Why Great Leaders Focus On Mastering Relationships

The power of technology can be optimized primarily by engaging the networks of human and inter-organizational relationships that enable scale. JL


Douglas Ready reports in MIT Sloan Management Review:

In the digital world, the idea of teams has expanded. This requires significant trust and relationship-building to operate effectively. Companies become talent magnets only if their leaders place a premium on building relationships that empower employees. Collaborative relationships are important to driving better results but also help build a more vibrant working environment. Leaders need to build relationships across silos to spot opportunities and respond quickly to them. As work becomes more virtual and business models more digital, the key determinant of success is less the power of a company’s algorithms than the efficacy of the relationships we forge.

Without mastering collaborative relationships, both inside and outside the company, we won’t produce the outcomes needed to win our customers’ business.”
— Lori Beer, chief information officer, JPMorgan Chase

Mastering personal relationships that build trust and create a collaborative work environment is central to leadership effectiveness in the digital economy. This skill set distinguishes great leaders from merely good ones, based on my interviews with C-suite executives in companies around the world.
In a digital business environment, great leaders are those who appreciate and understand the power of technology and analytics. But that alone is insufficient. They must also have the skills and mindsets to bring together people from diverse businesses and functions to deliver superior customer outcomes. As Lori Beer, CIO at JPMorgan Chase, says:

“We don’t need everybody to know how to write the perfect API, but we do need people with a passion for working together to create an understanding of how those APIs, a blockchain, the cloud, AI, and machine learning can change the way you think about delivering services to our customers.”

Why Mastering Relationships Matters

Great leaders have always done three things exceptionally well:

1. Inspire teams that continuously produce innovative, cost-effective products and services that generate superior outcomes for customers and shareholders.
2. Create inclusive working environments that foster collaboration and employee growth and continuous development.
3. Conduct business responsibly to benefit communities and society.

In an increasingly digital economy, today’s leaders need to address each of these leadership challenges with a renewed focus on relationship building. 

Inspiring teams to produce differentiated outcomes. In the digital world, the idea of teams has both expanded and morphed dramatically. Many companies today operate in an ecosystem world, meaning that they might be a core platform in one environment and an ecosystem partner in another. As such, companies can be both “team members” and competitors with other companies. This dynamic requires not only sophisticated legal arrangements but also a significant dose of trust and relationship-building capability to operate effectively. Moreover, at the intracompany level, as Beer explains, business leaders and functional experts need to build relationships across silos to spot new opportunities and respond quickly to them. As Beer puts it: “If you can get to the point where you don’t have to actually own and deliver all of the levels in the stack, if you can trust the teams that are building them horizontally across the organization, you can focus more attention on the top of the stack, the 20% that is truly product- and customer-differentiating.” Creating inclusive, employee-centered, collaborative work environments. Companies will become talent magnets only if their leaders place a premium on building relationships that empower employees to raise their hands, create stretch goals, continuously develop, and hold themselves accountable for their own career development. This is critical to building a thriving community that welcomes empowered employees. Collaborative relationships not only are important to driving better results but also help build a more vibrant working environment. Beer says: “Sometimes it feels like finding great tech talent can be a challenge, but the more we pay attention to building an inclusive culture, where people from highly diverse backgrounds and perspectives can come together to work together, the more people are energized and want to work here.”
Technologists and digitally savvy professionals have lots of options these days and can choose the work environments that suit them, so companies are working hard to build mutually beneficial relationships with their employees so that they’ll choose them as employers.
Conducting business responsibly to benefit communities and society. I’ve argued that the great, game-changing organizations are those that strive to be simultaneously purpose-driven, performance-focused, and principles-led. Companies aspiring to greatness in the digital economy are no different. It’s usually easy for a company’s leadership team to excel at one or even two of these aspirational capabilities, but achieving all three at once is exceptionally challenging because of competing tensions that arise, for example, between profits and principles.

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As companies digitize their business models and value chains, these tensions take new forms (for example, privacy issues, unethical uses of data, and biased AI). But digitalization doesn’t simply give rise to new tensions. It also offers solutions to long-standing societal issues in health care, education, and social justice. Apple, for example, has poured tens of millions of dollars into ResearchKit, a digital mapping technology that dramatically improves diagnostic capabilities of medical researchers. Apple’s CEO Tim Cook readily acknowledges that Apple will most likely never turn a profit with ResearchKit, but he feels using Apple’s technologies in this way is better than writing checks through a charitable foundation. Or consider Grab, a ride-sharing company in Indonesia, now one of ASEAN’s fastest-growing and most successful companies. One of the core tenets of the talent strategy of Grab’s executive team is to use its technology to employ women from remote locations in rural areas, helping lift them out of poverty. At JPMorgan Chase, Beer’s team leads a program called Technology for Social Good, which runs coding challenges for high school students, college students, and experienced professionals who work alongside JPMorgan Chase employees to build technology solutions for nonprofits. Employees continue the work beyond the coding challenge, to build complete solutions that have helped more than 1,000 nonprofits, touching millions of lives in communities across the globe.

These leaders recognize that relationship building and building a better world are deeply interconnected. In so doing, they also make their companies talent magnets for workers seeking a sense of purpose and meaning in the workplace. What is important to note, as Beer so eloquently articulates, is this: As our work world becomes more virtual and our business models more digital, the key determinant of sustainable success is less about the power of a company’s algorithms than it is about the efficacy of the relationships we forge.