The world of work has changed, and so should leadership models. Greater responsibility and collaboration for all team members increases engagement, and profit margins.
Leadership and context are inseparable. As the context changes, so, too, does leadership. Today’s business world is fraught with greater complexity, uncertainty and high velocity, so leadership needs to respond accordingly. Organisations must develop new strategies to move from hierarchical entities to flatter, matrix-type structures. This enables them to respond with agility using decentralised and faster decision-making processes. But strategies and structures alone are not enough. People are what make things happen, and organisational culture needs to support new strategies with new leadership structures.
What is collective leadership?
True agility requires organisations to increase their leadership capacity by developing leadership at all levels – which is what is meant by the term collective leadership. This means engaging and empowering employees more than ever before, which makes them feel valued, trusted, and motivated. They perform more effectively, think more creatively and are innovative. According to the Human Capital Institute, fully engaged employees return up to 120 per cent of their salary in value. In the longer-term, this also shapes the new culture of the organisation.
Collective leadership is non-hierarchical and collaborative, and it requires heightened awareness throughout the whole organisation. This means that everyone has a voice and takes responsibility for the success of the team and organisation, not just for their own jobs. The responsibility shifts from being centred on a few individuals in formal positions of authority to being cross-organisational.
The benefits and the evidence
In 2008 Cisco was one of the largest technology companies in the world with revenues of more than $40 billion. But as other market players matured, the company’s growth began to decline. In response, Cisco decided to move from a traditional top-down leadership structure to a collaborative model built on a series of boards and councils. Annmarie Neal, the chief talent officer at the time, explains that it wasn’t an easy transition but eventually competition for power and resources was replaced by shared responsibility for success.
Cisco’s new leadership initiative, C-LEAD (collaborate, learn, execute, accelerate, disrupt), focused on innovation and shifting from developing “superstars” to “super-teams”. The company claims to have saved millions of dollars and generated billions in new business as a result.
Similarly, Ardanta, the third largest insurance group in the Netherlands, was a firm with a command and control leadership style. Following the global financial crisis in 2008, the firm confronted huge challenges including mistrust of the financial sector and growing competition. In response, the CEO decided to implement a collective leadership program from mid 2010 to 2011.
As result, Ardanta shifted from being a firm with employees working in silos with a low sense of responsibility and little interest in innovation, to one with an empowered workforce with self-confidence and a sense of worth that takes ownership and responsibility for decisions, leading to a positive impact on the company’s business outcomes. By 2013, productivity increased by 35 per cent, recruitment reduced by 20 per cent, and within two months two new sales channels accounted for 13 per cent of total sales in a highly competitive and saturated market.
Make no mistake, collective leadership creates organisational cultures that promote adaptation, agility, employee engagement and empowerment, inclusion and diversity, creative thinking, and innovation.