Episode 119 – Rod Collins – Leaders On Leadership
Top-down hierarchies are the business structure for the longest time, and though it is already tried and tested, such a model may cause unhealthy employee competition and untargeted work. Because of this, Rod Collins believes that leaders must start applying a network structure within their teams. The Chief Innovation Facilitator at Salt Flats sits down with Dr. Tracey Jones to discuss how this specific business model gives room for deeper collaborative work, better employee relationships, and streamlined tasking. With such an efficient strategy, leaders can expect better results and higher productivity.
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Rod Collins – Leaders On Leadership
Our guest is Rod Collins. Rod is the Chief Innovation Facilitator at Salt Flats. He's a keynote speaker and he's the author on the next generation of business management. His book is titled Wiki Management: A Revolutionary New Model for a Rapidly Changing and Collaborative World. You are going to love reading what Rod has to say about what it takes to pay the price of leadership.
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Rod is the Chief Innovation Facilitator at Salt Flats and a keynote speaker and author on the next generation of business management. He is the former Chief Operating Executive of the Blue Cross Blue Shield Federal Employee Program, which under his leadership, experienced its greatest five-year growth period in its 60 plus year history. Year after year, it's set new records for financial operational performance. Rod is the author of Wiki Management: A Revolutionary New Model for a Rapidly Changing and Collaborative World and a blog contributor for Management-Issues.com. Rod, I'm so excited to talk to you.
I am delighted to be here. It’s good to see you, Tracey.
Thank you so much. You sound like a futurist and a thought leader. I can't wait to hear your pearls of wisdom that you're going to share with us.
I'm looking forward to it.
For our readers, a lot of you have known me talk about the C-Suite Network and that's where I connected with tremendous Rod. He's that level person that's in that peer group that I've talked so much about and had some other guests on. Rod, without further ado, my father loves talking about leadership and had a pragmatic but exuberant approach to leadership. He gave a speech called The Price of Leadership many years ago. In it, he talks about the four things that you are going to have to be paying in order to truly be conceived or known as a true leader. Otherwise, you're a leader in name only.
I want to unpack each of them and see from your varied and years of experience what these different words mean to you and how you would lay them out on your leadership journey so our leaders can learn something from you too. The first one my dad talked about, the first price of leadership that he said was loneliness. They say it's lonely at the top. Rod, like everything else in life, loneliness can have a duality to it. Can you unpack for us what loneliness means for you as a leader, maybe where you've experienced it, or some words that you can give to our readers on how to deal with it?
I've come at this from a different vantage point. When I was asked to reflect on this, my first thought was, I wasn't lonely in leadership. It had nothing to do with me as a personality. I have written a book called Wiki Management: A Revolutionary New Model for a Rapidly Changing and Collaborative World. That new model is the emerging new model of management going forward, which is the distributed peer to peer network. For the last century, management has been centralized top-down hierarchies. The old saying is, “It's lonely at the top.” I do think that leaders in top-down hierarchies do experience a high degree of loneliness because they have a fundamental source of power that comes from being in charge. It is expected and their fundamental activity is that they are expected to direct things. Another thing about hierarchies is they leverage the individual intelligence of the people at the top.
The basic theory is, organizations are smartest when the smartest people at the top direct the work of everybody else. The whole organization is smarter than it otherwise would be if people were left to their devices. In the model that I follow, the paradigm is completely turned on its head. Let me give you a little background on why I didn't experience loneliness as a leader. In the mid-1990s, after a fifteen-year career as a General Auditor for the Blue Cross Blue Shield Federal Employee Program, I was tasked with taking over the operations. I was also tasked with turning around it.
It sustained about two decades of low growth, low performance. I said to my boss, “I'm going to do different things.” He said, “I don't care what you do. Turn this around.” For a little background for our readers, many people don't realize Blue Cross Blue Shield is not one organization. It's a federation of 39 separate organizations. The Federal Employee Program that I worked for, when I left, it was a $19 billion operation and it was an alliance of the 39 separate organizations to deliver seamless health insurance to 4.5 million federal employees and their family members around the world.
