Leadership and Social Capital

The second form of capital in the organisational I.Q. is social capital. This is the asset created by relationships, both internal and external, both in quantity and quality. The modern business organisation of today has a web of external connections. Alliances, partnerships, joint-ventures,etc. are common. The web may be so vast that it is bound to contain ‘nodes’ where competitors sit. Companies may find themselves competing and collaborating at the same time. It has been called co-opetition. Internally, organisations are rich in connections and relationships but most of the time they are ignorant, focusing only on a relatively small part of human collaboration models: the teams. I have called the current business organisation a teamocracy because this model of collaboration has become coterminous with ‘organisation’.

In today’s business organisation, the organisation chart is dead. The job description is dead. But, as of Mark Twain’s, the death of the structure may have been grossly exaggerated. For clues, see Biology.

Like biological organisms, business organisations are in continuous adaptation to stimuli (external and internal environments), and must change and evolve accordingly. Biological organisms do not understand one year budget cycles, quarterly reporting on activity, one-off post-retreat reorganisations, static organisation charts, two-page-forever job descriptions, or annual objectives set up in January and assessed in December. They grow, generate antibodies, move, reproduce, get smaller or bigger, and die at different paces and rhythms.

Their ‘ultimate structure’ is created by their functionality “The function creates the organ”, I learnt from my anatomy teacher. Also, they can not be fully explained without reference to another system to which they belong or are connected to. In fact, they are complex systems that are better understood through the glasses of complexity theory.

Organisations may be just the same. What happens inside them can’t be tracked by the static organisation chart and the job description manual. The different components (people, groups, teams, networks of influence, etc.) are linked by an information flow which is far from static. The organisation is an information network. Leaders today need to understand this. Organisation-chart-management - fiddling around with reporting, solid lines, dotted lines, any combination - is like grammar. It has to be right. But leaders should play their role in literature. Mistaking one for the other is not a good sign of leadership. Let’s take a further look at this property of the organisation to create its own connections, because if this is true, then leaders have to be aware and also lead this ‘more invisible part’.

Leadership and ‘home effects’

In a previous post, I mentioned to you that leaders are architects and that there are 3 dimensions to their architecture. I’ve already focused on how they need to protect time and create space in my previous posts. Now, let’s look at how leaders build homes: the second dimension.

Leaders build ‘homes’. Leaders build organisational I.Q. which is a combination of three things:

1. Human Capital: the combination of individual talents, assets that the company does not possess but hosts. The organisation is like an investment bank using other people’s talent
2. Social capital: the quantity and quality of relationships between people internally and externally and between the organisation and other organisations.
3. Architectural capital: the assets developed and grown from (a) a particular ‘way of doing things’ and (b) a particular way of being organised.

The no-war on talent
In 1997, McKinsey-consultants coined the term ‘war on talent’ to describe the fight between corporations over the attraction of good human capital. Talent is a key asset, not a commodity, so there must be a war to win it for the company. There were articles and more articles and a book… It took a few years for somebody to shine a different light on the problem and it was Prof Jeffrey Pfeffer of Stanford University who did it. I learnt of this through an intriguing article in the Financial Times in 2001 with the title The futile war on talent. After all the noise made about the war, to have the FT saying there wasn’t one, or that it was futile, deserved a bit of attention.

The thesis was very simple. All this business about a war on talent distracts people from focusing on the talent inside their organisations. By making so much noise about a talent that seems to be ‘out there’ and for which organisations are murdering each other, we lose sight of our own internal talent pool. The issue, the article put forward, was how to host talent (whether home-grown or attracted) not how to grab it from some sort of extra-terrestrial place.

Sitting quietly alone

The French philosopher Pascal said that “all of humanity’s problems stem from man’s inability to sit quietly in a room alone”. It is a valid statement today. Modern life, organisational life, business life is not terribly conducive to letting ourselves be with ourselves ‘in a room alone’. But the need to find that ‘lost space’ is greater than ever.

