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The Wharton Center for Leadership and Change Management
The Wharton School, University of Pennsylvania
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Philadelphia, PA  19104

Social Technology and the Changing Context of Leadership

by Roland Deiser and Sylvain Newton

Most companies are painfully aware that over the last two decades the context of leadership has changed dramatically, putting tremendous pressure on traditional models of management and organization. Today’s leaders are faced with highly unpredictable and volatile environments that defy long-range planning. Their organizations are enmeshed in a new interconnected world of complex global networks that engage in novel ways of co-evolution and co-creation, with stakeholders dispersed across the globe. They are faced with disruptive forces that require continuous business model innovation, and they have to deal with mounting political, economical, and ecological mega-challenges on a global scale.

To turn these challenges into opportunities, leaders have realized they need to shape highly creative, agile, and flexible organizations. To achieve real-time strategic responsiveness, organizations need to push responsibilities “down and out” to the periphery, to those who are closer to the dynamics of the market. With responsibility goes accountability. Therefore, in this world of constant flux, virtually every employee must become an empowered leader who can act successfully in the logic of network relationships, which have become so typical for today’s value creation processes. This requires a more “horizontal” leadership culture which fosters cross-boundary dialogue, participation, and collaboration among internal and external stakeholders. It is obvious that the traditional management model of the 20th century, with its emphasis on linear processes and vertical command and control, is ill fitted to meet these challenges; it tends to create silos, slack, and bureaucracy.

These insights are not new; they have been a staple in the last two decades’ literature on leadership and organization, and they are discussed in virtually every corporate leadership program. However, putting these insights into practice has so far proved to be extremely difficult and elusive, especially in large and global corporations, which have to orchestrate multiple businesses, in dozens of countries, across a workforce of tens of thousands of people, and with thousands of players in their supply chain. Despite the universal battle cry for cross-functional and cross-divisional collaboration, most companies are still trapped in a traditional mechanistic, hierarchical management paradigm with its culture of risk avoidance, anticipatory obedience, and unilateral top-down processes. And until recently, technologies primarily designed for process streamlining and one-way communication supported this conundrum.

This situation is now rapidly changing. Social technologies with their inherent democratic, anti-hierarchical quality easily transcend internal and external boundaries, suddenly creating a powerful thrust for horizontal collaboration and participation. They give each and every member of an organization a creative voice and enable real-time virtual connectivity in a way we have never seen before. This makes them a great catalyst for the organizational principles that are required by the new leadership context of the 21st century. They have not only the potential to make the often lofty claims for agility, resilience, and horizontal interconnectedness a practical reality – they are actually a powerful force that actively drives companies towards organizational innovation, for better or worse.

The double impact of social technologies on organizations – as drivers of change as well as the solution to some of those very change imperatives – makes them key levers for the much needed transformation of our outdated management and leadership models. Unfortunately, as we are still early in the game, most organizations are not yet sufficiently harnessing the power of this new world. There is little awareness of the link between leadership practices and the emerging role of participatory media, and little understanding of required skill sets and corresponding organizational design needs. The ability to deal with social media does not appear as a key element in leadership capability frameworks or executive development curricula, and it is not the subject of transformational strategic initiatives.

This needs to change. Organizations must realize that capitalizing on the transformational power of ubiquitous communication and connectivity requires a new set of individual and organizational capabilities1. It calls for a different type of leadership as well as for new organizational models. The good news is that this challenge leads us back to some timeless principles of effective leadership: strategic creativity, authentic communication, social and political orchestration skills, and the ability to design a smart organization that is aligned with the strategy of the firm. While these skills remain at the core of any successful leadership practice, the new universe of ubiquitous interconnectedness elevates each of them to a new logic and a new dimension of complexity. It moves them even more center stage.

Some elements of the new paradigm are:

Authenticity and Imperfection
Leadership in the context of social media gives authenticity a new and more important meaning, as first person engagement and visibility become critical success factors. Leaders need to be confident to engage in creating rich media messages that make people take notice and that trigger their response. To do so, they will have to develop a distinctive voice that stands out from the noise, and that is credible and authentic. Producing compelling messages in the realm of participatory media is strikingly different from the traditional world of broadcast media. The logic of co-creation calls for abandoning the idea that each and every leadership communication has to be perfectly crafted – too much perfection becomes actually dysfunctional in collaborative contexts as it disinvites participation. It also calls for spontaneity and defies the corporate ritual of fine-tuning presentations with dozens of stakeholders just to assure that they do not trigger too much discussion in the board room. Acquiring a mindset of openness and imperfection can be quite difficult for leaders who are used to polished statements which are often crafted by a staff of communication professionals – it means taking the risk of showing vulnerability. But this is what authenticity is about.

Social Orchestration
Understanding how messages travel in the social media universe requires that leaders abandon traditional linear thinking in favor of letting go and embracing the logic of self-organizing networks. While traditional organizational communication is all about the vertical control of distribution channels (which remains important), social media activities are in addition about fostering participation and engagement, making messages viral, and letting the dynamics of the system work without too much direct intervention. These dynamics are naturally hard to predict, which can be quite scary for leaders who only feel comfortable if they are in control. The art of social media leadership is to create an enabling eco-space that fosters collaboration and exchange, and that is guided by shared principles rather than by unilateral rules.

