Five Dynamics of Network Leadership

Most senior leaders were trained, promoted and rewarded inside a hierarchy, and then spent the second half of their careers doing work that hierarchy cannot reach: alliances, joint ventures, supply networks, regulatory relationships, community partnerships and shared-service arrangements in which nobody reports to anybody. The skills that produced the promotion are not the skills the work now requires, and the gap is rarely named out loud.

Four frames of leadership perspective

The practice's own research, developed over many years of competency profiling with senior executives, identified four frames of reference from which executives operate. The frames differ in the level of pattern they are able to recognize. Borrowing an analogy from motion: Frame A is like knowing your position or the distance travelled; Frame B is distance over time, which is speed; Frame C is acceleration and deceleration; and Frame D is the rate at which acceleration itself is changing.

• Frame A - self and technical. Attention sits on personal tasks and personal expertise. Technical competence in a relatively narrow area is highly valued and visibly displayed. The wider picture, and how this expertise might be leveraged with others, is only dimly in view. In a leadership role, the executive operating from this frame tends to be experienced as directive.
• Frame B - team and analytical. Attention extends to the unit and to the analysis of its performance: tasks, targets, measures, allocation. This is the frame most competent management is conducted in, and most executives are extremely good at it.
• Frame C - organization and systems. Attention extends to the whole enterprise as a system of interacting parts, where an improvement in one function can degrade another and where the useful question is about the interaction rather than the component.
• Frame D - community and network. Attention extends beyond the organization's boundary altogether, to the web of relationships within which the organization is one node among many.

An important asymmetry follows. Executives operating in Frames C and D can see, understand and work within the perspectives below them. Those operating in Frames A and B generally find the higher-level perspectives difficult to grasp and easy to dismiss as abstraction. That asymmetry explains a great deal of otherwise puzzling friction on executive teams.

The way you ask questions matters

The frames are visible in the questions people ask. A systems question - Frame C - asks how the parts of our organization interact to produce this result, and where the leverage sits. A network question - Frame D - asks who else is affected by this, what they will do in response, and what the second-order consequences will be across the wider community. The two are not competitors; the second contains the first. But an executive team that only ever asks Frame B questions will get Frame B answers, indefinitely, and will experience its environment as a series of surprises.

The five dynamics

Network leadership is not an additional workload on top of the existing job. It is a reorganization of attention: replacing the Frame B task-based approach with a Frame D perspective, and organizing thinking around five dynamics that act on any enterprise.

Dynamic 1 - the market-oriented PULL dynamic

Start here, and start from the outside in. How is the organization connected to its sector and to the wider marketplace? Is it broadly connected, or dependent on a handful of major customers or funding decisions - and if the latter, what dynamics are acting on them? Are the key clients growing or under threat? How are demographics changing their situation? Is the market, or the society around it, genuinely moving? Outside-in thinking is listed first because organizations that begin anywhere else tend to describe their environment in terms of their own capabilities.

Dynamic 2 - the innovation PUSH dynamic

Most organizations hold seeds of growth and value creation inside the experience and expertise of their own people, their suppliers and their partners. Alongside a market that pulls expectations into new shapes, an enterprise's innovation engines can push markets toward new expectations or create markets that did not previously exist. The ability to create and provide something of value is presumably the reason the organization exists at all. Some organizations are excellent at creation and depend on others to commercialize; some are strongest at the service interface, others at packaging resources for those who deliver. Knowing honestly which you are is a network judgement, not an internal one.

Dynamic 3 - the knowledge and capital LEVERAGE dynamic

Initiatives that link employees, suppliers, partners, clients, end users and sometimes even competitors into a shared knowledge system are now a requirement for senior leadership, and they remain the least practised and most under-skilled capability in the executive cadre. The old mantra that knowledge is power is being displaced by a better one: collaborative exchange is power. Even consultants are now engaged less for what they know than for who they know and the networks they can reach. Shortening product lifecycles have compressed payback periods, which makes leverage across a network the difference between recovering an investment and not.

Dynamic 4 - the community TRANSPARENCY AND ACCOUNTABILITY dynamic

Operating at the network level makes something plain that hierarchy obscures: you are not alone, and your decisions create consequences for others which then generate dynamics of their own. It also makes visible the privileged position a senior executive holds in society, and the accountabilities that come with it. People expect more of executives and government leaders than they once did, and they are finding both legal and informal mechanisms to secure it. Good senior leaders have arguably always understood this; the difference now is that the expectation is enforceable.

Dynamic 5 - the regulatory, environmental and competitive CONSTRAINT dynamic

Few dynamics in the universe are unconstrained; natural law sees to that. On the network we call Earth there are constraints on organizational growth, some natural and some imposed. Ore bodies are exhausted. Biological systems are poisoned and fail. Waste disposal collides with expanding communities. Budgets and investment pools are finite. Customer markets saturate. The network leader therefore keeps the constraint interfaces in continuous view rather than discovering them at the point of collision - and treats growth for its own sake with the suspicion it deserves.

Network leadership focus

Set out like this, network leadership can look like a great deal to add to an already impossible workload. That is a misreading. Nothing is being added; a lower-resolution frame is being replaced by a higher one. An executive who organizes thinking and action around the five dynamics acting on their enterprise has a better context for the work they were already doing: clarifying, positioning and prioritizing; mobilizing, motivating and empowering people; and facilitating innovation rather than commissioning it.

The accountability dimension of this argument is developed in Issue 8 on transparency, and the knowledge-leverage dimension in the feature on the seven C's of knowledge leadership. The executive leadership section records the programmes this material came out of, and the full library is in the Leadership Acumen archive. For contemporary treatments of leading across organizational boundaries, Harvard Business Review remains the most accessible source.