All this stuff about psychological spaces and protection of time will also sound incredible stupid to the always-on executive, the one who never switches off. As Michèle’s husband says, this kind of leader and the company’s server are a continuum via a wireless umbilical cord recently called, amongst other names, Blackberry.

As leader, or leader-to-be, or leader in development…. you should look into all these issues seriously. Some people take a view that it is simply logistics, a question of good time management. Other people however tend to think that there is a more fundamental problem behind the pervasive and ubiquitous busy-ness of executive life.

There is little question that concepts of reality are different depending on what view you take. And - as I said in the introduction of my book Leader with Seven Faces and repeat in my Leadership seminars - the answers to these questions are personal. Unfortunately, the consequences of the answers are not.

As a leader who builds organisations (ideas projects, common purpose around a vision), how you choose to answer matters. And not only to you but to everybody else depending on you. Not a minor burden.

If you want to read more about leadership or want to continue reading from the above, you can read it all in my book The Leader with Seven Faces: finding your own ways to practice leadership in today’s organization.

You can also read some of the resources on leadership posted on the left or contact us for more information.

‘Social space’

Mothers are very often trapped in a vicious circle of child-feeding, nappy-changing and sleepless nights (My general practitioner says to them, “YOU will understand why sleep deprivation is barred under the Geneva Convention”). They are a good example of always-doing-not-much-time-for-being. Sometimes this period of their life becomes a-social (!) with baby-talk occupying much of daily airtime. Their need for ‘space’ is often translated not into need for sleep, isolation and tranquillity as you would have expected, although those are, of course, also very welcome! But into the opposite: opportunity to talk to other adults, socialise and recover a sense of connection with the world!

Also, people mistake this issue of protecting time and space with the famous ‘work-life balance’. It is often assumed by people that a work-intensive environment with not much flexibility for those protections must surely be compensated by a non-work one full of ‘space’ and ‘time’. (Watch the language! We call ‘life’ the other side of ‘work’ in the work-life balance, which says a lot about our concept of work.) But being trapped in an environment with perhaps reasonable ‘place’ but no ‘space’ and ‘no’ time is not exclusive to work. Family life with its commitments and challenges (and not only for mothers!) may equally be one of non-space, and the same principles apply. So, let’s not get this wrong. Space is not necessarily about solitude!

I make no apologies for my insistence on the protection-of time-and-space despite the fact that, statistically, only some privileged managers, executives, leaders, employers or employees have access to mechanisms such as the ones that create or protect them. Many people are trapped in jobs and levels of freedom and autonomy where their flexibility to seek a protection of space is limited. If they read this, they would think that you and I - lucky fellows who could still craft some spaces of freedom - are…well, just lucky! But everyone at every level should – and can - work at protecting whatever little time and space they can!

If you want to read more about leadership or want to continue reading from the above, you can read it all in my book The Leader with Seven Faces: finding your own ways to practice leadership in today’s organization.

You can also read some of the resources on leadership posted on the left or contact us for more information.

Leadership and the End of Time

A consequence of the ‘no time’ ethos is the ‘fast ethos’. There is no time, so you have to run fast, be agile, be first, etc. Society, and therefore business, is working on a ‘time-space compression’. The American driven fast-food industry has known it for a long time. As it has been expressed, they have “taught us to eat standing, walking, running and driving and above all never to finish a meal, all in favour of the endless snack”. Eating has been reduced to “a purely instrumental, no-nonsense utilitarian activity which exemplifies a ‘re-fuelling ethos’, rather than an intrinsic source of pleasure to be anticipated”. No wonder the ‘Slow Food movement’ became a truly international one!

The ‘fast ethos’ goes hand in hand with the ‘ephemeral ethos’ that takes for granted that things will not last. It is a common feature in fast-cycle businesses where products become obsolete quickly, but it has also been extrapolated to the ethos of the entire new, 21^st century enterprise. We all have friends somewhere who have started their own company with the idea of selling it as soon as possible. Most of the ones I know, do not intend to stay with their own baby for long.

