Leadership in organisation design

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Last week I posted an extract from Chapter 8, Leadership,  from the forthcoming third edition of my book “Guide to Organisation Design,”.  The group I am working with discussed the chapter, raising the question – can you design organisations to foster the type of leadership needed now?  Jim Shillady, one of the group, has picked up on this in his guest blog below.  Many thanks to Jim.


Today’s organisations are moving away from a seemingly stable and rigid simplicity towards an evolving, more purpose-driven complexity.  And leaders are being judged on more than pure business outcomes – for example, on sustainable development goals, inclusion and diversity, and the values associated with their company’s brand.  Indeed, their success in achieving results is increasingly seen as a consequence of their ability to adopt broader roles and develop new behaviours, not just to drive directly for performance. 

Part of this shift is summed up by Michael Lurie, McKinsey, who talks about the leader as visionary, architect, catalysts, and coach.  He calls for a new approach to leadership that, “must focus on co-creating meaningful value with and for all stakeholders, expanding beyond shareholders to include customers, employees, partners and our broader society”.    And, in another recent McKinsey article, Carolyn Dewar and others build on this idea of a new role and exhort CEOs to, “elevate ‘to be’ to the same level as ‘to do’”.  In other words, behaviour now matters in leadership’s success.

Realising this, organisations have created competency frameworks and behavioural definitions to guide leadership’s development and ways of acting and deciding.  But, against that background, the idea has also emerged that context has a profound impact on behaviour; the turn of events can suddenly render some existing behaviours irrelevant and call for others that weren’t foreseen.  We need look no further than the Coronavirus pandemic.  Leaders were forced to do what the external context demanded and did it best when it recognised what the internal context, the people they lead, could accept. Not all succeeded in doing it well.

Then, just as leaders are wrestling with behaviour and the pressures of a changing context, new findings emerge about what it takes for leaders to develop.  It turns out that 70% of what leaders learn comes from “challenging experiences and assignments” and only 10% from formal learning, with the remaining 20% from coaching and mentoring. (The Center for Creative Leadership expands on this).  Standardised leadership programmes have a strictly bounded impact; the learning that leads to behaviour change comes mainly from personal growth, gained through experience.  And not just by passive acquisition, but through active learning and a commitment to personal change.  (David Lancefield captures some of this shift in his article)

In sum, it seems ‘design for leadership’ may need to reflect at least three big current ideas – that leadership success demands behaviour change, that context shapes behaviour, and that experience shapes learning.  These need to be joined with a truly rigorous approach to formal leadership systems that avoids the illusion of rationality while achieving the right degree of planning and control.  So, what kinds of organisational design features might reflect these ideas and increase contemporary leadership success?

First, leaders need to know how they are doing in terms of their behaviour and its impact on others.  They need system designs to provide them with information for reflection, insight, and response – information that should ideally be offered in the same positive spirit with which leaders ought to receive it.  Which means that people throughout the organisation have to be equipped to give and receive feedback appropriately. And it takes the discipline of declared values (another design element) to provide a touchstone; leaders cannot simply react to what they hear in an attempt to keep everyone happy. 

Next, they require the means to make sense of their context – external, organisational, and personal – and to weigh up how it may affect how they behave and how far they will choose to let it.  (If you can, access Professor Gary John’s paper, “The Essential Impact of Context on Organizational Behavior” for some real insights into how context actually works and how it changes the forces acting on leaders.)  This is not simply a question of designing ‘environmental scanning’ systems to detect trends and likely events.  Rather, leaders need help and tools to work out what changes in behaviour – for example in risk tolerance or speed of decision making – they must come to terms with or achieve.

If leaders are to make sense of what’s around them, it cannot be left to chance.  Building on the 70/20/10 principle, leadership development can be designed to provide explicit support for learning from experience, coaching to offer a sounding board, and training in the methods and frameworks for analysis.  Not many senior people get this kind of help and even those that do may not all be able to make the desired change.  Effective organisational leadership can only be assured long-term by talent management that’s designed to identify those with the potential and the willingness to grow.  (At the limit, the gulf between effective leadership in traditional and contemporary organisations can be too big for some individuals to bridge.)

Then there is the issue of balancing responsiveness with authoritativeness.  Employees, particularly at times of stress, now want leaders to display distinctly humanising characteristics like vulnerability, authenticity, and empathy.  But they demand the reassurance of leaders who are decisive too.  This tension might be resolved through leadership processes designed to signal when certain ways of being and behaving are most appropriate – for example, emphasising logic when choosing between limited strategic options, but prioritising human values in innovation and exploring new ideas.

Whether traditional or contemporary, organisations have to deliver and it remains the job of leaders to ensure that they do.  But we are abandoning the idea of the performance driven leader (at the top of a hierarchy) in favour of the coaching leader  present throughout an organisation who  helps others give their best.  This means organisation design must combine the rigour of systems, structures, processes, and measures with the nuances of social organisation if it is to foster these new approaches to leadership. But how is that to happen?

Organisation design for effective leadership is ideally guided by ambition but rooted in pragmatism.  For example, given the leaders you have now and the likely speed with which that group can develop (or be changed), try to aim for a realistic but stretching vision for a new future.  Discover what it is about the current organisation that is likely to frustrate leaders’ efforts to behave differently and start to design it out.  Try to understand what can reinforce their efforts and must either be preserved or built from scratch.  And consider the leadership dimension of those aspects of organisational life which affect how they work.  For example, does your performance management system cast your leaders as judges, handing out prizes and punishment, or as coaches and, at times, the recipients of feedback about their own behaviour?  Similarly, will the decision rights and processes you are designing tend to over-concentrate power at the top of your organisation and reduce its responsiveness elsewhere? And does structure reflect the levels of cross-functional teamworking you are aiming for or might it mean that leaders will have to spend time removing barriers that need not be there in the first place?

My conclusion is that organisation design can indeed help today’s evolving forms of leadership to succeed, but that, at a minimum, ‘Does this foster effective leadership?” must also be a test applied to all aspects of an organisation’s design.

Image: https://www.brandman.edu/news-and-events/blog/what-can-you-do-with-a-masters-in-organizational-leadership