Behind the current economic crisis lies another crisis on a much larger scale: the devaluation of public companies-the sense of people belonging and caring for something greater than themselves. Decades of short-term management, especially in the United States, have inflated the importance of CEOs and relegated the rest of us in the corporation to the level of interchangeable commodities–human resources to be “downsized” as the stock price falls. The result: mindless, reckless behavior that brought the world economy to its knees.
Government stimulus programs and bailouts of the biggest and sickest corporations alone will not solve the problem. Companies must re-engage their people. Both management and leadership practices need to be rethought.
The problem of subprime lending is a prime example of this. How could it have happened in the first place and how could it have spread to so many large financial institutions? The answers seem obvious. Those who promoted these mortgages sought to increase sales as quickly as possible to maximize their own bonuses, and to hell with the ultimate consequences. And the financial institutions that bought these mortgages were out of control. Many of their executives adopted what has become a widespread style of “leadership” in America: they sat in their offices and announced goals that they wanted others to achieve, instead of taking up the cause and helping to improve performance. Managers didn’t know what was going on, and employees didn’t care what was going on. What a monumental failure of management.
To one degree or another, the same failure occurred in the private and public sectors. A belief has emerged that leadership is somehow separate from and superior to management. This view only isolates people in leadership positions, thereby undermining the sense of community in organizations.
Communities at Work.
Individualism is a good idea. It provides incentive, promotes leadership, and encourages development, but not by itself. We are social animals who cannot function effectively without a social system that is bigger than ourselves. This is what is meant by “community,” the social glue that binds us together for the common good. Think no further than the energy unleashed by the strong sense of community in Barack Obama’s campaign .
Community means caring about our work, our colleagues, and our place in the world, geographically and otherwise, and, in turn, inspiring that caring. Characteristically, some of the companies we admire most – Toyota, Semco (Brazil), Mondragon (Basque Federation of Cooperatives), Pixar, etc. – usually have a strong sense of community. This was made clear in a September 2008 article in HBR by Ed Catmull, president of Pixar, in which he attributed the studio’s success in producing a number of very popular animated films to its “vibrant community where talented people are loyal to each other and to their collective work, everyone feels they are part of something extraordinary, and their passion and achievements make the community a magnet for talented people coming out of school or working in other places.
Young, successful companies usually have this sense of community. They are growing, full of energy, committed to their people, almost family. But maintaining it as they mature can be a different matter: events slow down, politics escalate, the world is no longer their oyster. Community is sometimes easier to maintain in the social sector-with NGOs, nonprofits, and cooperatives. The mission can be more appealing, and the people more engaged.
But somehow in our feverish, individualistic world, a sense of community is lost in many companies and other organizations. In the United States in particular, many great enterprises, along with the country’s legendary sense of enterprise, are collapsing as a result.
Enough leadership.
“Community” is not a word in the English language. But it is supposed to stand between personal leadership on the one hand and collective citizenship on the other. In fact, I believe we should never use the word “leadership” without discussing community.
Of course, leaders can engage and involve others. But the concept is still person-centered – personal initiative. Show me a leader, and I’ll show you a group of followers.
Community certainly uses leadership, but not in the self-centered, “heroic” way that has become so common in the business world. These days we make a big fuss about the evils of micromanagement – the interference of managers in the affairs of their subordinates. Much more serious is “macro-leadership”: the exercise of power “from the top down” by detached leaders. Community requires a more modest form of leadership, which can be called engaged and distributed management. The community leader engages personally to engage others so that anyone and everyone can take the initiative. If you doubt this can happen, look at how Wikipedia, Linux and other open source operations work.
So maybe it’s time to wean ourselves off the heroic leader and recognize that we usually have enough leadership — leadership that intervenes when it’s appropriate and encourages people in the organization to get things done.
That’s how IBM came into e-business. An enthusiastic programmer eventually convinced the middle manager that the opportunity existed. The manager put together a team with virtually no budget. And when the initiative finally reached Lou Gerstner, then CEO, he supported it. That was it. Enough leadership!
From top-down to average.
How can we rebuild companies as communities? Unfortunately, most of the hundreds of articles and books on how to manage large-scale change – transformation, revitalization, upheaval – focus on leadership. A popular example is “Leading Change: Why Transformation Efforts Fail” (HBR Classic , January 2007), in which the author, John Kotter, identifies eight steps: First, create a sense of urgency. Then build a strong leadership coalition in which “senior managers always form the core. This coalition must create a vision and broadcast it so that others can realize it. The process moves on to planning for short-term wins, consolidating improvements, and institutionalizing new approaches.
Kotter’s approach sounds reasonable enough and has probably worked. But how often and for how long? What happens when the driver of leadership leaves? Perhaps it’s time to rebuild companies not from the top down or even from the bottom up, but from the middle – through groups of middle managers who band together and make key changes in their organization.
Can major transformations really begin like this, almost spontaneously, with small actions by people outside the top management? Well, think of the American Revolution, which began with the tea party, or the French Revolution, which began with storming a prison to free a handful of prisoners. In his recent book, “Community: The Structure of Belonging,” Peter Block, an authority on workplace learning and productivity, wrote: “Most sustainable improvements in community happen when citizens discover their own ability to act … when citizens stop waiting for professionals or elected leadership to do things and decide that they can give back what they have delegated to others. Think of all managers as citizens of their corporations.
A useful framework.
In large hierarchical organizations, certain conditions help ease the transition to community:
Community Remains.
It’s much easier to build what’s left of a community than to create one from scratch. In my experience, many companies that seem to have lost their sense of community actually retain it somewhere, even if it is hidden from executives who have not appreciated it. For example, in pharmaceutical companies that have become bumbling behemoths focused on sales and acquisitions, you can always find groups of scientists who are still deeply committed to finding cures for diseases.
Often the remnants of commonality must be sought among middle managers. A significant number of these people tend to be knowledgeable about the enterprise and deeply interested in its survival. After examining the role of middle managers in corporate transformation, Quy Nguyen Hai, professor at Insead, wrote: “I was surprised by the intensity with which [middle managers] sought to protect the long-term interests of the company and the well-being of their subordinates. again and again” (“Praise for Middle Managers,” HBR, September 2001). Senior managers, not to mention middle managers themselves, should recognize the power of this dedication.