When you have worked in leadership development and coaching for some time, you become used to hearing a refrain, repeated time and again in after-action reviews, that goes something like, “Well, we had a great program, but I feel we are sending changed people back into an unchanged system.” The accompanying sigh is the tacit admittance that there was not much that could have been done about it.

The acknowledged problem is that the approach to leadership imparted during the leadership program was almost bound to fail, given the confines and limitations of the traditional hierarchical organization. This problem is a source of irritation and tension, particularly among younger managers, who often want more freedom to lead in a way that doesn’t always fit with the traditional style of the company.

The Pyramid of Power

These organizational structures evolved to enhance two main aspects of work: control and efficiency. In the traditional pyramid of the hierarchical organization, the division of labor improved efficiency in the industrial age, but management control stifled change and innovation in the modern era.

Some companies tried to compensate for this problem by promoting human-centered approaches, such as company values and leadership principles, in the hope that they could overcome the internal barriers. Others leaned in the direction of changing the structure. The concept of the flat organization became popular, but ill-defined as it was, it never offered anything tangible apart from justifying de-layering as automation and information technology (IT) systems hollowed out the middle of the organization. By and large, any changes were marginal, and the old pyramid of power remained the structure of choice for most companies.

Market-driven Change

Two factors drove real change. Like all great innovations, they came in response to the real challenges companies experienced when trying to serve their clients in a changing world. The agile movement began in the software industry (which didn’t exist when the hierarchical model emerged) in response to customers’ demands for more speed and assumptions that software changes could be made on the fly up to the delivery date. These demands caused frustration within the industry, and the agile approach was born directly out of this tangible need.

The successful implementation of the agile methodology in the software industry led to its adoption by more traditional industries. The agile approach drives autonomy and places decision-making at the most appropriate organizational level. To paraphrase Steven Denning’s book “The Age of Agile,” “It’s not about moving decisions up the corporate hierarchy but moving the competence down to those best qualified to make them”. Agile also reduces internal hand-offs and promotes an outward, customer-centric view. Crucially, it combines authority and accountability in self-directed teams that flex and change in accordance with priorities and customer demands. From an employee perspective, it’s both engaging and energizing. The manager morphs into an agile coach and, thus, swaps role-based power for facilitation skills. The agile approach, in its various manifestations, is now a real structural choice for organizations.

The second factor is that high-profile corporate failures in the early 2000s prompted the public to question the basic integrity of corporate leadership. The 2008 financial crisis further exposed the “short-termism” and, indeed, greed of many at the top. Something had to change, and many companies made genuine efforts to redefine their leadership priorities.

While the concept of purpose is not new, it quickly became the approach of choice for companies driving change, echoing the thinking of Bill George, former Medtronic CEO in his 2006 book “Authentic Leadership.” Purpose is powerful, as finding it is and must be a demanding experience. It requires introspection and revelation, listening and sharing. It asks the question “Why?” both at the personal and organizational level. Why does a leader want to lead?  Why does the organization exist? At its best, it fosters deep reflection and meaning and facilitates that most sought-after quality we seek in our leaders: self-awareness.

A Marriage Made in Heaven?

While some companies have embraced agile ways of working, and some have introduced purpose-driven leadership, there is a dearth of larger organizations that have combined these imperatives at scale, across the world, at the same time.

ING Bank (headquartered in Amsterdam) has. Maarten van Beek is a senior human resources (HR) director at ING and has been at the center of this effort for more than four years. Maarten summarized his approach of combining purpose and agile initiatives as follows:

“At ING, we invest in giving all our employees the opportunity to define their individual purpose. In this VUCA world, we find that knowing their purpose helps ground our people and gives them the inspiration to excel in their individual craft and in delivering on ING’s company purpose, ‘empowering people to stay a step ahead in life and in business.’ Within ING Benelux, our 25,000 people now work in an agile structure, and that, combined with ‘purpose,’ is at the core of all that we do.”

Great and purpose-driven leadership has always existed, and it is so powerful that not even the most turgid and inflexible organizational cage could impede it. More than one purpose-driven leader has melted the barriers and elevated employees to greater levels of both performance and engagement despite the straitjacket the organization had put them in. However, they are the exception and not the rule.

Imagine releasing this leadership force into an agile space and structure that facilitates and amplifies its effect rather than hindering it. Gary Hamel, Stanford professor and author, talks of the potential of harnessing the agile philosophy to reduce the non-productive inherent bureaucracy in the traditional pyramid and more than doubling the economic growth rate of Organization for Economic Cooperation and Development (OECD) countries over the next 10 years: “It would have a bigger upside for our society and our economies than any other public policy proposal or any technology proposal that is out there.”

The after-action review of leadership and coaching programs could soon be missing one of its most persistent refrains as more and more organizations recognize the potential of combining these compatible and synergistic change models for extraordinary success.

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