Effective leadership and culture are driven by concepts like “Context, not control.” By leveraging the visualization of key metrics, leaders (founders, team leaders, and so on.) can effectively present their vision, progress (OKRs etc.) and the context and meaning behind the figures.
Founders, executives, and team leaders are increasingly turning to “Contextualized Leadership,” a leadership approach that emphasizes the importance of providing stakeholders with the right context to make informed decisions – rather than imposing strict controls and micromanaging every action. We’ll show how context in leadership can be a highly effective strategy for founders, CEOs and team leaders to maximize the potential of their teams and organization.
At the heart of this data-driven leadership style lies the strategic use of key metrics and their visualization. When leaders skillfully leverage these metrics, they can clearly articulate their vision and track progress toward strategic objectives.
By presenting data visually, leaders can transform raw numbers into meaningful insights, making it easier for their teams to understand the bigger picture.
One of the most influential documents of the modern business era is Netflix’s Culture Deck, a document that outlines the company’s values and philosophy.
First released in 2009 under the leadership of Reed Hastings and Patty McCord, the document’s approach was nothing short of revolutionary, and its fundamentals are still largely in place today.
Indeed, when the company itself writes about “What makes Netflix special,” it lists the following:
1. Encourage decision-making by employees
2. Share information openly, broadly and deliberately
3. Communicate candidly and directly
4. Keep only our highly effective people
5. Avoid rules
Add other key elements from Netflix’s culture such as “Context not Control” – and you can quickly see that the availability of contextual information, coupled with effective communication, is central to the company’s success.
Anyone doubting the efficacy of the context in leadership approach just needs to look at the company’s performance since first releasing its Culture Deck. Netflix’s share price went from under $10 per share when the document was first released, to its current levels of around $600, making it the 36th most valuable company in the world with a $276 billion market cap.
Clearly, context in leadership works.
Consider the scenario of a startup founder articulating the company's strategic vision. By aligning team leaders and employees with a vision, the founder can better equip them for success. For instance, if initial investors have pledged to increase their investment at a significantly higher valuation upon meeting specific sales targets within a set timeframe, then transparently sharing these goals, progress, and their potential impact with all internal stakeholders can energize and empower the team – increasing the likelihood of achieving success.
But it’s only by being aware of those numbers – the investment, the sales goals, and the progress – that all team members can truly thrive. Leading with numbers is good leadership.
It works both ways. In the late 2000s and early 2010s, BlackBerry was a leader in the smartphone market with a peak market share of over 20%.
In 2009, the company experienced a dramatic decline due to internal missteps and a lack of strategic alignment. Despite its dominance, BlackBerry failed to adapt to the shift towards touchscreen technology and robust app ecosystems, over-relying on its physical keyboard design.
Key issues stemmed from siloed departments and inconsistent data usage, leading to fragmented strategies. By 2013, BlackBerry's market share had plummeted to less than 3%, and its stock price had fallen from a high of over $230 in 2007 to under $10.
Unified metrics and consistent data access for all internal stakeholders could have facilitated the level of collaboration required and early detection of market shifts, potentially averting this downfall.
These cases show that the more relevant numbers are shared, and the wider the reach of these numbers, the higher the chance of a company’s success.
In 1974, management guru Peter Drucker characterized strategic planning as a “continuous process of making present entrepreneurial decisions systematically and with the greatest knowledge of the futurity”.
He emphasized the importance of aligning efforts, capabilities, and resources to execute strategic decisions effectively. Additionally, he stressed the necessity of systematically measuring outcomes against expectations to ensure alignment with strategic objectives. This is data-driven leadership par excellence.
But how can today’s leaders practically lead with numbers?
What’s needed is a solution that combines numbers and narrative to give effective context to all stakeholders.
This is where the power of Decipad comes in. Let’s run through a specific example.
Let’s imagine the CEO of a fast-growing startup is meeting with her small sales team. Instead of “presenting” the team with the commission plan – specifically the variable element – as a static PDF, she wants to collaboratively agree on a compensation package that will ensure buy-in from the team; incentivizing them while also ensuring it makes the most sense for the company.
She uses Decipad to show her initial proposal, broken down into the various components that can be adjusted live.
With Decipad:
This simple example shows the power of giving the wider team context. It leads to “aha” moments; moments where the leader of the group doesn’t have to explicitly say something, but can let the overall narrative and numbers give the context.
In this case, the sales team now understands:
1. What they can expect to earn if they hit their Quota, exceed it, or fall short (On Target Earnings or “OTE”)
2. Exactly how their salary is made up in terms of fixed and variable portions
3. That this is a fair arrangement, one that they are happy to commit to
4. What the revenue numbers are that the company wants to hit, and how these are broken down by quarter
5. The narrative of how the company intends ramping up through the year, and their essential role in making it happen
The ability to visually give teams context, tangible numbers, progress, and expected outcomes, is one of the most powerful leadership tools available.
Decipad was built to uniquely enable context in leadership. To try it for yourself – for free – take it for a spin here.
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