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Boost Potential with Shared Authority and Lean Management

| Posted by Walid Farag Follow 0 Followers on Sep 11, 2014. Estimated reading time: 25 minutes |

Shared leadership is a modern and exciting way to lead and manage. The goal of sharing authority within a team of leaders is to maximize the use of all capabilities and ideas in the organization.

It can be applied to a small team and to a big organization, and examples of shared leadership among peers are:

  • The self-organizing team in Scrum, a simple type of shared leadership.
  • Sharing authority among C-level managers (CEO, CTO, CSO, CFO, etc.).

The influence of informal leaders and subordinates is another aspect of shared leadership:

  • The beyond-budgeting framework lets an organization move beyond command-and-control processes into a decentralized leadership approach. It lets people at a given hierarchy level make the decisions they themselves execute.
  • The responsibility of developing portfolio expertise and sales is a collaborative process between experts and management.

Shared leadership is a fact in many organizations. The top management defines vision and strategic direction. The formal and informal leaders of an organization implement these.

It is like an iceberg. Its tip represents the visible leadership while most leadership practices take place under the surface. Another nice metaphor is the whitecaps of waves in the ocean. The currents below the surface are what define direction, speed, and power (Pearce & Conger, 2003).

I argue that shared leadership is at least as old as human states and empires. Rulers had to share power and authority with ambassadors, distant governors, and military leaders. Based on visions of goals, priorities, and values, those subordinates were empowered to negotiate and make decisions.

An adaptive management model assumes that an organization has a few layers of management and that strategy and key decisions are delegated to front-line teams with the scope and authority to respond rapidly to emerging threats and to seize new opportunities as they arise (Hope et al, 2011). This definition of the adaptive management model implies shared leadership.

Why is shared leadership essential?

In today’s global market, conditions are becoming more competitive. Business goals and tasks are so complex and massive that formal leaders find themselves overloaded and overwhelmed. Formal leaders become at many times bottlenecks and this reduces performance and flexibility. Sharing authority is in my view an unavoidable management practice.

Knowledge workers are the informal leaders who implement strategy. Shared leadership allows them to systematically take over some of the formal leaders’ responsibilities.

Shared leadership offers many advantages:

  • More engaged employees feel more pride in the company and stay at their jobs longer. It minimizes turnover.
  • Maximizes use of ideas and minimizes bottlenecks.
  • Maximizes systematic networking and synchronization among experts in delivery units, recruiting, finance, and sales.
  • Sharpens focus on what the customer expects.
  • Improves finding best solutions that reflect all possible viewpoints.
  • Increases quality and performance and hence decreases time to market.

Shared leadership in the literature

Though the concept of shared leadership is not new, not much literature covers this important subject.

I found Pearce and Conger’s book Shared Leadership, Reframing the Hows and Whys of Leadership (2003) very useful. It covers the history of shared leadership, its different conceptual models, and several examples of its application. It also presents a group exchange structure and a social-network approach to the topic.

Though the book is full of theories, it is easily understood. I was able to derive new and direct applications for my context and in the shared-leadership lean framework.

If you want to learn or apply shared leadership, this book could be valuable resource.

Leadership models (according to Pearce and Conger)

Leadership assumes there’s a team to lead, a team focused on a common goal. For example, a team working on a software project aims to develop the product requirements. Other examples include teams responsible for sales, developing, and delivery of products and services. These teams could be cross-functional. Members of these teams might include roles from different domains like sales, product management, software development, and operations.

Leadership is the process of inducing others to take action toward the defined common goal. It includes influence in all directions of organizational hierarchy, top down, bottom up, and lateral.

Top-down model

This is the classic model of command and control.

Bottom-up model

Leaders reflect what their colleagues think and do. They are leaders in name only.

Shared-leadership model

All team members are equal peers. Theoretically, they influence each other in an equal way.

A team will be effective if it fulfills four preconditions:

  • Availability of relevant knowledge.
  • Readiness to share this knowledge among team members.
  • Team members are able to process this knowledge and evaluate ideas.
  • Members are expected to accept the correct or best ideas.

In some situations, this model may only be theoretical because experienced or talkative members might dominate the environment. The team might never hear the valuable thoughts of relatively quiet members.