Organizational Design Sophistication
Unleashing the power of social media requires a socio-technical infrastructure that by design enables self-organized horizontal discourse and exchange across physical and geographical boundaries. To mitigate the risk of decision paralysis and unbridled proliferation of potentially harmful activities, leaders need to strike a balance between the traditional vertical command-control systems of the organization and the openness and participation that social technologies afford. It is important to understand the implicit nature of both dimensions and create transversal dynamics by marrying vertical accountability with horizontal networking in a way that is not mutually destructive. This is a tough design challenge. Case in point: Cisco’s John Chambers’ bold move to create an organization of councils and boards was a clear dedication to networked, collaborative decision making, very much in sync with the company’s DNA2 . However, Cisco failed to counterbalance the unleashed horizontal dynamics with vertical mechanisms, which led to unintended consequences. Decision processes became overly cumbersome, slowing down the company’s responsiveness and creating a situation where nobody felt accountable. In the best tradition of the Silicon Valley failure culture, Chambers admitted in 2011 that the model needed radical revisions and introduced new vertical decision rules. Cisco has been capitalizing on its experience since by driving an emphatically collaborative leadership culture which has become a benchmark for utilizing the power of social media, significantly advancing the company’s overall social and organizational media literacy3 .

The Decoupling of Leadership and Hierarchy
The impact of social media is undeniable in the power it gives to an individual. A great example is a research engineer at GE whose blog has become so popular that even CEO Jeff Immelt reads it. This kind of visibility and impact from the “bottom” would have been much harder in a different environment. The fact that a CEO becomes easily exposed to what one otherwise unnoticed employee among the company’s 300,000 people thinks, reflects exactly the paradigmatic change in leadership culture that gets enabled through social media. In the traditional hierarchical model, CEOs are by design disconnected from the realities “on the ground”; they live in a lofty world of courtiers where they usually receive only filtered messages, leaving them in the dark as to what is really going on in the peripheries of the organization. Social media changes this equation, by creating visibility for the previously invisible, by giving the network power to shape the agenda, by lending new meaning to followership, and more.

Increasingly, we will see individuals within organizations building their own personal brand by leveraging social media tools. Their ability to build that brand will impact their value and their identity as leaders. In such an environment, hierarchy no longer defines leadership. If an individual attracts a lot of followers on his or her blog, videos, and tweets, this person is an organizational leader, no matter what the individual’s formal role is. The typical senior leader who has been appointed through the hierarchy might not survive against this new “media literate leader.”

Governance
If it is true that social media will stay, that it will shape a new leadership culture, and that leaders need new capabilities to cope with these new realities, organizations must respond by providing the appropriate social and technological infrastructure, and by fostering literacies that enable networked collaboration and co-creation. As we are just about to realize the disruptive impact of the new technologies, most organizations have currently little governance in place to deal with these challenges. The solution is not to look to the CEO for guidance; while the chief executive certainly needs to provide broad support and commitment to the cultural transformation, the complexity of the issues asks for a stronger focus than an overly busy CEO can afford. Neither is it prudent to assign social media governance to the communications department only, as this function comes with a DNA of unilateral communication and is not used to think in terms of organizational processes and dynamics. And it is not a marketing responsibility either; their social media expertise targets customer engagement and branding and is primarily externally oriented. In order to make social media literacy an organizational capability we need to think beyond traditional functional responsibilities.

It is no small challenge that organizations face if they want to embrace the call to social media literacy. In most companies, mindsets and leadership practices are deeply ingrained in a century-old culture of vertical control, and their organizational mechanisms and processes are designed to assure this control. Defining leadership as the art of inspiring and enabling others is nothing new. The good news is that this gospel has finally found social media technology as a powerful ally that drives these values through its DNA, and that is embraced by the millennial generation that is entering the workplace. There is no way back. As leadership legend Warren Bennis mentioned: “Social media brings to life what we dreamed about for decades.” The winners will be the ones who embrace the challenge and engage faster and more fully in this inevitable transformation.

________________________________________

1 Deiser, R, Newton, S.: Six Social Media Skills Every Leader Needs. In: McKinsey Quarterly, 2013, No 1.

2 McKinsey conversations with global leaders: John Chambers of Cisco. McKinsey Quarterly, July 2009

3 Ricci, R., Wiese, C: The Collaboration Imperative Executive Strategies for Unlocking Your Organization's True Potential. Cisco Systems, San Jose, 2011

Roland Deiser is a Senior Fellow at the Peter F. Drucker and Masatoshi Ito Graduate School of Management at Claremont Graduate University and author of Designing the Smart Organization: How Breakthrough Corporate Learning Initiatives Drive Strategic Change and Innovation (John Wiley & Sons, October 2009). Sylvain Newton is a Senior Leader at GE Crotonville Leadership Development.

Author contacts: rd@rolanddeiser.com (twitter : @rolanddeiser) | sylvain.newton@ge.com (twitter : @sylvainnewton)