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by: Gifford and Elizabeth Pinchot
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.
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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.
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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.
Working Models
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.
Free lntraprise
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.
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