The team might not reach agreement. Voting on issues and accepting majority decisions are not always useful since people tend to make irrational choices. One reason behind this is the availability bias of one or more team members. Availability bias is the tendency for people to judge items that are more readily available in memory to more frequently occur. For example, someone who watches a lot of movies about shark attacks may think the frequency of shark attacks is higher than it actually is. In that way, resistance to new ideas or solutions that could replace habitual practices may be high.

To avoid such a situation, the team starts with a clarifying mission, developing group norms and skills and building efficacy. During the forming and storming team-building phases, the team might need a moderator to make sure that all involved can express their views.

Shared-leadership integrated model

Here the leader has greater responsibility and authority than in the previous model. The leader is always seeking the best options and ideas through communication among and with team members.

While it is not a pure shared-leadership model, this integrated model seems practical. It recognizes the advantages of influence among subordinates (team members/peers) and between the leader and subordinates in both directions.

This model offers the advantages of pure shared-leadership while some authorities and responsibilities still belong to the leader.

Shared leadership’s agile and lean core

Agile culture

Agile and lean movements incorporate many human values. For example, Open Kanban includes values such as respect, courage, collaboration, and a holistic approach to change. This results in high team morale and transparence among different levels and units.

Shared leadership fits best in such environments. In my view, when these values are missing, shared leadership will probably fail.

Transformational leadership

Transformational leadership is when leaders and followers reinforce each other in a combined advance to higher levels of morality and motivation. Transformational leaders inspire followers to improve expectations, perceptions, and motivations through the strength of their vision and personality as the team works towards common goals.

While transactional leadership emphasizes rewards of immediate value, transformational leadership adopts a symbolic priority of commitment, emotional engagement, or fulfillment of higher-order needs such as increased professional impact or a desire to engage in breakthrough achievements (Pearce and Conger, 2003).

A transformational leader is the one who recognizes the top requirements of his followers, such as autonomy, improvement, and purpose. Drive: The surprising truth about what motivates us, a YouTube video, illustrates how much value professionals put on these needs. Transformational leadership is essential in a shared-leadership environment because it will maximize engagement, which results in high performance.

Leadership and learning

Leadership is partially a social interaction between peers and leaders. The culture should allow people to learn and improve. Teams make small steps and learn from feedback. They solve small problems before the problems become bigger.

Coaching as strategy

In an agile organization, the role of a formal leader shifts from taking care of all details to coaching and empowering subordinates. Formal leaders focus on developing people and improving processes (Elatta, 2014).

Formal leaders should manage conflicts and smooth the way for subordinates.

The goals are to:

  • Find informal leaders, motivate them, and recognize their value.
  • Develop subordinates and transform them into formal or informal leaders.

Generative dialogue

In a shared-leadership environment, the leader does not act as a commander who gives orders. Rather, all team members and the leader together think and make decisions through dialogue. Speech is an essential way to communicate with peers and with leaders.

Dialogue passes through four phases: talking nice; talking tough; reflective dialogue; and generative dialogue (Pearce and Conger, 2003).

  • Talking nice, in my view, takes place mostly in the forming phase of the team.
  • Talking tough occurs during the storming phase.
  • Reflective dialogue takes place during the norming phase. Team members listen to and understand each other.
  • Generative dialogue is the ideal dialogue state and most fosters shared leadership. During the performing phase, members build on each other’s ideas and perspectives.

Applying shared leadership

The shared-leadership environment

To apply shared leadership successfully, you need to fulfill some preconditions.

  • Recognize of the value of shared leadership.
  • Organizational culture should allow shared-leadership requirements such as open communication, transparency, and constructive feedback. The top manager, especially, should keep a door open for anyone to come to talk and while listening to critical issues should assume the speaker has good will.
  • Management should be willing to share authority with subordinates. Top and line managers should be positive about giving up part of their power. They will have more time for strategic and pure line-management tasks. They should enjoy more success in return.
  • Clearly define the roles of formal leaders. They should act like coaches and enablers rather than commanders.
  • Reward systems should reflect teams’ work. Avoid individual rewards.

