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Not everybody loved Lee Iacocca, the automotive legend who died July 2. Before saving Chrysler in the 1980s, he lost his job at Ford Motor Company following years of conflict with a C-suite rival.
The way Iacocca tells the story in his autobiography, chairman Henry Ford II called him into his office shortly before 3 p.m. on July 13, 1978, and fired him. “Sometimes you just don’t like somebody,” the Ford family heir explained to his departing president.
The feeling was mutual. “If a guy is over 25% jerk, he’s in trouble,” Iacocca later said. “And Henry was 95%.”
Big egos often clash when organizations attempt shared leadership structures. Personality conflicts are just one reason. Strategic, philosophical and ethical differences also tear teams apart, resulting in high-profile departures.
Ford Motor Company had sufficient resources to survive the infighting, but many startups do not.
My new research with Serguey Braguinsky at the University of Maryland and Atsushi Ohyama at Japan’s Hitotsubashi University, identifies stable shared leadership as a key to new firm growth.
Top management teams that waste energy on power struggles, political coalition building and scapegoating drag their organizations down. Leaders who learn to share power and resolve conflicts in healthy ways lift their organizations up.
A third option, of course, is to skip shared leadership and bet everything on a single visionary guru who doesn’t need to consult with anyone before acting.
The trick is finding the one person with all the right knowledge to run a modern organization — preferably somebody with specialized industry expertise, along with a background in finance, accounting, marketing, engineering, law, governance and logistics.
Single leadership, even without a superstar at the helm, works better than political framing contests and jockeying at the top of an organization — with the pendulum of power swinging back and forth between warring factions. But even when single leaders are superbly talented, they fall prey to growing pains because there are just not enough hours in a day.
Our research shows organizations with single leadership are inevitably outrun by organizations that foster stable shared leadership.
Most entrepreneurs understand their need for help. As a group, they brim with confidence. But they also show humility. About 85% of new ventures launch with founding teams rather than lone leaders at the helm.
The collaborative approach gives fledgling organizations their best chance to grow and achieve industry dominance.
Leaders willing to share power can take the following steps to minimize the risks of high-profile feuds that lead to disruptive and demoralizing departures.
1. Start strong. Teams built for growth don’t form by chance. As I show in previous research, successful entrepreneurs pick their founding partners with precision. They search for people with complementary knowledge to harness the power of diversity. But they simultaneously focus on alignment of values to harness the power of unity.
2. Manage growth. Some organizations start small with single founders. Cost disadvantages often emerge with growth, but diseconomies of scale cannot be addressed simply by bringing on more leaders. Finding partners with complementary knowledge and aligned values remains key, regardless of when new leaders join the team.
3. Anticipate conflict. Smart people with similar values often disagree. Stable leadership teams anticipate conflict and figure out how to resolve differences in ethical and strategic ways. The process is not easy, but they make it a priority because they understand the stakes. Stable shared leadership stems not from the absence of conflict, but from the ability to repair and recover quickly and effectively.
4. Counsel together. The goal of shared leadership is not to divide and conquer — with subject matter experts staying in their swim lanes — but to achieve stability while working together and learning from each other. When strategic or ethical problems emerge, the best answer is often scattered among the leadership team or entire organization. Different people may contribute different parts of the solution.
5. Build consensus. Stable leadership teams focus on what is right, not who is right. They look beyond titles and prioritize the long-term interests of the organization over short-term gains. If disagreements persist, collaborators engage in consensus decision making. Rather than taking positions and posturing, they discuss the underlying reasons for any conflict. In the end they move forward with the best information available.
Instead of kicking people like Iacocca to the curb, stable leadership teams challenge each other and make each other better. They work like a Chrysler Pacifica minivan with room for everyone.
