What’s Better: A Facilitative or Directive Leadership Style? Yahoo! Says Both
Yesterday the Wall Street Journal interviewed Yahoo’s new CEO, Carol Bartz. When asked about the structure of Yahoo and it’s history she states:
…Organizations can get in the way of innovation, because if people are all bound up, and if they don’t know if they get to make the decision or somebody else, and if they do, what happens to them, and so on and so forth. There’s a freeing when you organize around the idea that you’re clearly in charge and go for it. It’s really a fantastic group of people, and just cleaner lines and cleaner responsibility, and freedom to make mistakes, and have some fun. This whole business that there’s no innovation side of Yahoo is just the craziest thing I’ve ever heard.
Before the dot com bubble burst in the late 1990s many start-ups were run in an extremely facilitative manner, with an emphasis on teams rather than a hierarchy and an overflow of resources for R&D. When the bubble burst facilitative managerial structure was thrown out the window in favor of hierarchical control, fiduciary responsibility and mundane job descriptions. In other words, these new companies adopted a directive-based approach when re-tooling their organizational structure.
Facilitative organizations invest in exciting projects and innovation in hopes that creativity will beat out the competition. However, there is no guarantee return on investment–the innovation may never come, the exciting project may be out-dated. On the other hand directive leadership, perpetually focused on short and long term cost reduction, will suppress innovation and creativity in the long run. However, that said a directive leadership style does at least go a long way in guaranteeing accountability, coordination, and control. So the trick is knowing how to balance the two. It’s easy to be facilitative when, as we said the other day, you can accommodate experimentation and failure. It’s easy to be facilitative when you are playing a non-zero-sum game. It’s tempting to be directive when resources are scare, when time is pressured, and when your playing a zero-sum-game. The trick is how to be both facilitative and directive.
Carol Bartz, taking the helm of Yahoo in January of this year, did what any good CEO should do: she implemented both a facilitative and directive organizational leadership so Yahoo could continue to innovate without taking dangerous leaps of faith. She is both establishing a clear chain of command and asking her employees to innovate and make mistakes.
Tagged as carol bartz, carol bartz leadership, directive leadership, dot com bubble, facilitative leadership, failure and leadership, fiduciary, fiduciary responsiblity, freedom to make mistakes, innovation, leadership styles, leading a zero sum game, leading technology, non sero sum game, structural organization, wall street journal, yahoo leadership, zero sum game + Categorized as Leadership, Proactive Technology
Yes, different modes or styles of Leadership are not ‘better’ than another. One might be better than another for a given situation. Lots of work hasd been done on the concept of ‘situational leadership’ (Blanchard – http://brucelynnblog.spaces.live.com/blog/cns!B5C035B7809F740A!165.entry).
My own delineation is between the two terms of ‘Leadership’ and ‘Management’. Both are complementary and need to be applied in balance appropriate to the context. My definition of the distinction is that ‘Leaders optimise upside opportunity, Managers minmise downside risk’ (I think there is some alignment between your concept of ‘proactivity’ and my notion of ‘going after upside opportunity’).
I don’t really cooncur that the problem with the DotCom companies was a ‘leadership style’ issue as you have articulated it here. I think that the DotCom’s weighed heavily on the ‘leadership’ side of pursuing upside. And in the context of a rapidly rising tide that floated all boats, that was a ‘reasonable’ bet and balance. The problem is that most DotComs simply put all their eggs in the leadership/opportunity basket with little investment in the management/risk basket. When downside hit (eg. ebbing tide, burned capital, business pllans not meeting targets), they were completely unprepared. But it was not a ‘style’ issue. There were plenty of DotComs who ran their businesses in highly directive manners into the ground and plenty of successful DotComs who thrived with a facilitative approach through the hard times (because they managed the downside risks effectively).
Bruce,
Sorry it’s taken me so long to respond.
First, the problems you have with the Dotcom argument are sound. It would be foolish to say ALL start-ups in the booming Silicon alley days were run by Facilitative leaders. Instead, I said “many” and I think I did this is, as you pointed out, because the economy was good.
Facilitative leaders often lead with a few basic assumptions (I outline them here: http://bacharachblog.com/proactive-leadership-skills/10-signs-you-are-a-facilitative-leader/ ) one of them being that there is more opportunity than risk in the market.
These basic assumptions were easy to hold in the Dotcom era. When the bubble burst people woke up and began, as you say, to fight off risk. Facilitative leaders couldn’t as easily feel comfortable with there assumptions and had to reevaluate there leadership styles.
You make a great point about the difference between Leadership and Management. I add that Leadership also implies the ability to get things done. Meaning, leaders have the ability to follow through with optimizing opportunity or downsizing risk.
Thanks for the link to your blog (http://brucelynnblog.spaces.live.com/blog/cns/ ) . I’d recommend it to anyone. Great reads and tons of book reviews.
Besy,
Sam B.