In the past, companies have traditionally relied on authoritarian structures to delegate responsibility down the organizational hierarchy. However, leadership models (e.g. Shared Leadership) are becoming flatter in nature as the continuous business development requires organizations to adopt new ways of advancing ahead of their competitors.
First, let’s see what is wrong with the hierarchical leadership.
The Dark side of the hierarchical leadership model
Hierarchical leadership is usually consensus-driven and structured by exhaustive routines and processes, such as appraisals and reviews. The ‘boss’ usually sits in their office, delivers orders and team members carry them out. Hierarchical leadership is dragging down the efficiency of modern teams in a number of ways:
- Focusing power in one place leads to a weaker organizational core.
The pyramid approach to power is one of singular authority. Placing all the responsibility on a single person is decreasing efficiency not just for the team but for the manager as well. Furthermore, it means members have little or no say at all about the future activity of the team. This plays a negative role in the motivation of the team by minimizing their valuable input and puts a heavy burden on the shoulders of the manager to handle everything on their own.
- In a pyramid leadership model, the regular sharing of information is compromised.
Maintaining ownership of information is a typical characteristic of hierarchical leadership. Managers usually distribute information to the team rarely either because they don’t have the necessary radiators or out of indifference to the overall development of the team as a whole. However, depriving your talent of information can only damage the efficiency of the company, because it makes the process of executing ideas more difficult and minimizes the chance for timely innovation within the team. When you don’t have all the facts, you cannot work with confidence towards the goal of organizational growth.
- The team does not embrace the process of generating ideas.
Unlike shared leadership, in the hierarchical model, ideas are generated by people from the upper levels of the hierarchy and passed down. Conservative managers occasionally listen to ideas and suggestions from their teams. However, in most cases, the team is expected to follow the instructions provided by the management and “do their job”. The result of this reality diminishes the creative capacity of the team and the members begin to come to terms with the fact that their ideas will not influence the strategy of the organization.
- Flexibility within the pre-set rules is limited and the team must operate within controlled boundaries.
In a hierarchical culture, solutions are generally delivered to team members. These decisions are made, approved and passed on in the boardroom or the executive suite. This approach gives the team very little room to maneuver and apply alternative, and sometimes even more appropriate, solutions. As a result, a gap may appear in the relationship between managers and employees that may contribute to the formation of silos in the organization. The work process will become unresponsive to change because alternative approaches or pivots to the original plan will either take too long to be approved by the top tier of the hierarchy or will not be condoned at all for the same reason.
- Giving and receiving feedback becomes a one-way street and continuous improvement is not embraced.
Traditional leadership relies on hierarchy, regulations, and rules that limit both managers and team members alike. The feeling of working within preset parameters without encouragement to grow beyond them hurts the agility of the company on a global level and slows down the workflow itself. In companies that place responsibility based on the level of the hierarchy, feedback is usually provided on an annual or semi-annual basis as part of a performance review. This frequency is rarely enough to boost morale within the team and continually improve the team dynamic at the right pace. Giving feedback on rare occasions may end up driving out some of your company’s top talent.
This kind of autocratic, top-down information-sharing, decision-making development model is becoming increasingly inefficient and fails to bring modern teams to their optimal output. According to research carried out by the Blanchard Company, dysfunctional leadership practices can cost the average organization as much as 7% of their total annual sales. While flatter leadership practices can generate a 3-4% improvement in customer satisfaction scores and a corresponding 1.5% increase in revenue growth. This discovery has made it crucial for the very idea of what it means to lead an organization to transform.
Shared leadership is driving the hierarchy out of business.
Realizing the flaws of the hierarchical leadership model, forward-thinking business owners have started seeking more flexible ways of leading their organizations. A solution was found in applying a more horizontal way of leadership, also known as shared leadership. The backbone of the model consists of delegating responsibility throughout the organization and providing a larger number of people with the ability to execute decisions, to a certain degree, without supervisor approval.
Fostering this type of leadership mentality prompts team members to truly take ownership of the part they play on a global level and contribute to the company’s success. They will feel more responsible for their deliverables, rather than feeling forced to execute tasks by an omnipresent ‘boss’ figure. They also will feel more secure in their roles, not because they don’t have to worry about performing well, but rather because they actually feel empowered as a catalyst within their team.
Unlike traditional notions of leadership that focus on the actions of the individual, this model of leadership puts weight on the responsibilities shared by members of a team. The main goal when adopting leadership on a multilevel basis is to provide each member with the liberty of generating ideas and making decisions to some extent. Feeling the empowerment, your team members will start to put additional effort into their work to prove that they deserve the trust you have placed in them.
Research demonstrates that groups of employees who feel encouraged to self-manage can often achieve much higher levels of productivity than those who are micro-managed. A study by the University of Iowa and Texas A&M shows that, on the basis of data from 587 factory workers in 45 self-managing teams at three Iowa factories, peer-based rational control corresponded with higher performance for both individuals and collective teams.
Another extreme example of successful shared leadership is the case study of the Brazilian company Semco Partners. The company adopted a shared leadership model in 1983 and significantly cut management layers to only retain three: corporate (counselors) and two operating levels in manufacturing (partners and associates). The flat leadership model not only increased autonomy but also reduced overhead costs and improved the overall efficiency of the company. Since then, the company has maintained a continuous growth of approximately 20% each year.