Venture capitalists and investors have long incorporated the ‘exit’ aspect as central to the deal. How to exit is as important as how to enter, and it is part of written business plans. I know of somebody who could not give me the name of his new company but had already thought out the ‘exit’. He is a young guy for whom this is the normal way to set up business. He did not know of any other, and looked at me puzzled at my suggestion of creating something that could last ‘forever’.

The end of time
A quick Amazon.com search will tell you that there are 800+ book titles which start with ‘The end of’. Affluence, man, distance, work, politics, nature, sanity, the future, ideology, capitalism are some of them. From those, there are more than twenty recent ones entitled The end of Time. This lot includes slow-digestion physics books sharing shelf space with more dubious ‘time management books’, which are an industry of its own. It’s funny to see what lives on the same shelf!

This ‘End of Everything’ may just reflect the fact that things have changed at an unprecedented pace, producing quantum discontinuity. In this accelerated time, fast is good, slow is suicidal. The fanciest business magazine is called Fast Company. Business Week, referring to the new start-up companies, announced a few years ago that it takes on average 10 days from idea to business plan and launch. It used to be months. Today, perhaps it’s an afternoon. Venture capitalists tell us that “whilst it used to be that the big eat the small, now the fast eats the slow”. ‘Speed’ is considered the new revered capability, a crossroads for new corporate competencies that include ‘surprise’.

This connection of no-time/ephemeral organisation/run fast in the meantime has profound implications on the reflection of your leadership style. Perhaps you have never stopped and reflected upon this (Ooops! I see, you can’t stop, you don’t have time, hm!).

Here are two different views on speed:

1. John Chambers, President and CEO of Cisco Systems, Inc.:

"Companies that are successful will have cultures that thrive on change, even though change makes most people very uncomfortable. In the end, you might just have speed, talent and branding. Those things may be the only differentiators”

Note speed first in the list!

2. Now meet Andy Grove, ex-CEO of Intel:

“This business about speed has its limits. Brains don’t speed up. The exchange of ideas does not really speed up, only the overhead that slowed down the exchange. When it comes down to the bulk of knowledge work, the 21st century works the same as the 20th century. You can reach people around the clock, but they won’t think any better or any faster just because you've reached them faster. The give and take remains a limiting factor.”

What I find interesting about those quotations from public statements is that they come from two leader executives of hi-tech industries, certainly involved in … making information flow faster, to say the least. They represent two legitimate views of the (business) world. What ‘side’ leaders take, matters because, as architects, the houses they build will be a reflection of their concepts of time and speed.

If you want to read more about leadership or want to continue reading from the above, you can read it all in my book The Leader with Seven Faces: finding your own ways to practice leadership in today’s organization.

You can also read some of the resources on leadership posted on the left or contact us for more information.

What the 7 Faces are

I believe you have to practice to be a good leader (note I don’t say emulate).
To practice leadership, you need ‘a map’ and lots of questions. We are far from a short on answers – remember those shelves - but we’re not sure we have the right questions. So we may just be kidding ourselves with sets of beautiful answers to the wrong questions. I’m interested in questions, and:
The answers to these questions are personal.
Unfortunately, the consequences of your answers are not. Other people at work, home, party, church, organization or in the wider society depend on them. No pressure…

If after reading this or after getting other help and other triggers, it is not obvious to you what to practice, I think you’ll have a problem (if you still aspire to becoming a good leader). Note that I say what to practice, not whom to emulate.

You’ll know that you are a leader when others think of you in that way voluntarily. “The proof of the pudding is in the eating”, my fellow compatriot Miguel de Cervantes said around 1615. The proof of your leadership capabilities is in the response and nature of your followers.

