In an era when startups are causing untold disruption to traditional businesses and developments in technology are sparking continual innovation, management that is built on a conventional chain of command is no longer the most appropriate option.
In order to create an environment of inclusivity and collaboration that can adapt to changing consumer needs, leaders need to create an agile vision for the future in which employees feel they have a part to play. But what does it take to be a modern leader?
There have been a number of headline-grabbing examples of new leadership styles recently – both radical and controversial in equal measure. Last year, American online retailer Zappos scrapped its management hierarchy to make employees equal; it introduced a ‘holacracy’ model where staff self-manage and come together through ‘decision circles’.
The move led to 50 employees quitting earlier this year but CEO Tony Hseih has stuck by his decision, saying it sparks an entrepreneurial spirit in employees and moves the company forward.
Meanwhile, Dan Price, CEO of American credit card processing company Gravity Payments, raised the minimum salary for his staff to $70,000 (£49,000) a year. In China, telecoms brand Huawei installed three rotating CEOs, each of whom leads for six months at a time to enable more decision-making responsibilities to trickle down to global teams.
Huawei’s CMO Glory Cheung says this new way of operating is required because “changes in society, open source innovation, social production and crowd culture” mean the business has put “more thought [into] how the company can be organised in a new era”.
Aside from the media coverage that these generate, there are also new business strategies that support them, which go beyond simply being experimental.
Break conventional leadership models
At a lecture on creating a 21st century tech company last month, Cheung introduced the brand’s new operating model, which she calls a global innovation hive. She explained that “things change from the traditional authoritative model of the previous dominant [structures] to new opportunities” because the brand believes in “the power of collaborative intelligence and wisdom”.
This means the rotating CEOs handle “more significant issues” within the company, resulting in “a lot of decisions [being] made by different teams”.
Research released last month by the Employers Network for Equality and Inclusion supports this way of thinking. It states that while ‘command and control’ leadership has dominated organisations historically, they are being forced to rethink management styles to adapt to a changing and increasingly diverse world.
The study suggests more inclusive and supportive leadership models contribute greatly to employees’ sense of belonging, engagement levels and job satisfaction (see The benefits of inclusive leadership).
“You have to make sure it’s not a command and control structure,” says Jason Stockwood, CEO at insurance company Simply Business. “The old-school hierarchy where you prioritise the highest paid opinions has been inverted. If you want the best people to work with you, you have to give them the conditions for their success rather than try to find what success looks like for them.”
Simply Business came first in The Sunday Times 100 Best Companies to Work For ranking and Stockwood won the best leader award, with 91% of the company’s 350 employees saying he inspires them.
“The best way to drive meaningful business growth is to ensure your approach never gets stale. It’s important to have the right people leading and driving the business“
Rachael Pettit, Uber
During his first year at the business, Stockwood reorganised more than half of the company’s staff to enable him to implement his model. He says: “Once you start to set the vision for the business, you need to get the right managers in place. There is no point in creating a values led organisation if the senior people don’t live those values.”
Stockwood also changed the cultural structure so that employees work in cross-functional teams to solve problems rather than having traditional marketers working on marketing and finance people on finance.
He gives people the “freedom to choose the things they work on and how they work” and then measures them simply on their output. “If you give people that trust and those conditions, it’s powerful what you get back,” he adds.
Encourage leadership from below
Cheung compares Huawei’s structure to Silicon Valley models, which she describes as typically having an innovation guru, who sets the vision for the company, gets venture capital for the business and then gets engineers to deliver a product. Japanese and South Korean companies use a conglomerate model, she says, where key components are controlled within the company.
At Huawei, it is the responsibility of global teams to come together and collaborate; project leaders do not necessarily come from its Chinese headquarters but from global offices in India, Russia, Europe and the US. Chueng says: “It is about [capability]; it’s not to say the HQ [leads and is] going to control the teams.”
“The leader cannot call it all of the time,” says Simon Haslam, the Institute of Directors’ programme lead for its ‘Director’s Role in Strategy and Marketing’ course and co-owner and director of FMR Research. “Others can call it in the moment as consumers are looking for in the-moment responses.”
Haslam believes that leaders require a “restlessness of style” and “the ability to be reflective and circumspect” in order to be visionary in today’s environment.
