Future Vision of Organizational Structure and Leadership

As we entered the 21st century, the technological revolution was evolving at such a rapid pace businesses were blindsided and have stumbled along over the past several years trying to catch up and adapt. The National Intelligence Council (NIC), in their report titled Global Trends 2025: A Transformed World, reference the 2008 financial crisis as pivotal to this predicament:

. . . reduced economic growth could slow globalization’s pace, increasing protectionist pressures and financial fragmentation” (p. 10). This presents an opportunity for us to ‘catch up’ with technology and implement strategies that streamline processes, improves transparency, enables restructuring with an emphasis on transformational leadership, and increase the percentage of a virtual workplace. (p. 10)

Technology drives globalization.
Copyright 2011 Discovery Education

                  This is good news for businesses today, but it is critically important for organizations to take
                  advantage of this unique opportunity not only to catch up, but also to do everything they can to
                  prepare for a future that promises to return to an even more rapid pace than previously
                  experienced. The typical organizational structure that we are accustomed to is Hierarchical – it is
                  very rigid with naturally occurring silos, as referenced by Evan Rosen, in his article Smashing
                  Silos, “. . . adopting collaborative culture, processes, and tools can keep silo syndrome in check
                  and create greater value” (Rosen, 2010).

Hierarchical organizations are predisposed to suffer from silo syndrome:

This manifestation of silo syndrome breeds insular thinking, redundancy, and suboptimal decision-making. Silo Syndrome can also impact business unites, wreaking havoc with customers. . . . Silos also commonly extend to systems and data. As systems fail to interact and data becomes trapped and unavailable to decision-makers outside the silo, people are less likely to interact. When people are culturally inhibited from interacting across departments and functions, they avoid sharing data and information outside of their silos. It’s a vicious cycle, one that can cost an organization in agility, productivity, and responsiveness. (Rosen, 2010)

Additionally, organizations that hold tight to a traditional hierarchical structure will suffer. Not only with innovation be stifled, but these organizations will become more and more out of touch with their customers and suffer from not attracting the best talent. If the organizational structure is not transformed, silos will become more common making the organization increasingly less effective and relevant. “Formality fuels silos and poisons collaboration . . . We should be able to view the availability or ‘present status’ of everybody in the organization and connect with them immediately through instant messaging, voice, or real-time video . . . everybody is potentially available to everybody else. Unified communications and collaboration systems (Rosen, 2010)

Organizational Silos
Copyright 2011 Beyond Philosophy

Jeffrey Cufaude, in his article Break Out of the Silo Mentaility, emphasizes systems thinking which:

                  . . . takes a holistic and big-picture view, as opposed to one that is more simplistic and linear. It
                  looks for and acknowledges the dynamic, complex, and interconnected nature of relationships
                  and activities. . . . systems looking asks us to look beyond isolated events and to consider
                  patterns of behavior and, even deeper, the structure, beliefs, or mental models that may be
                  contributing to them. (Cufaude, 2009).

Carolyn Corbin, who wrote the book Community Leadership 4.0: Impacting a World Gone Wiki, concurs and emphasizes the responsibility of a new form of leadership as necessary to facilitate this transformation:

On the horizon is yet another paradigm shift: Community 4.0, in which technology erases geographic distance altogether and raises social and intellectual capital to all-time highs. People can live where they choose and telecommute for employers near or far, while quality of life surpasses that of any prior era. No community on earth has yet reached Community 4.0, but almost any can if it adopts a global mind-set that embraces diversity, risk, inclusiveness, and innovation. (2011, p. 5)

Copyright 2011 Carolyn Corbin

Corbin (2011) continues by emphasizing that effective leadership must anticipate tomorrow . . . and promote collaboration (p. 6). Her approach resonates with anyone who has worked within a wiki environment. “In Community 4.0, a leader is anyone who makes a positive impact. And in a wiki community, there may be no formal leader for a particular project” (Corbin, 2011, p. 6).

This review of Corbin’s book within a Futurist journal offers a great synopsis of her forward-thinking text:

                  Community Leadership 4.0 attempts to address future trends without focusing too much on the
                  past. Pointing instead to rapid societal change mirroring technological advancements, the author
                  uses pragmatic reasoning to address issues such as the outsourcing of jobs overseas, virtual
                  work environments (with the advantage of new technology), cyberspace communities, and so
                  on. Corbin sees the future as a smart, intellectual, well-planned, goal directed, globally
                  competitive, innovative, democratic community that fully embraces changes such as Internet
                  based work environments. Community Leadership 4.0 pertains to the kind of leaders we want
                  today in a fast-paced, ever-changing world with extreme needs for communication effectiveness,
                  flexibility, and adaptability to virtual environments. (New, 2012, p. 53)

Experts agree that the organizational structure is changing and will continue with radical change over the next 10+ years. The process of change, however, will be painful for those who are inclined to cling to the ways of the past. Cufaude states“Long-term change only occurs when we address the mental models and belief systems that get in the way of desired results” (2009).

John Kotter authored the article Hierarchy and Network: Two Structures, One Organization, defines a key problem with the existing structure and offers a very realistic approach to integrating the new structure within the existing one: “. . . 20th-century, capital “H” Hierarchy (a sort of hardware) and the managerial processes that run on it (a sort of software) do not handle transformation well. And in a world with an ever-increasing rate of change, it is impossible to thrive without timely transformations. The data, case studies, and personal anecdotes to this effect abound” (2011). Kotter hones in on the mind-set that creates opposition, the inevitable changes organizations will be forced to deal with over the next 10+ years, and then presents a resolution that enables organizations to transform albeit a little less painfully:

                  The challenge is that, at both a philosophical and a practical level, the Hierarchy (with its
                  management processes) opposes change. It strives to eliminate anomaly, standardize
                  processes, solve short-term problems, and achieve stopwatch efficiency within its current
                  mode of operating.

                  In a sense, the crowning accomplishment of the Hierarchy and its management processes is the
                  enterprise on autopilot, everyone ideally situated as a cog whirring on a steady, unthinking and
                  predictable machine.

Organizational Network
Copyright 2009 Interlock

                  . . . the successful organization of the future will have two organizational structures: a Hierarchy,
                  and a more teaming, egalitarian, and adaptive Network. Both are designed and purposeful.
                  While the Hierarchy is as important as it has always been for optimizing work, the Network is
                  where big change happens. It allows a company to more easily spot big opportunities and then
                  change itself to grab them.

                  My idea of the Network is a system of teams with representatives from all divisions and all
                  levels, who leave formal titles at the door to participate in a decidedly anti-hierarchical forum. As
                  the environment changes in various ways, this system senses and responds to it, and in turn
                  creates more and more teams with volunteers to address the discrete parts of a larger change.
                  With this Network, potential opportunities and changes are identified, urgency around
                  tomorrow’s possibilities is fostered and maintained, strategies for organization-wide changes are
                  formed, barriers are identified and addressed, and change is achieved. . . . a whole new system
                  that is much bigger, more powerful and involves far more people.
                  (Kotter, 2011)

Technology has been the force driving this revolution. Global stressors also contribute to the need for change – which include economic challenges, global warming, increased competition, and social responsibility associated with poverty and conflict. Corbin references community as “. . . when people do life together” and sees a future where “a leader is anyone who makes a positive impact” (2011). Our world is changing and the organizational structure will become extinct.

In the report titled The Art of Foresight: Preparing for a Changing World, researchers state that, “People who can think ahead will be prepared to take advantage of new opportunities that rapid social and technological progress are creating. . . . Futurists have recognized that the future is continuous with the present, so we can learn a great deal about what may happen in the future by looking systematically at what is happening now . . . the key thing to watch is trends” (World, 2004, pp. 1-2). Today businesses are increasingly developing virtual teams, collaborating with other industry experts, and engaging individuals across divisions and/or traditional hierarchical levels. The trial and error mishaps make it obvious that technology is a powerful tool but must be carefully considered (with appropriate planning and training) to be effective. Technology that will enable organizations to merge all of their data sources in one system that is accessible to everyone and continually updated will be essential. Effective communication tools are essential, and a revision of corporate policies that not only take into consideration the new environment bu also speak to the renewed vision of the corporation is essential.


