Wednesday, October 14, 2009

Leadership Constellations: Examining Collective Leadership as a Way of the Future

Denis, Lamothe, and Langley have continued their research examining the collective leadership structure. Through interviews and case studies, when institutional change was desired, the researchers realized that there are enabling forces, destabilizing forces, and obstructive forces that can arise. The authors’ name “three levels of coupling” that is necessary to be enabled in order for change to occur, however the destabilizing and obstructive forces must be combated at the same time for changes to transpire and perpetuate. The authors present a very interesting view of leadership for pluralistic organizations, and in light of recent failures in leadership when perhaps power was too centralized under a single individual such as at GM, or the Oakland Raiders, it is a viable alternative corporate structure. As we move toward a new age of responsibility and ethical behavior in business, the formation of collective leadership groups at organizations’ highest levels is an attractive option for the future. This study has revealed an adequate model, but has also revealed ways for that model to operate more effectively to sustain a productive organization over the long-term.
The researchers studied the Canadian health care sector particularly large Quebec hospitals, where the leadership collective, and in turn the “diffuse power arrangement has been regulated by law since the early 1970s” (Denis, Lamothe, & Langley, 2001). Each collective has been termed by the authors to be a “leadership role constellation” because it implies the existence of “multiple actors”, and a separation of duties. The difference between the “leadership role constellation” and a “top management team” is the complementary nature of the skills of the members, directed at leading the organization as a whole. As opposed to the more typical silo structure of a top management team where all members have very similar skills and leadership styles as the individual heads of their particular division.
The authors stated four key observations following their extensive case studies: first they assert that united leadership is crucial in affecting change; second the leadership collective is a fragile entity; third they discovered the cyclical nature of change in these particular organizations; and lastly that the credibility of a constellation is critical at perpetuating changes. The breakdown of each of these observations is fundamental because ultimately they all speak mostly to the formation of the constellation; the careful compilation of the leadership group in order to achieve maximum effectiveness. In the opinions of the authors there wasn’t a single collective that achieved greatness in their case studies. So one must take these observations to the next step, examining the weaknesses they reveal and using imaginative thinking to find solutions to how the leadership constellation could function more effectively for the long-term, and in a private sector setting.
The authors’ first observation is rather straightforward but crucial, skills MUST be complementary in the personnel of the leadership constellation, and actors MUST be united. However the authors do not specifically delineate ways of accomplishing this. They state how personnel is elevated to the collective in a multitude of ways; such as by seniority, by election, and in one instance the top position was filled almost by default as individuals were rotated through that position on a schedule. This wide variety of promotion rationalization led to a lack of long-term effectiveness at instilling lasting strategic change. There was, and is, too much turnover in the system and not enough deliberate appointment to the leadership collective. Granted this variety is most likely a result of the public nature of the study subjects, therefore if collective leadership was employed in a private organization more assiduousness should be applied to the formation of the leadership constellation. Leaders should be chosen for their traits and behaviors, which should be in complement to the other members of the team; seniority, politics, and ego should be ignored, as much as is feasible. Basically members’ skills should congruently cover the gamut of leadership styles, and should also include those with manager-type skills, therefore collectively forming a group with maximum effectiveness potential. Once an effective constellation is formed, each leader should adopt a tyro (not the proper title, however for lack of a better word…) to mentor, therefore molding a potential replacement if needed, aiming to develop effective sustainability.
Even when a leadership constellation is effective in the short-term, the sustainability of their success is hampered or nullified by the inherent fragility of the constellation. The authors state that fragility results from internal conflict between individuals (lack of “Strategic coupling”), detachment as a whole group from the follower base (lack of “Organizational coupling”), and detachment from the true capabilities and available resources of the organization (lack of “Environmental coupling”). Firstly, the potential for conflict between members, lack of strategic coupling, must be combated by better choices of individuals; and secondly, through the promotion of a shared vision among the constellation members. If the members are united in their pursuit toward a shared vision, then conflict is easier resolved as personal concerns can be separated from strategic ideas. The Community Hospital constellation in the study proves this as when “diverging conceptions” exist; it leads to conflict and disconnection (Denis, Lamothe, & Langley, 2001).