He says: “In terms of complex markets and turbulence, the degree to which we can be certain about things can [become] reduced. Reflective leadership is a useful quality and with that is the ability to think on a few levels simultaneously. “
Haslam describes this as an “ability to put the energy and focus on delivering present business models as the same as being able to enable the organisation to progress to future business models”.
Being visionary goes beyond communicating the ‘what’ and should reflect the ‘why’, according to Haslam. He explains that the assertion of the ‘what’ is sometimes useful but the understanding of the underpinning rationale, the ‘why’, is probably more valuable.
This, he says, is because “there is a greater interrogation from employees of the integrity of the leader and what that means for the organisation”. “Leaders who understand the value set and the ‘why’ behind organisations resonate more capably.”
Open yourself up to scrutiny
At flight comparison website Skyscanner, brand advocacy and the vision for the business are made clear to employees. Chief executive Gareth Williams ensures that he attends employee inductions, holds monthly ‘town halls’ where staff can question him, blogs regularly and presents updates to staff. The brand ranked fifth in the 2016 Sunday Times 100 Best Companies to Work For, which reveals 87% of staff find Williams inspiring.
Williams also delivers a five-week programme for high performing employees, educating them on how to think like an entrepreneur, while the brand’s chief operating officer delivers a seven-week programme where emerging leaders can learn more about leadership in practice.
“To understand what the business is about is to understand Gareth’s initial goals for Skyscanner, which by and large remain true today,” says Ruth Chandler, director of talent at Skyscanner. “He is as passionate about Skyscanner as he was in our early years, and is open to hearing ideas and thoughts from people across the business.”
“If you want the best people, you have to give them the conditions for their success“
Jason Stockwood, Simply Business
The CEO of print services specialist Webmart, Simon Biltcliffe, records a weekly ‘bizcast’ for employees at its three offices in the spirit of being open, honest and “having one version of the truth”, where staff have access to unedited meeting notes and financial results.
Webmart runs a “Marxist-capitalist” business model where capitalism creates the value and Marxism redistributes the wealth, Biltcliffe claims. The company retains £400,000 of profit to reinvest in the business, anything between £400,000 and £1m is split between the board and its 41 employees and anything over £1m goes to employees. The average income is £80,376.
Biltcliffe says: “The best thing you can put money into are the people because they are what a business is. When you have people strongly incentivised to work together, do the right thing for the right reasons and benefit from it, it takes bureaucracy and politics out of the way.”
Trust is core to his leadership style and the business, which he believes is an efficient, lean and effective way of running a company. Biltcliffe also benefits because he does not have to “micromanage everything”. It also has an effect on customer retention as they stay with the brand longer because “they feel the difference from the start of the interaction to visiting the office”, adds Biltcliffe.
Breed an entrepreneurial spirit
Inspiration is a major part of being a leader today but it is also important to follow up on the effect this has on employees.
Instilling an entrepreneurial spirit has been a key part of the businesses cited and nurturing that can be beneficial to the future success of companies. Not recognising the value of staff can have the opposite effect.
The UK Commission’s Employer Skills Survey, which examines the experiences and practices of more than 91,200 employers and the skills challenges they are facing, shows that employers may be experiencing a skills imbalance where they perceive staff are being under-utilised.
Nearly a third (30%) report that they have at least one employee who fits this description within the business, with two million workers believed to be under-utilised.
The report warns that under-utilisation represents not only a waste of individuals’ talent but could be a missed opportunity for employers to increase performance and productivity, improve job satisfaction and employee well-being, and stimulate investment, enterprise and innovation.
Chandler at Skyscanner says: “While it’s important that inspiration comes from the top, as a business we are relatively flat in terms of hierarchy, and it’s equally likely that inspiration may come from a small team working on a pilot project, or a personal story from an employee who has worked on an aspect of Skyscanner for many years, and looks back on our evolution.”
Employees are also empowered to “take charge of their own personal growth”, whether that is through external events and courses, or joining one of the employee-led courses the brand holds internally.
Measure progress and achievement
To ensure that Webmart empowers staff, the company measures the intellectual and emotional well-being of its workforce, as well as the financial value it creates. The principle is that as a leader you cannot manage what you do not measure, but most businesses only measure the financial results.
