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Leadership for a Networked World

Probably the first people to think about how to develop leadership for their world were the Romans. In Rome they trained people in all the arts and skills necessary to be an effective proconsul in a far-distant province. Then, essentially, they sent the new proconsul over the hill or out on a boat and waited for news of the results of his reign.

The British adapted that model effectively in preparing people to send out to their empire, vaster in geography than the Romans, but tied together with more rapid forms of communication. And the British model became the model for training civil servants everywhere.

In most of the industrialized world, the basic model that we use for leadership is based on a command and control idea that the Romans developed based on what worked in their army.

That model has served effectively and it has served well, but the world is changing.

A 1997 study by Gallup and San Jose State University found that Fortune 1000 workers received an average of 178 emails per day. For two thirds of those workers, email is the preferred tool for internal communications. We use a variety of tools to help stay in touch, in fact. The study identified a range that includes mail, voicemail, email, fax and phone and found that 71% of workers use at least two of these while 16% use four or more.

There are other forces at work, too. Waves of downsizing and re-engineering have moved millions of folks out of corporate offices, only to be re-hired as consultants or vendors. They work outside the main company offices, but are linked by email, phone and other technologies.

Those "outsized" workers join an increasing number of telecommuters. Telecommute America counts 11 million of them, and Olsten Temporary Services says that more than half of major US corporations now allow some telecommuting.

Oh, yes, and let's not forget the vendors and customers who have access to corporate extranets, or who join the network mix by means of electronic mail.

This new world demands that we take a new look at how we do leadership and how we prepare leaders to be effective. We need to see what it is that leaders do, how that’s affected by overall trends in leadership and management, and how the Net and Web especially create new problems and opportunities for leaders everywhere. Then we need to make a stab at sorting out what all of that means.

First, though, let’s make a brief side trip to my underlying beliefs about leadership.

My first key belief is that leadership is not restricted to the top of the organization. Even in a command and control model, I don’t think it ever was. In every organization I’ve ever been associated with, and every one that I’ve read about, there were formal and informal leaders at all levels. What exactly is leadership?

The literature in the last 20 years has seemed to make a clearer distinction between supervisors, managers, and leaders. Often the refrain is, "we need more leaders and less managers."

That misses the point. It’s not that people are or are not "leaders." It’s that they have some leadership work to do in whatever job they happen to be in or whatever situation they happen to be in at the time.

The research on groups and leadership and management points to three specific kinds of roles for anyone who’s responsible for a group and its performance.

That being responsible for a group and its performance is the key thing that separates people with leadership responsibility from those who are individual contributors. It’s not better or worse to be a leader or an individual contributor. Some folks are suited for hunkering down and doing the work that they do exceptionally well, and passing that product on to others. They may work collaboratively with others. The thing that makes them individual contributors, however, is that they are not responsible for the performance of others.

When that happens, when a person becomes responsible for the performance of a group, then the person has three kinds of work to do.

One of those kinds of work is supervision. Supervision deals with tasks and individuals. You are doing supervisory work when you counsel someone who works for you about a performance problem, or when you work in a training mode or coaching mode to help that person develop skills or work more effectively.

In addition to supervision, there is work that relates to management. Management work is about groups and priorities. When you’re doing management work, you’re concerned with scheduling and budgets, and other balancing acts. You’re concerned with achieving short-term goals through the group. That makes you responsible for how that group works together and the interpersonal issues that make them effective or ineffective.

Leadership work is about purpose and change. When you’re doing leadership work you’re concerned with why you and your group are here, what you’re doing, why, and you’re concerned with how that will change over time.

Everyone who has group responsibility does al three of these kinds of work. The mix varies from job to job and situation to situation. It varies up and down the hierarchical pyramid. Folks at the top of the pyramid tend to have more leadership work to do and less supervision, but they have some of both along with a bit of management work.

Folks at the very bottom of the hierarchical pyramid, first-line supervisors, have lots of supervision work to do, but also do management and leadership work.

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What is Leadership Work?

Leadership work involves three clusters of tasks. Leaders establish direction and purpose, communicate that direction and purpose, and maintain the thrust of the group.

