What leaders – and businesses – gain when they relinquish power

05 Jul 2019

Professor Vlatka Hlupic has seen the power of humane business. Seen how a happy workforce can improve business performance. For her, organisations must adopt a leadership style focusing on people, purpose and knowledge sharing. She explains:

It’s a sad fact that people are increasingly disengaged with work. Research shows corporate life expectancy and performance have declined 75% in the past 50 years. Gallup’s 2018 report on employee engagement found that two-thirds of Americans have ‘miserable work experiences’ or ‘usually show up to work and do the minimum required, but will quickly leave their company for a slightly better offer’. Meanwhile, in the UK, a survey from Investors in People revealed 49% of workers cited ‘poor management’ as the main reason why they thought about getting a new job.
 
What’s gone wrong? I think the answer’s quite simple. Most organisations have outdated approaches to leadership.
 

It starts at the top

 
Through qualitative research I figured out there are five levels of individual thinking, and a corresponding management culture at each level. Every level is characterised by specific thought patterns, language, behaviour and leadership style, and they’re largely influenced by the leader, because the culture is a reflection of a leader’s consciousness.
 
  • Level 1: The mindset is lifeless, and the culture is apathetic. There is fear and blame.
  • Level 2: People do the minimum they can get away with just to get a pay cheque.
  • Level 3: This is the traditional command and control, micromanaging level. We do what we are told. We don’t unleash a passion for work. Levels 2 and 3 are where around 80% to 85% of organisations are today.
  • Level 4: The mindset is enthusiastic; the culture is collaborative. The key words are trust, transparency, purpose and fun. The leaders are inspirational, and the organisations are humane.
  • Level 5: The mindset is limitless! Highly innovative teams operate at places like Google X, making driverless cars.
 

Release power to get power

 
The problem is that most organisations and CEOs rely on command and control (Level 3). There is simply a lack of awareness that a better way of doing things exists. However, when leaders relinquish power, they paradoxically get more power back. Everybody’s more engaged, you hold on to talent, performance improves and profits go up.

 

Vlatka Hlupic on reinventing the traditional leadership paradigm:

 
Organisations do need to have some elements of Level 3 when it surrounds compliance, security and safety. I wouldn’t suggest to air traffic controllers to suddenly let go! But whenever we need innovation and a greater understanding of customer needs, then we need Level 4 when decisions are made.
 
Unilever and Salesforce are great examples of Level 4 – they are more socially and environmentally responsible than many of their competitors, and their share prices and profits continue to go up. Non-profit-wise, Buurtzorg is a Dutch community nursing organisation that continuously grows based on Level 4 principles, with patient costs 40% lower than mainstream home care providers. Revenue over the past 10 years has grown from under €200m to €400m, according to Apolitical
 
Among SMEs, the example I love is Propellernet, a digital marketing company based in Brighton. The CEO lives in the French Alps and they have lots of fun meetings over there – and they have the ‘Dream Machine’ where employees submit their dreams. When a target is met or award given, a dream is picked to come true.
 
“If you have a critical mass of humane companies, then society will shift – which can only benefit everyone.”
 

Step one: acknowledging there’s a problem

 
So, how can organisations implement change? Firstly, they need to acknowledge change is needed, and decide to do things differently. They can also start by taking smaller steps: giving people more responsibilities or tasks, improving the openness of meetings, sharing knowledge and creating more opportunities for people to meet and talk.
 
My work is about transferring knowledge into action. Because I find gamification a powerful tool for executive education, I have created a board game via which players can explore the eight key building blocks for becoming a humane organisation: mindset; motivational engagement; higher purpose; alignment between individuals and organisations; alignment of systems; self-organisation of employees and community; ethos; and organisational processes.
 
Players can explore each pillar from past, present and future perspectives and, at the end, have a very specific strategy they can implement straight away. It’s a safe environment where people can explore key issues and have very specific actions to implement. Harvard, Oracle Corporation and Birkbeck University of London are among the early adopters who have used the game.
 
Although we live in turbulent times, I remain optimistic. I passionately feel my life purpose is to help as many businesses and leaders as possible make that move to Level 4, creating new types of value and ultimately improving innovation and engagement. I firmly believe if you have a critical mass of humane companies, then society will shift – which can only benefit everyone.
 
A management consultant and executive coach, Vlatka Hlupic has also authored two books, The Management Shift and Humane Capital, with the latter featuring a foreword from the Dalai Lama.