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Leadership at a Crossroads: Addressing the Stakeholder Revolt

October 25, 2019

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NBA, AOC, Gen Y: Leaders -- Facing the Stakeholder Stampede

July 20, 2019

NBA, AOC, Gen Y: Leaders - Facing the Stakeholder Stampede | LinkedIn

 

 

 

 

 

 

A leader without followers is just someone taking a walk. John Maxwell                                                                                                 

What if the player-led seismic reordering of the NBA last week foretells the future of leading? Superstars LeBron James, Kevin Durant, and Kawhi Leonard created bedlam in professional basketball by choosing-up-sides and reforming teams. These days college athletes change schools like underwear. The new normal: usurping traditional leadership. The signals are unmistakable: The relationship between leaders and their stakeholders is changing. 

 

Yet as always, today’s big problems – immigration, income inequality, climate, political division – demand effective leadership. Problem is, many of today’s leaders are hemorrhaging followers.   The consumers of leadership are demanding a different model. The competition for top talent has intensified and stakeholder demands are more empowered. Is leadership doomed? Is it even possible?    

 

Amid high profile CEO ousters at places like Wells Fargo, CBS, and Uber, we have seen mass walkouts at Google, Amazon, and Wayfair along with charges of leadership malpractice at Facebook. This week the Board at Planned Parenthood canned their new CEO after eight months. Executive search firm Challenger & Gray reports CEO turnover among large public, private and NGO organizations jumped 25% in 2018, the highest since the CEO bloodbath of the 2008 great recession.  They conclude, “Boards are also strictly enforcing company policies regarding relationship and/or ethics issues. Eight CEOs left amid sexual misconduct allegations and another four due to allegations of professional misconduct.” PWC finds CEOs removed for ethical lapses rose 50 percent in 2018, exceeding those for financial performance or board struggles, both a first in their study’s history. Leadership is being viewed through a new set of lenses: #metoo, toxic culture, generational divide and stakeholder activism. Results still matter but the big risk for today’s leadership career is relationships.

 

In politics we see increasing division and dysfunction between moderate and extreme factions of each political party – AOC & squad vs. House Speaker Nancy Pelosi, between left and right across political parties and among branches of government. The cost of these broken leadership relationships is beyond calculation as elemental proposals to address pressing problems like immigration go nowhere. 

 

The more educated and politically engaged people – those who have historically been our leaders – appear most blinded by partisanship and most likely to distort the positions of their opposition. Recent research indicates the politically disengaged are three times more accurate in their perception of the other side. At a time when we desperately need productive leadership, our leaders hurl accusations and blame, expanding an ever-yawning partisan gap. Were our climate heating at the rate our political relationships are melting, we might not make it to the 2020 election.  

 

Underneath all of this is our generational divide. Millennials (Gen Y) want more say in setting their hours, working from home and in key decisions. The authors of New Power conclude: “What is emerging—most visibly among people under 30 – is a new expectation: an inalienable right to participate.” The cofounder of a nonprofit helping academically underperforming teenagers in gang-infested communities recently shared that the Crips and the Bloods are experiencing Millennial pressure – impatience to share power, participate and take on traditional hierarchy. Who knew even gangbangers are struggling with leadership in the midst of relational discord?  

  

Even in families, the leadership demands of parents have changed. Mothers who juggle jobs outside the home spend just as much time tending their children as stay-at-home mothers did in the 1970s and spend more time doing hands-on childcare – reading, homework, games/recitals – nearly five hours per week versus one hour and forty-five minutes in 1975 – and worry that is not enough. Fathers who live in the home are more involved than ever.

 

Yet, psychologists have raised alarms about children’s high levels of stress and dependence on their parents and the need to develop independence, self-reliance and grit. Research finds children with hyper-involved parents have more anxiety and less satisfaction with life. More engaged parent relationships are not translating into more resilient, self-sustaining kids. 

 

Either leaders have become inept over night or the nature of relationships has changed. Time to rethink leadership. 

 

Relational Leadership: A Stakeholder Model

 

In the face of these pressures, people have been rethinking leadership. Witness major leadership makeovers in Navy SEAL teams, open source software development and athletic teams designed to be less top-down, more team-focused and empowered, and operating more as a network and less as a hierarchy.  

 

Once upon a time, leadership was primarily about the leader. Win one for the Gipper, make the boss happy, follow orders and don’t ask too many questions, the boss may not always be right but is always boss. The boss was large, best-informed and in charge.  

 

Today leadership is primarily about the team. The language has changed: win for the team, take-one for the team, be a good teammate. Research reveals we are increasingly distrusting of leaders distant from the action and more trusting of those closer to the work or customers, experts or people like us. The democratization of information has hijacked leadership power and control. Today's fear is that leaders will misuse power to impose decisions and coerce actions counter to the team or other stakeholder values – to benefit shareholders over employees or customers, special interests over voters, parental-control over “free-range” kids.    

 

Today things move fast and traditional leadership can slow things down. In large, complex organizations the silos may block access to breakthroughs or key assets locked in budgets, reporting structures, and silo-centric metrics. Restructuring these relationships will require restructuring leadership.

