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Open Leadership - Book Review

1 April 2011
Dr. Moria Levy
book cover

"Open Leadership: How Social Technology Can Transform the Way You Lead," authored by Charlene Li, a partner at a management consulting firm, was published in 2010. In 2009, Li gained recognition as one of the most influential women in technology, and in 2008, she was acknowledged as one of the 40 women to follow and one of the 50 most influential women in Silicon Valley. While the book is titled "Open Leadership," it might be more accurate to refer to it as addressing "open organizations" or "organizations that intelligently utilize social technologies."


Indeed, being an open organization requires a manager who is both a leader and a leader, but this is just one of the components. The book addresses this aspect, along with others contributing to organizational openness. Openness arises from the new world we inhabit and its updated laws. The book explains how to achieve transparency and provides examples from the world's leading companies. It can be viewed as another piece of the significant puzzle that aids us in leveraging WEB2.0 and the associated changes for the organization's benefit.


The book covers the following topics:
  • What is an open organization?

  • Openness strategy

  • Borders

  • Realization: Promoting the organization to an open organization

  • Addressing failures openly

  • Examples


The book is recommended for anyone wishing to adopt social technology solutions as an organizational strategy. This article serves as a summary and is separate from the entire reading, encompassing detailed explanations and numerous examples. I also recommend exploring the website - http://www.charleneli.com/open-leadership/. Happy reading.


What is an open organization?

People envision an open organization as one characterized by complete transparency, with internal reporting to employees and external disclosure to customers and partners. However, most organizations are hesitant to embrace this level of openness. Factors such as classified financial data, processes involving individuals requiring privacy protection, and negotiations with other companies demand certain confidentiality. An open organization seeks transparency and authenticity but within specified limits. While the organizational mindset revolves around openness, control, and balance, exist to determine the extent of transparency.


An open organization involves redefining relationships with employees, customers, and partners. Within the context of an open organization:

  1. Respect for Others

  2. Sharing and Building Trust

  3. Cultivation of Curiosity, Coupled with Modesty

  4. Requirement for Openness

  5. Ability to Forgive Failures


Regarding openness in decision-making:

  1. Decisions are made centrally by a small group.

  2. In democratic decisions, it is determined by a majority vote.

  3. In decisions achieved unanimously (consensus).

  4. In decentralized decisions, knowledge and information are dispersed. Technologies such as blogs, websites, forums, social networks, and more enable levels of openness previously unattainable.


At first glance, some decision-making components lack openness. However, openness is manifested in defining when a decision is made in each type and in determining the participants in the decision-making process. Openness can be heightened even in concentrated decisions when more people are involved in the decision-making process.

Openness strategy

Every manager opting to lead their organization openly, whether externally to customers, partners, and competitors or internally to employees, must proactively determine the appropriate openness strategy for the organization. The initial step in shaping the strategy involves establishing goals—clarifying what the organization aims to achieve.


Goal: Learning

Benefit:

  • Speeds up the learning process

  • Facilitates a comprehensive understanding of the market and fabrics, etc.

  • Enhances marketing efforts toward advanced/aspiring audiences


Goal: Discourse, Dialogue

Benefit:

  • Generates awareness and positive buzz

  • Improves search engine positioning

  • Boosts sales promotion (broad and appealing distribution of innovations)

  • Strengthens the organization's image

  • Encourages trust

  • Deepens relationships and builds commitment


Goal: Support

Benefit:

  • Increases employee efficiency (whether internal support or customer support online)

  • Enables early detection of problems


Goal: Growth

Benefit:

  • Encourages a greater variety of ideas

  • Accelerates development and growth

  • Improves accuracy in assessments and assumptions accompanying innovation

  • Fosters loyalty among customers, partners, and employees


Additionally, there are several benefits expected for all purposes:

  • Financial savings compared to alternative methods for the same goal

  • Reduction of barriers: sharing information is more accessible in an openness strategy

  • Support for advancing efforts; information moves quickly, widely, and with less effort in an open-minded strategy

  • Rapid response to events and changes

  • Gaining commitment from those with whom openness has been established


Learning is a preliminary stage that should be achieved before pursuing other goals. While the advantages of learning in this manner (variety, speed, cost-effectiveness) are apparent, it's crucial to acknowledge that learning in this way is not straightforward due to:

  1. Information noise—irrelevant information that doesn't contribute and may distract.

  2. Non-representative information compared to planned surveys.

  3. Threats to internal elements in the organization fearing a loss of power.


Charlene Lee introduces a pyramid of commitment levels:


Explanation: Curating (>>exhibition curator)—an extensive commitment to investing effort and time that individuals willingly undertake. According to Lee, assessing people's positions on the pyramid is straightforward.