References:

Corbin, C. (2011). Community Leadership 4.0: Impacting a World Gone Wiki. (C. f. Century, Ed.) Create Space. Retrieved Nov 29, 2012

Cufaude, J. (2009, Dec). Break Out of the Silo Mentaility. ASAE The Center for Association Leadership.  
        Retrieved Nov 29, 2012, from http://www.asaecenter.org/Resources/ANowDetail.cfm
        ItemNumber=46320

Kotter, J. (2011, June 6). Hierarchy and Network: Two Structures, One Organization. Forbes. Retrieved
        Nov 28, 2012, from http://www.forbes.com/sites/johnkotter/2011/06/01/hierarchy-and-network-two
        structures-one-organization/

New Leaders for New Communities. (2012, January). Futurist [futurist online], 52-53. Retrieved Nov 30,
        2012

NIC: Council, N. I. (2008). Global Trends 2025: A Transformed World. Washington DC: US Government
        Printing Office. Retrieved Nov 27, 2012

Rosen, E. (2010, Feb 5). Smashing Silos. Business Week. Retrieved Nov 28, 2012, from
         http://www.businessweek.com/managing/content/feb2010/ca2010025_358633.htm

World Future Society. (2004). The Art of Foresight: Preparing For A Changing World. Bethesda, MD.
         Retrieved Nov 29, 2012, from http://www.aacc.edu/future/file/Art%20of%20Foresight.pdf

Self-Formed Teams &Wiki Collaboration

People often find themselves working on deadline-driven projects utilizing wiki collaboration. Wikis are simple and easy to use - so what is it that causes so many teams who use wikis for collaboration to become frustrated, miss deadlines, or have unsuccessful results? The answer lies in the emergence of leadership.

Individuals who work virtually often find themselves collaborating on a project with people they have never met and know very little about. Wiki technology has many useful purposes – the example used herein involves a group article summary project in fulfillment of an online course requirement. Individuals in the class were asked to self-form into teams after a brief eight weeks of class interaction through discussion board and a trial summary project using wiki collaboration. The lessons learned are applicable to virtual teams who use this type of technology. The process of wiki collaboration requires effective emergent leadership – this article addresses how self-formed teams evolve and suggests a process for effective wiki collaboration.

SELF-FORMING TEAMS

What does it mean to self-form into teams? This indicates that there is a larger group and that each member of the group will choose the team they want to join. The fact that the larger group exists before self-forming into teams indicates that individuals will have at least some awareness of one another. In my example of an online course, each student had introduced themselves to one another, had participated in a few discussion groups, and had been thrown together to collaborate using wiki technology for a previous assignment.

At this time a little more detail about the previous wiki assignment is important. The class had to figure out what wikis were all about – then the class was asked to collaborate by summarizing an ebook article within the class wiki. This was the entirety of instruction and guidelines provided, the class was left on its own to figure out how to proceed. As a result of this assignment, students had an opportunity to see how others engaged and performed – which became important when the class was then asked to self-form into teams and perform the same assignment as smaller groups. What happened from this point forward has been the catalyst for this article.

The first step is for each individual to determine which team they will join – who they wish to collaborate with. The observations made during previous interactions would naturally influence this decision. “People like to associate with groups they think are (or will be) successful” (Nemiro, et al., 2008, p. 219). Some will invite individual classmates to join a specific group. Others will watch for groups to begin forming and then join one that they think will be successful. Regardless of how teams begin to form one thing is certain, those who join teams early are able to be selective regarding who they want to collaborate with and were probably more observant during previous interactions. The action of contacting individual members and inviting them to join a specific team is the most proactive and would necessarily result in a complete team forming quickly. Such team development would increase each member’s confidence in the team and establish the foundation of trust in one another since they were all invited and thereby trusted by someone else on the team. As an example for the remainder of this article, only one specific team example will be used identified as Team A.

Nemiro, et al. (2008), emphasize “Setting Expectations for Working Together” in their textbook, The Handbook of High-Performing Virtual Teams: A Toolkit For Collaborating Across Boundaries, and continue with the following steps: “First is setting goals . . . a critical part of VEtiquette . . . Second is defining roles and responsibilities . . . Third is identifying the team’s decision-making method” (pp. 484-485). It is apparent that leadership is critical – but how is a leader identified within a self-formed group? Someone must step up, of course, but that alone does not a leader make. The group must accept the leader. This introduces the concept of emergent leadership, which is what occurs in such a group where there is no assigned leadership position. Emergent leadership is a topic of its own, and will be discussed in a separate section. It is important to understand what Nemiro et al. (2008) means by the term VEtiquette:

VEtiquette, which stands for ‘virtual etiquette’, is required in work that is typically real time and synchronous. VEtiquette guides team members’ behavior as they collaborate virtually either while speaking or writing using Internet, mobile, or video technologies. It can be summarized as, ‘Be effective, or don’t be heard.’ This extra attention to virtual interaction matters because the effectiveness of the team depends on it. (p. 480)

It is also important to understand the evolution of the team – one of the best examples of this would be Bruce Tuckman’s Team Life-Cycle, the stages of which are shown in the Tuckman Model (Figure 1), which presents the following stages: Forming, Storming, Norming, Performing, and Mourning (or Adjourning). In the following sections each stage will be revealed as it relates to leadership emergence, goal setting, accountability, trust, and results.

Staging of the “Team Life-Cycle”

Figure 1: Tuckman Model: Forming, Storming, Norming, Performing

Copyright Firovia Consulting 2012

FORMING

Once the team exists the actual forming of the team begins. Brown, et al. (2007), in their eBook Managing Virtual Teams: Getting The Most From Wikis, Blogs, And Other Collaborative Tools, define this stage: “During this phase, many discussions occur, serving to build support and consensus about the vision. . . . Toward the end of this phase, you might get a ‘honeymoon’ period. Everyone is excited about the project, getting to know each other, and busy ensuring . . . that the project can succeed. . . . harness this initial burst of energy and productivity by setting appropriate expectations, ensuring a clear path free of bureaucratic obstacles, and directing activities” ( p. 7). As it relates to our example of the online class assignment – Team A engaged in some discussion about how to proceed with the project, which appeared to be effective in building support and consensus about the project, and the energy was supportive. As Brown et al. (2007) indicate, this presented the ideal time to establish a plan. In the case of the class summary, this took the form of an outline identifying sections that would assign tasks equally amongst members and enable everyone to contribute. It is important to note that this discussion occurred in the comment section of the wiki with the outline itself appearing as the initial wiki content. Group email was also utilized as a follow up to the discussions within the wiki. Although discussions concerning the particulars of the project were good, there was no discussion regarding the preferred method of communication for the group – this is addressed later.

STORMING

Brown, et al. (2007) describe this phase as, “Similar to the first year of marriage, this stage lays bare all the differences and conflicts about vision, expectations, work style, and communication style. During this phase, the guidelines are honed, compromises are made, and often, real bonding takes place. . . . shorten this period of conflict by facilitating discussions, documenting decisions and guidelines, modeling expected behaviors, ensuring that everyone is heard, short-circuiting power struggles, and when necessary, redirecting people to the larger purpose” (p. 7). It is during this phase that potential leaders will begin to emerge. It is prudent at this time to investigate emergent leadership more thoroughly.

