17 Sep Not All Roads Lead to Collaboration: Key Steps for Effective Leadership Transitions

The first step to making an organisation more effective is often said to be collaboration. However, this isn’t always the right approach. Consider three scenarios: turning around a problematic organisation, starting a local business, and operating a fast-growing founder-led organisation.

Turnaround

When organisations lose their way, small private companies fail quickly, while large or government-owned entities can destroy value for a long time if propped up by external resources. The fastest resolution often comes from consolidating authority in the hands of a visionary leader who centralises decision-making, resets the organisation, and restores stability. The effectiveness of a turnaround depends heavily on the leader’s skills and character. In these cases, executive selection and stakeholder support are key, not collaboration.

Centralised decision-making, while necessary, can cause disorientation or disengagement within teams. To avoid this, the turnaround leader should communicate clearly and ensure teams understand the temporary nature of command-and-control leadership. This approach aligns with themes from our earlier blog, Don’t Spit into the Wind, which examined how rigid adherence to linear models of leadership can lead to costly errors.

Startup

In local startups, founders often lead by exerting authority to protect limited resources and drive the business toward their vision. These startups usually don’t attract top talent, and the founder’s leadership is essential to making the most of what’s available. In such environments, followership is more important than collaboration.

However, giving teams small tactical decision-making authority can help balance followership with innovation. This approach enhances effectiveness without compromising the founder’s control. As discussed in Food or Poison,understanding the organisational stage is crucial to adopting the right approach.

Owner-Led Growth

In fast-growing founder-led organisations, transitioning from founder-driven leadership to a professional management team isn’t straightforward. Founders often maintain command-and-control relationships with second-tier managers, who may be unprepared for strategy formulation and decision-making.

To shift toward collaboration, both the founder and the management team must be ready. Teams accustomed to directive leadership need training in decision-making, trust-building, and conflict resolution. Creating a culture where teams feel empowered is essential for long-term success. This scenario relates to our discussion in Romancing the Stone, where we explored the challenges of leadership transitions.

When to Collaborate First

Collaboration is crucial in many situations, but only after leadership readiness, structure, and direction are established. In stable organisations, collaboration drives continuous improvement by leveraging diverse skills and perspectives. It becomes particularly important when solving complex problems where no single individual has all the answers.

Research shows that collaboration is critical when dealing with ambiguity. Involving diverse voices can uncover blind spots, making collaboration a driver of long-term success.

In some successful organisations, founders create profitable, loyal environments with little collaboration. Transitioning to a collaborative model should be handled carefully, as it can introduce unintended consequences. If implemented too early, it can cause confusion and frustration. Timing is critical—begin collaboration only after decision-making frameworks, leadership readiness, and team alignment are in place.

As discussed in Candles in the Wind and Romancing the Stone, leadership, organisation design, strategy, and teams are inseparable. Shifting leadership models too hastily can lead to complications. Collaboration should be introduced thoughtfully, particularly when transitioning from more directive models.

Call to Action

If your organisation is navigating leadership transitions, we can help assess your readiness for collaboration. Join us for the September 2024 WorldsView Café, where we’ll explore organisational vision and leadership readiness. Register here for the free 90-minute session and participate in a dynamic conversation about aligning vision and engagement across teams.