May 25, 2010
Charlene Li became an industry name with the 2008 publication of “Groundswell,” which she co-wrote with Josh Bernoff. Their mantra — that it’s the relationships, not the technology, that matters — still resonates today. Now she is teaching leaders to enter the conversation, strengthening these relationships by improving efficiency, communication and trust.
Li, founder of the Altimeter Group and a leading social media expert, reassesses the digital leadership space in her new book “Open Leadership.” There she explains how to become open without losing control. Her insight shows leaders how they can not only adjust to this new digital reality but also use these tools as leverage for their organizations.
Li talks to The Strategist about the challenges of letting go, the power of dialogue and the importance of failure.
In “Open Leadership,” you discuss the need for openness while acknowledging the need for limits. What are the biggest challenges facing organizations as they try to adopt this new mind-set of openness?
Letting go of control. Leaders have been trained as business people their entire careers — to be in control of the message, to be in control of people and to be in control over the product. There’s a new reality: You’re actually not in control. However, you still need to be in command, which is the hard part. There are ways to [achieve this balance]. Figure out how to work with the people who already have responsibility and power, rather than fearing [these changes] and trying to maintain control. Otherwise you won’t get anything done.
What’s the first step when a company wants to adopt this open leadership strategy?
The first step is to understand what your strategy is, why you need to be open and where the advantages are. Early on in the book I lay out 10 different ways we can be open and talk about the advantages and benefits of each and how to measure them against specific goals that you are trying to achieve. There’s no sense in being open unless you’re trying to achieve something by being open. Who has the right to speak on behalf of the company? This is a big issue for a lot of companies that [only allow one spokesperson]. What if you could actually allow more — maybe five, or let’s say 15? What about 50 or 500, or all of your employees? You start to see some of the advantages.
What are some successful examples of open leadership?
I talk a lot about Best Buy. They are all about being open. They empower their employees to do a tremendous amount of representation on the store floor directly to their customers. Best Buy knows these are sort of über-geeks, people who love electronics, and they work at Best Buy because they love electronics. That passion is hard to replicate. So they said, “Why don’t we let them actually be the face for our support teams on Twitter?”
Now, instead of just having a small number of people provide support on Twitter, they have more than 2,000 people. It’s something called Twelpforce. Anybody can ask a question by sending a message to Twelpforce on Twitter and then any of the 2,000-plus employees who are signed up can respond.
Is there a single factor that predicts whether a company’s attempt at open leadership will be successful?
The biggest one is the mind-set of the chief executive officer, because that person sets the tone and the pace and the strategy for everything else that happens in the company. Somebody at the top needs to say, “Openness is an important part of our strategy, of how we will accomplish [our] goals.” Anything below that level, without the commitment of somebody at the top, isn’t going to get a lot of support, because it’s hard [to be open].
Is open leadership right for every organization?
No, absolutely not. How open an organization is depends completely on their goals.
I talk about the Apple factor. They’re not a very open organization, but they’re appropriately open where they need to be and want to be. They have a strategy. They know where they [will] be open and where they will not, and they will explore and test different areas.
Are they as open as they could be? Could they be more open in innovation? Well, do they really need to be? Will they be any better? Because they already have such great people internally. Do they need to be more open in a dialogue? Probably not, because everyone else is talking about them. [They’ve been] very closed with what messages they send out, and everybody picks up from there.
If you have teams of the best innovative thinkers in this space, if you have an arent fan base that will provide customer support and will talk about you till the ends of the earth, then sure, you don’t have to be as open. However, most companies aren’t Apple.
A lot of organizations are struggling to find their footing in this climate. Is it wise for companies to shift toward open leadership now?
It’s important to do this because it creates leverage. A lot of companies are looking at this and saying, “How can I do customer support for a lot cheaper?” But it’s not only that. Being more open and doing it better and faster than anybody else in your competitive space gives you a huge advantage because this is hard to do. It’s not like you can turn it on one day and be done with it.
The fact that Best Buy has invested in its work force and its employees in developing a level of trust for years now means that they are so much further ahead of other retailers. That is a huge advantage. If you believe that this is going to give you a competitive advantage, then start working at it now, because you may not see payoff in dividends for years.
Have your ideas on social media and companies’ roles in building relationships changed since publishing the first book?
The key mantra, which is “it’s about the relationships and not the technology,” still absolutely holds. But the relationships have changed in one major factor. When we wrote “Groundswell,” there wasn’t this cultural sharing that exists today. That’s a fundamental difference in that before, companies could get out there and still have this idea of messaging to people. In “Groundswell,” we describe it as talking.
[Now] you need to have a dialogue. It does mean letting go, and that is something that’s different. When you share, you open yourself up and make yourself vulnerable. That is the biggest problem people have with this space, and it’s something we didn’t address in “Groundswell” because [then] you could still look at it as a marketing channel. You could still use all of these tools in a directive way and never be open about the way you come to the table.
How can organizations protect themselves with this openness?
You don’t go into this blindly. You need covenants so people understand what the relationships are. These are bargains. These are promises that you make to each other so that if you’re going into a relationship, yes, there is trust. But again, trust is not blind. You go into it knowing that, hey, sometimes things don’t work out. So you take little steps and you put all the contingencies in place and the plans of how to deal with it if things don’t work out the way you want.
There’s a tremendous aversion to risk when it comes to business, especially in trying these new tools. People are afraid of making mistakes. And my point to people is this: You’re going to make mistakes. Things are going to go wrong. You will fail and sometimes spectacularly fail. You have to get good at recovering.
You say not to be afraid of failure in your book. Have you seen failure turn into a positive experience for an organization?
An example I put in [the book] was Wal-Mart. I also talked about Motrin Moms early on. I’m not saying any company would willingly seek out those things. But take every failure as a learning experience. A great suggestion from a book called “Celebrating Failure,” by Ralph Heath, is that you keep a failure file of all the things that you’ve done wrong and what you learned from them.
I guarantee you will go back to that more than your success file if you’re honest about it. That’s where you’re going to draw your strength not only to say, “How did I get out of that situation?” But when things are tough, you’re going to go back and say, “I was able to bounce back from that.”
[Open leadership] is definitely something that you have to have a tremendous sense of confidence in yourself to be able to do. [You need to have] confidence and also the humility to let go of the need to be in control. It’s hard.
What is the most significant challenge facing leaders who are considering openness?
The biggest one is not being able to deal with the stress of being open as a leader, and the honesty and the candor that has to come with it.
The hardest thing is to say to somebody whom you worked with for years, “You know, we’re moving in this direction and you’re not moving with us. We’re going to have to have a parting of ways because we believe in this new direction.” Any time you take on a big strategic or cultural change, you end up having to say goodbye to valued employees who have done well in the past but whom you don’t believe will necessarily work in the future.