In situations where leadership is not assigned there is an obvious void that needs to be filled. Northouse (2013), in his book Leadership: Theory and Practice, speaks extensively on this subject and references Fisher, who states:
                     This type of leadership [emergent] is not assigned by position; rather, it emerges over a period
                     through communication. Some of the positive communication behaviors that account for
                     successful leader emergence include being verbally involved, being informed, seeking others’
                     opinions, initiating new ideas, and being firm but not rigid. (p. 8)
Team members who engage with the other members early and often while offering ideas, asking for feedback, and emphasizing deadlines are poised to emerge as leaders. Northouse (2013) notes, “When others perceive an individual as the most influential member of a group . . . the person is exhibiting emergent leadership” (p. 8). He identifies personality as it relates to emergent leadership: “The individuals who were more dominant, more intelligent, and more confident about their own performance (general self-efficacy) were more likely to be identified as leaders by other members of their task group” (Northouse, 2013, p. 8).

Within virtual teams, emergent leadership does not have to be a solo role – in reference to the Team A example, there were two or three individuals who shared this role. The early communication and establishment of structure contributed to members’ confidence that the team would be successful and became a catalyst for team cohesion. Individual members signed up to perform specific tasks and could see the structure and how their contribution fit within the framework of the team.

NORMING

“Teambuilding begins in earnest as individuals become comfortable with each other and their roles” (Brown, et al., 2007, p. 8). This phase is where true leadership emerges. Nemiro, et al. (2008) state that good leadership fulfills key roles:

1. Motivating people
2. Coordinating efforts
3. Developing potential
   (p. 214)

 Effective leaders must motivate the virtual team – Nemiro, et al. (2008) expands on this concept by presenting three challenges: “. . . providing a compelling message, managing conflicting goals, and establishing team identity” (p. 215). He references Hackman in stating that, “Effective leadership involves unapologetically and authoritatively setting a clear and engaging direction for the team” and chimes in personally by adding, “In other words, the overall mission or purpose for the team is not open to debate” (p. 215). Virtual teams can get off track if the clear purpose, or mission, of the team is not kept in focus – which requires the establishment of goals and deadlines. Goal setting is identified by Nemiro, et al. (2008) as “an excellent way to motivate a team”, and references Locke & Latham, who state: “A tremendous amount of research shows that goal setting works when goals are clear, challenging, and consequential and when regular feedback is provided” (p. 216). There is a delicate balance, however, within a virtual team where emergent leadership is the norm – as Nemiro, et al., enumerates when he adds, “. . . the implication is that individualized consideration in goal setting becomes even more critical within the context of virtual teams. . . . taking the time to appreciate each person’s responsibilities outside the team” ( p. 216).

The second challenge mentioned in reference to virtual team motivation involves managing conflict – once again, goal setting can be helpful in overcoming this challenge. Huang, Wei, Watson, & Tan (as cited in Nemiro, et al., 2008) reference studies that have found “. . . teams using goal setting in a computer-mediated situation reported higher team commitment, better cohesion, and a stronger collaboration climate than teams without goal setting” (p. 216). This type of cohesion is also referred to as “collective identity” (Nemiro, et al, 2008, p. 218), or team identity.

If a virtual team has a collective identity and has a clear focus on the ultimate purpose of the team, when conflict arises it is easy to work together toward a resolution that is in the best interest of the team. Again – using our Team A example – the collaboration was conflict free for the most part, but there were two moments that bear addressing. This project was assigned on a Monday and was due to be completed by the following Sunday. The tasks included sectional summary (where each member was assigned a section to summarize – a noon Friday deadline was posted for completion of this task). Additional tasks included a ‘summary of the summary’ – which meant that the member assigned to perform this task would re-work the summary so it flowed seamlessly (as if written as one piece); and the final task was editing, which would include the checking of referenced material for in-text citations, addition of graphics, etc. in addition to general editing. The deadlines were established in respect for each task so those who relied on individual contributions to the initial summary would have adequate time to fulfill their role. By establishing a noon deadline on Friday for the initial task completion, there was room for the deadline to be extended a little bit on Friday, but by having a deadline the urgency for completion was established. There was some discussion as to whether strict adherence to this Friday deadline was necessary – it became obvious that the other task deadlines had not been emphasized and, therefore, every member of the team did not understand the importance of this first deadline. This could have been avoided had a team leader made no assumptions and had more clearly outlined the process. The only other incident was in regard to the lack of an agreed upon form of communication – when a member of the team had previously suggested that the discussion board be used the team did not immediately acknowledge this recommendation (which was a great idea), which resulted in some delayed discussion (and apologies) several days into the project. Team A was fortunate to have collective (team) identity and the primary focus on the ultimate purpose of the team collaboration made it easy to work through the conflict and resulted in a more confident team. This example supports the statement by Nemiro, et al. (2008): “The best way to establish confidence is through success. Small, early successes, are great confidence builders. Experience ultimately informs team members as to whether the team is successful and whether confidence is justified” (p. 220).

PERFORMING

Brown, et al. (2007) describe this phase as: “The ‘zone’. The team is working well together, knows where it is going and how to get there, and works interdependently” (p. 8). Virtual teams, at this point, have settled into groove. Members know their place, have accepted the team identity, and are motivated to perform. Clearly defined goals and deadlines at this point is critical. Leaders can use the S.M.A.R.T. approach to goal setting (Nemiro, et al., 2008):

The SMART approach to goal-setting:

Specific – Clear statement of what is to be accomplished or delivered, in concrete terms that can be easily observed and mutually understood.

Measurable – Define how success will be measured in quantitative and qualitative terms, stating the outcomes and benefits.

Attainable – Challenging and stretching but achievable.

Relevant – Tied to the overall direction of the company or business unit.

Time-bound – Time frame for the goal is stated, including stages.
(Nemiro, et al., 2008, p. 73)

Image Copyright 2011 Kadena Tate

Using the example of Team A, the S.M.A.R.T. approach was utilized. There was a clear (specific) understanding by the team regarding the assignment and what was expected. The directive came from the professor, but the understanding resulted from the previous wiki collaboration experience and the first discussions in the wiki comments section. The measurement of success would be realized as each member fulfilled their individual commitment and realized the interdependency of the team. The tasks were evenly distributed – the deadlines were challenging but achievable, and necessary considering the scope of the project. All of the work was relevant to the assignment, and the time frame was divided according to task priority in consideration of the due date for the project’s completion.

TESTING

How is team trust built? The initial trust is adopted from the leader or other member’s implied trust in one another (a result of being invited to join the team), but true trust must be earned. The next phase, as outlined by Brown, et al. (2007) is the testing, or the verification phase: “As pieces of the project are completed, they are verified against specifications and other components of the project. Problems are identified and corrected” (p. 8). It is by fulfilling commitments that member’s earn trust with one another. It is important to communicate throughout the process. Brown, et al.(2007) emphasize this point when they say, “Communicate, collaborate, coordinate, and communicate some more” (p. 23). It is by communicating some more that members come together to assess the progress of the virtual team – where they can see the accomplishments and know they can trust one another – and they can see how interconnected and interdependent the team is. In our Team A example, this testing was affirmed when everyone’s tasks were completed and the final summary came together as a perfectly synchronous project that everyone could be proud of.

ADJOURNING

This is the ‘wrap up’ phase, as described by Brown, et al. (2007): “The team is finishing its tasks, evaluating how things went, and preparing to move on to other things” (p. 8). This is also called the Mourning phase (although adjourning seems to be a more appropriate title). Bruce Tuckman (as cited by Smith) refined his theory around 1975 and added this stage:

                    . . . it views the group from a perspective beyond the purpose of the first four stages. The  
                   Adjourning phase is certainly very relevant to the people in the group and their well-being, but
                   not to the main task of managing and developing a team, which is clearly central to the original
                   four stages. Adjourning is the break-up of the group, hopefully when the task is completed
                   successfully, its purpose fulfilled; everyone can move on to new things, feeling good about
                   what’s been achieved. From an organizational perspective, recognition of and sensitivity to
                   people’s vulnerabilities in Tuckman’s fifth stage is helpful, particularly if members of the group
                   have been closely bonded and feel a sense of insecurity threat from this change. (2005)

Members of a virtual team can be confident that their collaboration was effective when they either don’t want the group to split or look forward to working together again. Regarding Team A – the follow-up assignment was to reflect on the team’s wiki collaboration, which complements the adjourning phase. Members of Team A agree that they hope to work together again and are pleased with the team’s performance.