When shared leadership won’t work

Shared leadership will not work when:

  • Willingness to share power is missing or resisted. Sometimes managers have much work and turn to be bottlenecks even though their subordinates can and would like to take over more challenging tasks. To gain the support of those leaders, it helps to show them the benefits of sharing authority and the consequence of resistance, especially regarding their personal development.
  • Power distance is high. According to Pearce and Conger (2003), power distance is the degree to which members of a culture accept and expect that power is distributed unequally.
  • Reward systems are not properly defined. Immediate monetary rewards turn to be a punishment when removed or reduced later (Bogsnes, 2009).
  • When knowledge, skills, or abilities are missing. Shared leadership assumes knowledgeable and skilled workers.

What should not be shared?

Not every authority can be shared. Top leaders will continue to play a central role in:

  • Vision.
  • Strategic intent.
  • Global processes such as procurement and billing.
  • Contract templates and other legal subjects.
  • Building of teams.
  • Orchestration of organizational activities on a high level.
  • Empowering leaders and teams to self-organize and to make decisions in detailed execution.

In smaller organizations, top management is obviously more involved in the definition, introduction, and deployment of aforementioned responsibilities.

In bigger organizations, top managers will be involved on a high level and delegate all or parts of these responsibilities to middle management.

Frameworks incorporating shared leadership

Shared leadership is not only part of our daily business but is also predefined in several software-development and management frameworks.

Scrum

Scrum assumes self-organizing teams. Scrum teams require mentoring and coaching. They don't expect command and control.

Team members usually:

  • Pull work for themselves rather than wait for their leader to assign work. This ensures a greater sense of ownership and commitment.
  • Manage their work (allocation, reallocation, estimation, re-estimation, delivery, and rework) as a group.
  • Communicate more with each other. They are committed to the project. The Scrum master is not the leader of the team.
  • Understand requirements and aren't afraid to ask questions to get their doubts clarified.
  • Continuously enhance their own skills and recommend innovative ideas and improvements. (Mittal, 2013)

I find self-organization a kind of shared leadership. It applies a pure shared-leadership approach in which all team members have equal authority.

Scaled agile framework (SAFe)

SAFe defines three levels of planning, execution, and monitoring: portfolio, program, and team. It assumes central strategy definition at the portfolio level and decentralized execution by programs and teams.

A release-planning event is a good example of the integrated model of shared leadership. During the event, all program teams are involved (in an agile release train). Members communicate, estimate, give feedback, and plan the next potential shippable increment (PSI). Then every team implements its part. Continuous integration takes place on the program level.

SAFe lets decisions be made at the level and by the team nearest to the problem or subject. This usually leads to practical ways to reach goals and solve problems.

“Shared Leadership” lean framework

Shared Leadership is the name of a new lean framework that builds on Open Kanban values and practices. The vision of this framework is to maximize use of the potential of any organization through the concepts behind the integrated model of shared leadership mentioned earlier.

  • Top management cooperates with line management and leaders to define the direction of the organization.
  • Line management orchestrates activities and synchronizes them with short-term and midterm targets and goals.
  • The leader acts like a coordinator. He takes care of his product/service, the delivery, the knowhow of his team, and finding solutions for existing problems.
  • Depending on the task, teams responsible for end products/services should be cross-functional. Team members from different business units such as sales, delivery, procurement, and recruiting should be part of the team.

I published the Shared Leadership lean framework under a Creative Commons license in May 2014. You can use it as you like. It is still a moving target so please stay tuned. More about this framework can be found here.

Open Kanban

Open Kanban is an open-source, ultra-light, agile, and lean method meant to improve any area of the organization. Although its main focus is IT and software development, Open Kanban can be used in any business or non-profit to achieve agility and continuous improvement.

One key value of Open Kanban is a “holistic or systemic approach to change” (Hurtado, 2013). In order to reach steady and successful change, the experts should be motivated and empowered to make changes where it counts.

Shared Leadership is implied in kanban’s “stop the line” culture, when all team members focus on the problem and provide solutions from different perspectives.

Beyond budgeting

Beyond budgeting is a framework that lets an organization move beyond command-and-control processes and into decentralized leadership. Beyond budgeting aims to build empowered and adaptive organizations without loss of control (Hope et al, 2011).

