Business News Daily receives compensation from some of the companies listed on this page. Advertising Disclosure


Shared Leadership: How Modern Businesses Run Themselves

Business News Daily Editor
Business News Daily Editor

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. 

Business management is rapidly changing from old, authoritarian models to more open methods, as many companies have been inspired by social media and newer web technologies and thus have begun facilitating the sharing of information.

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

Dubbed "shared leadership," the modern approach to getting work done is being employed by more and more companies, big and small. It could help small businesses grow without investing in new employees or high-salaried managers.

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 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."

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, and 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 position or more of an open-door policy in which everyone's ideas are given fair consideration.

Why is shared leadership important?

According to the Harvard Business Review, shared leadership leads to better organizational performance.

Shared leadership has a positive influence on the way a company operates. 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 what to do, both productivity and job satisfaction increase.

When individuals feel that they have an impact on the organization and that they 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 they are personally invested in.

"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.

Example of shared leadership

Shared leadership may be a relatively new concept in the business world, but it can be seen in the government structure of democracies. Instead of one person, such as a king or an authoritarian leader, having all of 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, 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 in creating shared leadership:

  • Encouraging transparency
  • Providing a safe environment
  • Supporting autonomy

Transparency is key to employee trust and satisfaction. It also allows everyone involved to be 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.

A safe environment means that employees feel comfortable sharing their ideas. 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.

Supporting autonomy means that employees need the freedom to make some of the decisions regarding their work. Not all companies will adopt a model like Gore-Tex'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 in which employees talk about how ideas are different and where there is agreement, rather than arguing over whose idea is better, Collins said.

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, Chung-Yan said.

"It's not the same as giving equal responsibility or the same responsibility to more than one person," he 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."

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 increases employee engagement and job satisfaction, and it allows the company to adapt to change more quickly and come up with innovative new ideas.

Image Credit: Paul_Bradbury / Getty Images
Business News Daily Editor
Business News Daily Editor Member
Business News Daily was founded in 2010 as a resource for small business owners at all stages of their entrepreneurial journey. Our site is focused exclusively on giving small business advice, tutorials and insider insights. Business News Daily is owned by