The lack of organizational coupling can be addressed through proper selection of an individual for the constellation, but also through the use of the apprentice figure. An effective “second-in-command” can allow a leader to maintain an authoritative distance with the organization’s members. Congruently, this apprentice can maintain a warmer and more intimate connection with organization’s members. The importance of this communicative relationship cannot be ignored; especially in the hospital setting where the “front-line” employees are highly educated physicians and nurses. The same would be applicable in high-technology organizations, biotechnology companies.
The input of these employees is crucial at maintaining the organization on path toward achieving its shared vision. The more comprehensive and comprehensible the communication relationship is between the base and the leadership constellation, the more considerate of the base’s stance the constellation can be when forming change strategies. Therefore, strengthening the “organizational coupling” through “conformity between objectives it [the leadership constellation] is pursuing and the interests” of the key members of the organizational base (Denis, Lamothe, & Langley, 2001). Subsequently combating the forces of fragility, and enhancing the long-term effectiveness of the leadership constellation.
The tenuousness the authors observed in these particular leadership constellations, was so inhibiting it bears extra attention. Especially when compared to their following observations that “change is cyclical” and sequential in addition to “credibility is crucial” which are negotiable. Understanding that when an organization has a new CEO who must first strengthen the organizational coupling before tackling the environmental coupling problems. In addition when a leader’s credibility affects the ability of that leader to act within the leadership constellation, consequently affecting the leadership constellation as a whole to act as an agent of change. Both of these observations speak to the proper selection of the individuals selected to be a part of the leadership constellation. Also, adoption of a tyro who possibly had existing ties to the organizational structure would be ideal to assist a new leader in building their credibility through better communication to the ranks. Granted an apprentice figure could have his own Machiavellian aims, however the leader should utilize their skills to select the fittest candidate avoiding those who may seek to undermine the constellation’s effectiveness for personal gain. To reiterate these recommendations the most important task when establishing a leadership constellation for an organization should be the careful selection of the individuals involved, coupled with a determined effort to communicate and establish rapport with the organizational base (the followers). This will bestow the constellation with the capital to then begin to affect change in the organization and the foundation to sustain that change over the long term.
The ability of a leadership constellation to withstand both strategic and organizational uncoupling has been discussed at length because both are closely associated with the immediate effectiveness of the constellation and are directly related to the complementary nature of the skills of the leadership constellation. However, once an effective constellation is in place, and has a strong coupling with the organization, the next step is to create strong coupling with the organization’s environment. This is achieved through the existence and utilization of the slack resources available to the organization, as it allows stability combating fragility and empowering the leadership constellation to “move more aggressively” (Denis, Lamothe, & Langley, 2001). Then through the creation of stronger environmental coupling the leadership constellation has the tools to effectively execute the change strategies they envision for the organization. Without the adequate slack resources to implement change, strategies will appear rhetorical to the organization’s followers, and ineffective in the short and long-term.
The existence of slack resources also imparts the time needed and the buffer for creative opportunism that were recognized as forces of stabilization by the authors. “Social embeddedness, inattention, and formal position,” were also recognized as forces of stabilization (Denis, Lamothe, & Langley, 2001). However, these would arise again from proper attention to selection for the leadership constellation, and effective communication networks between the constellation and the follower base. Therefore to better understand how to achieve change, one must examine how to achieve better environmental coupling.