As I looked at why is it we've had so much trouble sustaining the growth we wanted and the operational performance we wanted, the insight was we lead this organization like it's a hierarchy. We're barking out directives from Washington, DC, which is where the headquarters was. When I looked at this and said, “We're not a hierarchy, we're a network. What if we were to learn to lead this as a network?” There are no books on that and I realized that we let it as a hierarchy because that's all you’re taught. That's the only method people knew.
We ventured out and became pathfinders. Over the next couple of years, we successfully put in place a network management model. Leadership in a network management model is different because one of the things that happen when you shift from a hierarchy to a network is that the locus of power shifts. Power is not about being in charge, it’s about being connected. Our job as leaders was to increase the connectivity among all of the various organizations participating and to learn how to herd cats. The other thing we recognize is we had to lead by consensus. Through some innovative ways of bringing people together, which is the essence of the work that I do as an innovation facilitator.
We were successful in building this network but what it meant is, as the leader, my job wasn't to direct the activities. My job was to facilitate the container in which the direction would be shaped to come up with processes where we could tap into the collective intelligence of all of our people. I wish we had this in our world now. It's the complete opposite of the tribal divisions we find ourselves in. We have some appreciation for it because, unlike the two tribes we have now in the United States, we have 39 different tribes. In forming them into an effective network, we had to find a way to call out the best of everyone's thinking. Maybe later in another point in the interview, we could go into that in more detail if it's helpful.
Wiki Management: A Revolutionary New Model for a Rapidly Changing and Collaborative World
I personally went through a significant paradigm shift in what leadership meant. It meant not that I had to give the directions, but that I had to make sure that the right direction was found and discovered. In the process of doing this by involving people in creative and innovative ways that we could accomplish fast and with surety, we tapped into two key attributes that are generally missing in most organizations. The fact that these are missing drives the traditional loneliness that executives feel in top-down organizations.
We got good at aggregating and leveraging our own collective intelligence and in the process of doing that, we got good at putting together and collating a shared understanding. The shared understanding became a great driver of consistency, in terms of performance. Collective intelligence wasn't something we were aware of. It's something we discovered. As we begin to focus on, “We've got to get people's fingerprints on what we're going to do. We're not going to be in charge of people.” It doesn't mean that you're not engaged in leadership and it takes a higher set of skills to be this type of leader.
In the process of setting up the meeting dynamics that helped us come forward, we stumbled into this phenomenon of collective intelligence. I believe the most untapped resource in the typical organization is the collective intelligence of its own people. With organizations lacking the processes to tap into it, hierarchies are designed not to tap into it. They're designed to leverage the intelligence of the people it's taught. Once you have this asset, what you realize is that collective intelligence is a higher intelligence than the capacity of any single human brain. It's a higher level of intelligence.
Once that is formulated, the other thing that we found is people bought into it rapidly because they helped create it, and now processes brought together the best of everyone's thinking. The apparent dissonance from different points of view went away when we were able to combine ideas into more optimally intelligent solutions. The byproduct of this is an incredible shared understanding. When there is a shared understanding, you're not lonely at the top. You are surrounded by an incredible group of powerful people at the core. Leaders should not be at the top. That's what hierarchies do. Leaders need to be at the core, but the core isn't about amplifying themselves. The core is about optimizing the activity of the whole organization so you're tapping into everyone's intelligence. I have to say, the most fun I had in my executive career, were the last couple of years when we did this.
It works so well that after leaving operations for the last five years, I was promoted to the Chief Executive of the business. It is a different way of leading but I have to say it was a less stressful way. By being able to tap into this larger intelligence, I felt like I had an incredible competitive advantage. We have somehow stumbled onto a way to tap into this great asset and by the end of it, my mindset at the end was, “Why would I ever substitute my own intelligence for the collective intelligence of this organization?” We were able to put that together and the sessions generally had about 40 to 50 people in them. You need that much to tap into it.
It’s the old Ken Blanchard quote, “None of us is as smart as all of us.” Rod, you were in the organization when they said, “We see there are issues here. We would like you to take it.” Is that correct or did you come in from the outside?
