Collaborative Leadership

Building Relationships, Handling Conflict and Sharing Control

David Archer, Alex Cameron

• Publisher: Routledge
• Year: 2013
• eBook ISBN: 9781135079185
• Edition: 2
• Topic: Business
• Subtopic: Business General
• Index: Business

We all live in an interconnected world and for business leaders the last decade has seen a dramatic rise in the speed and scale of this interdependence. But while increased connectivity is inevitable, increased collaboration is not. To succeed in today's environment, leaders need to be able to build relationships, handle conflict and to share control in order to promote effective collaboration where it is needed most.

Archer and Cameron have been working in this field for over 10 years and were amongst the first business authors to define and explain Collaborative Leadership in their 2008 book. This 2nd edition draws on interviews, examples and additional cases studies of the new collaboration challenges that leaders face such as; working together to deal with the consequences of financial contagion in the Eurozone or elsewhere, responding to the growth in use of social networks by their staff and customers, and managing global supply chains to reach new growth markets.

This fully revised, updated and re-structured text provides an easily accessible 'how-to' guide for leaders in today's interconnected world. It will give both experienced and aspiring leaders the techniques and confidence to manage complex collaborative relationships in a sustainable way. It also acts as a guide for leadership development professionals, coaches and consultants who have to build leadership and collaboration capability within organizations.

1
Interdependence and its Consequences for Leaders

Past performance does not guarantee future success

For Fred Goodwin growth was all about making deals. As Deputy CEO of the Royal Bank of Scotland (RBS) he had already played a major role in carrying off what was then the biggest deal in UK banking history when RBS bought the National Westminster bank in 2001. Three years later, and now as CEO, he led the acquisition of Charter One which propelled RBS into the top ten of US commercial banks. The biggest deal was yet to come. In 2007, RBS bought Dutch banking group ABN Amro and briefly became the largest bank in the world by asset value. And yet within a year he was out of job and the bank he had grown so spectacularly had come ‘within hours’ of running out of money altogether, according to the Governor of the Bank of England.¹ To a large extent Fred Goodwin’s rapid growth strategy for RBS was undermined because the number of businesses involved made the system too complex to fully understand. But it wasn’t just the complexity of the system that was at fault, the suitability of leadership style was also part of the equation.

Hindsight is a wonderful thing, but the Financial Services Authority was raising concerns back in 2004 about Goodwin’s leadership style and saying that ‘the challenging management culture led by the CEO raised particular risks that had to be addressed’.² You might have thought that this would have been a sufficiently important warning sign to investors. But Sir Fred was building a bank that he and many others seemed to think would be ‘too big to fail’ – and exploring the impact of his personal leadership style was probably not high on his agenda. How wrong he was and what an enormous cost his shareholders and the British public paid to learn the lessons. Fred Goodwin lost out too. He lost his Knighthood as well as his reputation – joining a small group of disgraced political leaders including Robert Mugabe and Nicolae Ceausescu in having that honour revoked.

Or take another leader whose rise and rapid fall from grace has been well documented in recent years, Tony Hayward at BP. In February 2010, he reported another good year-on-year increase in profits with good prospects as the company continued its industry-leading 17-year run of increasing reserves. Under John Browne’s leadership BP had developed into a major player in deep water oil exploration and Haywood was seen as a straight-talking, enthusiastic and above all safe successor to a CEO who had become increasingly controversial in his later years.³ But two months later came the explosion on the Deepwater Horizon rig and the start of the most costly oil spill disaster in the world.

Drilling for oil at depths such as those found in the Gulf of Mexico is a technically very difficult operation – and one that calls for close collaboration between the many different experts working for different contractors. The chain of events that led to the explosion of the Deepwater Horizon platform was complex and involved people working for BP’s partners Halliburton and Transocean as well as their own staff. But although the cause of the accident was technically complex it was not inevitable. The reports from the Presidential Oil Spill Commission clearly trace the causes back to leadership failings on the rig and in the chain of responsibility reaching right back through the management of BP. To quote from the Chief Counsel’s report, ‘The Chief Counsel’s team concluded that all of the technical failures at Macondo can be traced back to management errors by the companies involved in the incident. BP did not fully appreciate all of the risks that Macondo presented. It did not adequately supervise the work of its contractors, who in turn did not deliver to BP all of the benefits of their expertise.’ And they also found that ‘What the men and women who worked on Macondo lacked – and what every drilling operation requires – was a culture of leadership responsibility.’⁴

