At first glance, Southwest Airlines, Walgreens, Google, and 3M have little in common. But if you look more closely, you will see that they share an important trait: Each has clearly defined core values and principles that are fundamental to the company’s culture. There’s a sense of purpose that everyone in the organization can recognize and support.
Alignment between values and goals sets the stage for systemic leadership, a model in which leadership is distributed and everyone in the organization has the potential to be a leader. Though it’s easy to think of leaders as incredibly talented individuals who stand above and apart from the rest, research tells a different story. Rather than being embodied in a single person, leadership is a vast web in which anyone can step out of a day-to-day role and contribute to the organization’s larger purpose.
One way to understand the value of systemic leadership is to think about the human body. The heart may be central to its existence, but this vital organ becomes insufficient unless other parts also function optimally. Similarly, those with positional leadership need others also to optimize their performance—to become leaders who contribute to goals that matter—for an organization to achieve sustainable success.
This analogy is apt. As Patrick Lencioni argues in his recent book The Advantage: Why Organizational Health Trumps Everything Else in Business, gaining and keeping advantage in a highly complex environment requires an organization to be both smart and healthy. In healthy organizations, people trust and are willing to be vulnerable in pursuit of shared goals. They’re accountable to the organization, and their results are measured against its goals and values.
Today, a focus on short-term returns isn’t enough to ensure the organization will survive and thrive. Increased global competition and the velocity of change require organizations to be more flexible and nimble. They must look beyond individual leaders and draw on the rich diversity of thought found within them from top to bottom. This leads to becoming an organization that’s valuable in the marketplace and can generate strong returns over time, regardless of economic conditions.
Assessing Your Organization
The first step in creating systemic leadership involves examining whether your organization looks like one that values this kind of leadership. Your organizational chart can provide a clue. Companies with systemic leadership tend to have a flat and non-hierarchical structure.
Also assess whether your organization venerates the individual leader, celebrates the contributions of everyone or lies somewhere in between. Lencioni’s advantage framework, which uses a 1 to 10 scale and makes it easy to see underlying values, is one that many organizations can use to determine whether they have systemic leadership in place.
Several questions are pertinent to the evaluation process: Does your organization provide the resources that enable people to demonstrate and be accountable to its core values? Is leadership distributed? Does everyone have the potential to become a leader? Does the organization focus on defining the values that give it a viable and distinctive personality, reinforce these values through behaviors and ask every individual to contribute to overarching goals? Are people allowed to experiment, become leaders in areas outside their job descriptions, and share their new expertise with others in the organization? If your organization doesn’t have systemic leadership, are conversations about core values taking place?
Though conceptually simple, systemic leadership only develops over time. An organization must be committed to building trust and creating a deeply reflective environment in which people assess their own values, strengths and weaknesses in the context of their team and the values of the organization.
Developing Leadership from Top to Bottom
As Jim Collins explained in his book Good to Great, companies need to have the “the right people on the bus” to succeed. The same is true for organizations committed to systemic leadership.
Systemic leadership recognizes that organizations are complex systems and require positive influences. Therefore, though this model distributes leadership, those at the top of an organization must understand their positional power and use it wisely. Building a distinctive systemic leadership culture requires senior executives to recognize their stewardship role and be in alignment with organizational values. An organization must support development of its capacity to lead in ways reminiscent of the Level 5 leadership that Jim Collins described in Good to Great as the highest form of leadership.
As stewards of an organization, senior leaders can provide the drumbeat for core values, reinforcing for everyone the reason they’re working together on common goals. At minimum, the organization’s performance management system should communicate the connection between core values and performance.
A culture in which everyone can play an active role in accomplishing what is of greatest value to an organization also needs leaders with a strong entrepreneurial orientation. These leaders must be willing to give people the maximum autonomy in their jobs and the opportunity to step away from narrow rules to achieve desired goals. Systemic leadership requires leaders to have the courage to trust others in an organization with new responsibilities.
Systemic leadership also calls for leaders to practice strategic human resource management in other ways. They need to set key metrics and behavioral expectations and then apply them in recruiting and developing others.
The attention to core values and principles affects both who and how an organization hires. Interviews are typically conducted by groups rather than by individuals. Interviewing focuses on a candidate’s behavioral and cultural fit with organizational values and on the person’s potential to rise to leadership. For those who are hired, autonomy is accompanied by accountability, with performance goals measured against the results of units, not individuals.
These practices promote leadership throughout an organization, but senior leaders must continually reevaluate the alignment between core values and goals. It can be all too easy for leaders to drift toward a more tactical focus. Processes, procedures, and rules can interfere or conflict with the values of an organization, causing it to forget its essence. Ongoing assessment serves as a diagnostic tool, letting people realize when this is happening. The ability of leaders to assess and adjust effectively reinforces an organization’s values and drives performance.
By expanding the capacity of everyone, organizations with systemic leadership invest in their future. Making money is a means to pursue core values, not a core value itself. Instead of the latest financial returns, the successes celebrated involve acts that go beyond the ordinary or that help a customer to overcome obstacles. Rewards go to units, not individuals, because no one is a soloist and everyone has a higher purpose.
Celebration aligned with an organization’s core values is a key part of systemic leadership. The outcome can be a positive value-creation loop: The organization’s core values attract potential leaders whose behavior is consistent with these values. When anyone can be a leader, values are absorbed and lived. An organization can then leverage the intelligence and passion of its talented people, perform well, and attract others like those already contributing to its success. Ultimately, systemic leadership and sustainability go hand in hand.