Establishing direction and purpose is "the vision thing." In stable organizations within stable industries, this is more about reviewing purpose than it is about establishing direction. In more volatile environments, leaders need to work hard at establishing both direction and purpose for their groups. That’s true whether you’re at the CEO level or the newest supervisor on a production line. In both situations your leadership work involves establishing the purpose and establishing how your groups performance and behavior needs to change in order to be most effective. To do that effectively you need to be aware of the environment and its key forces. You need to know how the environment is changing.

When you’re doing leadership work, one of the things you need to do is to be able to establish effective purpose and define effective direction. You job doesn’t end there, however.

You also need to communicate what that purpose and direction are. In order to do that effectively, you and other leaders need to understand the communication tools you have available and how you can use them most effectively.

Some of the most effective writing on this over the last several years has been done by Harvard professor John Kotter. I remember how excited I was reading his first major work, "The General Managers". I particular loved how Kotter zeroed in on the ways that effective general managers use occasional incidents and chance encounters to communicate effectively.

On the one hand, that was different than everything I’d read about effective time management and formal communications channels. On the other, and this was what was exciting, Kotter’s book effectively described what I saw effective general managers doing.

Communicating is not enough. There’s also the need to maintain thrust. If you want to use the "M word" – motivation – that’s OK. But the leadership role involves understanding the things that happen to your group and exhorting, informing, adapting, and supporting the performance necessary to deal with a changing environment.

The environment issue is important. The key change that’s been going on for us in the last several years as networks have become more important is the change in the environment in which leadership happens. But there’s another change that works with the technology. That’s the overall change in the way we look at and think about organizations.

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Thinking About Organizations in the New World

For a couple of thousand years, the basic model on which we built our organizations has been the one developed by the Romans when they put their armies together. To anyone who has read Caesar’s Gaelic Campaigns, the structure of most modern organizations is an old, familiar one. The models endured for so many years for a simple reason: It works.

What’s happening in organizations is a lot like what’s happened over the last 20 years in the way we think about systems generally. For years our mathematical and intellectual models of how systems work were based on a kind of mathematics called linear equations. In their simplest form, linear equations have a few simple variables and tell you that the result goes up or down when X or Y goes up or down. It’s a little bit more complex than that, but not much.

One of the reasons that those were our dominant models was that that was the level of mathematics that we had the power to compute. We could understand another kind of mathematics, non-linear equations, but they were almost impossible to handle with manual calculators and the computing power wasn’t there to effectively model the systems we saw.

It was actually a case of the old saw that "if the only tool you have is a hammer, every problem looks like a nail." We use simple models because we have the tools to handle simple models. Since the models work, there wasn’t much need to look for other things.

But almost every person who’s thought about how organizations work has come to the conclusion that linear models don’t work. We just never said that. I can remember being a young manager and studying quantitative methods. The problem I had when I took those equations back to the workplace is that the target always seemed to be moving around. One or another of the variables looked different every time I tried to compute or plan.

You hear that in almost every organization that tries to set goals or prepare budgets. We get around that by creating "scenarios." In this sense that means best-case, worst-case, and most likely.

In the late 60’s and early 70’s, scientists began to look at non-linear systems. Those systems are far more complex than linear systems and we could look at them because we suddenly had the computing power to be able to do so. That’s where the talk of chaos theory and complexity theory come from.

Those concepts have affected the way we think about organizations.

The old model we had, based on what the Romans started, was a simple, linear, hierarchical, and mechanical one. We put the people at the top of the organization who had the most knowledge that could spread across a variety of areas. That worked because we didn’t have the methods to spread information around.

We created functional channels, what have been called stove-pipe organizations, to move information up and down and across to other stove pipes and down those as well. We did that because we did not have the means to move the information more effectively, quickly, and cost effectively.

We also structured our organizational thinking on the model that’s been dominant since the late 19th century – the engineering model. We talked, in fact, about organizations as "finely-oiled machines." We used terms like "gears meshing" and "designing effective organizations." We did that because it’s the model that worked and it worked well with the concepts we had.

As we borrowed things from science and as our environment has changed, we started to think about organizations differently. We’re starting to see organizations as a variety of organisms. An organism is a living thing that’s part of a community or organisms. That thinking sees organizations as more complex, dynamic, and interactive than the older, more rigid, hierarchical vision.

