One of the most popular New Work concepts currently is the lateral leadership approach. This fits well into a broader context, given that the World Economic Forum announced in 2021 that we have entered a phase of stakeholder capitalism and that to solve global problems, we need to think systemically and lead laterally, we need to talk about accountability for outcomes to count. However, proponents of a lateral leadership approach often skip over the issue of accountability and decision-making. We want to take a closer look at how accountability and decision-making play out and how this can be improved in a lateral leadership approach.
What is lateral leadership?
Lateral leadership involves people taking ownership, autonomy, and accountability, regardless of their role or place in the hierarchy of a company. It amends the top-down management model with a cooperative working process where employees take personal responsibility for their contribution to reaching the company’s objectives, and work with their peers to make this happen. Some organisations even aim at fully replacing the hierarchical model.
Lateral leadership is challenging for leaders. It requires leaders to be more of a coach or mentor rather than a supervisor. They need to be good negotiators who can motivate their team while moderating conflict and steering the conversation and progress. Thankfully, the required competencies such as empathy, people skills, and negotiation skills are ones that can be learned in the process of transforming from a hierarchal leadership approach to a more lateral one.
Leadership and accountability
However, we can’t talk about leadership without discussing accountability. And accountability has been an issue, regardless of organisational structures. Accountability is often seen as synonymous with ‘blame’, and as something to be avoided at all costs. No one wants to be answerable for mistakes and take the blame. There are generally transparent accountability processes in place in the traditional, vertical leadership model. Regular meetings with supervisors, annual performance appraisals, often tied to a points system to reward the most effective employees. These accountability systems have huge drawbacks, as explained by Ron Carucci in this insightful piece. When only 14% of employees feel that their performance is managed in a way that motivates them and 69% think that they are not living up to their full potential at work, then something is clearly not right with the common performance evaluation systems.
A lateral leadership approach ideally enables transparency, where issues are discussed openly rather than hidden, where colleagues work together to solve problems, and ask each other for assistance. When employees work closely with their counterparts, they develop a shared sense of accountability. Unfortunately, in reality, shared accountability often turns into no accountability.
For the lateral leadership approach to succeed, it needs to move beyond a collaborative working process. It’s not about the team leader meekly asking his team if they wouldn’t mind taking on a specific task, or being ‘nice, reserved, or even inactive’, as Christian Sauer explains in this article (in German). Instead, the leader must be willing and able to focus the team’s efforts on specific topics and tasks. They must be willing to ask uncomfortable questions, challenge assumptions, infuse the team with a passion for the project, and drive results. And they must do this without ‘the hierarchal hammer behind their back’.
Without governance there is no accountability
While a lateral leadership approach can bring immense advantages to a company – such as an improved risk and compliance culture, a better innovation culture and higher performance in general – it only does so with clear governance structures. There still must be someone who takes the final decision, and thereby be fully accountable, and indeed occasionally even takes the blame. Democratizing accountability only goes so far. Yet, we live in a society where being answerable seems to have gone out of fashion. Even among aficionados of decentralized self-organisation, such as blockchain enthusiasts and members of DAOs (decentralized autonomous organizations), trying to ‘democratize’ decision-making can feel like an uphill battle.
Taking decisions in often complex environments and standing by them seems to be harder for many than opting out of the decision-making process and thereby avoiding accountability altogether. This is a dangerous development considering that the data shows that decision-effectiveness and financial results correlate at a 95% confidence level or higher.
Organizations need to teach their leaders and employees flex their decision-making muscles and be willing to defend their decisions.
How to ensure accountable decision-making
Both leadership approaches, the vertical and the lateral, have their value if decision-making power and accountability are clear. You need to know which leadership approach is appropriate to which degree of complexity and in which situation. In a crisis, for example, you don’t want coaching and lateral leadership or lengthy discussions. You want clarity and speed.
However, for both to work, the capability to take decisions and to execute them must be developed not just structurally as good governance, but also in terms of skill set.
Firstly, leaders and employees in key positions need to be able to understand the degrees of (systemic) complexity they operate in, and what paths of decision-making and action are appropriate to any given situation.
Secondly, people for leadership and other key positions need to be chosen carefully to determine both their willingness and their ability to take decisions, execute them, and ultimately be accountable.
We support companies in all three areas by helping senior management and boards to set up appropriate governance structures, to improve the decision-making process of leadership teams in complex environments, and identifying talent throughout the organisation with a specialised analytics suite brought by Bioss.
Get in touch with us to find out how we can help transform your company.