No, I was internal. For fifteen years, I was the general owner of the program.
You saw this stuff going on and you saw that the old army be all that you can be. You saw that it wasn't being all that it could be. There was leadership in there that sensed this dissonance, but it was okay until somebody above you finally said, “We’ve got to make a change.” Is that the way it happened?
The way it happened was we needed to turn the business around.
You were in a status of, “We can't afford to do this anymore,” type of thing.
They wanted to try something different. I did auditing different. One of the things we did was when I led the audit group. I looked around and I said, “We go out there and we get smart auditors who go out and have to spend perhaps 3 or 4 weeks on a site. I know these people know on the first day, what's wrong, what needs to be done, specially seasoned veterans.” They're going to spend 3 to 4 weeks coming up with the documentation of what they already knew. One of the things we were doing is in addition to traditional audits, we supplemented it with something I had come across.
I don't remember who the authors of this were so I can't give them attribution, but something that was known as Control Self-Assessment. What it was is we went out, we invested and bought all these machines where people could vote anonymously. In the first half day, we asked the people, “What are all the issues here?” We were able to get that so these control self-assessments could be done in three days. When you presented the findings, it wasn't like, “We found this on you.” Your own people identified it so there was an early stumbling into this phenomenon.
That is huge because I could see you were in it so you saw it, but you had a hierarchy that was evolved enough to give you the reins to change it, mean it, and back you. You had this control self-assessment where people came up with the issues themselves.
Network Structure: When there is a shared understanding, you're not lonely at the top. An incredible group of powerful people surrounds you at the core.
One of the problems with hierarchies is that they tend to pit people against each other. They're naturally competitive environments because everybody is trying to go up the pyramid. One of the things that happen in a network structure is it engenders collaboration. Everybody is saying, “We want to be more collaborative,” but to me, the test is, as long as you remain a top-down hierarchy, you don’t mean it.
It works against that.
If you want to be a collaborative organization, look at some of the technology companies. I've had the opportunity, for example, to walk into Zappos and walk around their place. It's unlike any office you've ever seen. A lot of people would say, “This isn't an office at all,” and yet they're a highly effective organization. Collaboration is built into the DNA. Another company and our audience would be surprised, they know its products well, is WL Gore and Associates, the makers of Gore-Tex. When I do public speaking on this, I asked the audience, “Would you be surprised to learn that there is a company that has been around for many years that’s made a profit in every year it's put its products in the market? It's a $3 billion enterprise that has 10,000 people in 30 countries around the world and nobody has the authority to make an assignment? It has no bosses. It's a completely self-organized company.”
I mentioned this not to say that our leaders should adopt this model. In doing the research for Wiki Management, I did come across several organizations that have no supervisors, but every one of them was born that way at birth. I pointed out to people to know it is a model that works and for over 60 years, this is how WL Gore and Associates works. The world's leading tomato processor is self-organized. It's been around since the beginning of the 1970s.
Companies like Google or Amazon for example have supervisors. You can have and anybody who's come from a legacy of supervisory management, I would not recommend they adopt these other models. We need to know they're there because they do work. When leaders shift and understand that I'm leading a network, not a hierarchy, which will become critical. I don't think legacy companies will be able to compete against the technology companies who are taking over more and more of the landscape space. What most business leaders don't recognize is one of the big competitive advantages they have is they're not designed as hierarchies.
They are able and naturally designed for innovation because, in networks, anybody can generate ideas. Not everybody gets money. Money's got to be earned. There are no prohibitions against thinking. Nobody will be fired because they have an idea that doesn't comport with what we're doing now. As a matter of fact, in a network, you want ideas that are not what we're doing now because we'd rather that come from inside our organization than have somebody outside come up with a new business and product model that all of a sudden gives us the new version of the Kodak moment.
Kodak, if they would design it as a network and encourage the proliferation of the new ideas that their engineers had, maybe people will be surprised to learn Kodak invented the digital camera but they put it aside because they were in the film business. They should have invented the iPhone. Network is not a way in which you don't have to be lonely. It's a way in which your organization can move fast. It can keep up with the new competition. It can keep you as a sustainable entity because the only competitive advantage now is not about efficiency it's about adaptability. If you're going to do that, you need to design an organization where leadership is a core, it's not the top of the pyramid.