Three insights:

  • Individuals are consistently at a certain level of commitment to the organization.

  • There's no need to fear direct dialogue on a two-way level with people at different levels.

  • The strategy's goal is not solely to focus on those at the top of the pyramid but to elevate a stage or more relative to the existing one for the defined goals.


In conclusion, a comprehensive strategy includes:

  1. Setting goals to achieve and determining the requisite knowledge or learning.

  2. Deciding the appropriate level of openness and identifying who is suitable to share with.

  3. Appreciating and understanding the capability to be as open as necessary to achieve the goal and deciding on a preparation course.


Borders

One of the crucial aspects of defining openness is delineating its boundaries. Setting clear boundaries is essential to guide employee behavior and provide customers with a clear understanding of what is acceptable and what is not. It is particularly vital to define boundaries because openness comes with inherent risks that need proper management. Additionally, some individuals harbor fears about transparency, even when implemented, and boundaries serve as a tool to alleviate these concerns. Establishing boundaries is critical to cultivating trust in openness.


These boundaries should be reflected in the company's policies, procedures, work processes, and information published on both internal and external platforms. They can also be articulated as a treaty, a term perceived more positively than "procedure." A comprehensive list of examples can be found on the book's website: https://spreadsheets.google.com/ccc?key=0Aoqpra0ucnSWdGlObzJERDBBVk52T1U2d1dmMFg0b3c&hl=en#gid=0.


Elements that should be included in the Convention or any other format of constructed boundaries:

  1. Introduction: Encouraging Openness

    a. Emphasize the promotion of openness rather than its restriction.

  2. Principles:

    a. Transparency in identity as an employee (including considerations for anonymity or identification as a company employee).

    b. Employee responsibility towards the network, the organization, and colleagues.

    c. Confidentiality of information when communicating online.

    d. Exercise of judgment and discretion.

  3. Recommendations for Conduct:

    a. Guidance on the tone of writing, urging caution, and expressing personality.

    b. Emphasis on the quality of writing, addressing issues from spelling errors to adding value in communication.

    c. Building trust by responding to inquiries, expressing opinions where expertise lies, and admitting errors when necessary.

  4. Updating People in the Organization:

    a. Guidance on when it is appropriate to provide updates about network activities.

  5. People/Sources to Consult in Dilemmas:

    a. Identifying individuals or sources to consult in cases of ethical or moral dilemmas.


Stages of Building Borders:

  1. Decide on a partner team involved in the process and determine who has the authority to make decisions in case of disagreements.

  2. Understand the existing level of openness.

  3. Define aspirations and address concerns related to openness.

  4. Gather real examples from other organizations to illustrate principles associated with expectations and concerns.

  5. Form primary boundaries and run sample scenarios to ensure practicality.


In conclusion, boundaries are integral; they exist and play a crucial role in expediting the trust-building process in openness.


Realization: Promoting the organization to an open organization

Specific steps need to be taken to actualize the strategy of openness, and cultivating transparency is essential. Direct steps to promote transparency include:

  1. Creating a Sense of Urgency:

    a. Generate a sense of urgency to initiate the issue.

  2. Understanding Initial Openness Levels:

    a. Assess the starting point of openness.

    b. Comprehend existing values that reinforce openness.

  3. Identification of Work Processes and Stakeholders:

    a. Identify work processes and stakeholders impacted by the process.

    b. Categorize processes into real-time handling of requests/inquiries, crisis management, and intra-organizational communication.

  4. Defining Processes and Stakeholder Roles:

    a. Define the processes and roles of each stakeholder.

    b. Decide on the appropriate supporting organizational structure, whether organic and developing, managed by a dedicated central team, or distributed throughout the organization.

  5. Providing Technological Support:

    a. Implement a supporting technological system.

  6. Training Officials:

    a. Conduct training for officials.

    b. Establish a reward system.


Remember to start small, grow gradually, and exercise patience, as this process is time-consuming.


