Over and over again, key company employees find themselves in a role in which they have to take on leadership tasks without actually having employee responsibility within the organizational structure.
This can be a challenging role in daily work practice and requires a range of professional and social skills. They must get managers and employees on board for change projects. They must achieve commitment for the implementation of new measures. The possibilities of hierarchical authority must be replaced by inner leadership and excellent social skills.
Lateral leadership implies leadership without hierarchical powers. There is no "command and control" basis. Instead, lateral leadership relies on building trust and understanding and strives to connect the different interests of those involved. Since disciplinary authority as a source of power is no longer an option, lateral leaders must rely on other sources of influence, such as personal authority, proven expert knowledge or targeted networking. The basis of this type of leadership is not derived from the formal leadership function set out in an organizational chart. It is created by agreement between leaders and those being led and is based to a large extent on informal factors to lead people and achieve common goals.
There are a number of challenges for the lateral leader. Differing interests of the stakeholders cannot be guided towards a solution by instructions but require much more complex and elaborate approaches and demand a high level of personal and social competence.
In order to carry out lateral leadership work well, it is helpful to focus on three discrete elements:
1. Acquire legitimacy
Whether we manage hierarchically or laterally, we exert influence, and this demands legitimacy. Hierarchical managers have a superior function vis-à-vis their employees, which they usually receive from those even higher up in the same hierarchy.
In most cases, lateral managers are also legitimized by the hierarchy. Because project managers or heads of working groups are usually appointed by superiors within the organization, it is clear to employees that management wants the lateral manager to lead. The more clearly their responsibilities and powers are regulated, and the more transparent, the easier it is for them to exert the necessary influence.
Another source of legitimacy can come from the team members themselves. Just as an association elects its board of directors, which also operates as a cooperative, there are many related corporate situations in which team members elect the person responsible for leading and coordinating the team.
Whether the original legitimization is provided by a senior executive or by the team members themselves, it makes sense to discuss questions of cooperation, acceptance and commitment with the team members from the start.
There is also an aspect of self-legitimization in this context. Without the inner willingness to take on a leadership role, or without the self-confidence in one's own relevant competencies, lateral leadership is not possible.
These sources of legitimacy must complement each other. A manager who is hierarchically legitimized but does not enjoy acceptance by the team will have a very limited capacity to act. Conversely, even if acceptance exists within one's own team, but not within the team environment or the hierarchical line, the effectiveness of the work will be very limited.
In both cases, power struggles can easily develop, making cooperation impossible and leading to conflicts or resistance.
2. Balancing the tension between trust and control
In every organization there is a tension between trust and control. In many situations, managers must decide on a certain relationship between trust and mistrust, and between control and the renunciation of control.
Trust is the belief that another person will act honestly. It is the foundation of our economic system. If we no longer trust in the value of money, it loses its value. If we do not trust our customers to pay us or do not trust our suppliers to deliver to us, we cannot trade. In a globalized world, in which we trade across different cultures and legal systems, an enormous amount of trust is involved.
As a company, if we do not trust our employees, we cannot be entrepreneurial. If, as employees, we do not trust our management, we will lack motivation and commitment to the company's long-term goals.
Of course, absolute trust is fiction. Anyone who continually builds a relationship on trust regardless of the behavior of others runs the risk of being exploited sooner or later. Acting in such a way would be considered naive.
In lateral leadership, the control logic of hierarchical systems is contrasted with a trust perspective. Trust can either exist between people or between organizations and people. The strengthening of the trust principle compared to control systems not only has a psychological basis, but also an economic one, since all control measures tie up corporate resources.
However, a strengthened trust perspective can also provoke. Accusations of naivety or social romanticism quickly come into play. A lateral leader who relies on trust also requires a certain level of psychological security; this can only be achieved if you are confident in your ability to establish an environment of mutual trust. Developing techniques and skills that strengthen and enhance this process will give you this confidence.
3. Use techniques of conversation, negotiation and decision-making
In the early 1980s, Roger Fisher and William L. Ury developed a new, groundbreaking concept of negotiation known as the Harvard Negotiation Project. While previous negotiation theories had focused on whether better results were achieved by hard or soft negotiation, the goal of the Harvard method was to reach constructive and peaceful agreement in conflict situations and to attain a win-win outcome.
The Harvard principle of negotiation has received intense academic attention and has found its way into politics and business. In the business context, it was primarily used in negotiations with customers and stakeholders, and initially, was less effective within the companies themselves. Here, a different mindset prevailed between superiors and employees due to established hierarchical relationships. People were often unaware that negotiation could be used as a tool in the decision-making process between managers and employees.
Within hierarchical structures, the opportunities for managers to assert themselves are often too seductive to engage in negotiations with employees. Of course, this quickly changes when hierarchical power is lost, for example in the context of legal regulations, company agreements or wage negotiations.
If lateral managers want to be successful, they need the will to negotiate and reach consensus with all other stakeholders. At the same time, they must not settle for unsatisfactory solutions prematurely and permanently. If a consensus is not possible, further negotiations are needed. These may lead to compromises which provide an opportunity to maintain the team's commitment despite differences of opinion.
There is a wide range of techniques and tools for discussion, moderation and conflict management. The mastery of these techniques enables lateral managers to achieve performance results that are often well above the results of their colleagues who hold hierarchical leadership power.