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Two Human Capital Attributes: Organizational Trust and Lateral Leadership

19 January, 2016 - 10:47

Recall that there are eight dimensions of organizational capacity for change. The first four dimensions focus on the human capital within your firm. These dimensions focused on your human capital are depicted in Figure 11.1. The first two dimensions, trustworthy leadership and trusting followers, are oriented toward producing organizational trust to the greatest extent possible. Organizational trust refers to the ability of members of an organization to put their lives and well-being at risk in service to the well-being of the overall organization. Hence, it refers to how much frontline workers trust middle managers and senior executives to watch out for their interests. Similarly, it addresses how much top executives trust middle managers and frontline workers to do their jobs well. Trust suggests that we perceive the other as not only competent but also genuinely concerned about the general well-being of others. 1

The second two dimensions, capable champions and involved midmanagement, are oriented toward unleashing the power of lateral leadership. Lateral leadership is concerned with getting things done across organizational units and functional areas of expertise. 2 The hierarchical organization will always be with us, but the power of hierarchical authority is diminishing. In its place is the power of influence without authority, in other words, lateral leadership. Crisis situations demonstrate this power quite clearly. When a crisis occurs, people often self-organize into social groups that do amazing things in inexplicably short amounts of time. The trick here is to enable the organization to self organize. In this book, I have emphasized the importance of creating change champions and involving middle management in the change process so that lateral leadership can occur. Figure 11.1 contains a graphical depiction of the two organizational attributes dealing with human capital in change capable organizations.

Figure 11.1 The Human Capital Required for Organizational Capacity for Change