Is there a school leadership thought that you would compare this to? Everybody has the big deal with servant leadership. I, in my leadership studies, have studied the power of followership. I'm a Robert Kelley girl. I’m all about critical thinking and all that engagement so it’s what you're talking about. Reverse the lens on leadership and 80% of the success of an organization as followers. Is there something that you've seen emerging in that field? I know you said adaptive leadership. That made me think of servant leadership but adaptive leadership. What are you thinking?
This is consistent. I do think that that leadership in the future is aligned with what's been called servant leadership. I like to call it facilitative leadership. I also think too, that somebody who had insight into this was Jim Collins. Most of our audience have probably read the book Good to Great and they will remember that Jim Collins talked about Level 5 Leadership. As a matter of fact, he writes in the book that one of the things he went into this study with is we're not going to talk about leadership. We're not going to say that. We're going to look at the activities and the dynamics. Where he was coming from was, it's not to get good intentions.
Collins was looking for operational criteria. It was a student who worked with him who badgered him until he gave in who said, “You can ignore it.” It was the only factor that was present in all eleven organizations. They had different types of leaders. The level five leader is consistent with this notion of a servant leader, a facilitative leader. This is not weak leadership. What Collins called it was humble will. These people had a sense of humility about them. They understood that the world didn't begin and end with them.
They understood the world began and end with all the people who were in their organization but they were strong-willed. They set an environment in which we're going to succeed. What do you need me to do to get things out of the way? It's that type of strength that is necessary. It's an interpersonal strength as opposed to a dominant strength. You want this interpersonal strength to permeate throughout your organization because if the interpersonal ties are incredibly connected, now you're experiencing the power of connectivity, which is what drives networks. This is a bit of a leadership shift. The other thing Collins pointed out is most boards anti-select the leaders who would be the best leaders.
I have found that on every board I've been on. I saw the same thing. I'm like, “This is the strangest phenomenon.”
These are not people who come in and take over the room. They don't see that as strength. As a matter of fact, there are people who lead by listening. They do a lot of listening. They focus on listening and understanding and this notion of understanding is critical because the leader’s main job is not to give direction. The leader's job is to cultivate the largest sense of shared understanding that they can throughout the organization. When you do that, people can make decisions that you're comfortable with at the lowest levels close to people and close to processes. Delegation without shared understanding is a formula for chaos.
Network Structure: Hierarchies are naturally competitive environments because everybody is trying to go up the pyramid.
Thank you for unpacking loneliness. I love talking leadership theory and application, especially when you're coming up with something new. The next thing my dad talked about was weariness and like everything else, all different kinds of weariness. Rod, how do you see the best leaders or the best organizations battle weariness and stay replenished or refreshed? How do you balance that?
This is another interesting aspect and I would ask our audiences to think about this. If you're in a top-down hierarchy, you're in a battle. Oftentimes the most dysfunctional team in the typical organization and whenever I say this I get a lot of knowing nods and knowing smiles is the senior leadership group. Why are they all competing with each other to be the CEO? They’re withholding information from each other and making each other look bad so they can look good. That is what weariness looks like.
If you have to go in every day and know that I am going to battle, not with the market, but I'm going to battle with about 9 or 10 other people, any one of whom may try and make me look bad in the meeting so they can look good, that's weariness. It's also unnecessary. It's an experience I didn't have as a leader. When you are leading a collaborative network, you're going in every day with 9 or 10 people who are focused on how we can help each other so we can win in the marketplace. Where the battle should take place is not inside the organization. It's out in the marketplace.
One of the disciplines that drove this was every two weeks we went off-site. I believe that strategy sessions were not something you held once a year, it's something you did once every two weeks. One of the products of the dysfunctionality among leadership teams is, if they're not working together, then we have not articulated strategy at the level we need. One of my favorite exercises when I do strategic retreats is to pass out two Post-it notes.
