Deborah Ancona on Dynamic Leadership and Outward-Looking Teams

In the past, Procter & Gamble depended on its 7,500 R&D team members to create and bring new product lines to market. By 2000, the company realized this invent-it-yourself model was cutting into their efficiency so they switched from research and development to connect and develop (C&D).

Now, they have access to 7,500 individuals inside the company and an additional 1.5 million innovators outside “with a permeable boundary between them.” This collaborative approach resulted in working with a little-known baker in Italy, the company’s competitor in Japan and others across the globe to create popular products like the Swiffer duster.

Seley Distinguished Professor of Management and founder of the MIT Leadership Center at MIT Sloan Deborah Ancona says, “There’s nothing really wrong with the way organizational teams work – except for the fact that they’re inward looking. This exception is critical, since the connections that enable the firm to seize market opportunities and leverage technological breakthroughs are on the outside.”

Prof. Ancona, the co-director of MIT AI Leadership, has spent years researching organizational leadership and team dynamics. Her work has crystallized two key concepts that every organization operating in today’s hyper-connected world should live by:

1. Distributed leadership leverages the leadership capabilities that exist across an organization to become more creative, innovative and agile.
2. X-Teams enable the practice of distributed leadership by working beyond external and internal boundaries to accelerate innovation and change.

Prof. Ancona’s research on X-teams led to her book, X-Teams: How to Build Teams That Lead, Innovate, and Succeed (Harvard Business School Press).

Good teams fail because they look inward, not outward.

Why is it mission-critical for businesses to look outside? Research shows that close-knit teams that look inward for ideas and solutions are often not successful. This is true of leaders, too.

In a globalised, interconnected world, external sense-making is a critical capability. Leaders and team members alike need to keep their fingers on the pulse of what’s happening in other countries, outside organizations and different parts of their supply chain, as well as what their competitors are doing. Without a map of the external context, it would be difficult to understand where a business is headed.

Let’s say you’re about to put together a newAI strategy for your organization. First, you’d determine how other businesses have implemented AI into their processes. You won’t simply replicate what they’re doing because every business has its own needs and culture, but you do want to “gain some understanding, build on the shoulders of others and test assumptions.”

In an interview with Infinite MIT, Prof. Ancona cites her work creating several X-Teams for Li & Fung. The Hong Kong-based supply management company implements a new strategic direction every three years, after which they shift again as a way of adapting to a fast-changing environment. They come up with numerous assumptions, but only by examining what’s happening outside can they test them.

Organizations are political arenas. You need to understand the political dynamics.

The notion of going outside before going inside is also important in building a case for change and innovation within an organization.

To spearhead change within organizations, business leaders need to know who’s supporting them and who’s not, who can be convinced or can the idea be shifted to accommodate people. Knowing what’s happening outside helps navigate these interdependent, complex pathways.

This is a key marker of successful distributed leadership as much as self-efficacy. Distributed leadership requires lots of people to share their ideas, which are then tested and vetted to gain insights into which paths to follow.

Leaders need to give their teams the freedom to look outside and reach out to people who have different ideas and expertise.

Distributed leadership is not about one person leading from the masthead – it’s a flattened structure where the roles of leaders and followers switch at different points in time.

Organizations need to develop a global mindset

The models of X-teams and distributed leadership are particularly relevant in a post-pandemic world rife with economic uncertainty.

Prof. Ancona shares that there’s a huge amount of anxiety affecting people in one of two ways. They’re internally focused and worried about what’s going to happen to them so they get into a rigid stance from where they cannot innovate – a well-known phenomenon in social sciences. Or they’re moving in different directions without figuring out what’s the right move.

She says that there’s an increased demand for "leadership in the age of uncertainty.” That’s why sense-making of the external landscape is so crucial. “If you're not sure what's going on in the world, being able to offer someone a map or the opportunity to create a map gives them confidence, hope and some kind of framework from which they can act.”

People crave more leadership during times of stress

More leadership, however, doesn’t translate to a “dominant parent figure” but understanding the conditions of stress,showing emotional intelligence and encouraging conversations.

Prof. Ancona points out that leaders are not immune to anxiety and stress and in times like these, they need to gather their resources, not close the shutters.