Leading new alliances

Last week I noted that Leaders used to leading in a command and control way in a hierarchy with layers and spans are having a hard time changing their leadership style to one that is more collaborative, involving, and recognizes networks of expertise rather than positional power.

An article on the new tie-up aimed at bolstering their offerings in small, energy efficient vehicles between Daimler and Renault-Nissan caught my eye. The new alliance will focus on sharing resources in four main areas: platforms for small cars and light commercial vehicles; small petrol and diesel engines; technology for fully electric and hybrid cars; and bigger diesel engines.

Carlos Ghosn, Renault-Nissan, CEO and President, believes that cross-shareholdings are a critical signal to employees, especially engineers, that the partnership is both long-term and strategic. He and Dieter Zetsche, Daimler's boss, now face the task of convincingly making the tie up work.

Making this work at all levels in all three organizations is a herculean job. Car manufacturers are typically stuck in the 'old' management principles that Gary Hamel, in his book, The Future of Management, rejects: the principles of standardization, specialization, hierarchy, alignment, planning and control, and the use of extrinsic rewards to shape human behavior.

Instead he offers five organizing principles that enable organizations to be "highly adaptable and fully human". To get the tie-up to work will certainly require those characteristics. Because despite (or perhaps because of) Renault's bold attempt to be the first volume maker of purely electric vehicles, investors, according to Mr Warburton [an industry analyst], still see the firm as "a long-term structural loser.

Hamel's five organizing principles are:

  • life/variety
  • markets/flexibility
  • democracy/activism
  • faith/meaning
  • cities/serendipity

He presents an excellent exercise that Ghosn and Zetsche would do well to introduce to their newly tied-up units. It would help them move from the known into the brave new world. Briefly the exercise is a series of workshops/discussions held with leaders and employees across the organization (or one large-scale collaboration using a collaborative technology) asking questions and seeking implementable answers in each of the five areas:

Life/variety: How would you introduce a greater diversity of data, viewpoints, and opinions into this process? How would you design the process so that it facilitates, rather than frustrates, the continual development of new strategic options and encourages relentless experimentation?

Markets/flexibility: How would you redesign this process so that it exploits the wisdom of the market, rather than just the wisdom of the experts? How might this process be used to help speed up the reallocation of resources from legacy programs to new initiatives? How could we make it easier for innovators to get the resources they need to advance their ideas?

Democracy/activism: How would you change this process so that it encourages, rather than discourages, dissenting voices? How would you make this process more responsive to the needs and concerns of those working on the front lines? How do we give folks on the ground a bigger voice in shaping policy and strategy?

Faith/meaning: How would you use this process to help focus on the higher order goals our three companies claim to serve (or should be serving)? How could this process help employees to identify and connect with the goals they care about personally?

Cities/serendipity: How could this process be redesigned in a way that would help our companies to become even more exciting and vibrant places to work and a magnet for creative talent? How could this process be used to facilitate the collision of new ideas?

What would introducing that approach mean for Ghosn and Zetsche personally? It most probably means changing their leadership styles and demonstrating that they have the courage to try new approaches in a traditional industry with entrenched thinking on the way things are done.