When Senior Leaders Get Stuck and Innovation Stalls: How This Sets the Stage for Peer Leadership From the Middle

I was having a great conversation with a well-connected senior executive coach who works with Fortune 50 firms on the West Coast, and the conversation turned to the faltering innovation that quickly follows when the senior team leaders cannot agree. There is nothing that freezes a team like senior leaders at odds over strategy and direction.

I wrote in detail about the theory of growth and renewal cycles here, so for today’s post I would like to focus on how things unwind and then get better.

When an organization is challenged profoundly in the marketplace, there is always a massive retreat to the core operation. For purposes of this discussion, the core operation is the one that is the cash generation engine — the operation that provides oxygen for the team to thrive.

If the core operation begins to misfire, then things tend to get very intense very quickly — and the CEO can end up with a real leadership crisis on his hands. At this point, rather than work collaboratively, many senior leaders hunker down and over deliver on their functional responsibilities, leaving the cross team cooperative efforts without the support needed to thrive.

The underlying middle management who needs to put things in place strongly follows the pattern set by their leadership, and since in many organizations vertically-oriented goals far outpace horizontal collaborative goals in importance, subtle unwritten decisions are made which bring innovation — especially higher risk, higher potential innovation — to a standstill.

The risk is that just as the shareholders are calling for more growth, the organization begins to withdraw from any activities that can lead to growth that moves faster than the core. All behavior is rational, and at moments like this, everything that is in you tends to move conservatively.

The neat thing about innovation, however, is that it’s nearly impossible to completely remove from an organization – no matter how much the senior team is struggling. If there are long-standing relationships, those middle managers who have strong leadership skills have a tendency to self organize and take steps to revive innovation programs that were under their responsibility.

This mid-layer work will keep innovation moving through the time when a turnaround senior leadership team is appointed. This can be a long time in coming – think of firms such as HP, Microsoft and IBM.

The first thing this turnaround manager needs to do is have 1:1’s that skip levels of leadership to find those middle leaders who have the fire in the belly to keep things moving. This activity is key to getting early results on a turn around, and needs to be raised in visibility and encouraged if real progress is to be made.

Four Keys to Finding the Embers of Innovation

An old adage says that to find the leader, you should look around and see who people are following. To be specific, here are some keys to watch for as these peer-led teams get rolling:

1. They begin to form cross team roles and goals to get a key step forward completed. Finding the time and space for this work is a real act of peer leadership, and is only possible when there is a leadership vacuum.
2. They have organic conversations about how they can work together to begin to move the needle.
3. They build the coalition under the radar – and without air cover, are able to lead the team based on sheer clarity and presence.
4. Results follow, and they either get promoted or they leave for a great job elsewhere.

Finding these “embers” in the coals of an organization that is struggling is key to revitalization and new growth. It will take some detective work to find these teams – tasking a staff leader who really knows the organization is a great start. I have seen new leaders call for a short cycle meeting where their staff needs to show up with their top five ideas for growing the firm. Inevitably, the top two or three ideas will be conventional and linear, but the second half of the list will give clues to this organic innovation. Finding and activating these pockets of leadership can give the new senior team a much faster start on the hard work of turning the firm around. If you’re curious what the next steps look like, take a look at this earlier post on breakout teams.

What are your experiences with finding or being part of a key program that is peer led? Have you had to form and lead something that was important, but not well supported by your leadership?

Please leave a comment below or drop me a line.