PRINCIPLE 4
LEADERSHIP
From Commander to Co-creator
A leader’s job is not to do the work for others, it’s to help others figure out how to do it themselves, to get things done, and to succeed beyond what they thought possible.
—Simon Sinek, author, Start with Why
IN 2003, GENERAL STANLEY MCCHRYSTAL TOOK COMMAND OF THE JOINT SPECIAL OPERATIONS TASK FORCE. What began as a military campaign against the Saddam Hussein regime eventually evolved into a prolonged, complex, and chaotic fight with Al-Qaeda in Iraq. For several years, the fight did not go well.
The task force had highly capable and experienced leaders, extremely disciplined soldiers, and the best technology and communications equipment money could buy. Al-Qaeda in Iraq had untrained fighters, had to deliver messages by courier, and used improvised, outdated weaponry. And yet the number of insurgent attacks was still increasing, not decreasing.
What McChrystal found, as documented in his book Team of Teams: New Rules of Engagement for a Complex World, is that the old ways of leading and structuring no longer matched the digital, deeply interconnected world.1 Old habits and old mental models needed to be updated, or discarded, to combat an enemy that lived and recruited online, had no permanent barracks or hierarchy, and changed identity as easily as it changed clothes.
So McChrystal altered the structure of the task force, and then the whole team changed its way of managing it. As he describes the transformation, “We reworked many of the precepts that had helped establish our efficacy in the twentieth century, because the twenty-first century is a different game with different rules.”2
They broke down the walls and hierarchies of the organization and remade them around new principles that reinforced adaptability and agility: trust, common purpose, transparent information sharing, and decentralized decision-making authority. They found that this organization was far more effective in dealing with the target.
As you would imagine, leading this new organization was an entirely different task. It required “transparent leadership that empower[ed] team members” and a refocus on creating an environment where everyone could and would perform to the best of their ability rather than being micromanaged. In short, McChrystal and his team needed to shift from commanding to co-creating.
This is the type of leadership that network orchestration requires. We don’t want you to think about business as battle. That would be antithetical to our purpose. But we do want you to think about leadership as a two-way street. It is a role that requires collaboration, facilitation, and co-creation rather than merely direction and control.
Relationships Are Changing
People are relating to the world differently from the way they used to, and that means leaders must relate to their worlds differently. Historically, for the most part, our relationships used to be based on family and proximity. We communicated in person or through the written word, and our sphere of influence was limited. We were similarly limited in our work and our contribution. We shared the products of our hands or minds with those we could physically reach.
Now we can form relationships with anyone in the world. We communicate through pictures, videos, links, likes, and shares as much as actual conversation. And each of us has a sphere of influence that is limitless, provided we can pay enough money or say something interesting enough. All this affects the way we act and interact socially, at work, and as consumers. We cover these topics in more detail later in the book. For now, let’s look at an overview.
WE HAVE MORE OPTIONS. Digital technology puts the world at our fingertips. We can find friends and affinities as easily with people across the world as we can with our own neighbors. We can buy any one of twenty-five hundred blenders through Amazon.com. We can work virtually for employers around the world.
If your employees or customers aren’t happy with you, they can jump ship in less than a heartbeat. Deloitte has found that customer loyalty to brands has declined steadily since 2010.3 What’s more, the American Management Association found that leadership teams view their employees as less loyal than they used to be.4
WE HAVE MORE INFORMATION. The amount of information we can access is astonishing, and its quality is markedly improved and improving. Not only can we buy twenty-five hundred different blenders on Amazon.com, but also we can see thousands of reviews for those blenders. When considering career moves, we can look at the salaries of workers across industries and companies to figure out where we want to go next. And when a company experiences a public relations nightmare in the form of a political misstep, environmental accident, or customer service disaster, we can see that, too.
Combining information with options is powerful. Further, given that organizations have the same or even better access to predictive analytics, they can increasingly send us relevant information in real time, thereby effectively increasing our options. Now when we hear something displeasing about an organization, we can easily vote with our pocketbooks (and clicks) for the next competitor.
WE LIKE TO PARTICIPATE. Social media allows us to interact with organizations in a direct and personal way—for example, tweeting at the CEO. Network orchestration allows us to participate directly in value creation—for example, posting a back bedroom on Airbnb. We want the same type of access and ownership as employees. Rather than cogs in a machine, we want to be valued partners.
These types of interactions make us feel an intimate and personal connection with companies. The brands that we tout on Facebook become a part of our own brand. The companies that we work with, either as employees or as network participants, also become part of our livelihood. This relationship increases our potential loyalty but also raises the stakes, because we don’t want to share our brand and our work with just anyone.
These three factors—more options, more information, and more participation—change us as employees and as customers. They also mandate a change in leadership style. The network orchestration business model requires that leaders interact with their employees and their customers on a whole new level. Motivating customers to buy is different from motivating them to contribute. Telling an employee to do something is different from giving her the tools and space to figure out how she should do her job. Changes in both culture and business mean that communication, inspiration, and facilitation are bigger parts of the job than ever.
A New Environment Requires New Leadership Styles
As McChrystal put it, “The role of the leader becomes creating the broader environment instead of command-and-control micromanaging.” The leader of an asset-building organization needs to manage plants, watch inventory and costs, and convince the customer to buy. The leader of a network-orchestrating company may do those things as well, but he also must set up an environment where his networks are enabled to contribute as partners, and then motivate members of those networks to co-create with the organization. Where the old style of leader is a commander, the new style of leader is a co-creator.
What’s tricky is that co-creation requires you to give up control—at least, some control.
When you partner with others, whether they’re employees, customers, suppliers, or investors, they will likely bring something unexpected to the table, and it will probably cause you to adjust your grand vision. If you’re in commander mode, that will look and feel threatening. If you’re in co-creator mode, it will look and feel intriguing. It all depends on your mental model, which influences your business model and your leadership style.