CONCLUSION

Whether it’s the classroom or the organization, increasingly more collaboration occurs in a virtual environment – and this trend will continue to increase. This results in people who have never met, or know little about one another, forming teams and working together. Technological resources, like wikis, become critically important to virtual teams and contribute to their overall effectiveness. It is leadership, however, that will ultimately impact a virtual team’s success. As the Team A example that was used throughout this article indicates, it is most often an emergent style of leadership found within virtual teams – leaders who earn the respect and confidence of the team; who step up and take control early in the process; who set goals and establish points of accountability; who maintain focus on the goals of the team; and who continue an ongoing conversation with every member of the team. When emergent leadership is effective, the virtual team will be successful resulting in member satisfaction.

References

Brown, M. Katherine, Brenda Huettner and Char James-Tanny. Managing Virtual Teams: Getting The Most From Wikis, Blogs, And Other Collaborative Tools. Sudbury: Wordware Publishing, Inc., 2007. 15 Oct 2012.

Nemiro, Jill, et al. The Handbook Of High-Performance Virtual Teams: A Toolkit Fro Collaborating Across Boundaries. First. San Francisco: Jossey-Bass, 2008.

Northouse, Peter G. Leadership: Theory and Practice. 6. Thousand Oaks: Sage Publications, Inc., 2013. 2012.

Virtual Leadership Challenges

A discussion of the key differences between leadership in a face-to-face versus a virtual environment and the challenges facing virtual leaders today.

Virtual Leadership Challenges:
Adapting From Traditional Practices

          “Gone are the days when you could work within the comfort zone of face-to-face communication and close proximity” (Kerfoot, 2010, p. 117). Regardless of one’s industry or work location, technology has impacted the way we work and communicate – everyone works virtually to one degree or another – but the pervasiveness of teams that are not co-located and work virtually instead, with little or no face-to-face interaction, demands attention be focused on how this impacts the function of leadership.

Andrew S. Grove of Intel Corporation (as cited in Derosa & Lepsinger, 2010) states: “You have no choice but to operate in a world shaped by globalization and the information revolution. There are two options: Adapt or die” (pp. 3). The problem lies in the fact that, although organizations have accepted the virtual world as a necessity, they have not adapted – meaning they have not acknowledged the nuances of this new environment and made the necessary adjustments to ensure it is not only successful, but a better alternative. It is important to understand the challenges this new environment presents. The responsibilities for leaders and the needs of team members remain the same – leaders are responsible for developing high-performance teams that are aligned with the organization’s vision; team members need to trust leadership and each other, understand their role, and contribute to the overall good of their team and the organization.

The environment where this team work takes place presents challenges. There are misconceptions assumed by an organization that leading a virtual team is the same as leading a traditional face-to-face team:  “. . . many organizations simply recycled the same guidelines and best practices they were using for their co-located teams and hoped for the best” (Derosa & Lepsinger, 2010, p. 4). Unfortunately this philosophy is ineffective due to the absence of relationship, face-to-face communication, group cohesiveness, individual accountability, trust, and shared vision. “. . . virtual teams may be increasingly more popular . . . but they’re not necessarily successful” (Lepsinger & Derosa, 2010). It is critical, therefore, that leaders focus on the challenges virtual teams will face and accept the responsibility to adapt as needed.

There are three key challenges facing leaders and virtual teams: Communication, Trust, and Training. “. . . many companies that had made significant investments in technology and virtual teams were not performing to their full potential due to ineffective team leadership, lack of accountability among team members, lack of time to focus on the team, and lack of skill training” (Derosa & Lepsinger, 2010, pp. Intro xx1111-xxv). Virtual teams can become the best asset for an organization, but only if these challenges are addressed, and the onus lies with the organization developing a new version of exceptional leadership – “Leadership is the fact most important to the success of virtual teams” (Lepsinger & Derosa, 2010).

Challenge #1: Communication

In a traditional situation, teams worked in the same location and there were several forms of communication, including formal meetings, informal (or social) interaction, as well as non-verbal cues – all of which developed relationship – even written communication was presented in person and included verbal discussion or details. It is no wonder, then, that “. . . communication is the primary hurdle virtual teams face” (Derosa & Lepsinger, 2010, p. 23). The lack of face-to-face communication results in many challenges that can negatively impact a virtual team. Leaders must be proactive in addressing this issue. They must establish a virtual community that enables members to develop relationships. They need to clearly communicate on a group and individual level, assign roles highlighting each team member’s competencies, set goals, and prioritize tasks. Since a leader is not present physically, he/she must also develop an accountability structure and be accessible to every member at all times. All of these leadership responsibilities are associated with communication and must be handled differently by the leader of a virtual team versus a co-located team.

            In an online article Derosa & Lipsinger highlight key points from their book, Virtual Team Success: A Practical Guide for Working and Leading from a Distance, and identify communication as a challenge faced by virtual teams: “. . . successful teaming depends largely on the effective interaction of team members. Virtual teams need to compensate for the inherent lack of human contact” (2010). A leader can compensate for the lack of face-to-face interaction and informal communication by introducing each team member to one another virtually. “Leverage synchronous tools . . . to increase spontaneous communication” (Lepsinger & Derosa, 2010). For example the leader could create a blog or forum where each member has a profile that includes professional competencies as well as hobbies – enabling members to get to know about one another. Members can then see who is assigned to which role; and, more importantly, why they are qualified (based on their expertise). They also get to know a little about the person by the hobbies they enjoy, and they can put a face to the name by including a picture. The leader can present this tool in a kick-off meeting and encourage team members to use the space to share ideas, discuss projects, give updates, or even ask for help from other team members. A kick-off meeting (preferably via video-conference) is important – the leader addresses the entire group and establishes the structure of the team: “Leaders who engage their team members as a group have an easier time keeping their teams on track and are more successful in achieving their goals” (TechSource, 2008, p. 29). The leader should also schedule times when the group will convene on a regular basis. “Virtual teams that connect their day-to-day work to the organization’s business strategy and objectives are more likely to stay committed and engaged over time” (Derosa & Lepsinger, 2010, p. 53).

Additional forms of informal conversation amongst team members will enrich the development of relationship for members. The leader could enable instant messaging as a source of communication for members one to another to accomplish this, which is deemed necessary as noted in a TechSource study (January, 2008) “Informal communication methods, such as IM, can create a relaxed environment in which team members can get to know one another in a natural way” (p. 29). Once trust is established amongst team members and roles are clearly established there is less ambiguity and more cohesiveness within the group.

            The leader of a virtual team must stay in constant communication with the team and clearly establish a deadline and meeting schedule from the very beginning. He/she must also communicate directly with each member individually, creating one-to-one synergy that will result in commitment to the team and a clear understanding of goals: “Teams should always have clearly defined goals . . . goals increase group identity . . . also increase job efficiency” (TechSource, 2008, p. 30). This will enable leaders to watch for warning signs of trouble within the team, Lepsinger & Derosa cite examples, such as “You may notice team members work independently and do not reach out to other team members to collaborate . . . [or] an ‘us versus them’ mentality has developed between locations or sub-groups”.  Leaders cannot let people issues take over and negatively impact team efficiency (2010).