I tell the senior leadership team, “On the first Post-it note, I want you to put three numbers that add up to 100. You're going to rate them as follows. How much time do you spend on strategy? How much time do you spend on operations? How much time do you spend on people?” I collect those now I say with the second Post-it note, “Write down three numbers that add up to 100. How much time should you spend on strategy? How much time should you spend on operations? How much time should you spend on people?” I get those back and I lay them and I pick the median one and it is almost universal with any group I’ve worked with. The first set of answer is 10% on strategy, 80% on operations and 10% on people. That being said I should be spending 40% on strategy, I should be spending 20% on operations, and I should be spending 40% on people.
Where I draw their attention is, you’ve got 80% of your time on operations, you have 20% of where your time should be. Why do we have a 60-point gap? Who's doing strategy around here? You're only spending 10% of your time on that. If you are in a hierarchy and everything flows down from that, there's no strategy flowing down so people don't have context. What they see is that the leadership team, in their experiences, are warring with each other. The discipline that I wanted is we went literally off-site one day, every two weeks because we spent that day on strategy.
It was off-limits to talk about any operational problem we had. We separate meetings in which we handle that as a leadership team but I wanted this time dedicated to strategy and to have in-depth discussions, because in-depth discussions about the business is what forms the relationship stuff that drives the collaboration. The other thing I did with the team was to say, “None of you can make a unilateral decision about your area that affects anybody else.” For example, I would look at the marketing executive and say, “I'm going to hold you individually accountable for achieving marketing goals but you do not have the unilateral authority to make a marketing decision that you have not run by this team because I don't know which you're going to market. Do we have the systems built to do that? Can our operations deliver that?” I wanted us to think about strategy holistically. Too often what you have are individual silos that are making decisions. They don't necessarily fit each other. That's what weariness is about.
It’s the esprit de corps that we developed in this senior leadership team. I went into that meeting with high energy. I had a wonderful group of people with whom I worked with and that was one of the advantages I had. By the time I became the chief executive, we had developed this meilleur collaboration. We liked getting together and we had spirited conversations but never heated conversations. We had people building off of each other's ideas and we had people looking out for each other because we were all focused on winning in the marketplace. This type of discipline is necessary and it amplifies out to the entire organization when the senior leadership team is cohesive and focused on strategy. Strategy is the greatest gift that the senior leadership team can give to the operational organization because once they have that, they know how to handle the operations.
The reason that then the typical leaders spend so much time in operations is there is no shared understanding so the only way we can find the answer is to run it up a totem pole. If you're focused on developing an in-depth understanding of strategy, and you're conveying that to the rest of the staff and you're allowing them also to ask questions. It's what we want. Sometimes, in between two weeks, we would come back and somebody would say, “Based on what we talked about two weeks ago, I was talking with my staff and they came up with a good question.” We had a process in which that good question took no more than two weeks to get addressed.
Oftentimes, those good questions never get addressed. It's like, “That's a good point but the decisions we made, we’ve got to keep going.” As the world's changing, you need these types. I can't overemphasize the importance of this. I do want to add one thing if anybody reading to this admires the work that Alan Mulally did with the Ford Motor Company, this is exactly what Alan did. Once a week, he got his executive team together. I've seen this in writing, he called his meeting, it had a neutral title. He called it a Business Process Review if I recall right. It was this senior leadership meeting, where he was focused on how they could collaborate with each other and that is what drove the turnaround.
I remember reading in the book on this, he was given carte blanche to fire anybody who wanted to fire and he kept telling the board members, “I don't think I'm going to need to fire anybody.” They're looking at him. They were losing $16 billion a year. Feel free to do what you need to do. He says, “I'll feel that freedom, but I'm not sure I'm going to need to fire anybody.” He didn't fire a single leader. Two left on their own because they had philosophical differences with the way he was approaching things but the vast majority stayed. It's clear that they became a cohesive team and the turnaround of Ford is well-documented. Anybody operating like this, you don't feel weary. You feel energetic.
Loneliness, weariness and the next term he used was called abandonment. My father would always say that leaders need to think about what they ought and need to focus on and not what they like and want to. His terminology for abandonment was focus or clarity. With your leadership paradigm, can you unpack for us? I know we've got this collective thing, but how does the collective come to a singular point of, “This is where we need to go?” Can you unpack that for us?
