesses – and that is usually what prevents them from truly growing.
True leaders promote the concept and live the idea that employees, suppliers and customers are partners, not subordinates nor are they of a different species. Business leaders encourage collaboration among the disparate groups. Even more importantly to some extent, they empower employees to provide customers with answers and “things” they need, without having to deal with the chain of command and approvals process. They are trusted to to work with customers – regardless of what they do.
That means that employees can be empowered to make decisions on the spot in how customers get handled, nominate other employees for rewards, participate at some level in the discussions around strategic decisions etc. For example, NASA treats its 18,000 employees as collaborators and allows them, through the use of internal collaboration tools, like wikis, etc. to participate in knowledge-sharing and decision making. Here’s an excerpt from an IBM Institute for Business Value Case Study about NASA’s approach.
“NASA leverages wikis extensively to support and facilitate internal collaboration. Other internal collaboration tools include ExplorNET, which enables the creation of shared user profiles and launched 61 communities in its first 45 days of use. A Twitter-like tool for employee communication has also been enthusiastically received. A growing number of mobile apps for NASA-only audiences are distributed centrally by the Center for Internal Mobile Applications (CIMA). By providing employees the means to collaborate at scale, NASA has made it easier to share success stories, locate expertise and increase productivity across the agency.”
They are talking about the tools but the tools are there to support the leadership decision to get that 18,000-strong collective brainpower involved in NASA’s continued evolution as an agency that serves the future of the United States. When your employees are your partners, they are imbued with the mission and the vision of the company because they feel as if they are part of it (get it? part-ner) not subordinate to it.
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That’s all for Part I. Part II will follow on the heels of this one. In that we’ll look at the idea of leaders of a lean open organization and what they do and what that means; adaptability in times of uncertainty; the willingness to take risks; what employee empowerment means; why hierarchical organizations in general aren’t going away, despite the occasional edge case – and why that doesn’t mean we are doomed to old forms of organization that can’t function – it’s a leadership question – and many other areas.
For now, you’ll have to live with this and watch this video of me and Stowe Boyd at PivotCon in New York in October.
Interesting! I've been a big fan of disruptive leadership for years. One small difference I have with your comments though - I don't believe that companies empower employees. Employees have to accept power and be accountable for their actions. This is what allows co-creation. A leader can create an environment in which employees learn to empower themselves. This is different from the traditional idea of empowering employees simply by giving them new responsibilities without proper preparation. Marshall Goldsmith has a quick read in his blog post "Empowering Your Employees to Empower Themselves." Leading your people to take responsibility (self-empowerment) builds trust and loyalty while developing new capabilities and resources for the business. Is that what you meant? Can't wait for Part II
Posted by: Karl | January 24, 2013 at 10:08 PM