One way to think about elements of leadership is through the metaphor of a 'stack.'
In the tech world, a stack is a collection of components that work together and provide specific functionality, user experiences, and/or data processing. Some pieces are essential in a stack, while others are optional.
Much like a stack of papers or bricks, the components in a tech stack are usually depicted as a vertical tower with 'layers' of software built upon each other.
A layered stack of components that build upon each other's functions also works for thinking about organizational leadership.
In a hierarchical leadership model, the general direction of an organization is set through its vision, mission, value, and purpose. These comprise the top layer of the stack. They are implemented through high-level plans or strategies, which are the middle layer. Managers convert strategies into projects and everyday work as the bottom layer or ground level.
This leadership model originated from government, military, religion, and industrial-era approaches to scaling organizations. So it makes sense that hierarchical 'leadership stacks' often focus heavily on governance, tracking, and measures of control. They can be effective when a company is small, or the environment around the organization does not change very quickly.
Networked leadership has a different set of components in its stack. Networked leadership emphasizes connecting knowledge and experience from the edges of an organization with the wisdom and direction of its core. To accomplish this, the leadership stack of a networked organization employs additional components focused on connection, communication, and maintaining alignment rather than control.
Purpose, vision, mission, and values tell us how the organization sees itself in the future, what the organization will do to get to that future, what its purpose is, and how it will conduct itself along the way.
This level of the leadership stack sets the direction of a company at the highest level but is usually not clear or specific enough to act on.
Purpose has multiple levels: A purpose to is what the company does to make money for its owners, such as "the world's best selling activewear brand," and tends to be directly connected to financial transactions. A purpose for is what a firm does for its customers around its transactions. This is often related to customer service or offering a product that solves customer problems.Networked organizations also need to express a purpose with, which can be thought of as a shared purpose. This type of purpose focuses on a higher goal that can be shared with the world at large, not just those who are investors, employees, or even customers. For example, clothing company Patagonia's shared purpose is "use business to protect nature." This shared purpose goes beyond Patagonia's own business, involving joint efforts with companies like REI and celebrating social impact successes by other companies that Patagonia isn't directly connected to. Networked leadership requires some work, and a shared purpose provides a reason to put in the effort.
Organizational visions are a glimpse of the future, not necessarily detailed or precise. Their intention is to motivate people in the present and paint an inspiring picture of what the future could look like. For example, the Alzheimer's Foundation's vision is a simple phrase but represents the future they are working to create: "A world without Alzheimer’s disease.” Heavy machinery company Caterpillar has a more expansive vision statement: "A world in which all people’s basic needs—such as shelter, clean water, sanitation, food, and reliable power—are fulfilled in an environmentally sustainable way and a company that improves the quality of the environment and the communities where we live and work."
A company's mission statement should describe the functions the company will perform to accomplish its vision. For example, NASA's vision in the 1960s was to 'put a man on the moon,' and its mission was to create technology, make spacecraft and run flights. Caterpillar's mission to 'enable economic growth through infrastructure and energy development' defines how they will work towards their vision of a world where everyone's needs are met, and the planet is healthy.
Values in networked organizations are important seeds for behavior but often need clarification to be useful in everyday contexts. When organizations focus on revenue and profitability as their primary goals—sometimes even creating legal obligations to do so—employees may be unclear about how company values like "caring" or "wellness" will be implemented. Even non-altruistic values like "get the biggest market share possible" and "maximize profitability" won't necessarily tell you how to choose between two acceptable outcomes. Both seem important yet can sometimes be in tension as getting maximum market share is not always profitable. For example, Apple's values include "accessibility, education, environment, inclusion & diversity, privacy, racial equity & justice, and supplier responsibility." Only on closer inspection do they turn into tangible strategies, decision principles, initiatives, and actions.
Strategies and objectives help make the vision, mission, and values of a company real and tangible enough for leaders to act. They lay out a high-level path to the vision of the organization by implementing the mission in line with the values of the company in a measurable way.
The strategy layer articulates where to go and what to measure. It is more detailed than vision and mission but still requires some discretion and initiative to translate into actions and decisions.
One way that strategy can be represented is through a business model. Business models determine the elements needed to turn a good idea into a functioning business and can be used to evaluate the organization's desirability, feasibility, and viability.