The usage of slack resources by an effectively established, though even relatively new, leadership constellation is a function of the degree of control the leadership constellation must have over the slack resources, and also the timing to which strategic change is attempted in the organization. Attention must be paid to the timing at which the leadership constellation attempts their change initiatives. It should be a time where adequate resources exist, that can be utilized without negatively influencing operations of the firm that must continue as unaffected as possible throughout the change process. Otherwise personalities within the follower base may feel neglected or devalued, therefore detracting from the organizational stability that has already been created. This situation is analogous to when organisms within an ecosystem choose to breed. As breeding, and weaning, takes an incredibly high toll on an organism, most have adapted to breed at the ideal time when the conditions of the system have enough slack to support them. These adaptations result from millennia of natural selection, where organisms that attempted this costly endeavor at the inopportune moment were proven less fit than those who chose a better time to breed. Pacific Salmon are an adequate illustration as their breeding practices, of swimming hundreds of miles to return to a hinderingly specific spawning ground, are so narrowly effective the slightest change in available resources render large numbers of them unable to spawn. Therefore that species is particularly fragile. Similarly an organization that attempts change strategies without adequate slack resources, will not be able to sustain itself through the high toll that the initial changes take on the organization, and the strategies will falter in infancy never realizing the future vision for the organization, and consequently damaging the leadership constellations stability.
In order to utilize slack resources at a time when they can best assist the implementation of change strategy, a leadership constellation must have actual control over those resources. This seems more easily accomplished in a private organization, versus the Canadian public health care sector that Denis, Lamoth, and Langley studied. Proposed budget cuts and the production of rationonalization were stated as reasons for mergers between hospitals in the merger cases studied by the authors. Which represents a failure in foresight by the governing bodies that mandated the mergers. It would therefore behouve an organization on the precipice of change to ensure not only that there are adequate resources but that the leadership constellation is empowered to use this slack to facilitate the changes required. If adequate power is not imparted to the constellation, the constellation must unite as a whole to influence whomever needed in order to gain that power. If this is impossible then their change strategies must be down-graded until slack resources are adequate to achieve the change, or they must attempt to secure additional resources to achieve their change strategies.
Achieving sustainable positive change in an organization is not effortlessly done with a collective leadership model, as is proven through Denis, Lamoth, and Langleys study. However change is possible with the proper construction of the leadership constellation, the subsequent steps to overcome the inherent fragility in the constellation through effective coupling, as well as the existence and proper utilization of slack resources at the implementation of change strategies. Whether a leadership constellation would be more effective than a single leader at affecting change remains to be seen. Examining the food web of an ecosystem yields clues; as when the web is more complex with greater numbers of mid and upper level predators the system has a greater productivity (biomass) and greater species diversity, such as in a rainforest. If a predator is removed from the system, the system can recover more quickly to its levels of productivity, therefore making it more sustainable. When an ecosystem’s food web resembles more of a chain, with a single keystone predator such as a kelp forest, when that predator is removed the effects on the productivity of the system are devastating and often the system cannot recover from the loss without seriously active intervention (Molles, 1999). In conclusion, as parallels between organizations and ecosystems are increasingly drawn, we cannot deny the validity of exploring further the leadership constellation; even experimenting with new leadership models so that the effectiveness of an organization that functions more like a food web instead of like a food chain can be examined.
SOURCES
Denis, J.-L., Lamothe, L., & Langley, A. (2001). The Dynamics of Collective Leadership and Strategic Change in Pluralistic Organizations. Academy of Management Journal , 809-837.
Dubrin, A. J. (2007). Leadership; Research Findings, Practice, and Skills. Boston, MA: Houghton Mifflin Company.
Koehn, N. F. (2003). Leadership in Crisis: Ernest Shackleton and the Epic Voyage of the Endurance. Havard Business Journal , Havard Business School Publishing.
Molles, M. C. (1999). Ecology; Concepts and Applications. New Mexico: McGraw-Hill Companies, Inc.