In the immediate aftermath of the explosion Tony Hayward’s leadership response was to ‘circle the wagons’, to try to gain control of all crisis operations and communication about the incident. His instinct was to defend his own organization at all costs in the belief that they had all the expertise and resources needed to stop the leak and fix the problem. Ultimately this approach didn’t work. BP needed to reach out for help from lots of other organizations and agencies to deal with sealing the well and reducing the amount of damage to the Gulf Coast. And Hayward himself was replaced by BP’s US Chief Bob Dudley who quickly set about a different leadership approach, listening to stakeholders to try to address their concerns.⁵

Goodwin and Hayward show how the leadership characteristics that had smoothed their progress to the top of their own organizations may not be what is needed to succeed in a more complex world – with multiple stakeholders and many interdependent relationships. And this lesson doesn’t just apply to business leaders. Let’s take one more example of a leader that couldn’t adapt – ex-Prime Minister Gordon Brown. After three years as PM (and 13 in cabinet) his Labour party government lost its overall majority in the 2010 election. The polls in the run up to the vote were inconclusive but an outcome where no one party had an overall majority was always a high probability. In these circumstances for the Labour party to stay in power they needed a leader that could take them into a successful coalition with the Liberal Democrats. When the result was announced and the negotiating for a coalition began, it became clear how ill-equipped Gordon Brown was for that task. His leadership style had been described by his predecessor, Tony Blair, as ‘a great clunking fist’ – and it was clear that the Liberal Democrats just weren’t going to work with someone like that. We’ll never know exactly went on in the various negotiations but it was widely reported that ‘Mr Clegg said it would be impossible to work with Brown because of his attitude towards working with other people.’⁶ For four days from 6 to 10 May, Gordon Brown resisted the inevitable and then eventually resigned in order to try to pave the way for another leader to take the Labour party into coalition. But by then it was too late and the Conservative– Liberal Democrat coalition was formed with an agreed joint programme of work and with all the news channels commentating on the excellent chemistry between their two leaders David Cameron and Nick Clegg. Now the reality of setting up a coalition government may well have put all sorts of strains on a Cameron–Clegg relationship, but the point is that in the minds of the public and the media the perceptions were clear – here were two people that could adapt to the realities of coalition and have a positive relationship. That perception of leadership adaptability and collaboration certainly helped to pull their parties together and also helped give the public (and the financial markets) confidence that their coalition could work – at least in the short term.

In contrast, whatever his capabilities when he was Chancellor of the Exchequer or Prime Minister, Gordon Brown couldn’t adapt to the demands of a collaborative situation, and within a few weeks he had pretty much disappeared from public life.

These are just a few examples of leaders who struggle to adapt to the challenges of interdependence and complexity – but there are many others, from Jurgen Schrempp, who presided over the disastrous merger of Daimler-Benz and Chrysler, to Bernie Ebbers, whose passion for deal-making built WorldCom into the world’s largest telecom company but couldn’t translate this into the savvy necessary to run such a complex business in a tough market. Leaders respond to change in different ways but the biggest message is that their past performance does not guarantee future success – as it says in the small print of all your investment brochures!

Like it or not, we live in an interdependent world. Creating coalition governments, managing mergers and partnerships are just some of the specific examples of how we may have to adapt to today’s reality of interdependence but one thing is for sure, as leaders we can’t ignore it.

But, as the next section shows, that may not be such a new realization anyway.

The rise of interdependence

On US Independence Day 1962, in a speech delivered in the hall where the American constitution was created, John F. Kennedy chose as his subject not independence but interdependence. Or, as he said, ‘not the individual liberty of one but the indivisible liberty of all’.

At the time he was trying to engage his audience in the creation of a new transatlantic partnership, and the need for America to support the emerging consensus in Western Europe against the Warsaw Pact. To do so he drew by analogy on the long tradition of checks and balances in the United States constitution between state and federal power – a system ‘designed to encourage both differences and dissent’.

But in a rather prophetic way his speech looked ahead to the wider challenges facing political and business leaders across the world in this twenty-first century. As Kennedy put it: ‘As the worldwide effort for independence inspired by the American declaration of independence now approaches a successful close, a great new effort – for inter-dependence – is transforming the world about us.’⁷

He saw that however strong the desire for independence might be, the prosperity and the security of one country (even the most powerful and wealthiest on earth) was dependent on the well-being of all its trading partners and neighbours.

Some 46 years later in a speech at the DAVOS World Economic Forum in 2008, former British Prime Minister Tony Blair quoted from JFK and echoed the theme. He said ‘Globalization is forcing changes in how people collaborate in a fundamental way - if we are interconnected and the world is interconnected, the only way for the world to work is to have a set of common values. We have no option but to work together.’

