Dr Henrik Bresman; Associate Professor of Organisational Behaviour at INSEAD; Research Fellow at the HEAD Foundation

X-Teams: A Vehicle for Developing Leaders in Indonesia

by
Dr Henrik Bresman

Associate Professor of Organisational Behaviour at INSEAD and Research Fellow at the HEAD Foundation

To better take advantage of the complex and ever-changing business environment of Indonesia and grow through innovation, organisations must maintain an external focus. Dr. Henrik Bresman outlines five basic principles that senior leaders of Indonesian organisations should apply to develop externally focused teams, or x-teams, as a way to ignite innovation and to develop a new generation of leaders.

The need to be agile and innovative is increasingly important for Indonesian companies today. Indonesian firms now live in a world where information flows freely across borders and, consequently, entry barriers have come down. Indonesian leaders need to make their companies work better and faster or fall prey to new competition. The time when Indonesian firms could grow by coasting along in expanding markets or rely on cozy arrangements with the political class is increasingly in the past. And, in many cases, the only remaining viable growth strategy is innovation.

Of note, this innovation is unlikely to come from the C-suite. It will come from the people and teams at the frontline who keep their fingers on the pulse of the market and have the latest and best information about what is going on in an increasingly fast-paced environment. To adapt to this reality, Indonesian leaders must distribute leadership throughout the organisation, across people, layers, functions, and geographies. In other words, they need to develop leaders throughout the organisation.

But how can they do this? How can they develop networks of leaders across the organisation that can help the organisation be agile and innovative? One possibility is to develop their frontline people into leaders by training them to work in x-teams.

A new kind of team

The x-team is a new kind of high-performing team designed for innovation-driven environments. It is also a vehicle for developing leaders at every level of the organisation. Compared to traditional teams, where their focus is on internal goals and dynamics, x-teams are more externally focused. Their members reach out to build expansive networks inside and outside the larger organisation. Such connections help x-teams stay abreast with changing markets, competitors and technologies, and they help members anticipate problems and identify innovative solutions. Importantly, they help x-team members to take on strategically important leadership roles and to develop strategically important leadership capabilities.

Making it work: Five principles

How, then, can organisations implement and leverage x-teams in order to develop the next generation of leaders? The research that I have done in collaboration with Professor Deborah Ancona of MIT suggests five core principles, as outlined below.

1. Make external focus a modus operandi from day one

An important step to developing a new generation of leaders is to encourage them and their teams to “go out before they go in”. In other words, they must first understand the context and the interests of important external stakeholders (for instance, senior leaders, competitors, and customers) before they focus on the internal team dynamics required to get the job done.

2. Work with top management for commitment (think “power”)

Frontline leaders need to be encouraged to work actively with top management in order to develop new ideas and directions, while at the same time acquiring the strategic mindset needed to connect their new ideas to the overarching strategy developed by the most senior leaders.

3. Work with other groups (think “interdependencies”)

In addition to working vertically with top management, leaders at the frontlines of the organisation must be encouraged to work laterally, to understand the interdependencies they are facing. For example, if team members are charged with developing a new product or service, they need to have a clear idea of how their work is related to the products or services developed by other teams Teams and individual managers tend to have a clear idea of their own goals and aspirations. Our research suggests that the best way to reach these goals and aspirations is often to understand the goals and aspirations of other groups in the organisation and to help them reach these. Indeed, helping others is often the best way to help oneself.

4. Update your map of the territory (think “knowledge”)

Having commitment from the top and an understanding of the needs of others is necessary but not sufficient for success. High performers also need an accurate picture of the fast-evolving context within which they operate. Frontline teams need to be encouraged to spend time constantly updating their map of where the competition, the customers, and new technologies are heading.

5. Build psychological safety

Working with stakeholders up, down and sideways in the organisation takes much effort. It takes courage; dealing with uncertainty and possibly rejection; and it requires psychological safety – a climate that is safe for interpersonal risk-taking. If frontline leaders think that they will be punished if their innovative ideas do not work, then they will not even try advocating for them. One of the most important roles of senior leaders in developing leadership talent in their organisations is to create a space that is psychological safe, where workers can unleash their entrepreneurial spirit. A key step in building this type of climate is to show would-be frontline leaders that they will not be punished for failure – as long as they learn from it.

The courage to let go

Our research demonstrates that organisations that have used x-team principles to build teams and develop leaders do better. These include software companies that develop better software; pharmaceutical companies that develop safer and more effective drugs; energy companies that develop more innovative solutions; and management consulting companies that win more bids.

However, opting for the x-team model as a vehicle to develop a new cadre of leaders may be a challenging choice for senior Indonesian leaders. It means that they will have to let go of some authority to managers of lesser seniority. In my experience, this is not easy for many leaders operating in an Indonesian context. Successful Indonesian companies have often been built on an autocratic model with one or a few strong figures at the top. What made that governance philosophy successful, however, is not likely to work as well moving forward. A fast moving context means that people close to the ground need the space to maneuver entrepreneurially.

I am not suggesting that all leadership tasks are distributed and I am not advising that senior Indonesian leaders give up their prerogative to make the most important decisions. Some leadership tasks should clearly remain with the most senior decision-makers or else there will be chaos! I am therefore suggesting that some leadership tasks – particularly those related to coming up with innovative solutions in an ever-changing world – will need to be distributed to those who have the best information. These people will not be sitting in in the boardroom.

Top Indonesian leaders must therefore relinquish some of their power in order to develop the next generation of leaders and secure the long-term future of their organisations as well as their own legacy.

This article was first published in HQ Asia (Print) Issue 08 (2014).

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