The Fourth Element: Co-Created Leadership and Employee Voice
It is unsurprising that enlightened leadership often plays a key role in driving workplace innovation within enterprises. Leadership theory is highly contested but leadership development has gained increasing prominence through business schools, professional institutions and consultancy.
Early leadership theories were primarily focused on the distinction between “task focus” and “people orientation” and this remains a useful distinction. More recently theories have emphasised “transformational”, “charismatic”, “visionary” and “inspirational” leadership. These often draw on the rapidly growing number of biographies which celebrate business leaders such as Jack Welch and Steve Jobs.
The dark side of such leadership approaches soon began to emerge including the potential for abuse of power, narcissism, destabilisation, blind obedience and fear of questioning. One US academic commentator (Khurana) argues that the extraordinary trust in the power of charismatic CEOs displayed in these leadership approaches “resembles less a mature faith than it does a belief in magic”.
Alternative approaches advocated by Peter Senge and others focused on leadership as a creative and collective process. They were less concerned with the central, charismatic individual and more with the creation of opportunities for employees to seize the initiative and contribute to decision making. Such “shared and distributed leadership” relates to a concern with empowerment and building organisational capability. It is therefore a key element of workplace innovation because it focuses on releasing the full range of employee knowledge, skills, experience and creativity.
Recent developments in the UK, for example, add extra weight to the focus on leadership. On the same day in June 2015, two public agencies coincidentally published guidelines on productivity and employee well-being. Acas and the National Institute for Clinical Excellence, 2015 both refer to the need for positive leadership styles which encourage creativity, new ways of doing things and opportunities to learn, and for leaders to be open, honest and visible.
Each of the three UK case studies discussed below illustrates different ways in which shared and distributed leadership can stimulate and drive workplace innovation. In each organisation, workplace innovation was instigated by a newly appointed Chief Executive and led to greater employee empowerment and innovation. Yet the three journeys of transformation were very different, reflecting the very different contexts in which each organisation operates:
Drax Power is the owner and operator of Drax Power Station in North Yorkshire, the largest power station in the UK. The arrival of Chief Executive Dorothy Thompson and HR Director Richard Neville transformed a record of poor industrial relations. Drax Power’s Working Together agreement with trade unions combined with a comprehensive consultation programme in which Dorothy invests large amounts of time each year in face-to-face meetings with staff helps build an understanding of the major technological changes faced by the plant, establishes trust, demonstrates transparency, stimulates employee ideas and creates a more entrepreneurial culture.
Skanska, a Swedish-owned company established in 1887, is one of the world’s leading project development and construction groups. The UK operation was established through acquisitions from 2000-2013. When Skanska acquired the UK companies it inherited many practices at odds with the Swedish parent’s open and transparent culture and values. Mike Putnam’s appointment as CEO in 2009 demonstrated a clear commitment to break with the past. Visibility and accessibility is characteristic of his leadership style. He explained that:
“One of the big transformations has been to adopt the Swedish approach to openness and transparency.”
“Everybody in the UK talks about it but in the Skanska Group it is at a completely different level.”
“When you have your values you need to be visibly seen to follow them. The behaviour that backs up that leadership is absolutely crucial.”
Skanska UK has been on a sustained journey of transformation, distancing itself from traditional industry practices by embracing ethical principles relating to safety, the environment, transparency and quality.
Bristan was founded in 1977 in Birmingham as a family owned business but was acquired by Masco, a US-based company. Bristan is now a leading supplier of showers, taps and bathrooms in the UK with exports to Europe and Russia. The company is led by Chief Executive Jeremy Ling. He joined Bristan Group in 2009 when it was a family-owned “can do” company but with “a lack of clear focus and inconsistent objectives”. Although the company has retained its family atmosphere Jeremy’s arrival was transformative. Leading by example, he created a culture of shared leadership, values and behaviours:
“Empowerment of my top team and feedback on performance are essential for us to be a learning organisation”.
He and his senior team are guided by “boundaries” rather than strict role definitions, and are trusted and empowered to be entrepreneurial within those boundaries. Jeremy points out that all employees have two duties: to develop themselves and to change and develop their roles.
One employee summed up Jeremy’s leadership: “This senior management team are the best ever, they know all our names.’’ Jeremy has empowered line managers, teams and frontline workers, introducing a culture of continuous improvement that has become embedded throughout the company.
Workplace partnership and employee voice
Partnership between management, employees and trade unions can take many forms, but always requires openness, transparency and two-way communication. At the very least it can be an effective tool for positive industrial relations, minimising conflict and resistance to change.
So this means that industrial relations go beyond adversarial bargaining; it looks for win-win outcomes for the organisation and its employees. It means partnership forums, times and spaces where senior managers and trade unions or employee representatives get together to tackle big issues in a climate of openness and trust.
Yet partnership can also transcend the industrial relations sphere. Where it works best, partnership blows through the entire organisation. It stimulates dialogue and, like a wind, carries the seeds of innovation both ways between senior management and frontline employees.
An important body of research has begun to show that representative partnership structures on their own may have little direct impact on performance or quality of working life. Rather they can exert a positive influence on the development of activities and practices that may do so.
Kaiser Permanente, one of the biggest healthcare providers in the US, offers a particularly striking example of this. Its Labor-Management Partnership has driven improvements in the quality of care through employee-led innovation, leading to win-win-win outcomes for patients, management and employees.
In Ireland, proactive intervention by the union-led IDEAS Institute and local shop stewards reversed several years’ underinvestment in Becton Dickinson’s Drogheda plant, saving more than a hundred jobs and creating several more. By unleashing the knowledge and creativity of frontline workers, productivity and performance improved to the point where the parent company recognised that the plant had been transformed from an increasing liability to a major asset.
When partnership arrangements exist alongside the types of participative workplace practices described in the previous three Elements it creates a system of mutually reinforcing practices leading to improved information sharing, greater levels of trust, reduced resistance to change and heightened performance.
This combination of representative and direct involvement is known as “employee voice”.
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