Leaders can refocus people’s energy with direct interventions or do so indirectly by adjusting the system so people naturally gravitate toward what needs to be done.
Direct methods of leadership include commands, decisions about resources and promotions, and guiding individuals and teams. As organizations become larger and more complex, direct interventions by senior leaders carry less of the load.
- Less direct leadership focuses on communicating inspiring vision and values, on listening and caring for the followers, on leading by personal example.
- The most indirect and potentially invisible forms of leadership focus on creating conditions of freedom that guide people toward seeing the common good.
When indirect leadership is at its best, the people say, ‘We did it ourselves ‘ The more direct the method of leadership, the more room there is for other leaders in the organization.
Three Ways to Empower Leaders
Different models of the organization lead to different approaches to empowering people and creating leaders.
We’ll consider three- 1) delegation within a hierarchy, 2) creating a community with common purpose shared values and 3) establishing a free market system.
- Delegation within a traditions hierarchy. In a hierarchy, delegation is the primary tool for creating opportunity for more leaders. The subordinate leaders accept the scope of their command and use leadership to accomplish the tasks given them. If delegation is the norm, each leader can create leaders below them. Given the rules of bureaucracy, subordinate leaders have limited scope for big picture or cross-functional thinking. As a result, the people at the top have too much to do while everyone else is “waiting for orders.” Delegation is a good first step in creating space for leadership to emerge, but does not fully, meet the needs of information age organizations.
- Creating community. Many great corporate leaders, such as Max DePree of Herman Miller, and Ben Cohen of Ben and Jerry’s, see their organizations as communities. They create space for more leaders with inspiring goals and trust that employees guided by community spirit will generally use their freedom to do good rather than harm.
Effective leaders today use the tools of community building to create an environment in which many leaders can emerge. They contribute inspiring description of shared vision to align everyone’s energies. They care for and protect their employees. They listen and do their best to accept the contributions and divergent ideas of employees as honest attempts to help. They give thanks for the gifts of ideas, courage and self-appointed leadership that employees bring to the community. They discourage backbiting and politics. They do their best to treat each member as a spiritual equal worthy of respect. They share information so everyone can see how the whole organization works and how it is doing. They publicly celebrate the commuity’s successes. In tragedy they mourn the community’s losses.
We’ve watched Jack Ward Thomas, chief of the US forest Service cry in public over the loss of fire fighters. Community occurs most easily when free people with some sense of equal worth join together voluntarily for a common enterprise. Great leaders create the sense of freedom, voluntarism and common worth, but do so most easily in smaller organizations with face-to-face contact. As organizations become larger, more complex, and more geographically distributed, it becomes harder to create enough common vision and community spirit to guide the actions without increasing reliance on the chain of command. When people are separated by distance, vast differences in power and wealth, and conflict over resources and promotions, political struggle often replaces community. As the power of community spirit is stretched thin, the chain of command becomes more prominent, and sense of community declines further.
3. Liberating the Spirit of Enterprise. The more machines take over routine work and the higher the percentage of knowledge workers, the more leaders are needed. The work left for humans involves innovation, seeing things in new ways, and responding to customers by changing the way things are done. We are reaching a time when every employee will take turns leading. Each will find circumstances when they see what must be done and must influence others to make their vision of a better way a reality. To create room for everyone to lead when their special knowledge provides the key to the right action, we must move beyond traditional concepts of hierarchy. To become lean and mean is not enough. In the times to come, leaders must find ways to replace hierarchy with indirect methods of leadership that allow greater freedom, lead to more accurate allocation of resources and focus on the common good.
Where do we find the models for this new form of leadership? The leaders of corporations, non-profits, and even government agencies have much to learn from the methods of leadership and control used by successful nations.
By freeing their nation’s entrepreneurial spirit from the monopoly power of the party, China’s leaders have achieved double digit economic growth. After introducing freer markets, South Korea, Chile, Singapore, Peru and Taiwan have all achieved astounding economic growth.
Can the same level of explosive growth in productivity and innovation be available to leaders of organizations who create institutions that liberate the entrepreneurial energies of their people?
In national economies, the free market seems to be indispensable for creating productivity and prosperity. When national leaders establish an effective market system, many entrepreneurial leaders arise to help them satisfy people’s needs. By using institutions that create a self-organizing system, the leaders indirectly motivate and inspire followers to find the most efficient and effective ways in which they can serve the larger community or group.
From monopoly staff services to freemarket insourcing, a debate rages between proponents of the efficiency of centralized service and those who believe that decentralization of functions will create greater responsiveness to divisional needs. But these two solutions are merely alternative flavors of bureaucracy and miss the point. Whether centralized or lodged in the divisions, services still have a monopoly over the customers they serve. Neither centralized nor decentralized staff service uses the discipline of choice; their proponents merely argue over who should be in charge of the monopoly.
Learning from the success of free enterprise leaders will change the terms of the debate from centralization vs. decentralization to monopoly vs. user choice.
We call the system based on free choices between alternative internal suppliers their intraprise system (short for intra corporate free enterprise).
An advanced free intraprise organization has a structure much like that of a virtual organization. Both have a small hierarchy responsible to the top leaders for accomplishing the mission. The main businesses buy the bulk of the components and services that create value for their customers from suppliers. The difference is this: in a virtual organization those suppliers are outside firms, and in a free intraprise organization many are internal “intraprises” (intra corporate enterprises), controlled by the free internal market but still part of the firm.
Most everyone at work provides a service. The advantage of outsourcing is dealing with resources through a market with choice rather than the monopoly structures of a chain of command. In future organizations, most employees will work in intraprises that provide services to the core businesses. The core businesses will be run by small groups of line managers who buy much of the value that is added by their businesses from internal intraprises. Free intraprise provides the core discipline for the horizontal networked organization, allowing senior leaders to project strategic intent through a small hierarchy without creating much bureaucracy.
If you tried to enliven a command economy, you would get nowhere by telling local party leaders to take more risks or by training the managers to be more empowering. To crack that bureaucracy, the leaders must allow entrepreneurs to compete with monopolies.
Similarly, to cure corporate bureaucracy, training managers in empowerment is not sufficient. Intrapreneurial teams must be developed to offer services that compete with the functional and staff monopolies. Free choice between different providers will sort out what works to serve the mission and values.
Leaders can use free market choice inside to achieve many of the benefits nations achieve when they liberate the entrepreneurial spirit of their people by creating free market institutions. They can create a self-organizing network that spreads learning and capabilities across divides without the need for direct senior leadership intervention or even direct inspiration. They can create a feedback system that sorts out what internal services are effective without having to evaluate and decide themselves.
To establish a free intraprise system, leaders allow choice between several internal suppliers of services and components; establish right of employees and teams to form an intraprise; protect intraprises against the efforts of former bureaucrats to reestablish their monopolies by political means; establish accounting systems that support free intraprise.
Internal markets provide a way to be sure everyone’s contributions to that mission are cost effective without relying on appraisal from above. For many leaders it is difficult to turn from direct intervention to creating conditions which empower others. But what greater legacy than the liberation of an organization to a higher level of productivity, innovation, and service.