The ‘praxis’ of leadership has different faces.
The practice of leadership may be helped by recognizing that the difficulty in making sense of the plethora of ‘examples’ is not necessarily that it consists of a mix of heroes, villains, charlatans, moralists, dictators, saviours, psychopaths and normal people. That mix is obviously an intellectual challenge in itself (!), because, if nothing else, it’s difficult to have an uncontaminated and clinical view of it without attaching a judgement to each ‘case’. The Mother Theresa case is good, the Hitler case is bad. Sure, but that won’t take us far.

The real difficulty, however, is one of presentation. Leadership is polyhedral, pardon my language. You can be looking at one of the polygons and get excited about it, only to realize that there are others just as exciting on the other side of the three-dimensional solid.

Yes, the leader has seven faces. In some leaders, only one or two are visible. When those leaders are proposed as examples or role models, the only faces of leadership we see are the ones they show us. When you as leader are ‘in front’ of your people, perhaps one or two faces are visible. But there are others, equally important. These seven faces are:
1
What leaders say. Rhetoric, language, words… matter. Many organizations are stuck on something (strategy, process improvement, change) because they do not posses ‘another language’. Leaders provide ‘language’ and meaning, a framework in which action can take place. If this is their visible face, leaders look more like teachers and educators, and language and meaning become the most visible traits.
2
Where leaders go. Leaders go places and take people with them. Some of them have a pretty good idea of the destination, perhaps too good an idea. Others are more of the type who ‘enjoy the journey’. However, if this is the visible face, both look more like cartographers, explorers or conquistadores. Life around them inevitably revolves around these themes of destiny and pathways.
3
What leaders build. Leaders are builders of organizations or ‘projects’. They build purpose and they build places. Places to be, to enhance people, to work in, to think, to do, to succeed, to attract people, to navigate through life. They build other things such as trust and relationships. If this is their predominant face, they look more like architects. ‘Space’ and its sister ‘Time’ are favourite themes around them.
4
What leaders care about. Finding this face of the leader is not difficult, because what they care about forms their language and behaviour. See what the leader says, observe what the leader does, see if it matches and you will discover the value system behind it! When this is the main visible face, these leaders may look more like moralists or teachers, even if they may not necessarily use the language of morality. But what this face shows is mainly beliefs. Beliefs seem to form everything else.
5
How leaders do it. Worrying about how things happen is prominent in some leaders. Very often, the ‘how’ is seen in our culture as ‘a detail’ or ‘a by-product’. But some leaders don’t see it like that. The way of doing things matters to them and this is their most visible face. When this is the case, they look more like stage managers focusing on styles, ways, dynamics, and plots. ‘Ways of doing’ may kill good visions. These leaders know it and worry about ‘the how’ almost above everything else.
6
What they are. This is a sometimes difficult face to understand. Perhaps the best way to do this, is to refer to famous lines from the Jewish text The Ethics of the Fathers: “If you don’t look after yourself, who will?” First stop. It looks pretty selfish, but it’s enormously healthy, because it’s prompting non-dependence on others. “If you only look after yourself, what are you?” Second stop here. This is a powerful question. Note the ‘what’, not ‘who’. “What am I?” is probably the most important question of our navigation system in the world. And third and last stop: “If not now, when?”

Some leaders worry about the ‘what-we-are’ and, if this is their predominant face, they look like identity seekers, rather constantly referring to a sense of belonging. Sometimes they look like historians as well, because identity and belonging are above everything else, with one eye on the past and another on the future. Awareness of themselves and others, including emotions, is very visible in them.
7
What leaders do. This behavioural face is always fascinating. It is often the most ‘visible’ and one that is easier to refer to, mainly to imitate. What leaders do - or don’t do – matters; for some people more than anything else (i.e. what they say, or build, or think…). This ‘action-face’ is certainly enormously important and the engine of the building of other dimensions, such as reputation and trust. It is powerful, both in its building and its destroying potential. Some leaders seem to have great ability to generate action around them, often seen as the only relevant dimension for themselves and the organization behind them. When the emphasis is on the doing and the main visible face is action, leaders sometimes look like heroes, or company acrobats, pointing to outcomes and measurements.