Beyond budgeting promotes 12 principles that lead to more dynamic processes, leadership, and front-line accountability. The first six principles focus on leadership (Beyond Budgeting Institute, 2011).

  1. Values: Bind people to a common cause, not a central plan.
  2. Governance: Govern through shared values and sound judgment, not detailed rules and regulations.
  3. Transparency: Make information open and transparent; don't restrict and control it
  4. Teams: Organize around a seamless network of accountable teams, not centralized functions.
  5. Trust: Trust teams to regulate their performance; don't micromanage them.
  6. Accountability: Base accountability on holistic criteria and peer reviews, not on hierarchical relationships.

These principles aim at sharing authority and leadership with accountable teams. Big companies that apply beyond budgeting let regional managers decide themselves what suits their context best (Bogsnes, 2009).

In my view, the principles of beyond budgeting reflect the integrated shared-leadership model mentioned above.

Case study

Shared leadership can be applied in different scenarios. I would like to present an early application of shared leadership with a focus on portfolio and sales in an IT consulting company with several hundred employees. The applied framework is the Shared Leadership lean framework.

Challenges and pains

The challenges and pains of IT consulting companies are similar to some extent. Fortunately, the following general challenges of IT consulting only partially apply to our case study.

  • Relatively weak focus on portfolio and strategy.
  • Concentration on short-term revenue.
  • The market is evolving to be limited to commodity tasks.
  • Customer expectations are high regarding quality and delivery speed.
  • Competition increases and outsourcing makes competing even harder.
  • Customers’ readiness to pay is decreasing.
  • Revenue and profit are decreasing and consequently the company exerts pressure on managers.
  • Expectations from consultants/employees are increasing. Many conflicts are not easy to solve.
  • Relatively high employee turnover results in weaker customer relationships.
  • Personal networking is weakening.

Company strengths

This case study presents a company with potential. Its strengths, below, make the transformation to shared leadership easier:

  • Open communication despite the hierarchy.
  • Many managers, informal leaders, and experts see the need to focus more on portfolio development.
  • All employees see an obvious need for more intensive internal networking.
  • Company size is neither too big nor too small. Forming an interesting portfolio network is possible.
  • Relatively wide coverage of industries and customers.

Goals

Certainly the ultimate goal of applying shared leadership is to retain market leadership and increase sales and profit. Intermediate goals are to:

  • Deliver services and solutions faster.
  • Improve quality.
  • Come up-to-date with technological and methodological advancements.
  • Make better offers than the competition and win more projects.
  • Build stronger partnerships with customers and subcontractors.
  • Fulfill the needs of employees/knowledge workers and minimize staff turnover.

The Shared Leadership lean framework offers a systematic approach for:

  • Focus on portfolio components
  • Internal networking with employees
  • Generating leads and sales.

Strategy

The formal leaders are clearly overwhelmed with management work and, to a lesser degree, with consulting tasks. The additional capacity that informal leaders bring is needed to overcome these bottlenecks and clear the way to the goals. A successful transformation without much resistance assumes that informal leaders already exist and are willing to take on some of the responsibilities.

So the strategy is to:

  • Find leaders. These are the experts that want to lead and push their domain expertise.
  • Recognize employee leadership and expertise.
  • Form focused, cross-functional teams for different portfolio components. For example, an enterprise mobile-integration group can consist of software developers, architects, usability experts, and sales.
  • Support these teams, manage conflicts, and remove impediments in their way.

Shared-leadership teams

The first task of every team is to define its mission. A mission could focus on an area and aim to improve quality, improve performance, and ultimately increase profit. The mission must consider and support the whole organizational vision and strategy.

Sales people are required to provide a market perspective and information about customers or leads that would purchase services based on the team focus.

The team defines its next milestone as well. Examples are showcases, training courses, presentations to customers, etc.

This shared-leadership team is the first contact in the organization when it comes to writing offers, estimating prices, and delivering services.

Informal start

The concept of shared leadership was still new to me and the framework was unproven. The new idea of sharing authority with informal leaders needs a trial-and-error approach.

Convincing top management with practical experience and working examples in addition to the theoretical framework will help obtaining their buy-in, so I decided to test the idea informally within a close circle of my colleagues.

