In my socially aspirational post university days, a group of us used to have a wine tasting evening most weeks. Someone would choose a country and we’d all tip up with a bottle, share it round and make a few notes on what we liked. It was a self organising and rather loose affair which petered out when we realised that beyond the distinction of ‘red‘ or ‘white‘, we were rather out of our depth. Some things are best left to the experts.
The Cooperative Bank has been in the news again this week: after several disastrous takeovers, it was bailed out by the government, joining the list of taxpayer funded institutions let down by systemic leadership and governance failures. In particular, it’s due diligence around takeovers was described as ‘cursory‘ and it’s attitude to risk misaligned with reality. Clearly out of their depth. Which is a shame, because when i had a bank account there, i assumed they were experts.
It’s not an easy read for the Board or the shareholders. Except that the Cooperative doesn’t have shareholders, because the clue is in the title. Questions were raised about whether the model of authority used, the fact that it’s more democratic, was inherently implicated in it’s failure. Indeed, some commentators have hinted that failure was inevitable.
It got me thinking again about models of authority and control. Social Leadership is a style designed to complement more formal styles, but exercised primarily in social and semi formal spaces. It’s consensual, through the permission of the community, because, in the Social Age, that’s where we create meaning, that’s where we curate our reputation and build our authority. There’s something democratic about Social Leadership approaches in that they are rooted in the citizenship of those communities and authority is not assured but granted.
Hierarchical models are simpler in that the spans and lines of control are mapped out and clear: there is little room for ambiguity. But that authority is founded upon position, not reputation. It’s inflexible, but can of course be highly effective, both through it’s clarity and also lack of ambiguity. That’s why it’s a style we find in the military, where ambiguity is a bad thing and people sometimes talk about respecting the badge, not the person. Social Leadership is very much about respecting the person.
Again, i’ll stress that the two are complimentary, not exclusive: someone with a highly formal role within the military may also have a strong social leadership role through their curated actions. Increasingly we see this on Twitter, where prominent military figures are carving out strong social leadership roles too. This blurring between formal and social spaces is a core feature of the Social Age, leading to both opportunities to enhance capability as well as room for dreadful mistakes as we fail to navigate the pitfalls.
The rise of the Social CEO reflects this trend: formal authority enhanced through Social Leadership. When this happens at senior levels, the personification of the organisation, the trend of associating the brand with a few highly visible individuals does not come without it’s risks though: we’ve seen senior and visible military figures disgraced (and in some cases transitioning to entirely social roles) and in the case of the Cooperative Bank, the prosecution of their very charismatic and visible Chairman for drug possession cannot have helped.
At a mid level, we see greater potential for Social Leadership to subvert formal and hierarchical channels: as with Mozilla recently, where the untenable position of the recently appointed CEO was partly subverted from within by a highly visible socially prominent executive with strong socially moderated power. Despite her gracious and courteous attempts to avoid subverting his authority, the result was inevitable.
But it’s not just the case of hierarchical and social models existing side by side: in cooperative ventures or collaborative leadership styles, the democratic model is built into the hierarchy itself. They are far more political affairs with decision making being far more consensual: a fact picked up in the report on the Bank’s failure. But does this have to be the case? Are collaborative models weaker or less responsive than hierarchical ones? Or was the failure of the Coop just a failure of leadership, irrespective of the nature of the model. Certainly we’ve seen a wide range of financial service organisations failing in this space, with no apparent and obvious correlation to nature of model used.
There are plenty of examples of highly successful cooperative models: here in the UK, the John Lewis Partnership is one of our most cherished and successful brands, exemplifying both high quality retail and an enviable model of social responsibility and reward. Certainly there was no outcry when everyone in the business (all the Partners) received generous bonuses this year (in contrast to the hand wringing and recriminations when the shareholder (and partly government owned) High Street Banks did the same.
We also see different behaviours exhibited by the teams themselves: less of a ‘them and us‘ attitude, more of an ‘us and us‘ approach, and it’s self regulating too. If someone abuses the generous social benefits, it’s likely to be the community itself that reprimands them in the first instance.
I’m liberal and progressive by nature: i like the ways that Social Leadership can subvert and refine formal hierarchies. I have little time for inane process that faces inwards and drives out innovation and creativity: but i recognise that there’s a balance. Social and formal leadership styles should co-exist (indeed, I sometimes work with military organisations trying to take on board the benefits of social learning and leadership approaches). Why? because the ecosystem is changing.
There may well have been a time when one dominant style was appropriate, but as our ecosystem evolves, we have to adapt, and today, when technology and social styles have closed the gap between formal and social, we have to be effective in both.
As to whether collaborative, cooperative, hierarchical, partner or shareholder owned models are superior? I think that’s a red herring. There are exemplary models of both, but that’s a red herring too. What we need to aim for are authentic models of leadership based on both formal and social power. Formal power is granted through hierarchy, social power through community. One is positional, the other consensual. In the Social Age, we operate in both spaces, for work and play.
The NET Model of Social Leadership defines nine core skills for Social Leaders: curation, storytelling and sharing, community, reputation and authority, co-creation, social capital and collaboration. These skills sit alongside formal ones: they’re designed to help you take a stance, to do what’s right and to do so empowered by the power of community.
Cooperative and collaborative ventures may well be more socially responsible, but it’s not an exclusive club: many shareholder owned businesses are equally so (although there is a different conceptual foundation). Either model can be effective, but both may need to employ different models of decision making and consensus building. It’s possible that hierarchical models are stronger and faster, but that doesn’t make them better.
Our wine tasting club kicked along quite happily with a fully democratised decision making process. Consensus agreed through a sedate evening and gentle reflection. Indeed, it broke up through general consensus too: a self deleting activity that formal organisations and processes are notoriously bad at achieving. So i could argue it was highly agile, even if totally social.
A key problem with formal hierarchy is that, whatever it’s foundations, it often becomes self important and self sustaining, with it’s primary focus being the status quo and the maintenance of power and positional authority. When i typed ‘positional’ then i nearly mistyped ‘poison’, which was auspicious, because lethargy is poisonous in the Social Age, where agility is the only thing that will let you unleash creativity and innovation, which will let you thrive.