The way we conduct business has changed forever. Office workers are heading home. Technology’s replacing manual labor. The days of CEOs being the “top dog” is out — and team-based decision-making is in.
Per American Express, 35% of millennials say traditional CEO roles will become obsolete within the next ten years.
And it’s not just in corporate settings.
More small-business owners are adopting collaborative leadership styles in the workplace. If you’re a leader who wants to build a team-oriented culture, then it may be time to implement the practice.
What is collaborative leadership?
Collaborative leadership is a management style that encourages a team-oriented approach to problem-solving and decision-making. It’s the opposite of the traditional top-down leadership model, which relies on an executive, such as the CEO, to make all decisions and give direction. Instead, it includes employees in different departments and levels in the company.
For example, instead of a business owner giving out orders to their team, the founder solicits employee feedback on their operations. Then they collaborate to solve potential issues.
“We have a small, high-functioning team with distinct areas of work and each person is empowered to lead that function,” says Jamie Snedden, CEO of membership community Groundfloor.
“We collaborate effectively by trusting each person is the best person to lead that function, and input from others is sought and given when needed.”
Why collaboration is important in leadership
Collaborative leadership fosters transparency, which can help build trust and loyalty among teams.
Making decisions together also allows everyone access to critical information, and gives leaders a grounded perspective of what’s going on in the company at all levels.
According to Harvard Business Review, Nokia had a collaboration among its executives, but there was a problem — decision-making was gated from its employees. Its corporate structure is partly why they failed to realize and react to the growing threat of smartphones.
Not fostering transparency and collaborative problem-solving can harm a business’s growth and innovation. In the end, Nokia sold its mobile and devices division to Microsoft in 2014 after failing to compete with iPhone and Android devices.
With collaborative leadership, important issues brought up by employees can be heard sooner, improving your business’s ability to adapt to challenges.
Benefits of collaborative leadership
Collaborative leadership is a powerful tool for any team, no matter the size or industry. It encourages everyone to contribute their ideas and work together toward a common goal.
This creates a workplace culture that’s open, honest, and innovative. Other advantages include:
- Faster decisions: The more people putting their heads together, the faster you can come up with a solution.
- More innovation: A team with different expertise and perspectives can pool their ideas to identify problems, overcome issues, and come up with new products.
- Higher productivity: Employees are more motivated to work hard when there’s a shared goal and sense of accomplishment.
- Improved communication: Leaders and employees will talk more and share information, which helps create a holistic picture of the company and its needs.
Having decision making concentrated to one or few people can create bottlenecks in the process, damaging the speed the organization can execute solutions.
On the other hand, collaborative leadership allows founders to leverage the expertise of others. Spreading the load also helps companies scale, as multiple decision makers can resolve challenges, instead of relying on one.
Collaborative leadership styles
There’s no one way to operate as a collaborative leader, but there are two popular styles businesses use today:
- Participative leadership: A power-sharing style that gives everyone responsibility and an opportunity to contribute to the company’s decision-making.
- Transformational leadership: Leaders focus less on creating strategies and making decisions and instead encourage and inspire teams to perform better and shape the organization’s success.
For example, a participative leader works directly with teams to go over problems, ideas, and solutions. Everyone works together to decide the future of projects and the company. Much of the leader’s day is spent with employees instead of just the executives.
A transformational leader spends one-on-one time with employees, listens to their feedback, and articulates the company’s objectives to help employees take ownership of their roles and reach goals.
The leader is also good at building relationships and trust with workers. Unlike traditional leaders, transformational leadership isn’t afraid to challenge the status quo, take risks, and solicit input from teams.
Collaborative leadership characteristics
For team-focused leadership to work, executives must have specific qualities and characteristics, like a willingness to listen to others and employing their ideas (even if they don’t 100% agree).
In 2021, American Express surveyed millennials about the top qualities a leader should have. Qualities listed include:
- Fairness
- Openness
- Teamwork
- Empathy
The report also shows millennials believe the 20th-century model of command and control is counterproductive and doesn’t benefit the business.
If you want to become a collaborative leader, then here are other characteristics you would want to adopt:
- Partnership and collaborating with others
- Active listening
- Celebrating victories
- Learning from failures
- Empowering employees
- Trusting other team members
Examples of collaborative leadership
There’s no cookie-cutter way businesses should adopt collaborative leadership, which makes it one of the most flexible styles out there.
For example, Josh Weiss is the CEO of Reggie, a company that sells dog supplements, and he employs a “pack leadership” mindset.
“We win and lose as a pack. We’re each responsible for supporting and uplifting one another to ensure our collective success,” shares Weiss. “We leave our egos at the door, accept feedback, ask for help, and take ownership.”
As a result, his employees learned to self-lead and make decisions independently, giving everyone a sense that they’re contributing to the direction and success of the company.
Celigo, a business process automation platform, uses monthly all-hands meetings to engage employees in the company’s affairs.
“The emphasis is on creating transparency and the exchange of ideas,” says Tony Deblauwe, VP of HR at Celigo. “Employees understand the state of the business, but have a forum to discuss, and sometimes challenge, leadership on actions and decisions.”
Small family-run businesses can also benefit from collaborative leadership. Marc Werner, CEO of mattress firm Ghostbed, holds a weekly companywide meeting.
“By fostering a culture of collaboration, small family businesses can ensure that all team members feel heard and valued, which can improve morale and motivation.”
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