Leadership for Market Shapers
What does leadership mean when you’re trying to shape – and share – a complex market?
In strategy, leadership consists of both leading your firm and your firm leading the market.
In market shaping strategy, actors collaborate to unleash the value potential of complex systems then share in the extra value. But market shaping requires, and rewards, the art of leadership more than ever. Only, leadership now means influencing by ideas, not dictating and dominating. Within the firm, hierarchy is flattened. Within the market, the shaping firm initiates change, but as often leads from behind as from ahead, either moving first then standing back or starting as fast follower then stepping into the lead. The market lead is shared and rotated, almost like the supported, switching solos of a jazz band.
· In complex adaptive market systems, leadership takes on a new, distributed meaning. One has to decouple leadership from the individual altogether; to distinguish between ‘leadership’ and ‘leaders’. Successful market leadership can be seen as a distributed process of learning, involving a number of individuals from various organizations.
· Two broad leadership tasks are Informing and Performing. Leaders inform themselves and their firm of the potential market in order to envisage a new shape (sense-making). They perform the new market by giving that sense to other actors and, negotiating it until they strike a resonant frequency and the system resonates with the new vision; and by then mobilizing resources, and securing commitments.
· Informing and Performing each consist of two “E”s: Exploring and Experimenting; and Expressing and Engaging respectively. These represent traits market shapers must foster in themselves and in collaborating organizations’ leadership. The four Es overlap and iterate, and their borders are porous.
· In Exploring, firms move from looking ahead (analyzing, forecasting) to looking around the market and at their own business definition. Market shapers seek opportunities to increase resource density by sensing value from multiple points, using triangulation and peripheral vision. They cultivate constructive paranoia, diagnosing problems by pre-mortem dissections of imagined failure.
· In Experimenting, market shapers move from traditional planning and controlling to probing the system, observing responses and provoking emergence. Experimentation demands rigor. Failsafe environments are stifling; you should craft safe-to-fail environments. Prefer experiments with low downside and high upside, and cut firebreaks to limit loss, but educate your team that negative results are learning opportunities. Successes can be amplified next round, while failures must be wound up even if it means “killing your darlings”.
· In Expressing a win-win-win market vision, market shapers move from traditional reading of a map to drawing their own map across the market, and negotiating it within the minimum viable system. They inspire and provoke like artists and persuade like orators. Linguistic skills include the use of metaphors (but avoid zero-sum sporting and martial metaphors); claiming markets by labeling and signaling; and by making the new, familiar and inviting.
· In Engaging, leaders move from taking the lead to sharing the lead. Basic options are creating the wave as a first mover or catching and curating it as a fast follower. The aim is securing commitments to the agenda, mobilizing resources, and building platforms for collaboration. Engaging requires a move from domination to orchestration and from self-centric to allocentric innovation, and to rotate the lead as in a jazz band.
Illustration: Leadership for market shaping