I have good experiences with seeking support for new ideas and this case should be no different. I started with close colleagues and others of similar mindsets. In the beginning, I needed frank and critical feedback from my circle before I talk to others about the idea.

The first step in applying shared leadership is a kickoff meeting. I invite several sales people in addition to experts and delivery managers. I present the idea of focusing on developing portfolio components from the points of view of both sales and delivery. I ask them for feedback and they support the idea.

The first two shared-leadership teams to form were Cloud-Ready Architecture and Agile 360⁰. They include technical and agile experts in addition to sales people.

Portfolio network

I introduce the Shared Leadership lean framework to the company. This framework focuses on developing the portfolio by applying a shared-leadership integrated model. At this early stage, the application of the Shared Leadership lean framework is limited to its values. We apply none of its practices. I have often presented the benefits in terms of sharpening portfolio components, networking with sales, and generating new projects.

My focus is to find leaders and motivate them to form a team with shared leadership for every portfolio component. I always consider the personal development of every potential leader in the discussion. Using a coaching style, I ask what she would like to do and which level of expertise she would like to reach. This helps to define the portfolio component in which the leader is interested.

Then we start to think of other people that are or might be interested in that particular portfolio component. The leader talks to them and invites all to a kickoff meeting. During that meeting, the team defines its vision and next steps.

Bringing technical experts together with sales people to develop and sell a portfolio component is the first immediate benefit for the organization. They feel like a team and a part of a bigger future for the organization.

After gaining confidence with this systematic approach, getting feedback, and enjoying success, I talk to more colleagues and grow the circle step by step. It includes other teams, units, and business areas. We form new focus groups like Java, mobile apps, usability and UI/UX, geo-information systems, portals, etc.

After several interviews, in addition to my knowledge about dependencies in the organization, I produce the first version of what I call the “portfolio network”.

(Click on the image to enlarge it)

The portfolio network presents portfolio components with some details. Behind every ellipse is a cross-functional team (not necessarily a dedicated team) from all needed competencies. For example the mobile apps team consists of developers, designers, and sales. Managers are involved to facilitate the process, support the team, and remove potential conflicts.

Lines between ellipses represent dependencies and relationships between portfolio components.

So, if you have a new project or offer, you can build on this transparent portfolio presentation. You know who is behind every capability and competency in the network.

The blue ellipses represent end-customer solutions. These are connected to the components on which they depend.

The green ellipses represent what I called “hub portfolio components”. These components are generic and have a large number of dependencies (connections in the portfolio network).

Depending on the size of the organization, the portfolio network might vary in size. It can be so complex that it might require more levels of detail. You might end up with a hierarchy of portfolio networks.

This is an ongoing experience. I might have more to tell about this later.

Orchestrating the portfolio network

In this case, rather than being a central task, the responsibility of developing the portfolio is shared among focused teams. The challenge is to orchestrate the portfolio network and to synchronize teams. The goal is to be able to prepare a unique offering that differentiates the company from competitors.

To have the portfolio network work, many things must happen. It must be transparent and up to date. People should be able to freely contact experts and compose solutions.

What I found successful is the following:

  • Sales people get a list of people behind the portfolio network. They contact them directly to develop the business together and prepare solutions/offers.
  • Regular (virtual) meetings between teams in the portfolio network.
  • Shared leadership is an experience- and information-sharing platform. To build focused teams in the portfolio network, continually plan training sessions and workshops.

Bottom-up approach

At first, top management was not involved. The initiative is started and tested on the very base level of the organization, the experts and consultants.

I prefer the bottom-up approach for several reasons:

  • I wish to verify the acceptance and applicability of shared leadership in the organization.
  • I think that orchestration of a portfolio network will work only when this network, or at least one to three teams, exists and a real, successful case exists. This will make convincing top management easier.
  • It is a complex task to manage a portfolio network centrally. Shared leadership offers a chance to self-organize the portfolio network.
  • First-line and middle managers successfully support and orchestrate this early, relatively simple portfolio network.

As the portfolio network grew complex, it was clear that it needed more support and orchestration from top management, especially to approve bigger budgets and manage activities.