That vision also interacts with the environment where networking and communications technology have become readily available, inexpensive, and easy to use.

This becomes a bit of a chicken and egg debate. Is it the networking and communication technologies that foster the kind of communication that change the organization? Or, do we change the organization by putting in the technology? And it seems, that the answer to both of those is, "yes."

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Taking a Look at the Net and the Web

The Net and the Web are not just the Internet and the World Wide Web. They also include technologies like telephone and fax and electronic broadcast. They are all of the ways that we become connected with other people. Over the last two centuries, and especially within the last 20 years, communication has developed a broader reach, greater speed, and easier access.

That the way we communicate and share information, data, and knowledge is nothing new. The Romans knew that when they sent their proconsuls over the hill. People in the late 18th century knew that when they communicated by letters. And 19th century people understood things differently when they could send trains rocketing across the continent.

Telephone and radio didn’t only provide a neat way to talk to each other, they changed the fundamental nature of how we worked in our individual lives and in our organizations. The Net and the Web are doing the same thing today.

Leadership Tools

There are three basic sets of tools that people doing leadership work need to use to be effective in today’s world. They’re electronic mail, collaborative applications, and hyperlinking (the Web).

Electronic mail is the most pervasive of the basic Net technologies. It’s the one that people are most likely to use and the one they’re most likely to rate at the top of their effectiveness list. To do leadership work effectively today, you need to know about how to use electronic mail effectively.

One problem with learning to use email effectively is that most folks seem to think you don't need to. Email just looks so easy. There are some things to keep in mind though.

Make sure you're clearly identified. If you have an alias or nickname that goes with your mail address, make sure it's descriptive so folks know that mail is from you.

Learn the art of writing effective subject headers. The more specific your headers are, the more likely your messages are to be read and generate the action you want.

Put the important stuff at the top. Studies tell us that email users don't scroll down unless they see a compelling reason to do so. That means that your important content (or an indication that something important is farther down) needs to be in the first 10 lines or so of your message.

Use your signature line to give important contact and other information. Include your phone number and email address at a minimum. Remember that over half the email that is read is printed out. Make sure folks can contact you even if all they have is a printout of your message.

Once you've mastered individual email, pay attention to using it for group work. Encourage folks to use email to share good news and bad, questions and solutions. Use email to a group to broadcast praise for an individual.

One of the most effective examples of this sharing is happening at Quaker Oats. There, a daily email, dubbed "Oatmail" conveys important information to everyone who's connected. Quaker Oats folks can also ask questions of top management via email. Some of those are answered in the public email newsletter.

Email is also the way that many leaders keep up with current events. Electronic, email based newsletters have become an essential way to gather information and news.

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Push technology applications (that delivers news to the desktop) like PointCast are a sophisticated variation on basis news delivery that combines both email and web technology.

Remember that your public website is also a communications tool. Your own people will be checking it out, especially in times of crisis or uncertainty. When IBM announced that it was purchasing Lotus, people from both companies jumped on the web to check things out. In the first several hours after the public announcement, 80% of the visitors to the IBM website were from Lotus or IBM.

We’ve also developed a number of what I call collaborative applications over the last few years. Sometimes those are referred to as groupware, sometimes they’re just the simple administrative support systems that ride the network, making it possible, for example, to check several people’s schedules simultaneously to select a meeting time.

Groupware applications do three things. They let members of a workgroup share a common body of data or information. They allow members to track workflow. And, perhaps most powerfully, groupware allows members of a group to work together on a joint project.

Some of the more sophisticated applications handle scheduling and workflow over internal networks, but they're only the tip of the iceberg. Contact and information managers such as Microsoft Outlook, Day-Timer, Sidekick and others now routinely allow joint scheduling of meetings over a network.

New products such as Wintronix communications suite allow folks to use a common whiteboard over either a public or private net. And links between email and pagers can alert folks when something important comes up that requires their presence.

And there's the old warhorse of collaborative applications: Lotus Notes. It's been in use for years by companies like Texas Instruments who credit some spectacular savings to the Best Practices sharing process that uses Lotus Notes as a platform. Recent updates to Lotus Notes have made it easier to use over corporate intranets and the internet.