Wednesday, March 11, 2009

Structural Inertia and Organizational Change

STRUCTURAL INERTIA AND ORGANIZATIONAL CHANGE,
By Michael T. Hannan and John Freeman:
Review and Application

Michael Hannan and John Freeman, in their paper Structural Inertia and Organizational Change, present an argument regarding the ability of organizations, of various size and age among other aspects, to change course either at their core or their peripheries. Using the base biological principle of the Theory of Natural Selection as a guide, the framework for an organization to change, and even more so what hinders an organization from being able to change is theorized. The hindrance of change is referred to by the authors as “structural inertia”, the Newtonian concept that an object, or in this case an organization, will remain at rest (or in motion) unless acted upon it by an outside force. This paper was published in 1984, and perhaps because of its importance, many of the ideas presented have disseminated throughout popular research since, making the hypotheses proposed here familiar and anticipated. However, Hannan and Freeman elucidate upon a few points that are especially revealing when one regards organizational change including the ruminations of whether “social change, like biotic evolution, [can] be blind”, and the concept of “organizations arise[ing] to fill the gaps created by market failures” and what are the characteristics of such organizations, as well as the assertion that organizational size lessens the probability of death (Hannan & Freeman, 1984). These three specific concepts, though fresh and interesting, (and the focus of this review) do not fully encompass the depth of the theory presented here, which in summary is that organizations are subject to selective pressures, just as organisms are in the natural world, from their environment and from within, the influence of which varies dependent upon the size, age, reproducibility, and accountability of the organization.
At the start of their paper the authors present a section titled “Transformation and Replacement” beginning it with an excellent explanation of Natural Selection:

Innovations are not produced because they are useful: they are just
produced. If an innovation turns out to enhance life chances, it will be
retained and spread through the population with high probability. In this
sense, evolution is blind. (Hannan & Freeman, 1984)