To support staff intellectually, Biltcliffe ensures they are given the right training to develop them to the best of their ability. Staff give feedback anonymously twice a year to tell the company how well they feel they are being developed.
To measure the emotional, Webmart has a ‘happy-o-meter’ that tracks emotions in real-time, as people can press emojis on iPads in the office that represent how they are feeling as they pass by.
“More businesses are going to have to come up with a solution to getting the right talent,” says Biltcliffe. “If there are companies like us delivering an exceptional return on our marketplace, we get the best talent. Unless you can compete with that, you will have to come up with something that is better.”
The visionary leadership of these companies goes beyond a business model that can be seen as a gimmick. Having a strategy that works in the present and the future can combat the challenges of disruption from new entrants and adapt to changing consumer behaviour.
Adapting the culture to be inclusive, to allow for skills to develop, adds to the success of a company in today’s diverse business environment. Traditional models of leadership are not always best.
“The world is coming towards this way of working,” says Biltcliffe. “In a marketplace of print, which has been through both structural and strategic challenges, we have never borrowed money, we don’t need to sell [the business] or do an IPO, and we don’t need to do anything that people say is the conventional wisdom.”
He concludes: “If you want to survive in the mid-term, you have to offer a more innovative way of working and being as a company.”
Visionary leadership advice from this year’s Vision 100 revealed
“I firmly believe in leadership at every level, encouraging people to think for themselves, treat every penny like it is their own and take real accountability for the decisions that they take and recommend. Driving this accountability and ownership is the biggest challenge we have as leaders.”
Helen Warren-Piper marketing director, grocery, Premier Foods
“By doing things differently and believing in something [the same people can] drive a very different performance.”
Lysa Hardy, chief commercial officer, Holland & Barrett
“I’m creating a new model where we will become content IP owners and generate revenue from our investments. It is a new model for us and for the industry and has required a whole new way of thinking.”
Laura Henderson head of content and media monetisation, Mondelēz international
“Fail fast, learn and iterate. The best way to drive meaningful business growth is to ensure your approach never gets stale, so it’s a piece of advice I actively put into place every day. It’s important to have the right people leading and driving the business forward that are both highly skilled and a strong cultural fit.”
Rachael Pettit marketing lead, UK & Ireland, Uber
“Instinct is a powerful tool and nobody knows a brand better than the people who manage it day in, day out.”
Kevin Sinfield head of brand marketing, Taylors of Harrogate
“Entrepreneurs and founders are optimists. I love that quality. When I worked at Northern & Shell, Richard Desmond was a powerhouse. He was incredibly mentally resilient as well five steps ahead of the rest of the room intellectually. But, even more than that, his standout quality was optimism. He never gave up on an idea and he didn’t let you give up on an idea either. That environment forced me to realise how much more becomes possible when you set the bar at ‘impossible’.”
Mimi Turner marketing director, The LAD Bible
The benefits of inclusive leadership
A report commissioned by the Employers Network for Equality and Inclusion, sponsored by the CIPD, the professional body for HR, together with Santander, EY and Affinity Sutton, looks at organisations’ understanding of inclusive leadership.
It is described as a sense of belonging, respect and support within businesses. The report delves into the perception of its practice in 11 participating organisations and looks at the link between the perception of inclusive leadership and self-ratings on performance, productivity, satisfaction and well-being.
The survey of 966 first-line supervisors and non-management staff and 61 interviews from the participating organisations, reveals the correlation between the degree of inclusive leadership and self-ratings of performance, satisfaction and engagement is 0.89 out of 1.0.
In statistical terms, any correlation higher than 0.5 is considered a good relationship and one approaching 0.9 indicates an invariable link between two things.
The research also shows that there is a strong relationship between the perceived presence of inclusive leadership in an organisation and employee self-motivation and performance. Additionally, in organisations where employees believe there are high levels of inclusive leadership they are more likely to regard their leaders as having a positive influence on their productivity, satisfaction and engagement.
Organisations with the highest levels of perceived inclusive leadership have a tendency to place a higher priority on the ‘explore’ aspects of organisational strategy, for example developing new products, services and markets, than on ‘exploit’ aspects of strategy such as focusing on the control of costs and procedures.