CommunicationInnovationsKnowledge ManagementLeadership
July 14, 2016

Networked Leadership: How Private Sector Leaders Are Investing

Designing a virtually-networked organisation calls for a special breed of leadership. CEOs of major multi-national companies have reported returns of between twenty and fifty per-cent, depending on the integrated nature of the business model or production delivery cycle. The time is right to build on the lessons-learned and success stories of the private sector. The challenge is to adapt those lessons to the specific challenges and myriad cultures within the public sector.

Dispersed organisations can be very powerful structures. There is ample evidence that shows that influential networks of experts and collaborators can transform great ideas into game-changing innovations. Canadian public servants live in a world where both private and public sectors are exploding word clouds onto every social platform to communicate their raison d’être as embracing “virtual,” “collaboration,” “innovation” and “open.” It may all seem intuitive and relatively simple. But leading virtually-networked organisations is more difficult than many people think.

Although the technology that enables collaborative work gets the lion’s share of attention and is predominantly associated with tech-savvy young professionals, the skillset needed to design and lead dispersed teams is neither technology-dependent, nor is it generational. It is not something “you have.” Leading virtual organisations demands a rigorous examination—a re-learning—of how to successfully scope and define the full spectrum of strategies that will support a dispersed organisational culture and keep it driven towards delivering measurable results.

The virtual organisation: a network of high-return and influential relationships

The innovation guru Michael Schrage wrote twenty years ago in his (ironically titled) No More Teams that “the real basic structure of the workplace is the relationship. Each relationship is itself a part of a larger network of relationships. These relationships can be measured along all kinds of dimensions–from political to professional expertise. The fact is that work gets done through these relationships.”

There is rich wisdom here. Numerous case studies of Fortune 500 companies reveal that successfully designed virtual teams deliver higher returns than stand-alone or proximity-based teams. CEOs of major multi-national companies have reported returns of between twenty and fifty per-cent, depending on the integrated nature of the business model or production delivery cycle. In the private sector, the return-on-investment of virtual collaborations can be measured by speed to market, increased business opportunities, revenues, sales and market shares. If private sector results are indicators of success, leaders of collaborative networks must be equipped with skills and knowledge to forge the high-impact and high performing relationships that will reach business objectives.

In the public sector, much reflection is still needed to identify the base-line metrics that describe how virtual success and intended impacts will be measured. Certainly, many government organisations are launching initiatives to explore new ways of working collaboratively. The time is right to build on the lessons-learned and success stories of the private sector. The challenge is to adapt those lessons to the specific challenges and myriad cultures within the public sector.

A special breed of leadership

Designing a virtually-networked organisation calls for a special breed of leadership. According to a Gartner strategic analysis report, “virtual team leaders must be deliberate, explicit and disciplined in adapting their leadership styles to the crucial differences in virtual team interaction, and be diligent in prioritizing and executing the team start-up process.”

Creating a virtually-connected, dispersed organisation is a significant leadership decision. It requires thorough design “intentionality” to ensure that the supporting structures of governance, relationship building, trust strategies, conflict resolution, change management and communications can withstand the inevitable erosions in human relations caused by the divides of space, time, language and culture.

We can learn from the private sector that this intentionality is focussed primarily on sets of skills that allow executives to build organisations that connect “islands” of knowledge and expertise into high-performing collaborative networks.

One of the foundational skillsets of the virtual leader is the ability to assess and identify the required governance structure that can lead high-impact networks and relationships towards the organisation’s goals. Although time-consuming, this prioritization of the strongest social capital allows organisations to make deliberate investments in relationship building and identify where travel dollars are most judiciously spent. Although commercial relationship mapping tools are available to help inventory and visualise high impact/influence relationships, no tool or technology can replace face-to-face human relationship building.

The High-Return Investments Required

To reach the connectivity and results envisioned by the year 2020, virtually networked organisations follow a rule of thumb that requires at least 20 percent more initial time and up-front costs in order to reach 20 percent higher returns than traditional organisational models.

Investment #1: The First Meeting

The literature is categorical that assembling a team of geographically dispersed members requires, at a minimum, a face-to-face kick-off meeting. This important investment of time must be designed to build strong relationships. Relationship building dovetails with the need to ensure the definition of relationship-specific trust strategies, conflict resolution strategies and robust communication plans. If there are no agreed-upon and enforced protocols for how information is shared, decisions are made, and conflicts are resolved, virtual organisations will simply fail to deliver. “Virtual leaders who fail to build and sustain a trusting environment … will miss team goals by 50%,” according to the Gartner study. Such a meeting is vital because it allows members to benefit from the rich human reciprocity that is only possible with in-person communication.

In the public sector where travel restrictions are a constant constraint, the successful virtual leader will understand the importance of in-person meetings and plan these strategically as a wise investment as opposed to an unwelcomed overhead cost.

Investment #2: Time for Forming and Storming Teams

Creating a high-performing team takes time and team members will go through the basic four lifecycle stages described by American psychologist Bruce Tuckman. Virtual teams will experience forming, storming, norming, and performing, except that the first two stages are initially more time-consuming to reach. Cisco, a company that makes extensive use of networked teams, has calculated that building these virtual networks can take up to four times longer than traditional proximity-based groups. The leadership required to lead groups through these critically important stages is demanding and requires specific training to be truly effective.

Investment #3: Training

Private sector executives from around the world are taking virtual leadership competency training seriously. The hiring / on-boarding programmes for new executives in some Fortune 500 companies includes virtual leadership boot camps, overseas experience, stretch assignments leading virtual teams and an obligatory time to reflect and write about their experiences. Virtual leadership training is planned and structured to ensure cost-effectiveness and strong returns for the organisation and their partners. The private sector has discovered that the best predictor for success in leading virtually dispersed teams and initiatives is successful previous experience.
Deloitte’s Corporate Learning Fact Book reveals that in 2013, US companies spent more than $70 billion domestically and $130 billion globally on corporate training. Of that amount a full 35% was spent on leadership development at all levels. There are no statistics yet on how much is being spent on virtual leadership development.

Despite these important investments, the 2012 McKinsey & Company State of Human Capital reports that almost two-thirds of human resource executives identified leadership development as their most significant concern both now and into the future. The report was striking in that it urgently observed that “there are big opportunities to rethink organisational design and workforce flexibility and recraft jobs and the characteristics of how work gets done across organisational and geographic boundaries.”

A new industry has sprung up in the private sector to meet the growing need for adapted virtual leadership development and training: companies and consulting firms around the world are responding vigorously to the call to provide virtual leadership training, development courses, programmes and certifications. An explosion of literature, from practitioner case studies, peer-reviewed articles, private sector best practices and social media discussions all unambiguously recognise that one of the most critical challenges facing globally connected organisations is leadership development. They recognize that national-scale and globalized companies are grappling with an urgent need to change the way they work in order to build the successful relationships that will deliver sustained success.

In light of what is happening in multi-national companies, the efforts of the public sector in Canada in developing the leadership competencies of those who manage networks and dispersed teams must be multiplied urgently. It must start with accepting that the culture of a virtually-networked organisation must be intentionally designed to enable new processes, structures and most significantly, the supporting network of collaborating relationships. The success of government in Canada—at all levels—will depend on it.

Deirdre Moore is Manager of a dispersed Library team within the Chief Information Officer and Security Branch of Natural Resources Canada 

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