Monitoring virtual team performance is naturally difficult, it is therefore important for leaders to establish a system for accountability – another key communication task. Leaders who “Clearly define team roles and accountabilities . . . minimize frustration and misunderstandings that can damage morale and detail productivity” (Lepsinger & Derosa, 2010). This requires constant contact by the leader and an observance of non-verbal cues unique to the virtual world. “Organizations should also continually monitor, assess, and improve communication, as it’s the top skill-development need reported by team members and top characteristic needed to lead from a distance” (Derosa & Lepsinger, 2010, p. 48). Leaders must be flexible and accommodate the special needs of each team member while simultaneously keeping their finger on the pulse of the group and addressing issues as they arise, working with members to resolve. “If the people side of virtual organizations is not addressed, virtual leaders will not be successful” (Kerfoot, 2010, p. 118).  This links back to the need for frequent communication, one-to-one and also as a group. This is supported by Derosa, who states, “Virtual teams that connect their day-to-day work to the organization’s business strategy and objectives are more likely to stay committed and engaged over time” (Derosa & Lepsinger, 2010, p. 53).

            Virtual environments create a literal ‘hands-off’ approach to leadership but simultaneously require an assertive, ‘hands-on’ approach to communication by the leader. Fortunately, today’s leader is not without options regarding communication in this new virtual environment. “Traditional leadership is becoming rarer while distance or virtual leadership is more common because advancing technologies can support new models of . . . communication” (Kerfoot, 2010, p. 117).

Challenge #2: Trust

“Virtual teams that are successful ensure that team members build relationships and learn about one another early on” (Derosa & Lepsinger, 2010, p. 56). Learning about one another is essential in order to develop trust, an essential component for success: “Teamwork always depends on trust” (Nemiro, Beyerlein, Bradley, & Beyerlein, 2008, p. 9).  As mentioned previously, developing relationships between virtual team members is a challenge. It is, however, necessary in order to gain trust in one another – and trust is essential to teamwork. The lack of trusting relationships result in a lack of cooperation (creating an uncooperative climate), which results in lack of task cohesion. In order to identify with other team members, individuals need to trust that each member has the skills to perform their tasks and will follow through on commitments. As per Nemiro, et al. (2008), “Trust may develop more slowly among virtual teams members” (p. 9). Virtual teams, however, have a different perspective on time, which means leaders must take measures to expedite the establishment of trust between team members.

Trust is complex – it is often seen as an attribute an individual possesses (such as when one says another is a trustworthy person), but in actuality this trustworthiness is earned through action and is thus a behavior. In a virtual environment it is the development of trust behaviors that is essential. Brothers, and Reina & Reina (as cited in Nemiro, et al., 2008) confirm this fact: “Extensive research shows that trust is built behaviorally” (p. 156). Leaders must be aware of the complexities involved in developing and maintaining trust within their virtual team and, therefore, take a multi-faceted approach focused on the behavior of trust. A well rounded approach would include the following: leaders should make every effort to have at least one face-to-face meeting with each member, or with the team, before the team/project is launched (focus on developing or confirming trust in the leader’s abilities by team members); leaders must clearly demonstrate their confidence in each member’s ability and trustworthiness (once members trust the leader, and the organization, they will adopt the leader’s trust of other members); leaders should establish timelines with check points where accountability will lend itself to task-related trust (mutual trust is confirmed as both the leader and team members fulfill their commitments to one another and the team); leaders should utilize trust building tools in order to identify trust issues and maintain ongoing team trust (trust can be broken, it is the leader’s responsibility to nurture trusting relationships); and finally - leader’s should involve early adopters amongst the team in the training of the technologies the team will be using (member-to-member experimentation and co-learning will build relationship and trust amongst members).

Leaders should make every effort to have at least one face-to-face meeting with each team member before the team is officially launched. If possible, also having a face-to-face group meeting for the launch of the team will further solidify the foundation of trust amongst the team. Duarte & Snyder (as cited in Nemiro, et al., 2008) emphasize the importance of strategically planning face-to-face time for virtual teams, “. . . studies have shown that project teams that meet at least once face-to-face at the beginning of their project have a much higher success rate than teams that initiate projects at the purely virtual level” (p. 634). Such meetings enable the leader to develop a relationship with each team member, which establishes trust in the leader (and thereby, the organization) by each member – a foundation upon which a fountain of trust within the team can spring.

It is the responsibility of leadership to clearly communicate why each member was chosen for the team, what skills and experience each member brings to the table that makes them ideally suited to perform their role on the team, and emphasizing the equal importance of every member to the team. Creating profiles (or identities) for each member within the team’s online community (a team blog, for example) can speed up this process and is an important factor for virtual teams. Kimble et al. (as cited in Nemior et al, 2008) states: “Identity plays a crucial role . . . because knowledge of those with whom one works and communicates is necessary for understanding and interpreting interaction styles” (p. 9). A leader must clearly demonstrate the trust the organization has in each member. This will result in members (who already have a trusting relationship foundation with the leader) adopting the organization’s trust in one another, building upon the team’s foundation of trust. This is known as “institutional-based trust”, as per Scott (as cited in Nemiro, et al., 2008), who states: “It is really the other forms of trust, however, that explain how we are able to trust those with whom we have never had any prior experience or knowledge. Institutional-based trust reflects an individual’s trust in the organization with which the other members are affiliated” (p. 111).

Although trust can initially be established by members adopting the leader’s trust in team members through institutional-based trust, long-term trust ensues as a result of members identifying with one another and from their experiences as they rely on one another for task completion. How the manager assigns and manages tasks becomes very important, as reported by Nemiro, et al. (2008), “Trust in virtual teams . . . can be developed from positive, ongoing experiences among members of the team . . . This means that a key to virtual team success is members’ keeping their commitments to each other and therefore making only commitments they can and will keep” (p. 10). This statement is reiterated by Lepsinger & Derosa (2010) in the following statement: “Task-based trust is one of the factors that differentiated top performing teams. In virtual teams trust seems to develop more readily at the task level than at the interpersonal level” (Lepsinger & Derosa, 2010). Derosa & Lepsinger recommend task-based trust as well and convey that “trust is a big concept” and that it is “important to start with small steps” such as individual tasks (Derosa & Lepsinger, 2010, p. 56). Leaders who hold members accountable – who establish timelines and deadlines – create a framework for task-based, mutual trust, and confirm the initial gift of adopted trust, as both members and the leader fulfill commitments and earn the right to be considered trustworthy.

Trust results in unity within the team. “Teams that know they can rely on each other to get the job done will have more cohesiveness and be more efficient”, therefore the leader should “ . . . help the team create good practices . . . [which] soon become routine”, once this trust is established, “. . . members can all help to keep each other accountable to the team’s shared expectations” (TechSource, 2008, p. 30). Lipsinger and Derosa indicate that leaders must watch out for warning signs – such as members using “I” instead of “we” – indicating they don’t appear to know one another very well or trust one another. If members are openly negative and don’t view others as credible the leader needs to work out the trust issues that are apparent (Lepsinger & Derosa, 2010). They are careful to recommend, however, that leaders “. . . don’t micromanage – [instead they] empower members to make and act on decisions . . . help people manage conflicts, not avoid them . . . [and] model and reinforce positive behaviors”; they continue by noting the results of proactive and supportive leader behavior: “Eliminate these pitfalls and a team’s chances for success greatly increase” (Lepsinger & Derosa, 2010).