Increasingly the communications lifeblood of organizations flows over networks using communications and collaborative software, but there's another technology that helps all of this happens more effectively.

Hyperlinking, especially hyperlinking over a network has given us new and more effective ways to link information.

I’ve chose to use hyperlinking, rather than World Wide Web, as the key descriptor here. The World Wide Web is one application of hyperlinking. It's an important application to be sure. The effective leader in the Digital World certainly uses the Web as a way to find the information that is the stuff from with vision and direction grows.

Hyperlinks on the Web combined with personal news services are powerful ways that leaders can sift through the mass of information and news and data and find the important stuff. Personal news agents are an emerging technology that will do this even more effectively.

But hyperlinks are not limited to the Web. We can set up hyperlinks within documents sitting on a single computer. Why is hyperlinking so powerful?

Hyperlinking is powerful because it enables individuals to use information in a way that is intuitive, comfortable, and effective.

That’s because hyperlinking mimics the way the brain works. The human brain has been described as, "natures connection-making engine." It’s impossible for you to sit in one place and listen to a speaker, or even read an article without having your mind jump off from different points to ponder, speculate, and investigate.

Well designed hyperlinks help you do that more effectively. When you put those hyperlinks on an internal or external network system, the power increases exponentially. Think of links as a way to really empower people, by giving them the ability to make informed decisions by connecting them to information and to each other easily and naturally.

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A Living Example: Marshall Industries

There's probably no comprehensive, perfect example out there of an organization using all the tools and being dramatically effective. The issue of Leadership itself is too complex for that and the environment is changing too fast. But it pays to take a few moments and look at a company who has integrated Networked World thinking into its leadership and strategy.

The company is Marshall Industries.

According to Vice President, Bob Edelman, the story has to begin with the business and has to begin back before the Internet and World Wide Web were an important part of anybody's thinking. That's because one dominant characteristic of Marshall's view of its own Network is that it is enterprise wide and strategic.

So, let's let the story begin around 1990. At that point, Chairman, Gordon Marshall and new CEO, Rob Rodin were confronted with a business problem that many have faced. The problem was pretty simple. While Marshall had been successful for years, it was successful in an industry that was beginning to change radically.

Marshall Industries is a $1 billion plus distributor of industrial electronics based in El Monte, California. It’s part of the semiconductor business. In 1990 that business, which had been in high growth mode, was beginning to mature. Industry margins were dropping adding pressure to reduce costs.

At the same time, Marshall Industries was what Edelman calls, "sub-optimized." It was made up of lots of different pieces, but the pieces often worked quite independently. Warehousing had its own concerns, as did the field sales force. And the folks who handled administrative operations had goals that sometimes conflicted with both.

Just like in lots of businesses, what often happened was that the people in the individual specialties cranked up their efforts for their own best interest at the expense of other interests and perhaps the interest of the entire company. As Edelman points out, it was a perfectly rational system.

"We would want them to do one thing, say, concentrate on a particular product line," says Edelman. "But folks would look around and realize that they would make more money, or get more praise if they did something else. So they followed their best interests."

So, Marshall and Rodin took a look around for an answer. But it wasn't the Internet or any other net, not yet. There were leadership issues that needed to be addressed first.

Like many other businesses, Marshall Industries took a look at Deming's Quality Principles for improving both quality and innovation. They decided that was the place to start because that would make a major change in the company.

The first step was education. People who worked for Marshall across a range of functions were educated in the Deming principles. But that wasn't enough.

Step number two was to modify the compensation program. At that time Marshall was like most industrial distributors. Compensation programs tended to reward effort in narrow spheres and large commission rates on the sales end tended to warp things in a particular direction. The compensation program that Marshall put in place in 1992 is still around today. It simply pays people by means of salary and a sharing of corporate results.

That allows people to concentrate on the customer and on making good business decisions. It’s s part of what Edelman describes as a need to align the company structurally with its purpose.

The result of the quality principles and the change in the compensation program was that people began to make good business decisions. They made those decisions in a variety of places, in Human Resources, and Operations. They made those with an enterprise-wide-type perspective (including both people and technology) and it's here that the net begins to kick in.