When Jack Dorsey and his collaborators developed Twitter in 2006, employees of the start-up used it internally. Cofounder Evan Williams described what happened.
There was this path of discovery with something like that, where over time you figure out what it is. Twitter actually changed from what we thought it was in the beginning, which we described as status updates and a social utility. It is that, in part, but the insight we eventually came to was Twitter was really more of an information network than it is a social network.5
Dorsey and his partners had no idea of the role Twitter would play in sociopolitical movements, pop culture, and business until the network actually started forming. Although it’s natural for any inventor or operator to resist others shaping her creation or carefully managed domain, this is the path to greatest value, for who knows better than the users how they can use the tool to greatest advantage?
And don’t be deceived. As a leader, the co-creator is just as active and important as the commander; the actions are simply different. Whereas a commander needs to figure out everything independently so that it can be communicated downward, the co-creator facilitates an ecosystem where the network figures itself out, and then the network communicates upward to ask for what it needs. The commander knows and instructs; the co-creator listens and synthesizes.
Principle 4, Leadership: From Commander to Co-creator
The fourth principle is to move from commander to co-creator. On the left side of the spectrum are leaders who prefer a structured, hierarchical, top-down organization and count on themselves to create and communicate the strategy. On the right side of the spectrum are leaders who seek insight outside themselves and who know how to motivate and inspire those around them to collaborate in building something together.
It is impossible to lead a company with a network orchestrator business model if you’re acting like a commander all the time. Network orchestration requires the active, eager, engaged participation of “assets” that you don’t own and that don’t report to you. People won’t contribute to your network if they feel you’re using them as tools rather than as valued and respected partners. Here are some of the ways that co-creators care for and engage their networks.
THEY MAKE THEMSELVES ACCESSIBLE. Co-creators understand that the best ideas and insights come from a hugely diverse group of stakeholders. Internally, they make themselves accessible to employees, regularly take comments and questions, and facilitate the momentum of innovative ideas—for example, through an idea “stock exchange” where the top performers get funding.
Externally, co-creators engage with their networks whenever possible and through all available channels—from in-person to Facebook to Twitter to Instagram and wherever else the network is making its presence felt. Co-creators know exactly what is being said about their products and service offerings on Yelp, Angie’s List, and Amazon.com.
THEY PUSH DECISIONS DOWNWARD. Co-creators recognize that they cannot make all the decisions. Further, they often are not the right persons to make the decisions, even if they could. Many decisions can be made best by the people closest to the effect the decisions will have; for example, Airbnb’s team does not decide what types of properties or what cities will be added to the network. The network makes those decisions.
Enabling appropriate decision making at all levels inside and outside the organization also shows respect for members of the network and encourages both their self-determination and their ability to self-serve.
THEY CREATE SHARED VISION AND VALUE. Co-creators co-design, truly believe in, and facilitate a vision for their organization that everyone buys in to and everyone profits from. The keyword is everyone; this means no exceptions. Every single person who touches and is touched by a co-creatively led organization is connected to its explicitly stated purpose.
The corporate culture must reflect the vision as well. One of the keys to network orchestration is making sure that members of the network receive value commensurate with or greater than that of their participation. That value is sometimes monetary, but it can also be the satisfaction or esteem that comes from participating in the creation of something inspiring.
You may not use your co-creative style all the time, but consider how capable you are when you use it. To what degree do you follow each of the actions just described? Mark where you fall on the spectrum from commander (1) to co-creator (10). Have your whole team do the same.
Leaders Are Still Unique Individuals
No two leaders are alike, and neither are two co-creators. In this discussion of leadership style, it’s important to remember that we’re focused not on personality characteristics, but on actions. Making yourself accessible, pushing decisions downward, and creating a shared vision are actions that you can take regardless of your personal nature. You don’t need to be warm and fuzzy like a teddy bear in order to motivate co-creation, although we wouldn’t rule it out.
Nor do you need to be a co-creator in every circumstance. Just as companies are portfolios of assets, leaders need to have access to and employ a portfolio of styles. Let’s take a look at how this played out for one great leader.
Steve Jobs isn’t often remembered for his co-creative leadership style. He is more often remembered for his difficult personality, emotional outbursts, and perfectionism. When Jobs had a clear vision for a product, he was notoriously dogmatic about enforcing it. However, he also created open Apple platforms and drew in a developer network that earned $10 billion in 2014.
Jobs had more than 450 patents and helped design multiple market-creating products, but when asked by his biographer, Walter Isaacson, about his greatest accomplishment, he said, “You know, making a product is hard, but making a team that can continually make products is even harder. The product I’m most proud of is Apple and the team I built at Apple.”6
Co-creation may not yet be the most comfortable style for many leaders, just as it wasn’t for Jobs, but it is simply required if you want to tap in to the value of network orchestration. Relinquishing control and sharing value are the only ways to motivate the needed participation and sharing from the network that forms the core of the network orchestrator business model. Remember the 8× price/revenue multiplier earned by network orchestrators, and keep letting go and empowering your networks.
Co-creation Leads to Value
In the end, the argument for leaders to co-create is an argument for profit, growth, and value. Network orchestration taps in to the assets, skills, insights, and relationships of groups external to your firm. The external network enables low or near-zero marginal cost of scaling as well as rapid growth, higher profit margins, and, ultimately, greater investor returns. But to get there requires many leaders to take on a new set of skills.
Every one of us possesses a portfolio of leadership styles, and each one has its place. A surgeon may be a commander in the operating room, and a co-creator when developing a treatment plan. Find your inner co-creator and start increasing value creation—for customers, employees, and investors.