How to implement shared leadership? Use the lean method of Kanban and place emphasis on the continuous improvement principle.
Companies usually turn to the Kanban method when they suffer from lack of efficiency and need a simple way to increase it. The Kanban board and cards on their own serve as a great information radiator, but without applying the Lean principles, the method will have little chance to truly blossom.
Kanban and Lean encourage acts of leadership at all levels of the organization. This means that you don’t need to be a manager or an executive to be a leader. The essence of the visual Kanban board suggests that acts of leadership can come from those who are operating within the workflow just as much as those who are managing it.
In order to increase the efficiency of a process significantly (sometimes by up to 300%) in the long run, Kanban relies heavily on a culture of continuous improvement. It aims to reduce wasteful activities from any work process as much as possible. Continuous improvement involves identifying benchmarks of excellence and instilling a sense of employee ownership of their duties and education.
At the core of the philosophy are the beliefs that virtually any aspect of an operation can be improved and that the people most closely associated with an operation are in the best position to identify the changes that should be made as well as the tactical steps that should be taken next.
This model of leadership contradicts other autocratic structures that rely heavily on hierarchy, where team members operate out of compliance rather than self-motivation. To illustrate this, let’s refer to a software development team applying Kanban. Within the hierarchical leadership model, when a feature needs to be developed, the manager will create a task, set a deadline and assign it to a certain team member, no questions asked. When applying the shared leadership model, the task will appear as a Kanban card placed on a visual board, accessible to the entire team. Then, the team will have the liberty to decide among themselves who is going to work on it if there is more than one person who is suitable for the task and when they will undertake it in order to meet (and potentially exceed) the goals of the business. When setting deadlines, the team will keep the Takt time of the project, the cycle time of the card, as well as the existing queues of tasks already present on their boards.
- Start with what you know.
While it is important to have strong leaders at the top of a company or organization, it is vital to develop leaders at all levels of the organizational structure in order to excel in your industry.
When adopting Kanban and starting to apply this new model of leadership, you don’t have to make drastic changes at once. If you want to transition successfully from one leadership model to another, you need to do it step by step and give the organization enough time to adapt before moving on to the next stage. In order to steadily and consistently develop leaders at the various levels of your organization, you must begin by applying various principles that will create an environment in which potential leaders can naturally step into their role.
- The first thing necessary for shared leadership to blossom is a collaborative environment.
Establish an open-communication policy where employee opinions are encouraged. All employees should have an opportunity to weigh in on strategic decisions regardless of title or position. A good way to create it is to adopt a practice of daily stand up meetings between team members and bi-weekly standup meetings between teams or departments. The Kanban board, as a visual information radiator, can do wonders in this case. All members should gather in front of the Kanban board and talk about what each of them has achieved during the previous day or weeks and what they intend to do in the future. The point is to keep everybody in the loop about the ongoing activities and enable collaboration across different roles. This way, team members can build strategic relationships that will be of great help in achieving common goals of the organization. Further, it will stimulate the exchange of ideas that could improve and build upon existing approaches.
- Come up with a mechanism for rewarding acts of leadership.
When you are creating a culture of shared leadership, it is important to find interesting ways in showing appreciation for your team members’ efforts. For example, try rewarding team members and managers alike for books they’ve read that can positively influence the work of the team or the company itself. Internally, the Kanbanize team has created a Kanban board that holds cards with the books everybody has read throughout the year. Around Christmas, each person is compensated financially for the additional efforts they’ve put into their own education and that of their department. In scenarios of longterm dedicated leadership, consider allocating shares of the company to show the significance of a team member’s contribution to the company.
- Coach teams to be flexible and to anticipate change.
Taking initiative is important, being flexible to change – crucial. Coaching your team to see how their ideas can affect the entire organization and how they can be tweaked for best results will help them gain confidence in the long run. The Kanban board can be a great platform for idea generation and a tool to help teams be more flexible as their ideas transform. Down the line, the Kanban board can even be used to generate predictions about the workflow in order to help manage internal expectations within the team and those of external customers. Hooking a board to an analytics module can help the team make informed decisions about changing circumstances quickly and effectively.
- Develop transparency and unity within the organization.
Challenges may arise at any time and, in most cases, unexpectedly. Organizations that are used to the hierarchical leadership approach should train leaders on all levels to feel comfortable addressing urgency. This will encourage them to problem-solve for the group as a whole, not just for their individual tasks. The visual markers that indicate bottlenecks on a Kanban board can help bring attention to issues that exist within the workflow and encourage those who can help to contribute. Specifically designed expedite swimlanes at the top of a Kanban board can also serve to indicate that the team must unite around an urgent common objective. For example, the discovery of a critical bug in a past release means that the development team needs to react immediately. The person who first notices the problem places a card in the topmost swimlane of the board to indicate the need for immediate response. She has to either assign the card to herself and start fixing the problem or urgently find a colleague who is more qualified to solve the issue. In some cases, more members of the team need to unite around solving the issue quickly and effectively.
Leadership is at the core of every organization’s future. Changes to the existing model are extremely difficult and take time, especially when a previous method has become entrenched in the DNA of the company. Don’t wait for your efficiency metric to take a turn for the worse. Instead, evangelize lean leadership among your team in order to encourage continuous improvement on all levels of your organization. Embracing the positive change this will bring, giving your team a chance to show you their potential and encouraging them to grow could make it or break it for your business.