BOOK REVIEW: The Leader’s Dilemma by Jeremy Hope, Peter Bunce and Franz Röösli
It is generally accepted that the “command and control” management approach has passed its sell by date for normal situations. There remain ‘crisis’ environments where the direct hierarchical structure and unquestioning followership comes into its own, but for most organisations the complexity of their existence with information overload and speed of evolving situations, not to mention the increasing need to engender employee engagement and for perpetual innovation, a different more flexible model is required.
That model is evolving but it is also coalescing around flatter structures, with greater authority being given to individuals at all levels. This new ‘adaptive’ model is to be led by less directive leaders who place more faith in their staff and see their leadership role as being one that sets direction and then is there to assist in its achievement. Whether this be as a ‘servant leader’ or ‘enabling leader’ or through ‘collective leadership’ for ‘leadership at all levels’ – all the emerging theories have roots in the same ‘give power to the people’ idea.
And yet, despite the broad acknowledgement that the new adaptive model is a sensible one, its take-up can hardly have been said to have spread like wildfire. And the reason is simple – as much as a CEO may want to free his managers and staff from the drudgery of ‘command and control’ and instigate greater autonomy and innovation – they all, ultimately, need to show that budgets are not being blown, money wasted and general plans adhered to (not to mention a raft of statutory records and rules that must be monitored and recorded). This is the Leader’s Dilemma of this book – as the authors’ put it “how can he or she dismantle the bureaucracy and budget and build empowered and adaptive organisations, yet maintain coordination and control”.
The authors, Jeremy Hope, Peter Bunce and Franz Röösli, constitute three of the four founding members of the Beyond Budgeting Round Table – a group of academics and practitioners that are focusing on this dilemma of not throwing the value creation baby out with the bureaucratic bathwater. As they note “…it is the thousands of decisions taken every day by hundreds of managers that create (or destroy) value for customers and ultimately shareholders. Innovation, adaptation and collaboration are increasingly seen as emergent properties of the collective organisation culture.”
This collective organisation culture is, they make clear, a function of ‘systems thinking’, “…living systems are integrated wholes whose properties cannot be reduced to those of smaller parts…” and in the same way organisations, if they wish to be adaptive and innovative to meet changes in their environments need to operate in a similar fashion, “with a capacity …for self-organisation and self-regulation…”.
The authors contend that they have created twelve principles that will enable managers to build an adaptive flexible organisation yet not lose its inherent unitary coordination and control which are listed below. The creation of these frameworks are undoubtedly the way to build successful “adaptive leadership” models – this one is rooted in common sense and human behaviour which is a vital starting point.
The 12 Principles
Principle 1: Values – bind people to a common cause not a central plan
Principle 2: Governance – govern through shared values and sound judgement, not detailed rules and regulations
Principle 3: Transparency – make information open and transparent, don’t restrict and control it
Principle 4: Teams – organise around a network of accountable teams, not centralised functions
Principle 5: Trust – trust teams to regulate and improve their performance; don’t micro-manage them
Principle 6: Accountability – base accountability on holistic criteria and peer reviews, not on hierarchical relationships
Principle 7: Goals – set ambitious medium-term goals, not short term negotiated targets
Principle 8: Rewards – base rewards on relative performance, not fixed targets
Principle 9: Planning – make planning a continuous and inclusive process, not a top-down annual retreat
Principle 10: Coordination – coordinate interactions dynamically not through annual budgets
Principle 11: Resources – make resources available just-in-time, not just-in-case
Principle 12: Controls – base controls on fast, frequent feedback, not on budget variances.
Buy the book on IEDP
Link to Beyond Budgeting Roundtable