Lean startup

Lean startup is a method that combines iterative product or service development, business-hypothesis-driven experimentation, and validated learning (a process by which one learns by trying out an idea and then measuring results to validate the effect).

Applying lean startup allows for minimal investment until results are evaluated. I find it useful to define the following during the first and second virtual or physical meeting:

  • The commercial goal.
  • Target customer (group).
  • Available/needed competences.
  • Availability of validating resources.
  • Lead-generation method.

When special training or certifications are required, a small budget is approved. Potential leads will be contacted as early as possible to let us validate the ability to sell the service.

Depending on the service, a budget might be increased to finance further activities such as sales, transfer of knowledge, and lead generation.

Acceptance of experts

Experts are professional consultants and engineers who focus on specific technical or business areas. Examples are Java developers, iOS app developers, usability engineers, and specialists in business processes. These share leadership to develop and sell portfolio components.

In the Shared Leadership lean framework, experts play a vital role. They give me mostly superb responses regarding focus, portfolio development, networking, and sales. I think shared leadership satisfies several needs of the experts such as autonomy, competence, and connection.

When it comes to taking leadership roles within the teams, however, some act completely independently while others need (minimal) support.

Experts begin to speak with other colleagues about what they are doing in the context of shared leadership. The term is increasingly used and the awareness is growing. Sometimes, colleagues propose new teams. The slow, viral effect is fascinating. It can also be risky when conflicts arise so orchestration is essential.

Experts might need a coach or a mentor. The coach’s role is to help the expert define priorities and find ways to manage conflicts and remove impediments. The coach, however, is not deeply involved in the technical or professional details as these are the responsibility of the expert.

Acceptance of sales

Sales people are always eager to win – and certainly to sell. I have generally positive experiences when providing customer strategic directions and projects. Certainly, the responses vary depending on the actual need and priorities of the sales person.

In this particular application of shared leadership, sales opinions are essential. I recommend listening to the sales people and their expectations with patience. Bringing sales and technical experts (even experienced ones) together can sometimes be challenging. With some moderating skills and listening, it works, indeed.

First-line and middle managers

Front-line and middle managers who work directly with experts need a systematic and focused approach to develop the portfolio. Shared leadership offers them an opportunity to motivate their subordinates and make them feel part of the organization. It is also an opportunity to increase sales and profit.

The managers’ role is to manage conflicts and support experts in reaching their goals. The bottom-up and to some extent informal approach unfortunately reaches its limit here. Short-term-project results and expectations of top management are certainly more highly prioritized.

I expect that the managers will welcome shared leadership. I talked to couple of them about it. Some consider the opportunity and take the portfolio network seriously for their business and offers. One considers it a much bigger organizational change in his business area. This is still a running experience.

Top management

Top management, in this case study, represents the highest level in the hierarchy.

I tell them about my thoughts, experiences, and limitations. I convinced three of them that shared leadership has the potential to maximize use of capabilities and ideas. I also tell them that essential changes are required in order for the portfolio network to function well. Only top management has the power and authority to make these changes.

At the time of writing this article, I have received positive feedback from them and I’ve learned that top management is formally considering the application of the Shared Leadership lean framework.

Other roles

Shared leadership assumes cross-functional teams from all units in the organization. Teams in human resources and finance can also be involved. For example, when the team identifies growth in a certain area such as cloud computing, recruiting new experts could be vital to the ability to deliver.

At the time of writing, I have not yet contacted these domains.

Conclusion

Shared Leadership lean framework offers a new way to manage a portfolio. It does not force change upon the organizational structure. It rather builds on the existing structure and makes the best of it.

However, shared leadership implies intensive communication between many parties and distributing responsibilities. So I think it will better work in organizations with fewer hierarchy levels and open culture.

Shared leadership is a great opportunity to maximize performance, gain market leadership, strengthen employee engagement, and increase revenue.

Applying shared leadership is challenging but also fun. I wish you great success on your shared-leadership journey. Please let me know how I can help you with it.

About the Author

Walid Farag is a management consultant in Seven Principles AG and the founder of the ValueCourse e-learning platform. Walid is the author of the Shared Leadership lean framework.

More about Walid can be found on his Xing and LinkedIn profiles.

 

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