Abandonment has two dimensions. The first is, “Do I feel abandoned?” We wouldn't spend much time on that because if you're lonely and you're weary, it's a matter of time before you're going to feel, “Does anybody care?” I don't think we need to talk anymore on that, because anybody who's working in this network type of approach feels a lot of company and support, and it comes naturally. The abandonment that matters is, when do we need to abandon what we've been doing that's made us successful so far.
Good to Great: Why Some Companies Make the Leap and Others Don't
Organizations have great difficulty with that. One of the things that I liked about some of the technology companies I studied when I wrote Wiki Management is this sense of, “We have got to be open to abandoning what's making us successful,” is baked into their DNA. Some of these companies, for example, when they put a successful product into the marketplace, would put together another team and say, “Your job is to kill what we put out there.” They know that in this rapidly changing digitally connected world with new possibilities for business and product models, somebody's going to do it. They set things up that aren't going to be done to us. We're going to do it to ourselves. It's something that in the old management paradigm is called cannibalism. You never want to cannibalize your own products. That thinking is gone.
If you don't cannibalize your own products, somebody else will. The idea that you can sustain a business or a product model for 30 or 40 years, which was possible in the late twentieth century is no longer so. Think about it several years ago, the iPhone didn't exist. We were running around with flip phones and Blackberries. We now take that for granted. Over the next decades, we're going to see an even larger technological revolution because the Internet of Things will be more transformative than the internet. It will create new possibilities for business and product models that we can only imagine now that will come at us faster than we realize. This is one more reason why networks do a better job of abandoning things.
Let me give you an example of a company that's well-designed for abandoning what doesn't work and it's a company I talked about before WL Gore and Associates. When there are no bosses, so you don't have a central group formulating strategy. How do you decide what you do and how do you decide what you stop doing? They have a simple rubric. When you get enough people to come to the meeting around a new idea, you start doing it, and you keep working on it as long as it's working. When do you stop doing something? When people stop showing up to the meetings because of their performance system, which is based on collective intelligence.
Another thing about a network is don't have people reviewed by a single person, have them reviewed by the people whom they need to collaborate for you as a leader to succeed, so they see all of those people not as competitors but as customers. This is what Gore set up. In 1958, when he set this up, he realized, “If I'm not going to have supervisors, how do I get people to do more work rather than less work and the right work rather than the wrong work?” We set in place a simple appraisal process where everybody is evaluated by twenty people and everybody evaluates by twenty people. That keeps people focused on those two things because, at the end of the year, I need those twenty people to see me doing more rather than less work and working on the right things and not the wrong things. They're able to drop projects that are going nowhere.
In a hierarchy when your whole identity is built around a project that is dying but you can't admit it because if you do, you’re designating yourself as a failure. That's a terrible dynamic to have in an organization. When the technology companies are operating from the mindset of, “We're going to fail. Let's do it as early as we possibly can.” You hear this thing, “Fail early. Fail often.” I know that's not palatable to our audience so I asked them to look at it this way, “Learn early and learn often.” That's what you're doing and put in place procedures.
Intuit is another company that's designed more a network. They have a monetary award, as I read somewhere. They pay people money for the Best Failure of the Year and the Best Failure of the Year was something from which we learned a tremendous amount and we circulated it all across the organization so other people wouldn't make the same mistake. When you hide failures, then other people down the road may make a similar failure and if we're not letting people know, it didn't work. You don't want to fail big. One of my favorite lines is, “If you don't want the big failure, tolerate the small failures. If you can't tolerate the small failures, be prepared for the big failures, especially in the changing times.”
You hit a little bit on it too. The last price is vision. Loneliness, weariness, abandonment, and vision. I love how you said that you show up for a meeting, seeing what needs to be done and doing it. I love how you said that the team coalesces and when it's done, it's done. Can you share with me what your idea of vision is and leading a networking or a highly collaborative workplace?
