Leadership

One evening as I was driving home and had to navigate 2 and 3/4 of these roundabouts.  I started to think about the difference between roundabouts and stoplights, and it struck me stoplights are very rigid control mechanisms, and we actually waste a lot of time sitting at a red light when there is no one coming.   Roundabouts on the other hand, are more flexible and self-empowering.  They still have rules, but they are much more accommodating and self-empowering.  As you approach a roundabout intersection, you see what's going on and merge with traffic in an orderly fashion, using good judgment all the time.

Interestingly, the accident statistics show that there actually fewer accidents, and far fewer serious accidents with roundabouts than with “conventional” stoplights!  In this example “accidents” are a metaphor for “failure” or “lack of desired results”. 

As I thought about this, I thought about the implications for management and leadership!  I would make the argument that stoplights are really like management functions.  They are gatekeepers, and it doesn't matter if you are there all by yourself, and there is no one else around, you are supposed to wait until that light turns green.  Those are the rules that managers have in place, and their job is to enforce the rules!  Managers are the Gatekeepers, the dispensers of caution, and the enforcers of rules.  Wait, there might be somebody coming and it's not your turn till the light turns green! 

Contrast this to roundabouts.  In this little example, I equate roundabouts to leaders, catalysts in an organization.  Leaders enable and establish an organizational vision, a vector direction, and general guidelines to focus on the real results desired, but not rigid or binary rules.  Leaders enable people in their organizations to use good judgment and focus on the end results – like getting quickly and safely through the roundabout intersections.  Roundabouts are really a simple example of self-organizing systems.  These “roundabout systems” have rules, rather simple rules like who has the right-of-way, who yields and when, and they expect good judgment and courteous behavior.  Their goal is to keep traffic moving as efficiently as possible toward the real goal – getting you where you want to go with as little rigid disruption as possible.

As you observe traffic moving through the roundabouts, you see examples of all types of behavior, just like you see in organizations.  You see the optimists - those who look, decide, and yield or move as rapidly as possible.  You see the pessimists – those who arrive at the roundabouts and stop at the yield line, and wait to be absolutely certain that no one is even close to the intersection before proceeding.  I often wonder who these people actually are in their organizations.  What is their organizational experience?  Did they miss their system’s equivalent of driver’s ed?  Have they been punished for taking initiative?  Are they overwhelmed by fluid situations? 

I believe there are some simple parallels here.  In the business world we have catalysts and we have gatekeepers, and there are fundamental and significant differences.  Not necessarily by position, but by thoughts and actions.  Catalysts, true leaders, focus on creating, even better, co-creating a compelling vision for the future of their organization and everyone that participates in it – employees, customers, suppliers, everyone.  Then they focus on enabling the stakeholders to realize their connection with the vision and their interdependencies in achieving it.  Leaders promote processes, procedures and infrastructure, rules in the broadest sense, that facilitate achieving the vision.  They do not over regulate or mandate, they serve the vision like everyone else; facilitate, enable, support, encourage, and develop people to achieve so that shared aspirations are fulfilled.  Leaders are catalysts, cheerleaders, and “dispensers of hope” in their organizations.  In contrast, gatekeepers control, dictate, micro-manage, enforce, and dominate.  Pessimists, they are the “dispensers of caution.  “We already tried that and it didn’t work.”  “That is not the way we do it around here.”  “Don’t think, that’s my job.” “Unquestioning loyalty is the most important quality in a subordinate?”  Are you a Catalyst or a Gatekeeper? Are you rigid or agile?  Are you a mobilizer or a controller?  It makes a bottom-line difference.

Consider one study of many, this one published by Paul Gompers, Joy Ishii and Andrew Metrick in 2003 in the Quarterly Journal of Economics.  It compared the performance of corporate “dictatorships” (gatekeepers) to that of corporate “democracies” (catalysts).  The study ranked 1,500 companies across 28 governance provisions.  It compared the performance of the 10% of firms with the most dictatorial governance against the performance of the 10% of firms with the most democratic governance.  Through the 1990s, the returns from the stocks of the Democracy Portfolio outperformed the Dictatorial Portfolio by 8.5 percentage points per year. 

While this may sound like an argument for banishing gatekeepers, that is not entirely the case.  It is more about emphasis.  There must be rules in any endeavor involving people, and someone has to enforce them.  There will always be a place for gatekeeping in organizations.  It is when gatekeeping and gatekeepers define an organization that agility and genuine productivity decline. 

In an economic environment that depends on creating real growth in real assets, rather than just superficial primping for speculators, new behavior is essential for success,  We need catalytic leadership, vibrantly efficient self organizing systems, corporate-wide intelligence and organizational agility to succeed in the rapidly emerging new world of grow or die competence.