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John Baldoni
Leadership author

John Baldoni

John Baldoni is a leadership consultant, coach, and regular contributor to the Harvard Business Review online. His most recent book is Lead Your Boss: The Subtle Art of Managing Up.

What successful decentralized leadership looks like

Q: Has the recent success of the Tea Party come because of, or in spite of, the movement's lack of a formal leadership structure? Along with Wikipedia, open-source software and organizations like moveon.org, is this another example of the power of distributed leadership?

Leadership does not belong solely to people with titles or even big reputations. Leaders come in all persuasions and personalities. A denominator common to leaders is a willingness to affect change. Very often that change begins at the bottom and percolates up through the organization. Some call it "leadership at every level"; in plain English, it means doing what needs doing and getting it done right.

Two organizations come to mind when thinking about distributed leadership. The first is McDonald's. While McDonald's built its reputation on standardization (same practices, pricing and menus throughout), its management embraces a concept called "bubble up." Such practice enables franchisees as well as corporate employees to surface ideas for consideration in the operation and product offerings of the company. Founder Ray Kroc's philosophy was that if the franchise operators make money, McDonald's makes money. That approach gives franchisees voice in influencing how the company develops new products, markets them and manages store operations.

A second example is HCL Technologies, one of the fastest growing of India's IT companies. CEO Vineet Nayar believes passionately that the success of HCL, now a global company, depends upon enabling employees to think, create and experiment. As Nayar writes in his new book, Employees First, Customers Second, he and his management team create conditions where employees can feel free to innovate. Nayar also holds himself accountable for results, even going so far as to invite feedback from employees and to post his own performance reviews on line.

McDonald's and HCL are not unique; many other organizations encourage decentralized leadership. Of those who do encourage it, you will find these defining characteristics:

Openness. Corporate cultures that are open are ones where individuals can make their ideas heard. In companies where openness prevails, you will find senior leaders walking the halls, eating in the cafeteria and meeting with employees frequently.

Focus. A focused enterprise is one where employees know where the organization is headed. Knowing such a direction is the "big picture" that enables people to see how their work contributes to the success of the whole.

Transparency. Senior leaders "walk the talk." They hold themselves accountable for their actions as well as the results their teams achieve. You see this most when things go badly; accountable leaders stand up and take the heat. This sets an example for others to follow.

Respect. Employees are considered colleagues and, ideally, collaborators. Leaders at the top are not the ones developing, building, and distributing products and services; employees do it. Senior leaders respect the contributions of others and actively encourage employees to come up with new and better ways of doing things.

Discipline. Contrary to what skeptics might say, leadership at all levels does not mean everyone does what he or she wants to do. While senior executives are open to ideas and methods that percolate from below, they are not obligated to implement all of them. Successful initiatives are rooted in doing what is best for the organization.

In fact, those companies that do not practice it are doing themselves a disservice, because a defining factor in today's global economy is the ability to respond to change, either to anticipate it or react to it. If an organization is too centralized, it sacrifices its agility; it cannot respond to customer needs in a timely fashion. Over-centralization leads to paralysis.

Jeff Immelt, CEO of GE, once told Fortune magazine he was judicious with the number of "my way or the highway" type decisions he made every year. If he made too few, GE would lose focus; if he made too many, GE would lose talented managers. Finding a balance between strong leaders at the top and distributed leadership throughout is a challenge that successful organizations manage.

By John Baldoni

 |  September 21, 2010; 10:13 AM ET
Category:  CEOs , Corporate leadership , Organizational Culture Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
Previous: The Tea Party reveals our leadership vacuum | Next: Tea Party: Informal leadership can only get you so far

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Why are the American People treating the terroist group known as the “tea party’ any different than the terroist group known as the “taliban”. Both groups use hatred and fear as their weapons of choice. Why?

Posted by: rkornegay1 | September 21, 2010 5:02 PM
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