And this is not just political rhetoric; we believe there are many financial and technical forces which will continue this drive to increasing interdependence and this drive has consequences for business leaders as much as for politicians in the years to come.

There are many forces that drive interdependence. Whether it’s oil, the supply of credit or specialist skills, if there is a limited resource and multiple calls on its use, interdependence of one form or another is inevitable. In addition to resource constraints, there is the growth of networked technologies. As these technologies grow, so do the interconnections of the people who use them – and in turn the technology provides faster and more extensive ways for people to be connected. Leaders cannot ignore the consequences of networked technologies for the way they communicate and manage their business. But the speed of global communication has major consequences for the way leaders feel that they have to behave. And finally there is the impact of regulation, especially in utilities, transport and telecommunications. Whilst the main job of the regulator could once have been seen as achieving value for money for the public by ensuring competition between the various players in the system, they now have the task of enabling collaboration, often to achieve cost reductions required by the government.

The leadership response

In today’s world, interdependence is inevitable but collaboration takes lots of leadership effort.

That doesn’t mean you need to collaborate everywhere but you must know how to decide where to collaborate and how much to collaborate. And then you need to build the collaborative leadership skills and capability across your organization to sustain those relationships in the areas where it brings the greatest benefit.

Interdependence can have its advantages. When there is an urgent global problem such as an imminent pandemic, organizations from many different countries and cultures can see the need to collaborate and pool large resources to innovate at surprising speed. For example, when the World Health Organization needed to combat a deadly outbreak of the SARS virus, it was able to bring together teams from 11 research labs around the world to collaborate on isolating the virus – they managed this incredibly demanding and complex task in just one month.⁸ Collaboration between organizations with different knowledge bases and traditions can be immensely creative – if it works.

But all leaders need to find a strategy to respond to the reality of interdependence – you can’t go it alone anymore.

The significance of this was perhaps best expressed by the CEO of Nokia, Stephen Elop, as he launched their partnership with Microsoft in 2011. At that time Nokia was still the biggest mobile phone manufacturer in the world with over 23 per cent market share but it was losing out in the growing smartphone market, primarily to the Apple iPhone but also to Blackberry and Google Android devices. Elop saw it wasn’t just his rivals’ design quality that was attracting customers away, it was the whole set of add-ons, downloads, covers and other highly fashionable items that were tying customers in. Nokia were being beaten not just by better products but by entire ecosystems – a universe that customers would enter when they bought an Android or iPhone that they would never need to leave. By entering a partnership with Microsoft, Elop was taking a bold leadership step to respond to this new threat. He said: ‘Today, the battle is moving from one of mobile devices to one of mobile ecosystems … Ecosystems thrive when they reach scale, when they are fuelled by energy and innovation and when they provide benefits and value to each person or company who participates.’⁹

Elop makes the case for collaboration as a leadership response to this business challenge of a complex world – but that brings with it the need to bring about a change in leadership style. Away from style of a charismatic or heroic individual leading their team or their organization to glory, and towards a more co-operative style where leaders have to work together to build the relationships they need to ensure mutual success. Towards being more of a collaborative leader.

So before we go any further, we need to define what we mean by collaborative leadership.

Defining collaborative leadership

John Kotter in his classic 1996 book Leading Change discussed the difference between leadership and management. Leadership he said ‘creates the systems that managers manage’. And he defined the key tasks of leadership as:

• Creating vision and strategy;
• Communicating and setting direction;
• Motivating action;
• Aligning people.¹⁰

In 2012, the inevitability of interdependence means the leadership task is more complicated than this. Leaders do still have to create strategies, build systems and align people, but they have to do it across many different organizational boundaries – and in co-ordination with their partners who are probably trying to do the same (but different) to them at the same time...

Table of contents

• Cover Page
• Half Title
• Half Title page
• Title Page
• Copyright Page
• Contents
• Illustrations
• Foreword
• Acknowledgements
• Introduction
• 1 Interdependence and its Consequences for Leaders
• Part 1 Tools for collaboration
• 2 The Collaboration Spectrum
• 3 The Three-Legged Stool – Governance, Operations and Behaviours
• 4 Measuring Collaboration
• 5 Analysing Different Organizational Cultures
• 6 The Partnership Roadmap
• Part 2 The collaborative leader in action
• 7 Secrets of Success – Conversations with Collaborative Leaders
• 8 Why Some Collaborative Leaders Fail
• 9 Collaborative Leaders in the Boardroom
• 10 Relationship Risk
• 11 Conflict and the Collaborative Leader
• 12 The Future Collaborative Leader
• Notes
• Index