Organizations, large and small, look to their leaders to establish an organizational vision. Popular commentary on corporate leadership presupposes that a company’s vision comes from its CEO and that, without a strong CEO, the company has no vision. But that’s not the case.
Members located throughout an organization have plenty of thoughts about what the organization is and should be.
Thus the challenge of setting a group’s course lies in forcing a single vision out of the multiplicity of organizational vision held by the group’s members.
The process of articulating a vision is one of negotiation – in particular, multilateral negotiation, which relies on coalition building.
Leaders at Goldman Sachs, the venerable investment banking partnership, faced exactly this challenge as they sought to negotiate its transformation into a publicly traded corporation. In 1986, Goldman Sachs was a $38 billion business owned by more than almost 200 active and retired partners. While the partnership structure had insulated the company from the vicissitudes of the stock market and given the company a strong culture of teamwork, it had some significant disadvantages, particularly an unstable capital base and an inability to grow by making acquisitions with stock.
The firm’s nine-person management committee thus recommended that Goldman Sachs become a corporation and sell its shares to the public. Over several meetings over several years, starting in 1986, the management committee failed to convince the partners. It wasn’t until 1998, when the firm’s two co-chairmen engaged in one-on-one conversations with nearly all the firm’s 190 partners, that the partners voted to accept the recommendation. As this example shows, the process of articulating a vision is one of negotiation—in particular, multilateral negotiation, which usually requires intensive, face-to-face coalition building.
Like a skilled diplomat, a leader, whether a corporate CEO or a department head, creates a common vision by building a coalition among its members to support that vision.
Building a coalition in support of an organizational vision demands a skilled use of the negotiation principles outlined here, including members’ interests, creating effective working relationships, and communicating in the right voice and in the appropriate medium.
It is a labor-intensive, time-consuming process that requires you to connect with all key players.
How has your organizational vision changed, and how did negotiation play a role?
Related Article: Find the Right Leadership Voice
Adapted from “Real Leaders Negotiate” by Jeswald Salacuse in the May 2006 issue of the Negotiation newsletter.