Make the Move to Distributed Leadership

Most legacy companies are organized around hierarchies that worked in the 1980s — but won’t necessarily be effective today.

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MIT Sloan Management Review: We read some of your thinking on distributed leadership, and I was wondering if you could describe this concept and what it looks like at your organization.

Maile Carnegie: If you look at the way business is run in a modern 21st century company, whether it’s Google or Amazon.com or others, it is organized in an agile way. Decisions are made by the people who are closest to the customer. This means you get a lot more speed in delivery and speed to value. Employee engagement levels are also much higher in these agile 21st century companies.

Most of the traditional 20th century companies — such as Procter & Gamble, which I’ve worked for, and now ANZ — are still very much organized around functional, classical 1980s hierarchy. They tend to run excruciatingly slow.Employee engagement is on the decline.

Distributed leadership is about moving to agile. While there is the quite orthodox application of agile, I’m thinking more of agile being a significant change in leadership, skills, and capability. So, distributed leadership is fundamentally about shifting leadership, skills, and capability, and moving to agile — and that’s what we are doing at ANZ.

As you move toward this more distributed leadership, do you need to provide employees training to take on these more leadership roles? Are they eager to step up? What have you had to do to help make this distributed leadership happen?

Moving to distributed leadership requires a combination of training and new skills. Some of the habits and tools can be taught quite easily. Some new skills may also need to be brought in. In some cases, those skills can be trained. But in other cases, it’s going to require bringing new people in, for new skills that haven’t been called on before, like data science, software development, and the DevOps space.

Many traditional 20th century companies have outsourced their software development. However, newer companies wouldn’t outsource this skill. It would be near and dear to their hearts. They wouldn’t outsource it to save their lives. People in the organization may have a good background in software development, but they haven’t had their hands on the tools for a while. So, that’s a great opportunity to train them and brush them up. But in many cases, these skills would need to be brought in.

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Topics

Digital Leadership

As organizations rely increasingly on digital technologies, how should they cultivate opportunities and address taking risks in a fast-moving digital market environment?
See All Articles in This Section

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