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  • Writer's pictureZsofia NAGY

Distributed leadership in supply chains


empowered teams take ownership
team living the benefits of distributed leadership

Over the last 2-3 decades, we went far away from distributed leadership in corporate business, therefore also in supply chains.


What is distributed leadership?

It does what it says on the tin. 😁 Giving trust, empowerment, tools and support to your teams down to the last levels of the organisation to allow decision making to take place where it should, resulting in agility, resilience and transparency.


In short: decision happens where the information is, and not far away from it.


Let me illustrate this with a story:

Hungarian railways were originally designed and built, when the country had a larger territory. The network was designed based on the theory and methods of systems thinking & snowflake theory (you can look up both).


There was a central node, but the load of the network and the connection points were distributed to regional nodes, then to local nodes, including decision making and control.


This ensured speed, variability of services, reliability of connections and repairability without losing service levels (redundancy built in, if you will).


Then came WWII and at the end of it, critical parts of this network were detached from the territory of the country (we won't dwell on political or justice aspects here).


Guess, what happened?


The central node remained with spider-like legs for railway lines without regional & local connection points to operate them.


Basically, it became an inoperable monster with a deadwood of a single-point, central operating head, where all those regional/local node distributed services and functions had to be solved from a single location.


What should have been done at that point?


Re-designing the network again, based on the same methodology for the smaller territory remaining.


They didn't do it, as based on communist theories, a strong, central oversight and governance is key to keep up the communist system.


The results we see even today (despite all modernisation efforts on the network): mediocre services with zero variability in connections (you have to take a trip to central to get from 2 different parts of the same segment of the country, say south-east), zero speed or turnaround times, zero redundancy in rail services.


Let's get back to how this relates to our business setups, I hope you got the concept of distributed leadership from this example!


So, how do I know that we moved away from distributed leadership?


I saw and still see it first hand happening, whenever I worked in industry roles.


For those who don't know me, I started at the bottom of the food chain, rose to the challenge and higher levels of international organisations, so I've been around the block.


The point here is not my career red tape or choices, but an interesting aspect:


I felt more empowered, free to make decisions and free to run with options to solve issues when I was at the start of my career (early project coordination).


The more I moved up that proverbial ladder and the more the time went, I had less and less freedom to make the relevant decisions, had less and less authority over my remit (despite my growing expertise and experience and despite job descriptions getting longer and longer in expectations and requirements).


Organisations went from being entrepreneurial and applying (to a certain degree) distributed leadership….to being more and more autocratic, risk-averse and centrally controlled to a point where the top leaderships of organisations started suffocating benevolent, motivated, strongly qualified experts and specialists, heck even down to the levels of operative executional roles.


I hear those working in organisational security / corporate legal teams (from any aspect) saying:

"Sure, we need more security, control and oversight, and workers / employees are the weakest link in the equation as we have seen sooo many times!"


Yes and no, or not quite.


Why?


I remember every single all-star team I was part of very well.


Majority of us have never had a single thought about digressing, doing harm or unethical stuff. We were there focused, wanting to improve the world of the company and deliver results for them (results for them, not for our private agendas!!).


We showed up in full every day:

  1. We had complex roles, coming up with extraordinary options and solutions every day to overcome challenges (even at times when things seemed impossible)

  2. Going the extra mile every day

  3. Reading professional journals and learning about every other department to do our jobs even better

  4. Collaborating and communicating with benevolence and taking prudent risks (prudent!!)

  5. Checking in with the leadership above us, when we felt something is missing or if we needed direction/guidance

  6. We had no problem getting access to solutions & resources that were needed to do our role and beyond (these weren't necessarily costly)

  7. Speaking up, when we needed more clarity or we thought something went in the wrong direction


In short: decisions were made where the information was, therefore it resulted in ownership. We trusted each other and had each other's backs, regardless of where we were in the organisation.