There are tools available that leader’s can utilize to keep a finger on the pulse of the team and identify changes in the trust relationship amongst members. Nemiro, et al., (2008) identify “The Reina Trust and Betrayal Model” as a useful tool for leaders in establishing virtual team trust (p. 156-160). The Reina Trust and Betrayal Model focuses not only on establishing trust, but on identifying and working through trust betrayal as an essential function of virtual leadership. The three elements described in the [Reina] model help simplify the complexity of trust, and include: Transactional trust . . . [which is] reciprocal in nature . . . and created incrementally. There are three factors of transactional trust: contractual, [which] involves mutual understanding between people; communication, in an environment with strong communication trust, people feel safe to ask questions, honestly speak their minds, challenge assumptions, raise issues, give and receive feedback, or acknowledge that they do not understand and ask for help; and competence trust, [which] influences the ability to perform job responsibilities (Nemiro, et al., 2008, pp. 157-159). Leader’s who adhere to the principles of the Reina model help develop “transactional trust as the foundation for virtual collaboration”:

Contractual trust sets the tone and direction, shapes roles and responsibilities, and helps make expectations clear. Communication trust helps establish norms for information flow and standards for how people talk with one another, share information, provide feedback, and work with mistakes that have been made. Competence trust allows individuals to leverage and further develop skills, abilities, and knowledge, particularly those required for virtual collaboration. (Nemiro, et al., 2008, p. 159)

The conclusion, per Nemiro, et al. (2008), is that high trust tends to make both communication and collaboration easier (p. 156).

            The final point is actually related to the third challenge as it involves experimentation of the technology tools, which results in a collaborative form of self-training by members. This training, however, is independent of the more formal training outlined in the following section – and focuses on members who are perceived as the early adopters of the group. Rouse defines an early adopter as, “a person who embraces new technology before most people do” (2007).  Encouraging early adopters to teach others empowers all the employees (TechSource, 2008, p. 28). As early adopters experiment with the available technological tools presented for use by the team, they can aide in the selection of the most appropriate tools as well as in peer-to-peer experimentation (training) along the way. This communication and open discussion among team members (which is supported but separate from leadership involvement) helps build camaraderie and cohesion amongst team members. The TechSource article, Best Practices for Working in a Virtual Team Environment, states: “Studies have shown that organizations in which knowledge is shared across the organization, not simply from top to bottom, have more successful virtual teams than those in which it is not” (2008, p. 29).

Challenge #3: Tools & Training

There are ample tools available that can be used by virtual teams, and a TechSource report indicates that, “A good team leader will use a variety of tools to facilitate the work of the group and to encourage its members” (TechSource, 2008, p. 29). New technologies are often very complex so it is wise to “Choose the tool that gets the job done with as small a learning curve for your employees as possible” (TechSource, 2008, p. 28), and select the right tools for the team and the task. Then it is important to make sure everyone (especially the leader) is trained in the use of those tools. Investing in proper preparation can make all the difference in a virtual team’s success, but this isn’t always understood: “Despite the strong link between training and virtual team performance, many organizations do not make this investment” (Lepsinger & Derosa, 2010). It becomes the leader’s responsibility, therefore, to make sure that he/she is competent and that they can train team members, as needed, so the tools in use are a help instead of a hindrance to the team. Nemiro, et al., confirm the necessity for training:

Effective use of the new media requires insight into their richness and presence limitations, the ability to compensate for these, and the ability to agree on and adopt rules for their use. When teams are able to overcome the complexity and invisibility dynamics and build norms to use technology well, the new media can be used to support highly focused, effective processes. Working productively in this new environment, and particularly working together, requires new or improved competencies and behaviors, which have to be learned. (Nemiro, Beyerlein, Bradley, & Beyerlein, 2008, p. 350)

There is a learning curve when adapting to the virtual environment. Leaders cannot make assumptions and must include training time in the team’s schedule. The research of Kerfoot (2010) echoes this: “It is a difficult adjustment for some leaders to move from traditional leadership modalities to the skills necessary for virtual leadership” (p. 117).  It is a matter of restructuring the system by which one leads, which is different in the virtual environment where leaders have to cross many different boundaries “. . . traditional leaders work in the system but, by contrast, boundary managers work on the system” (Kerfoot, 2010, p. 117).

            In their book, Derosa & Lipsinger (2010) have a lot to say about technologies, the need to determine the correct tools for the task/team, and the necessity for appropriate training. They indicate that poor planning and implementation by the organization and team leader will result in low-performance teams. “. . . many organizations launch virtual teams without providing the necessary training to support them” (Derosa & Lepsinger, 2010, p. 23). Derosa continues by illustrating how organizations and leaders make the mistake of trying to utilize every tool that they can find thinking that more is better, instead of selecting the tools that are best for the task and  team, then training extensively:

. . . low-performing teams are more likely to suffer from technology overload or using too many different technologies, which leads to communication problems and hinders performance . . . [leaders must] match the technology to the task. . . . technology should be viewed as a catalyst for virtual team performance improvement not an automatic remedy . . . simply using the technology because you have it will not immediately solve your virtual team performance problems. You have to know how to use the right mix of technologies for your specific team.” (Derosa & Lepsinger, 2010, p. 22)

Conversely, organizations and leaders who match technology to the task and team, provide proper training, appoint leaders who have adapted for the virtual environment, and provide continued technical and emotional support, will result in dynamic and successful team communities that exceed expectations. Wenger, McDermott, and Snyder (as cited in Kerfoot, 2010) coin the phrase “communities of practice” in reference to a “. . . model [that] supports the connection of isolated pockets of expertise across an organization and supports interactions, relationships, and sharing of ideas and opportunities across boundaries and geography that will help virtual communities discover and create their own fire” (Kerfoot, 2010, p. 118).  Technology alone will not translate to successful virtual teams – as originally noted, effective leadership is critical. “Although technology is the foundation that enables effective virtual collaboration, it doesn’t guarantee successful virtual teams. Success requires using that technology to communicate effectively” (Derosa & Lepsinger, 2010, p. 19).

Conclusion

“The top skill-development needs for those working in virtual teams are communication and interpersonal skills. After that, teams selected collaboration skills, action planning, problem solving, and decision making” (Derosa & Lepsinger, 2010, p. 22) – add to this utilization of the best technological tools for task and team (and proper training). Derosa & Lepsinger (2010) findings indicate that a significant number of virtual teams are not effective, and perhaps more importantly, that there is a gap in how team effectiveness is perceived that often goes undetected . . . gaps in the perception of team effectiveness [means] . . . many organizations are not even aware that their virtual teams are performing poorly (p. 6). It is important for leaders, then, to adapt to this new virtual environment and devise techniques for assessing virtual team productivity and effectiveness.

Today’s leader cannot ignore the virtual environment and must, therefore, adapt by incorporating new techniques of leadership. “Successful virtual leaders learn how to cross time, space, and culture barriers to make improvements across small and large entities” (Kerfoot, 2010, p. 117). Leaders must focus on effective ways to communicate within a virtual team in order for relationships to develop, resulting in trust and cohesiveness amongst the team. Combine this with proper utilization and training of technological tools that work for the specific task and team and not only will the virtual team be more successful, their effectiveness can truly exceed that of traditional co-located teams, becoming a successful, and better, alternative.

 

References

Balthazard, P. A., Waldman, D. A., & Warren, J. E. (2009, June 8). Predictors of the emergence of transformational leadership in virtual decision teams. The Leadership Quarterly, 20(5), 651-663. Retrieved September 29, 2012

Derosa, D., & Lepsinger, R. (2010). Virtual Team Success: A Practical Guide for Working and Leading From a Distance. Jossey-Bass / A Wiley Imprint. Retrieved October 2012

Kerfoot, K. M. (2010, March-April). Listening to See: The Key to Virtual Leadership. Nursing Economics, 28(2), pp. 117-119. Retrieved September 28, 2012

Lepsinger, R., & Derosa, D. (2010, December 7). Virtual Teams Really are Different: 6 Lessons for Creating Successful Virtual Teams. Retrieved Oct 2, 2012, from RP News Wire: www.reliableplant.com/Read/27807/Virtual-teams-are-different

Nemiro, J., Beyerlein, M., Bradley, L., & Beyerlein, S. (2008). The Handbook Of High-Performance Virtual Teams: A Toolkit Fro Collaborating Across Boundaries (First ed.). San Francisco, CA: Jossey-Bass.