Thusly they provide the basis for an extremely interesting debate about whether or not organizations, change upon the supposed conscious directives of their human occupants, or whether organizational change can occur as blindly as evolution does in the natural world. Key to understanding these concepts is comprehending that just because evolution proceeds blindly it does not do so without purpose. Evolution is purposeful in that it is constantly moving organisms toward a genetically “more fit” version of themselves. Like the constant evolutionary pressure on an organism to become more fit, individuals within an organization can apply a similar pressure to attempt to drive organizational change or strategy. However, in turn these pressures may manifest themselves in totally unexpected ways throughout a firm, therefore resulting in a random evolution toward more fit processes and structure in an organization. So, organizational change, like evolution in the biosphere, is blind when instituted with the objective of improving the organizations’ fitness. Conscious innovations however are subject to human motivations which may hinder their viability toward the organization as a whole. For example, new policies introduced may be self-serving to a certain individual within, and not contribute to the overall fitness of the organization; recent political endeavors by the US government illustrate a real world example of this. The lesson, for organizational leaders, is that strategy must always serve to improve the organizations’ fitness (make the firm a better competitor) and the successful structures, and processes, resulting from the implementation of such strategies should then be further selected and reinforced by top management to perpetuate and accentuate the effects of such successes. Until of course environmental conditions require leaders to again formulate and implement new strategy, following which the same process of “cream of the crop rising to the top” can occur, and failures can be adjusted or abandoned.
Just as the authors’ correct application of biological principles was evident in their presentation of evolutions blindness, so is the concept of organizations arising out of ashes of market failures, or their own firm’s failures, will regenerate more fit than before because it offers the opportunity for restructuring into a more competitive machine. This hypothesis is best demonstrated through metaphor. For example, one can visualize an industry as a forest ecosystem populated with different species of firms each operating within their own niche, competing for resources, and continually struggling for survival or dominating the competition and thriving. Now imagine that a fire rips through that community decimating resources, injuring species, restructuring the environment (not unlike the current global economic crises we are experiencing now). Every occupant of this ecosystem will now experience the scramble to reorganize in order to compete effectively in the new environment because structures and processes that once conferred competitive advantage may no longer apply, or may in fact be detrimental to a species’ fitness. One of these detrimental factors, according to Hannan and Freeman, may be size meaning that the larger an organization the lesser it’s ability to adapt to revolutionized market conditions, such as insurance giant AIG, or even GM, is experiencing today. This is especially true if the giant is resistant to radical restructuring, known in the business world as declaring bankruptcy. When a cataclysmic event changes an environment the first species to successfully repopulate the area have certain characteristics, one of which is crucial to prompt evolution enabling successful adaptation to the new environment. These species are known as R-Selected, the first-movers of Mother Nature with smaller body sizes, decreased investment in their numerous offspring, and the crucial aspect of which should be applied to a firm is that of short maturity time, which in turn would decrease the time of generational cycle giving more fit adaptations the ability to quickly proliferate throughout the gene pool. An organization can accomplish this feat by decreasing the cycle time for their strategic initiatives, (also committing as few resources as possible to each new initiative thereby decreasing the cost of innovation which in such a situation, if too high can prove deadly) that way effective processes and structures will show quickly and can then be selected and perpetuated effectively evolving the organization to the new environment as quickly as possible. The counter to R-selected species, are K-selected species which have a longer generation time, larger body sizes at maturity, later in life reproduction strategies, and increased investment in offspring. Organizations though, unlike organisms in nature, have the ability to switch from R to K-selected if consciously undertaken by management as a requirement to making the organization a better competitor for the long run. So following a cataclysm a firm should reflect R-selected characteristics, but as the environment becomes more stable the firm should move toward a more K-selected strategy to carry it through the long-run.
Sustainably successful productivity in an organization is usually a key goal of its leaders and with this longevity comes an increase in size which in turn leads to a high level of inertia in an organization, or a resistance to core changes. Though size is stated as a weakness of a firm Hannan and Freeman also see it as a strength, for they assert that this large size reduces the possibility of organizational death. Interestingly this theory parallels that of K-selected species because with a firms’ longevity also comes the increased investment in new generations (increased R & D spending, and available organizational slack), and the longer maturity time (or long-run strategic initiatives). So it is these abilities, congruent with size increases but distinctive, impart important resistance to negative environmental pressures, and allow a firm to remain highly competitive in the face of anything less than a cataclysmic event. The numerous generational cycles that a mature firm has undergone enables the Natural Selection process to mold it into perhaps the fiercest competitor within its industry. The firm becomes similar to the Great White Shark, the Alligator, and the Crocodile, who are extremely resistant to disease and other threats (human technologies are disregarded in this case) because they are ancient species who reached the pinnacle of their evolutionary processes millions of years ago, and who are able to weather ice ages and asteroid collisions that wiped out numerous other species. So the more generational cycles, or strategic implementations (not necessarily size), an organization experiences, as long as the costs of such are monitored to be adequate and not exorbitant, the better a competitor it will become making it more resistant to organizational death, and the increase in size is just a side effect. (Anonymous, 2000)
In conclusion, the application of Natural Selection theory to organizational processes and structure in the attempts to explain and enhance organizational strategy changes can be highly successful as the correlations between biological systems, from the level of organisms to the biosphere, can be used in direct comparison. It is important to remember though that everything in nature exists on a bell-shaped curve or on a sliding scale, and everything is continually dynamic the only absolute being that nothing is absolute; there is no such thing as static, and to sustain profitability and productivity one must always be selecting to keep evolution always moving forward toward increased fitness. Therefore organizational leadership must take a lesson from Mother Nature and act as that agent of random selection always assisting their firm in achieving a better state of fitness, through regularly examination and renewal of strategic initiatives and implementation and constant adjustment, to maintain productive organizational homeostasis and repeatedly reach organizational goals.

RESOURCES
Anonymous. (2000, June 15). Biosphere Field Notebook. Chiracahuas National Monument, New Mexico: N/A.
Hannan, M. T., & Freeman, J. (1984). Structural Inertia and Organizational Change. American Socioligical Review , 49, 149 - 164.