Several years ago, the future CEO of what is today a Fortune 100 company had a problem. The staff at the then young company had been working on the development of a major product line that its leaders hoped would become the principal revenue stream for the business. This revenue source was to be a prime attraction that would entice investors in its upcoming IPO. As the future CEO inspected the product prototype one Friday afternoon, he wasn't happy with what he saw. The prototype was seriously flawed.
In most companies, these developments would have triggered a highly directed management response. In all likelihood, the CEO would have convened an emergency meeting of key leaders on Monday morning to develop an urgent corrective action plan with milestone expectations and an ambitious completion date several weeks out. A special ad hoc work group would have been assigned responsibility for solving the problem, an oversight steering committee would have been formed to monitor the progress of the work group and a single senior executive would have been held accountable for completing the critical corrective action plan.
A Simple But More Effective Approach
But that's not what happened in the young company because by the time everyone was returning to the office the following Monday morning, the problem was essentially solved. The CEO in this case doesn't believe in corrective action plans because he believes fixed plans are actually counterproductive, especially when the task at hand is extremely urgent.
The young company was Google (disclosure: the author is invested long) and the CEO was Larry Page. The prototype was an early version of AdWords, and the problem was an application that was presenting unrelated ads with its user searches. Page's response to correcting the flawed prototype, described by Eric Schmidt and Jonathan Rosenberg in their book How Google Works, was a simple -- but a far more effective -- approach that you won't learn in business school. Before going home on that Friday evening, Page printed a sample of the pages containing the useless ads, posted them on the bulletin board on the wall of the company kitchen and wrote "These Ads Suck" across the top of the pages.
Over the weekend, Page didn't call or e-mail anyone, nor did he schedule an emergency meeting. Instead, five Google colleagues, who had seen Page's note and agreed with his assessment, voluntarily worked on a fix over the weekend and created a greatly improved prototype that was ready for examination on Monday morning. And what's perhaps most astonishing about this story is that none of the five volunteers had responsibility for the ads project.
A Different Way of Leading
Traditional leaders go into a highly directive mode when critical problems happen because that's the way their organizations work. Hierarchical management structures are designed to leverage individual intelligence by giving the leaders at the top of the pyramid the power to command and control the work of their subordinates. The key leader in hierarchies is the CEO, which is the common acronym for the Chief Executive Officer. In the typical company, the CEO is expected to take charge when something goes wrong, and like the proverbial captain of the ship, direct the flow of the critical work of the special workgroups and oversight committees as they navigate the business through troubled waters.
Larry Page, however, is not a traditional leader. While he relishes and successfully hires smart people at Google, he doesn't believe that the smartest organizations leverage individual intelligence through the ascription of command authority. That's because the fundamental strategy of the business he co-founded with Sergey Brin is based on a radically different notion: The smartest organizations are those that know how to aggregate and leverage collective intelligence.
While other search engines relied on the judgments of editorial experts to rank web pages, Google's defining innovation was an algorithm that used the wisdom of the crowd to produce far superior search results. As their startup business grew, Page and Brin also used this notion to guide the design of their organization. Rather than building a top-down hierarchy that leveraged the individual intelligence of the few, they created a collaborative network that leveraged the collective intelligence of the many.
Managing Change Means Changing How We Manage
In leading a collaborative network, Larry Page behaves more like a chief enabling officer than a chief executive officer. He and Brin have created an organization that enables anyone in the company to initiate an idea, organize a team or solve a problem without waiting for permission or direction. Perhaps this explains why Google once again ranked #1 on Fortune's recently released list of the "Best Companies To Work For."
While chief executive officers are leaders of top-down hierarchies who exercise power by skillfully taking charge and being proficient in the competencies of command-and-control, chief enabling officers lead not by amassing power to themselves, but rather by enabling the practice of power throughout the entire organization. They do this by designing their organizations as highly connected collaborative networks where people are primarily accountable to their peers rather than to single supervisors. Chief enabling officers understand that, in a hyper-connected world, power is more about being connected than being in charge. That's why they don't construct bureaucratic barriers to getting things done. When people have the freedom to get things done, the time to solution is reduced from weeks to days.
If business leaders want to manage at the pace of change, those who are still leading top-down hierarchies will most likely need to change how they manage. They will need to learn how to effectively build and lead collaborative networks by understanding and embracing the new role of the CEO, the Chief Enabling Officer.
Rod Collins (@collinsrod) is Director of Innovation at Optimity Advisors and author of Wiki Management: A Revolutionary New Model for a Rapidly Changing and Collaborative World (AMACOM Books, 2014).