Vision is critical and everybody has to know what the vision is and vision needs to be literally seeable. Let me talk about a couple of dimensions here. Vision isn't something that is only understood in the C-Suite and I would guess that those who are limiting vision to the C-Suite would be surprised to find they don't have a vision. If vision is limited to the C-Suite, I'm willing to bet you that if you walk into a C-Suite meeting say everybody takes out a blank sheet of paper, write down the vision of this company. If you have ten people, you'll have ten different answers. Vision is not something that is like words on a sheet of paper. Visions are not handed out to people. Visions are something that people co-create an experience. It happens in several ways.
Number one, the leader's job is not to give directions to expect compliance. The leader's job is to cultivate and grow and this is hard work, not easy work. It requires strong leadership to grow the broadest shared understanding that you possibly can across your organization. That means several things. One, you do want to aggregate and leverage your collective intelligence and you do want people's fingerprints over ideas. That doesn't mean that the group is making decisions. The senior leaders should still make the decisions. In most of the networks, that's true and people are fine with that. As a matter of fact, most people in organizations don't want to make decisions.
They want the leaders doing it. What they want is you're making decisions because you've heard everything we've had to say and you've been exposed to a broad base of ideas so your decisions are as intelligent as they can be. In my experience when people express their voices, they didn't necessarily say, “Because I said so, it must be done.” First of all, if you hear all the voices not everything can be done but they want to know that you considered it. In considering it, you did that honestly and people will get behind whatever the group does.
I saw that over and over again. They were thankful that they were heard and often their experience is, “About 60% to 70% of the time, my idea does go forward. Thirty percent or forty percent it doesn't, but I understand why and I can get behind that.” That's what shared understanding begins to look like. Another thing is vision should always be reflected in metrics. If you haven't put your vision and metrics, it's not being reinforced. When I was with Blue Cross Blue Shield Federal Employee Program, everybody knew what was important in our organization if you walked off our elevators. One of the most important things that business leaders need to do is come up with the top four performance drivers for your business. Don't necessarily create it in the C-Suite. Involve a lot of people in defining what they are because here's the thing, none of those members are in your financials.
Most managers are managing to and by the financials. The problem with that is their outcome measures, which means the scores you get when the game is over. You want to get leading indicators. You want to find the four most important leading indicators that correlate with the outcome measures. I'll say, “Yes, you hold executives accountable for outcome measures for performance but they're lousy management tools, their performance tools.” The management tools, which is you're able to affect to the extent to which you'll succeed or which will fail. Find the leading indicators now once you have those. One of the things I'd like to do is all right, take that leading indicator and don't come up with a single metric, but come up with a spectrum of metrics.
What's the threshold? What should you be accomplishing 100% of the time? This leading indicator should never go below this level. What's the target? Seventy percent of the time, you should be able to hit your target 100% threshold and have a stretch. That's something that only has about a 10% probability of happening. If you're meeting all your stretch goals, you don't have stretch goals, you have target goals and you do want to stretch goals and you reward people for the target. Don't set up stretch goals, and subtly convey to people, “You could do better.” Stretch goals are incredible when you accomplish them. They mean something. You did land a person on the moon. It's that type of thing but most times, we should be aiming for targets and rewarding people appropriately. By having that stretch there, and with this understanding, you're getting people focused to do the best you can.
Network Structure: Strategy is the greatest gift that the senior leadership team can give to the operational organization.
When you have these measures, what we did is we color-coded them. Blue meant we were at stretch, and green meant that we were approaching the target, yellow was thresholds and red was we weren't meeting the threshold. Color coding is important because people respond to colors more quickly than they respond to numbers. They can glaze over with numbers but if they were to walk off our elevator and see all of these measures were red, you wouldn't have to call any meeting, people would start acting on their own than if they have the shared understanding. Our people are constantly focused on we want blue and we want green. We don't want yellow. We don't want red and if we get yellow, we're going to get acting.
I wanted everyone who walked off the elevator without being told by a supervisor, whether we were winning or losing in the marketplace. Those key indicators oftentimes reflect and are driving what the vision of the business is and what it is you want to create in the marketplace. At least one of those measures should be some form of a customer measure. When I focused on customers then we are navel-gazing inside an organization. We want to compete in the marketplace, not in the organization.