Rouse, M. (2007). Early Adopter. Retrieved Oct 14, 2012, from Search Server Virtualization: http://searchservervirtualization.techtarget.com/definition/early-adopter

TechSource. (2008). Best Practices for Working in a Virtual Team Environment. Library Technology Reports. Retrieved Sept 28, 2012, from http://www.techsource.ala.org

 

Leadership That Inspires

While performing extensive research for a leadership project - and following an intriguing introduction to TEDTalks - I happened upon an incredibly inspiring video presentation featuring Simen Senek entitled How Great Leaders Inspire Action and was compelled to share! I actually used this as a reference, which meant I had to transcribe the entire video, so you'll find the complete text below as well as the full video within the text below (or via the link in the reference at the end). Enjoy!

How do you explain when things don’t go as we assume? Or better, how do you when others are able to achieve things that seem to defy all of the assumptions? For example: why is Apple so innovative? Year after year after year after year, they’re more innovative than all their competition. And yet, they’re just a computer company. They’re just like everyone else. They have the same access to the same talent, the same agencies, the same consultants, the same media – then why is that they seem to have something different?

Why is it that Martin Luther King led the Civil Rights Movement? He wasn’t the only man who suffered in a pre-civil rights America. And he certainly wasn’t the only great orator of the day, why him?

And why is it that the Wright Brothers were able to figure out controlled powered man flight when there were certainly other teams who were better qualified, better funded – and they didn’t achieve powered man flight, and the Wright Brothers beat them to it.

There’s something else at play here. About 3 ½ years ago, I made a discovery. And this discovery profoundly changed my view on how I thought the world worked, and it even profoundly changed the way in which I operate in it. As it turns out, there’s a pattern. As it turns out, all the great and inspiring leaders and organizations in the world, whether it’s Apple or Martin Luther King or the Wright Brothers; they all think, act and communicate the exact same way, and it’s the complete opposite to everyone else. All I did was codify it, and it’s probably the world’s simplest idea. I call it the Golden Circle.

Why, How, What.

Figure 1: The Golden Circle
Simon Senek’s model demonstrating ordinary (uninspiring) leadership approach versus the remarkable (inspiring).

Copyright 2011 - Rush Lindquist, Lit-Engineering.com

This little idea explains why some organizations and some leaders are able to inspire where others aren’t. Let me define the terms really quickly. Every single person, every single organization on the planet knows what they do, 100%. Some know how they do it – whether you call it your differentiating value proposition, or your proprietary process, or your USP. But very, very few people or organizations know why they do what they do, and by why I don’t mean to make a profit, that’s a result (it’s always a result). By why I mean, what’s your purpose? What’s your cause? What’s your belief? Why does your organization exist? Why do you get out of bed in the morning? And why should anyone care? Well, as a result, the way we think, the way we act, the way we communicate is from the outside in. It’s obvious; we go from the clearest thing to the fuzziest thing. But the inspired leaders, and the inspired organizations, regardless of their size, regardless of their industry, all think, act, and communicate from the inside out.

Let me give you an example:
I use Apple because they are easy to understand and everybody gets it. If Apple were like everyone else, a marketing message from them might sound like this:
            We make great computers.
            They’re beautifully designed, simple to use, and user friendly.
            Want to buy one?

Meh. And that’s how most of us communicate, that’s how marketing is done, that’s how most sales is done, and that’s how most of us communicate interpersonally. We say what we do, we say how we’re different or how we’re better, and we expect some sort of behavior (a purchase or the vote, something like that).
           
            Here’s our new law firm.
            We have the best lawyers with the biggest clients, (you know) we always perform for our clients.
            Do business with us.
            Here’s our new car.
            It gets great gas mileage, it has leather seats.
            Buy our car.

But it’s uninspiring.

Here’s how Apple actually communicates:
            Everything we do, we believe in challenging the status quo. We believe in thinking differently.
            The way we challenge the status quo is by making our products beautifully designed, simple to
            use,and user-friendly.
            We just happen to make great computers. Want to buy one?

Totally different, right? You’re ready to buy a computer from me. All I did was reverse the order of the information. What it proves to us is that people don’t buy what you do, people buy why you do it. People don’t buy what you do, they buy why you do it.
This explains why every single person in this room is perfectly comfortable buying a computer from Apple, but we’re also perfectly comfortable buying an mp3 player from Apple, or a phone from Apple, or a DVR from Apple. But, as I said before, Apple’s just a computer company. There’s nothing that distinguishes them structurally from any of their competitors. Their competitors are all equally qualified to make all of these products. In fact, they tried! A few years ago, Gateway came out with flat screen TVs. They are eminently qualified to make flat screen TVs, they’ve been making flat screen monitors for years. Nobody bought one. And Dell; Dell came out with mp3 players and PDA’s, and they make great quality products; and they can make perfectly well designed products. And nobody bought one. In fact, talking about it now, we can’t even imagine buying an m3 player from Dell, why would you buy an mp3 player from a computer company? But we do it every day.

People don’t buy what you do; they buy why you do it.


The goal is not to do business with everybody who needs what you have. The goal is to do business with people who believe what you believe. Here’s the best part. None of what I’m telling you is my opinion. It’s all grounded in the tenants of biology; not psychology, biology.

If you look at a cross section of the human brain, looking from the top down, what you see is that the human brain is actually broken into three major components that correlate perfectly with the Golden Circle. Our newest brain – our homo-sapien brain – our neo-cortex corresponds with the what level. The neo-cortex is responsible for all of our rational and analytical thought and language. The middle two sections make up our limbic brains. And our limbic brains are responsible for all of our feelings, like trust and loyalty. It’s also responsible for all human behavior, all decision making, and it has no capacity for language. In other words, when we communicate from the outside in; yes – people can understand vast amounts of complicated information like features, and benefits, and facts, and figures – it just doesn’t drive behavior. When we communicate from the inside out, we’re talking directly to the part of the brain that controls behavior and then we allow people to rationalize it with the tangible things we say and do.

This is where ‘gut’ decisions come from. You know, sometimes you can give somebody all the facts and the figures and they say, ‘I know what all the facts and details say, but it just doesn’t feel right.’ Why would we use that verb? It doesn’t feel right. Because the part of the brain that controls decision making doesn’t control language, and the best we can muster up is ‘I don’t know, it just doesn’t feel right.’ Or sometimes you say you’re leading with your heart, or leading with your soul. Well, I hate to break it to you, those aren’t the body parts controlling your behavior, it’s all happening here, (points to the ‘why’ in the chart) in your limbic brain. The part of the brain that controls decision making, and not language; but if you don’t know why you do what you do, and people respond to why you do what you do, then how will anybody – how will you ever get people to vote for you, buy something from you, or more importantly, be loyal and want to be a part of what it is that you do?

Again, the goal is not just to sell people who need what you have; the goal is to sell to people who believe what you believe. The goal is not just to hire people who need a job; it’s to hire people who believe what you believe. I always say that if you hire people just because they can do a job, they’ll work for your money. But if you hire people who believe what you believe, they’ll work for you with blood, sweat, and tears. Nowhere else is there a better example of this than with the Wright Brothers.