Fostering Openness:

Fostering openness begins primarily with the manager as the leader spearheading openness and, in the second stage, as the cultivator of openness in employees. The leading manager must gauge their readiness for openness based on personal characteristics. Key features influencing openness include:

  1. Level of Optimism

  2. Level of Cooperation (Teamwork and Relationships)

  3. Level of Curiosity

  4. Capacity for Modesty


Lee defines prototypes of openness leaders based on these traits, emphasizing that every manager should assess their qualities, particularly in the first two dimensions. A participatory, optimistic leader is crucial for success, but there are advantages in other prototypes as well. Managers of different types can be found at the organization's helm, and each manager can modify their conduct if aware of deficiencies. This can be achieved by involving individuals who lack the qualities to lead the process.


After a manager develops leadership abilities, the subsequent step is fostering employee openness. Recommendations include preferring new employees who align with the vision, excel in connections, and exhibit curiosity. For existing employees, it is advisable to encourage transparency and authenticity while fostering a supportive culture, eliminating barriers, promoting risk-taking, and adeptly handling failures for quick recovery.


Addressing failures openly

As evident, openness is more complex than we might wish. When an organization embraces openness, it becomes susceptible to more failures, similar to the challenges inherent in innovation—aspect organizations have come to recognize as positive and worthwhile (ML).


The primary key to effectively addressing the challenges of openness lies in the intelligent management of failures:

  1. Recognition of Failures: Acknowledge that failures are inevitable.

  2. Encouraging Discourse During Failures: Promote open communication even in times of failure, fostering continued trust.

  3. Separation of Failure from the Individual: Distinguish the failure from the person associated with it.

  4. Learning from Mistakes: Extract valuable lessons from mistakes.


Another recommendation for navigating the challenges revolves around risk management:

  1. Conducting Routine Debriefings: Regularly review and analyze experiences, especially those involving challenges.

  2. Preparing for Extreme Scenarios: Anticipate and plan for potential extreme situations.

  3. Monitoring Knowledge for Rapid Response Preparation: Keep a vigilant eye on information to facilitate swift response preparation.

  4. Preparing Individuals and Organizations for Consequences: Equip both individuals and the organization for possible consequences.


Recognizing that difficulties are inherent in openness, these strategies aim to enhance resilience and responsiveness to challenges, fostering a culture that embraces learning from failures and proactive risk management.


Examples

Despite the numerous examples intricately woven throughout the book, a curated selection of organizations that have embraced openness is presented towards the end. These organizations serve as valuable case studies, offering insights into the conditions for success:

  • Values Drive Vision.

  • Leaders Set the Tone and Example for Others, even if they are not personally immersed in technology.

  • The Old Organizational Culture Gradually Transitions into the New.

  • Systems, Processes, and Supporting Mechanisms Sustain Change.


Highlighted examples include:

  1. State Bank of India:

    a. Successfully undertook significant organizational change, turning a branch into a training center to promote openness.

    b. Engaged all employees in decisions to enhance services and image.

    c. Achieved a fundamental change in customer satisfaction within 100 days, leading to revenue, profits, and market share improvements.

  2. CISCO:

    a. Underwent an eight-year transformation from internal competition to a values-driven, open, and goal-oriented company.

    b. Decentralized decision-making processes.

  3. Best Buy:

    a. Fostered a culture encouraging employees at all levels to initiate ideas.

    b. Transformed the perception of hierarchy, implemented technological platforms promoting openness between systems, and changed business operations based on field-generated ideas.

  4. Procter & Gamble (P&G):

    a. Encountered growth challenges despite increased R&D investment.

    b. Introduced social technology to gather consumer-initiated ideas, resulting in renewed and strengthened growth.

    c. Leveraged social technology to sell innovations to other companies and competitors, yielding significant agreements.

  5. DELL:

    a. Embraced openness following a crisis triggered by a dissatisfied blogger.

    b. Improved service and gradually redefined customer relationships through dialogue and increased customer commitment.

    c. Learned from a past attempt at online blogging, emphasizing the importance of openness, authenticity, and transparency for positive outcomes.

  6. US State Department:

    a. Utilized openness to enhance diplomacy through the Internet.

    b. Defined boundaries to facilitate internal sharing while maintaining caution in external representations.

    c. Leveraged social technologies for outward communication, allowing individuals from Africa to send questions via SMS for a radio program attended by the US president during his visit to Ghana.


These examples underscore the diverse strategies employed by organizations to embrace openness successfully, showcasing the transformative impact on culture, operations, and relationships.

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