We've gone through loneliness, weariness, abandonment and vision. Rod, anything else from an overarching leadership view? You've unpacked an awful lot, but anything else you want to share with our leaders that are reading?
Yes, have the courage to think differently because, over the next decades, we are likely to see more change than we have in the last couple of years. Every one of our readers has experienced the impact of the internet and knows how that has changed everything. We don't have to convince our readers of that. What I'd like our readers to focus on is the Internet of Things will connect every person and everything into a single global network over the next decades. It will not require people to voluntarily go to a computer or mobile device to enter information. You will be collecting information 24/7, 365, and it's going to create the opportunity for new business new product models. Let me give a concrete example so we can relate to what that means.
Let's think about the car industry because the executives in the car industry are moving down this path. They understand the Internet of Things is coming. Years ago, if you told me that there was going to be driverless cars, I would say, “Not in my lifetime.” There are at least a million driverless cars on the road nowadays and all of our readers understand that sometime in our lifetime, we are going to see predominantly driverless cars but we're thinking in old paradigms. When we think of driverless cars, what we expect is someday I'll own a car. It's going to have a computer that will drive the car I do. Only it will be safer because it never falls asleep, never gets drunk, and never gets distracted. The first generation of driverless cars will look like that but the Internet of Things will do a complete paradigm shift.
This is another example of collective intelligence. In understanding how collective intelligence gets us beyond the limitations of the single human brain, which is where leadership has been in the past. Leadership needs to get beyond the capacity of a single human brain. Drivers' consciousness operates like this. Driverless cars will be nothing but collections of sensors. All those sensors will be interconnected and when they are, it will not be a single car navigating, it will be a network of all the cars on the planet operating in real-time.
In other words, every driverless car will be driving with the full knowledge of what every other car on the planet is doing because the artificial intelligence systems will be collective intelligence systems. If you think about now, if our audience is skeptical, we already have an application for this. The next time you get in the car and put in Google Maps where you want to go, it's able to give you this incredibly high quality, real-time information because it knows, through the mobile phone, the flow of traffic of every car in the world is connected. It's already operating.
I'll leave our audience with this little quote from William Gibson, a science fiction writer, “You need to recognize the future is already here. It's not evenly distributed. Get out of the past. Learn how to lead a network because the world with the impact of the network is fundamentally transforming our basic forms of social organization, from the centralized, top-down hierarchies to distributed peer to peer networks. That is the organizational model of the future. It will transform organizations. It will transform the way we do business and transform the way we do products. Those leaders who understand that will succeed, those who don't will have their own version of the Kodak moment. It's that simple.”
Rod, where can people get in touch with you? What's the best way for people to find you?
The best way to connect with me is on LinkedIn. I've got a pretty active presence there. I wind up repurposing blogs there. If they want to learn more about this model we've talked about, it's all spelled down in the book Wiki Management. It's built around 50 specific practices that the different organizations I study use because if we can't convert this into practices, it's theory. This needs to be practiced. It is a different form of practice.
I look forward to it. Rob, Thank you so much. I know we're connected. It’s incredibly insightful. It gave me much to chew on. Even the collective hive of making sure everybody's all in that collective hive because as leaders, we’ve got to make sure everybody's in it. Thank you so much to our leaders out there reading. I hope you get some great insights into what it takes to pay the price of leadership. Thank you so much for being a part of our tremendous tribe. If you liked what you read, please hit the button, make sure you hit the subscribe button too and we'd be honored if you would do us the favor of a five-star review. Thank you to all tremendous leaders out there. Thanks for reading and have a tremendous rest of the day.
Important Links:
Wiki Management: A Revolutionary New Model for a Rapidly Changing and Collaborative World
LinkedIn – Rod Collins
About Rod Collins
He collaborate with corporate leaders to seek, test, and deploy emerging technologies within weeks, rather than months or years.
He also help business leaders connect to the powerful tools of lean innovation and design thinking: rapid prototyping, "mixing and matching" traditional models with new ideas, and taking "purposeful risk" to deliver rapid results.