3 New Ways Companies Can Lead In The Digital World

This post is sponsored by IBM.

No matter how big a company is, usually it's the executives who set the goals, while middle management oversees the employees who have to carry them out. It's an efficient model, but it can cause ideas to flow in one direction: from the top down.

But these days, millennials and digitally savvy companies accustomed to more open lines of communication have realized that there are better, more inclusive ways of making things happen.

In a presentation at TED@IBM, Charlene Li, CEO and Principal Analyst at Altimeter Group and author of the bestselling books "Open Leadership" and "Groundswell," said companies can no longer thrive on the old methods. They need to do a better job of sharing and collaborating with their own employees.

And this is an urgent issue, according to Li. "Research from Gallup shows that worldwide, amazingly, only 13% of people are engaged in their work." While companies are working hard to making things better, "that number has barely budged over the past decade."

Successful organizations are changing everywhere, at every level. A strong advocate of collaboration and social business, Li laid out three criteria companies need to meet to thrive in the new digital world.

1. Trust Your Employees

Our current hierarchical structure was developed during the Industrial Revolution. Despite its efficiency, the usual structure "pales against the need for innovation and change," said Li. That's because the very people who have to deal with the rapid changes at any company "often reside at the edges and bottom of the organization." They're not listened to, even though they can see the company's problems (and possible solutions).

But Li said the the best way for a company to thrive in the new, digital world is for it to empower its employees. It needs to have a "two-way non-hierarchical conversation across the organization that can lead to decisions and action."

Li cited the restaurant chain Red Robin. When they launched a new burger, Red Robin servers posted customer feedback on the company's internal social network - "and it wasn't all good." Executives quickly realized that they had to change the recipe. They consulted with the servers and cooks, and changes were made in 30 days, rather than the usual 6-12 months. When companies listen and share, they become flexible.

2. Create A Culture Of Sharing

Li said middle managers can be facilitators of communication and accelerate the spread of information throughout their companies. But when they're not backed up by their supervisors and encouraged in their efforts, they can stifle innovation. An example of good communication within an organization, according to Li, can seem unlikely: the US military.

When Li was aboard the USS Nimitz, she noticed the captain encouraged input from anyone, anywhere. As she said, "It's ironic that one of the models of hierarchy, the military, is also one of the most transparent organizations." But technology allows the hierarchical organization to share information - and to react quickly in times of crisis. Managers that promote information exchange can gain a possible tactical advantage. Otherwise, lives could be put into danger.

There are many ways to encourage communication within a company. It can be encouraged on an ad hoc basis, or made a part of the company. IBM, for example, has internal "Jam" sessions that allow employees to collaborate and exchange ideas.

3. Practice The Art Of Followership

Li said in her presentation that she has found "People often put off acting like a leader until they have a formal title. People don't cross 'chains of command' because they can only report to one leader."

In a modern "followership" organization, though, the quality of your network determines how much influence you have. "One manager I know posted internal video updates about a project and answered questions from people throughout the organization," Li said. When it became time for that project to launch, that manager was able to tap her network for advocates of her project. Her influence came from her network.

When middle managers are encouraged to build their "followership" even as "their titles shift or even disappear," they remain relevant, Li said. And when meaningful decisions are made and executed through the networks, employees at all levels become more involved, responsive, and powerful.

How Can Companies Make These Changes Happen?

Ask your employees for help, Li said. She cited one CEO who "made the shift by asking employees via an internal platform for suggestions on how to eliminate needless processes and technologies." The CEO received over 800 suggestions, prioritizing which ones to cut, "again with input from employees." The organization then became more efficient, because it trusted its own employees.

Li said, "the generational shift from a control mindset to a influence mindset is happening." It won't happen overnight, but "just like when you were a teen and your parents had to let go in order for you to grow, organizations need to let go as well. They need to trust that their employees - if empowered and engaged - will do the right thing."

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