The results were:

  • project numbers successfully delivered that people today don't even believe to be possible,

  • costs were kept at bay as we felt it was from our own pockets,

  • governance was basically us keeping each other accountable and calling behaviours out that were not acceptable (even if not publicly, we knew the other was right),

  • internal process improvements on everything that we touched as it was ours to run and had the responsibility to run them well,

  • generally the feeling of ownership over what we had in our jobs and what we worked with.


In the last few years, whenever I talk to anyone really, in international industry expert positions including leaders (director, VP, SVP levels as well), they confirm the state of the nation:

  1. They need to jump hoops to get access to solutions and tools which shouldn't even be a question to allow them to do their jobs well

  2. They have little to none real decision making authority and have to get every little thing signed off by people above who don't have either experience or enough detailed, relevant knowledge to make that decision (especially in more senior expert roles and local, country leadership roles)

  3. There are people above them that shove extra deliverables on their budgets without a proper and valid discussion on how it will be delivered (specifically when local market knowledge is completely missing)

  4. At the same time cutting their budget on employees or any services that would bring these targets closer to becoming deliverable

  5. There is very little to no honest, transparent communication about their roles, authority and what's happening in the company, with diminishing roles in the end

  6. They feel (and so do their teams) that they simply cannot speak up or raise critical issues impacting their work and field of operation without repercussions

  7. Roles are unclear, overlaps of responsibility is blinding, people feel unsafe in permanent positions as roles get cut every 12-18 months, leaders have no time for their teams


In short: decisions moved away from where the information & knowledge is, resulting in lack of ownership and further issues as we see in the "results" below.


The results are:

  • Senior experts and leadership professionals move between roles more often, leaving gaping knowledge holes in organisations and are being more and more burnt out

  • Operative & tactical staff is mentally paralysed and is only willing to do the bare minimum (see quiet quitting)

  • The walls of organisational silos are higher than ever, instead of being built down (despite the numerous projects run to get there, ironic isn't it?)

  • Lack of trust between functions and organisational levels, lack of accountability

  • Even the numerous tech implementations don't deliver as expected, despite central investment in the tech, but little into the organisations running it

  • Many cases people feel they have no meaning and purpose doing their jobs, therefore the level of engagement is mediocre and internal quality & rate of innovation and entrepreneurship is as low as possible


So the perceived risk of security vs the asserted level of control in organisations went to a point, which seems to suffocate them at the most important aspects, where decisions should be taken with agility and in a reliable way.


In supply chains, I can safely confirm that these symptoms result in continued chaos and fire-fighting on a daily basis, which puts additional pressure on the existing external volatile environment-induced problems. These all result in additional cost (well above those that should have been spent on your team) and missed opportunities.


I have a strong background in Lean management. Distributed leadership is in its very fabric. How did we end up here despite all the knowledge we have about the benefits of distributed leadership?


What can be done?


It is not simple, but we can do a few smaller, easier steps, which will lead to distributed leadership organically growing in organisations again:

  1. Do the work and officially, intentionally identify what decision should be done at which levels linked to where the information is - for this, you'll need to involve your organisation in full (not just a few layers at the top)

  2. Take a look at why you cannot trust that part of the organisation with the decision currently and ask yourself "what should I do to allow that part of the organisation to make those decisions and at the same time allow me to trust them?" - then do it

  3. Intentionally change role holders according to the new structure with time. As soon as the new structure is enacted, you will see who is rising to the task and who cannot (for any valid reason, then they just need to do something else in the organisation)

  4. Provide help for your regional/local nodes (leaders) in making the change happen

  5. The more the change happens, the more you can see potential gaps which need support and/or interference from a compliance, risk and security point of view. If you involve your entire organisation, these won't be threatening your licence to operate.


There is no short-cut or easy solution here, but if we plug in the work, we can succeed again.


If I think about how much a company can earn out of such small steps, what competitive advantage they can build, it is clear that it is worth taking these small steps.


Is it only for startups / entrepreneurs, or for larger companies as well?


I'd say larger organisations need to be able to build up cells of entrepreneurial teams, like a beehive, and they can succeed with this setup as well!



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