- Desirability: the match between customer needs and what the organization offers
- Feasibility: how a company will functionally deliver value
- Viability: the economics of the exchange between customers and the organization
You can learn more in our introduction to digital business models.
Objectives and Key Results (OKRs) is a goal-setting framework for organizations, teams, and individuals, focused specifically on intended outcomes and the key drivers of those outcomes. - Objectives are specific business or career goals- Key Results are the measurable ways you'll know you're achieving those goalsThe OKR approach was popularized by Google and the book Measure What Matters. It arose in part as a complement to Key Performance Indicators (KPIs) which measure the velocity or quality of a business system. OKRs are intended as an antidote to 'vanity' or 'churn' metrics which measure activity without mapping to meaningful results. For more on OKRs, project management software company Asana has a great guide.
A digital or strategic narrative brings clarity to vision, mission, and values by connecting them to a company's past, present, future, customers, and organizational DNA. A strategic narrative can be used for many purposes, such as informing marketing, but is perhaps most powerful when it serves as a set of decision principles to help a company make important choices.
Every organization needs to have a strategic plan that maps out how it will fulfill its high-level vision and mission. However, strategic plans can be too high-level to articulate the details needed to execute or offer guidelines that people can apply in their own contexts. In a networked leadership model, strategic plans are mapped to decision principles as well as experimentation programs so they can be applied consistently and be adapted over time.
Organizations practicing networked leadership usually make a point of engaging in foresight, experimentation, learning, and unlearning. They scan the environment around their business and operating models for new ideas and challenges while paying attention to performance and opportunities internally. This capability takes many forms and is multi-disciplinary. Wherever this type of exploration lives in an organization, it's crucial to take advantage of the many forms of data they can contribute to decision-making processes.
Decision systems provide the layer of translation between strategy and everyday work. These systems may include governance, compliance, decision-making methods, and role definitions.
Most organizations struggle with decision systems due to accelerating rates of change in the environments around the business and the shift in power dynamics within digital organizations. Networked leadership relies on new types of decision systems to keep a company moving forward on the right path together when things are moving very quickly or through uncharted territory.
Decision Principles enable leaders to empower effective decisions without having to control everything. When people come to an unexpected situation, where the best solution is impossible to predict in advance, principles act as guidelines to help fill the gap between strategy and everyday work.
Decision rights communicate who has the authority to influence, make, or challenge specific types of decisions. Decision rights are part of a 'chain of command' model that has been adapted from its original military context to be used in businesses. They attempt to make sense of the different levels of authority and influence that a company assigns to various people. Decision rights can also include customers/end users, strategic partners, distribution channels, regulators, and unions.
Networked organizations are mindful about which decision-making methods they use (ranging from top-down edicts to consensus-based engagement, depending on the situation) and in what order decisions are made. For example, DevOps and other modern strategies have embedded thinking about how and when to involve various stakeholders in fast-moving processes.
At the most basic level of a company, projects need to be executed, tasks completed, products shipped and code written.
Rules, policies, and procedures are effective in relatively stable circumstances but can break down or constrain innovation when things are changing quickly. For example, a rule like "employees should never post on social media on behalf of the company" restricts communication that could have been of benefit to the brand. An alternative would be a decision principle like "when posting on social media be clear about who you are posting as, and emphasize positive news which is cleared for the public" that clarifies the company's preferences but leaves space for people to use their own discretion.
Projects define specific initiatives with Specific, Measurable, Actionable, Realistic, and Time-based (SMART) goals. A project should have sufficient clarity to be achievable by its core members. However, in digital organizations, the number of dependencies in projects can make it hard for a single team to control everything that impacts their results.
The work of actual production exists in tasks. In digital, networked organizations, however, tasks are not always contained within one project or department. Through technologies like modern 'matrixed' project management and communication systems, task handoffs can go back and forth between workgroups instantly rather than needing to go 'up and over' through layers of managers. For example, a customer support person's record of a customer call about malfunctioning software can simultaneously exist as a bug report in a development team's backlog. And when the development team updates that bug, it can automatically modify the status of the customer service record letting the support team know the bug has been fixed so they can follow up with the customer right away.