 

I call this new structure Relational Leadership where the top priority is productive stakeholder relationships. It is designed for a world where being boss doesn’t count for a whole lot and may invite large doses of mistrust. Where work is not “commanded” but must be sold, persuaded, cajoled or even “bought.” Where the power to resist often trumps the power to assert. Where everyone has opinions they consider well-informed by unlimited access to supporting data – with little agreement on what is “fake.” Where the young are increasingly unimpressed with the old and proven, and discount them for lack of relevance to today’s reality. Where simultaneously there is concern about a lack of diversity and yet the diversity of race, ethnicity, geography, ideology/theology and opinions as to company direction may be more varied and oppositional than before. It is a world where 67 percent of workers self-describe themselves as “disengaged.”  

 

3 Keys Shifts to Forward-looking Relational Leadership

 

For relational leaders facing this world and dedicated to more committed, productive stakeholder relationships, these three shifts will be crucial:

 

1.    Exert greater intention on building productive stakeholder relationships.  Stakeholders can choose to commit, disengage or resist; commitment is the scarce resource. Sustainable change is a function of the strength of relationships. Relational leaders make building stakeholder commitment a strategic priority and a part of their vision. To paraphrase Stephen Covey, “Begin with the stakeholders’ end in mind.”

  

The era of the narrow, selfish vision – just shareholders or my political tribe – is becoming too risky and destructive. Amazon CEO Jeff Bezos famously positioned the empty chair in his meetings to physically represent the “not present” customer. Wonder where NBA fans were sitting during this latest re-ordering? Might Bezos now add a couple of chairs for his “not present” frustrated frontline workers and stakeholders worried about Amazon’s monopolistic power? How about an empty chair in the Nation’s capital for “not-present” citizens awaiting progress on urgent problems.

 

Today leaders are accountable to a stakeholder ecosystem. How you get results matters – and any number of stakeholders can block you. Leadership vision is not enough; shared vision – including how – is required to sustain forward movement. 

   

2.    Embrace the function of leadership: to exercise control by creating more leaders. It starts with shifting the focus from the leader to the team. Why? Because the demand for effective leadership always exceeds available supply.  In a rapidly changing world where sustainability and scalability are crucial, the central aim of the leader is to effectively expand and distribute leadership vertically and across silos – closer to the action. When Steve Jobs was dying, Walter Isaacson asked him about his proudest accomplishment at Apple expecting him to say the iPhone or such. Jobs surprised with his answer: “Here’s what I’ve been trying to tell you. Making products is hard. But what’s really hard is making a great team that will continue to make great products.” 

 

Leading a group of stakeholders means thinking less about hierarchy and more about productive relationships in a high-functioning network. The authors of Strategic Doing urge Agile Leaders to take the initiative to be responsible for the health of the network. Where is hierarchical thinking limiting network function? The biggest bottleneck may be members of our own team who think hierarchy rather than network. The big leadership question: What are you doing to create more leaders and greater leadership capacity among your team members? 

 

3.    Prioritize strategic opportunity management and stakeholder variety to avoid being blind-sided by today’s rapid change.  There are two types of blindness facing leaders in today’s world of rapid change.  First is to be so distracted by short-term problems that we become blinded to opportunity. If productive relationships are our most valuable and value-creating asset, then the job of leadership is to engage that asset against the best opportunities. Why do strong relational leaders focus more on opportunity than on problems? Opportunity is more strategic and forward-looking, anticipating what will be needed. Problems look back to the status quo and may be symptomatic of larger issues that are strategic opportunities. Often, we over-invest in fixing yesterday’s problem (think landlines) while under-investing in capturing tomorrow’s opportunity (think wireless).

 

Accountability for opportunities is higher-level than for problems. Relational leaders know problems handled as opportunities unleash more energy and commitment – and are more relationally productive. Problems point not only backward but at specific people and groups. Undue focus on who or what to blame often elicits a relational response of “fight or flight.” Gallup’s research indicates that 70 percent of team engagement is a function of the manager.  Seeking opportunity, co-creating, valuing and expanding our assets – all draw on positive energy. Framing challenges as “how to” rather than “ought to” taps “asset” thinking rather than “liability” thinking. It frames tough feedback as opportunity versus problem – putting provider and receiver of feedback on the same side of the table. Leaders are opportunity seekers. 

 

The second blindness comes from insufficient variety, which extracts a heavy price in exchange for the short-term comfort and convenience of working with people who see the world just like you. Donald Trump’s election as President, Black Lives Matter, the #Metoo movement, Millennials’ rejection of traditional management, the Brexit vote all surprised stakeholder groups insulated from variety. These were actually opportunities for those not blinded by short-term, problem-thinking. 

       

The authors of Strategic Doing point out that complex environments have greater variety or more variables. Ashby’s law contends that dealing with complexity requires an equal amount of variety. In a world where ideas, movements and products that once took decades to absorb, now happen in years, months or even days. Think of how quickly Uber restructured the taxi business. Beyond Beef’s beef-less burger, mostly unheard of a year ago, is now sold in 30,000 retail outlets worldwide.  The NBA restructured in about 24 hours. Most leaders and leadership teams do not have the variety of skills and experiences to manage this rapid complexity. Diversification is to financial risk what cultivation of diverse stakeholder relationships (age, race/ethnicity, viewpoint, background, political, urban/rural, cognitive diversity) is to leadership: a strategy for intentionally seeking opportunity and mitigating risk.

 

Things that have meaning are hard. For leaders, the challenge of leading is too important to settle for the ease of just taking a walk.

 

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