Most people don’t know about Samuel Pierpont Langley. Back in the early 20^th century, the pursuit of powered man flight was like the ‘dot.com’ of the day. Everybody was trying it. Samuel Pierpont Langley had what we assume to be the recipe for success. I mean, even now, if you ask people why did your product, or why did your company fail, people always give you the same permutation of the same three things: under-capitalized, the wrong people, bad market conditions – it’s always the same three things. So let’s explore that. Samuel Pierpont Langley was given $50,000 dollars by the war department to figure out this ‘flying machine’, money was no problem. He held a seat at Harvard, and worked at the Smithsonian and was extremely well connected. He knew all the big minds of the day. He hired the best minds money could find and the market conditions were fantastic. The New York Times followed him around everywhere, and everyone was rooting for Langley, and how come we’ve never heard of Samuel Pierpont Langley?
A few hundred miles away, in Dayton Ohio, Orville and Wilbur Wright – they had none of what we consider to be the recipe for success. They had no money; they paid for their dreams with the proceeds from their bicycle shop. Not a single person on the Wright Brother’s team had a college education; not even Orville or Wilbur. And the New York Times followed them around nowhere. The difference was, Orville and Wilbur were driven by a cause, by a purpose, by a belief. They believed that if they could figure out this flying machine, it will change the course of the world.

Samuel Pierpont Langley was different. He wanted to be rich and he wanted to be famous. He was in pursuit of the result. He was in pursuit of the riches. And, low and behold, look what happened. The people who believed in the Wright Brother’s dream worked with them with blood and sweat and tears. The others just worked for the paycheck. And they tell stories of how every time the Wright Brothers went out, they would have to take five sets of parts because that’s how many times they would crash before they came in for supper. And eventually, on December 17 in 1903, the Wright Brother’s took flight; and no one was there to even experience it. We found out about it a few days later. And further proof that Langley was motivated by the wrong thing – the day the Wright Brothers took flight, he quit. He could have said ‘that’s an amazing discovery guys and I will improve upon your technology.’ But he didn’t. he wasn’t first, he didn’t get rich, he didn’t get famous, so he quit.

People don’t buy what you do; they buy why you do it.

If you talk about what you believe, you will attract those who believe what you believe. Why is important to attract who believe what you believe? Something called the Law of Diffusion Innovation, and if you don’t know the law you definitely know the terminology. The first 2 ½ % of our population are our Innovators. The next 13 ½ % of our population are our Early Adopters. The next 34% are your Early Majority. Your Late Majority (writes in 34%), and your Laggards (writes in 16%) – (pointing at Laggards section) the only reason these people buy touch-tone phones is ‘cause you can’t buy rotary phones anymore.

Figure 2: The Law of Diffusion of Innovation
This graph exhibits Everett Roger’s theory, which states: “diffusion is the process by which an innovation is communicated through certain channels over time among members of a social system” (Rogers, 2003) and also illustrates “the chasm” as labeled according to Geoffrey A. Moore’s philosophy (Moore, 1991).

Copyright 2012 - Greg Satell

The lay of diffusion of innovation, shows that the adoption curve (a typical bell curve) can be segmented out into the following sections.

Of all our population:

1.       2.5% innovators

2.       13.5% early adopters

3.       34% early majority

4.       34% late majority

5.       16% laggards

We all sit at various places at various times along this scale, but what the Law of Diffusion of Innovation tells us is that if you want mass market success, or mass market acceptance of an idea, you cannot have it until you achieve this tipping point (indicates the line between Early Adopters and Early Majority) between 15% and 18% market penetration, and then the system tips. I love asking businesses, ‘what’s your conversion on new business’, and they love to tell you, ‘oh, it’s about 10%’, proudly. Well, you trip over 10% of the customers – we all have about 10% who ‘just get it’, that’s how we describe them, right? It’s like that ‘gut’ feeling – they just ‘get it’. The problem is, how do you find the one’s who ‘just get it’ before you’re doing business with them, versus the one’s who don’t get it (points to the Laggard section). So, it’s this here, this little gap (points to the Early Adopters section) that you have to close, as Jeffrey Moore calls it Crossing the Chasm. Because you see, the Early Majority will not try something until someone else has tried it first. And these guys, the Early Adopters and the Innovators, they’re comfortable making those gut decisions. They’re more comfortable making those intuitive decisions that are driven by what they believe about the world (draws a miniature Golden Circle above that section of the graph), and not just what product is available. These are the people who stood in line for six hours to buy an Iphone when they first came out, when you could have just walked into the store the next week and bought one off the shelf. These are the people who spent $40,000 on flat screen TVs when they first came out, even thought the technology was substandard. And, by the way, they didn’t do it because the technology was so great – they did it for themselves. It’s because they wanted to be first.

People don’t buy what you do; they buy why you do it. And what you do simply proves what you believe. In fact, people will do the things that prove what they believe. The reason that person bought the Iphone in the first six hours – stood in line for six hours – was because of what they believed about the world and how they wanted everybody to see them. They were first. People don’t buy what you do; they buy why you do it.

So, let me give you a famous example – a famous failure and a famous success of the Law of Diffusion of Innovation.

First, the famous failure; it’s a commercial example. As we said before, a second ago, the recipe for success is money, the right people, and the right market conditions – right? You should have success then. Look at TiVo. From the time TiVo came out, about eight or nine years ago, to this current day, they are single highest quality product on the market. Hands down, there is no dispute. They were extremely well funded. Market conditions were fantastic – I mean, we use TiVo as a verb! I TiVo stuff on my piece of junk TimeWarner DVR all the time! But TiVo’s commercial failure; they’ve never made money. And when they went IPO, their stock was at about $30-$40 and it plummeted and it’s never traded above $10. In fact, I don’t think it’s even traded above $6 except for a couple of little spikes. Because, you see, when TiVo launched their product, they told us all what they had. They said:

We have a product that pauses live TV,
skips commercials,
rewinds live TV,
and memorizes your viewing habits without you even asking.

And the cynical majority said that ‘we don’t believe you’, ‘we don’t need it’, ‘we don’t like it’, ‘you’re scaring us’.

What if they had said:
            If you’re the kind of person who likes to have total control
            over every aspect of your life – boy do we have a product for you!
            It pauses live TV, skips commercials, memorizes your viewing habits, etc.

People don’t buy what you do; they buy why you do it, and what you do simply serves as the proof of what you believe.

Now, let me give you a successful example of the Law of Diffusion of Innovation. In the summer of 1963, 250,000 people showed on the Mall in Washington to hear Dr. King speak. They sent out no invitations and there was no website to check the date. How do you do that? Well, Dr. King wasn’t the only man in America who was a great orator. He wasn’t the only man in America who suffered in pre-civil rights America. In fact, some of his ideas were bad, but he had a gift. He didn’t go around telling people what needed to change in America; he went around and told people what he believed. “I believe. I believe. I believe” he told people. And people who believed what he believed took his cause and they made it their own and they told people. And some of those people created structures to get the word out to even more people. And, low and behold, 250,000 people showed up on the right day on the right time to hear him speak. How many of them showed up for him? Zero. They showed up for themselves. It’s what they believed about America that got them to travel on a bus for eight hours, to stand in the sun in Washington in the middle of August. It’s what they believed. And it wasn’t about black versus white; 25% of the audience was white. Dr. King believed that there were two types of laws in this world; those that are made by a higher authority, and those that are made by man. And not until all of the laws that are made by man are consistent with the laws that are made by the higher authority will we live in a just world. It just so happens that the Civil Rights movement was the perfect thing to help him bring his cause to life. We followed him not for him but for ourselves. And, by the way, he gave the I Have A Dream speech, not the I Have a Plan speech!

Listen to politicians now with their 12-point plans, they aren’t inspiring anybody.

Because there are leaders, and there are those who lead. Leaders hold the position of power, or authority; but those who lead inspire us – whether they’re individuals or organizations, we follow those who lead not because we have to but because we want to.

We follow those who lead, not for them, but for ourselves.

It’s those who start with why that have the ability to inspire those around them, or find others who inspire them. Thank you very much.

Reference:

Sinek, S. (2010, May 10). How Great Leaders Inspire Action. TED Talks. Puget Sound, WA. Retrieved September 20, 2012, from http://www.youtube.com/watch?v=qp0HIF3SfI4