That's because as decision making began to align, the information flows became more important. And it appeared that this net technology would provide some of the answers for helping Marshall work the way they felt they should.

It was 1993 and the Internet was not yet on the cover of Time Magazine. Sure, folks were emailing back and forth and several businesses were connected. But this was not a big interest yet. The folks at Marshall Industries decided, though, in early 1994 that this Internet was going to be a business-changing event in which they must participate if they were to be more effective.

That decision was a "vision" and it outlined the direction for change.

To be strategic, all of this needed to tie back to business purpose, to the need to reduce costs and increase efficiencies and make sales more effectively. The outreach side of that was one of the very first corporate websites in July of 1994.

It wasn't the first time Marshall had been technologically innovative. The company had been using Electronic Data Interchange (EDI) for over 10 years. But EDI is a technology that presupposes that there's already a strong relationship between parties. It doesn't allow for anything spontaneous or for investigation, and it only really increases efficiency in one or two parts of the business.

EDI didn't (by itself) fit the vision that the Net would be important for the total business. The idea behind Marshall's first website and everything since, according to Edelman, was "electronic commerce in its broadest sense. Not just selling, but creating intimacy with the customer." And sharing information internally.

That search for intimacy and a broad look at commerce began almost immediately with serious and continuing efforts to get information back from the people who visited the site. "We saw right away that we didn't want people to just get information from us," says Edelman. "We wanted them to interact with us so that we learn things about them and they learn things about us."

That led to various technological ways for visitors to tell Marshall what they thought. They could share suggestions, make requests, give reactions. It also led to some of the first focus groups very early in the process to find out what purchasing agents and engineers wanted from a supplier like Marshall.

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What was learned from those focus groups has become a driver for changes in the design of the site and for the development of new services and ways to communicate.

In the beginning the site had product information only. Then more information services.

In 1994 Marshall began integrating databases with its Web technology to provide custom solutions and active notification. By 1995, Marshall was beginning to offer the news services that would ultimately become the Education, News and Entertainment Network.

By the end of 1995, Marshall was providing a broad array of information in dynamic form to its customers as well as news and information to the industry at large. It was taking orders and responding to inquiries using Net technology. Internal systems worked well inside the company. It still wasn't enough.

Bob Edelman again: "What we had was fine for spontaneous users and for regular visitors, but strong business partners need more than that. That's why in early 1996 we began looking at an Extranet." Edelman is quick to point out that all of this was driven by the original strategic vision and normal business purposes - the need to reduce cycle times, to provide quick response to competitive initiatives, and to link information inside the company with key partners along the supply chain.

An Intranet was already in place for employees where they could gather information for commercial purposes, but also get training on a variety of issues including human resource and personal growth items. It was time for an Extranet to link the strong business partners and the internal people together, and for even more innovative uses of the technology. One key area of communication is training.

Marshall's Net seminars help meet goals of education, training, and communication from a studio in El Monte. The company can offer audio and video as well as pure information based on customer needs. The seminars were originally offered only to Marshall employees, but were soon expanded based on customer interest.

Edelman is quick to point out that "customer" in this sense is the broadest definition. It includes customers both inside and outside the company and people who may be customers for information but not necessarily, yet, for products.

The method of delivery is constantly improving. Marshall has recently discovered that more than 50% of the users of its training facility are coming in on lines of 56 kb or better. That allows a degree of use of multi media that would not be possible if their connections were of lower quality.

Marshall has used its net to train suppliers, employees, customers, and others. That’s part of the normal course of doing business and making yourself the supplier of choice. But they’ve become so good at it, and gotten so many requests, that Marshall starting to offer training services outside its normal supply chain through its ENEN subsidiary.

All in all, Marshall Industries has done an excellent job of establishing direction and purpose, communicating the vision, and maintaining thrust. They've seen the Networked World as an opportunity-riddled environment and also as a way to achieve corporate goals.

That's what leadership is all about. In the Networked World, the tools may be different, the environment and direction may change, but the basic work of leadership remains the same. It is an opportunity and a challenge.

To seize the opportunities, learn how to gather the information that helps establish your vision. Learn to use the network tools to communicate and maintain thrust. And keep growing and changing along with this exciting environment.

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