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Shared Leadership: How Modern Businesses Run Themselves

Marisa Sanfilippo
Marisa Sanfilippo
Business News Daily Contributing Writer
Updated Dec 01, 2021

Sharing knowledge keeps companies strong.

  • Shared leadership is the sharing of power and influence, with one person remaining in charge.
  • Shared leadership leads to better organizational performance.
  • Shared leadership is developed by being transparent, encouraging autonomy and being open to others’ ideas. 
  • This article is for managers interested in implementing a shared leadership strategy to boost innovation and employee engagement.

Business management is rapidly changing from old, authoritarian models to more open methods. Social media and newer web technologies that foster information sharing have inspired these changes as companies seek new ways to innovate and grow. 

Call it Business Management 2.0, in which firms essentially run themselves – up to a point, anyway.

Dubbed “shared leadership,” more companies, both big and small, are employing this modern approach to getting work done. Shared leadership could help small businesses grow without investing in new employees or high-salaried managers. Here’s what businesses need to know about shared leadership.

What is shared leadership?

“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.”

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.”

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?

According to a Harvard Business Review article, shared leadership leads to better organizational performance overall.

Shared leadership positively influences the way a company operates because this model 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.

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.

“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.

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

Examples of shared leadership

Shared leadership may be a relatively new concept in the business world, but it can be seen as far back as the Roman Empire, where individuals came together to share power with their peers in the Senate, giving the people a voice to which the emperor had to listen.

Shared leadership can also be seen in the government structure of modern democracies. Instead of one person, such as a king or an authoritarian leader, having all the decision-making power, the power is shared among different branches of government, with the president or prime minister taking the ultimate leadership role.

Collins gave an example related to the business world. Newark, Delaware-based W. L. Gore & Associates – a 9,000-employee firm that makes Gore-Tex, among other products – 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, and work is accepted by, rather than assigned to, employees. The company uses its employees’ collective knowledge of people to develop ideas and workflow.

How to develop shared leadership

There are three basic principles of creating shared leadership:

  1. Encourage transparency.
  2. Provide a safe environment.
  3. Support autonomy.

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% 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.

Does shared leadership work?

“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).

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 new ideas.

Jeanette Mulvey contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.

Image Credit:

Paul_Bradbury / Getty Images

Marisa Sanfilippo
Marisa Sanfilippo
Business News Daily Contributing Writer
Marisa is an award-winning marketing professional and contributing writer. She has worked with businesses large and small to help them drive revenue through integrated marketing campaigns and enjoys sharing her expertise with our audience.