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Updated Jan 18, 2024

Shared Leadership: How Modern Businesses Run Themselves

Sharing knowledge keeps companies strong.

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Written By: Marisa SanfilippoBusiness Strategy Insider and Senior Writer
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.

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Modern businesses need to be nimble and proactive, able to adapt and evolve as situations change. Supported by modern technology and seamless data sharing, a new approach to business management vests decision-making power in more team members in order to streamline operations. It’s called shared leadership and it’s enabling businesses to make smarter decisions and work more efficiently. 

What is shared leadership?

Shared leadership is a business management approach in which multiple or many leaders influence the development of strategy and its execution. According to a shared research study published in the International Journal of Artificial Intelligence and Agent Technology, shared leadership can be defined as “broadly sharing power and influence among a set of individuals, rather than centralizing it in the hands of a single individual who acts in the clear role of a dominant superior.”

“Most companies are organized on the premise that the smartest company is the one with the smartest individuals given the authority to manage the work of others,” said Rod Collins, author of Leadership in a Wiki World (Dog Ear Publishing, June 2010). “The digital revolution is spawning an entirely different management model, where the assumption is that the smartest companies have quick access to the collective knowledge of the company.”

Did You Know?Did you know
Shared leadership is only one management theory small business owners should know. Other management theories include administrative management, bureaucratic management and scientific management.

Shared leadership vs. traditional leadership

Shared leadership differs from the traditional vertical hierarchy management style. In the vertical management style, those in management positions are responsible for the bulk of the decision-making, while those in subordinate roles have little input in the decision-making process.

Shared leadership is more of a collaborative effort. One person is still in charge, but power and influence are shared within the group. This could mean individuals have more autonomy over decisions related to their positions or an open-door policy where everyone’s ideas are given fair consideration.

Shared leadership vs. team leadership

Many people think they have shared leadership if there are teams in place. While this does break down the hierarchy, it isn’t truly shared leadership. Within a team, there is typically still a team leader; even if there’s no team leader, the shared power is relevant only within the context of the team rather than being more broadly applied to the entire company.

However, teams can be a good place to introduce shared leadership when building a company culture. Teams offer smaller containers and can give employees experience within a leadership structure. According to an Academy of Management Journal study, for shared leadership to work within a team setting, the team should already have a cohesive environment, with well-understood goals and a strong atmosphere of mutual support.

Why is shared leadership important?

Shared leadership often leads to better organizational performance overall because it encourages and values personal initiative. When employees feel empowered to do what they know they need to do instead of waiting to be told, productivity and job satisfaction increase. And when employees are happy, the company runs more smoothly in a positive environment.

“The best examples of shared leadership are when decision-making gets spread across multiple individuals,” said Greg A. Chung-Yan, a professor in the Department of Psychology at the University of Windsor in Ontario, Canada.

When individuals feel they impact the organization and have some power and responsibility, they have a greater desire for success. Goals become more personal to them, and people naturally work harder at anything in which they’re personally invested.

“Teams with shared leadership have less conflict, more consensus, more trust, and more cohesion than teams that do not have shared leadership,” Peter Northouse wrote in his book Leadership: Theory and Practice (Sage Publications, 2015).

Collins gave the example of Newark, Delaware-based W. L. Gore & Associates, a 9,000-employee global material sciences company. The company itself is large, but it keeps its offices small, with no more than 150 people in each office. According to Collins, W. L. Gore works essentially without supervisors; work is accepted by, rather than assigned to, employees. 

Key TakeawayKey takeaway
Shared power creates a sense of ownership for employees, which increases productivity and job satisfaction.

How to develop shared leadership

There are three basic principles you need to implement in order to develop a culture of shared leadership. 

1. Encourage transparency.

Transparency is key to employee trust and satisfaction. When all employees are aware of a company’s situation, goals and perspective, everyone involved is on the same page. According to a survey conducted by TinyPulse and published in Forbes, transparency was the determining factor in employee happiness, with a 93 percent correlation rate.

2. Create a safe environment.

A safe environment means employees feel comfortable sharing their ideas in a culture of inclusion. Great ideas often come from the people doing the day-to-day work because they are the most experienced at doing their job. They are also often the first to notice when something isn’t working correctly. When employees feel that their ideas are heard and welcomed, the team benefits from their observations.

3. Support employee autonomy.

Supporting autonomy means employees need the freedom to make some of the decisions regarding their work. Not all companies will adopt a model like W. L. Gore’s, which lets employees choose which jobs to take. However, most businesses can benefit from giving more autonomy in select areas.

For small businesses, shared leadership could be as simple as creating a meeting format where employees talk about how ideas are different and where there is agreement, rather than arguing over whose idea is better, Collins said.

According to Chung-Yan, this new way of managing may be as simple as giving people responsibility for things and making sure their supervisors are open to hearing employees’ input on the subject.

“It’s not the same as giving equal responsibility or the same responsibility to more than one person,” Chung-Yan said. “It’s about making sure managers have an open door and that those who take a risk and share an idea or alert managers to a problem don’t get punished for it.”

Key TakeawayKey takeaway
Supporting employee autonomy is an excellent talent management strategy, helping retain skilled and valuable individuals for your business.

Could shared leadership work for your business?

Shared leadership has far-reaching benefits for members of the organization and the company as a whole. It improves employee engagement and job satisfaction, and it allows the company to adapt to change more quickly and come up with innovative ideas.

Tejas Vemparala and Jeanette Mulvey contributed to this article. Source interviews were conducted for a previous version of this article.

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Written By: Marisa SanfilippoBusiness Strategy Insider and Senior Writer
Marisa Sanfilippo is an award-winning advertising and marketing expert who uses her skills and hands-on experience to help a variety of companies — perhaps most notably, finance-focused businesses — attract customers, generate revenue and strengthen their brands. She advises and executes on top marketing strategies and tactics for email and social media marketing, print marketing, events, partnerships and more. Sanfilippo's expertise has been tapped by companies like First Financial Credit Union, McGraw Credit Union, Priority Payments Local and iink Payments. She has hosted webinars and in-person workshops to educate business owners on marketing best practices and works with RevGenius, a group that brings together sales, marketing and customer success professionals to trade tips on B2B go-to-market strategies geared toward scaling SaaS companies.
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