Why leadership today is about influence and connection rather than hierarchy

In this episode of Unleash Your Impact, Unlock Others, Dave and Rich explore what it really means to lead beyond the organisational chart. Together, they challenge traditional notions of hierarchy and shareholder-driven thinking, arguing that true leadership today means viewing your organisation as an ecosystem, one where influence, humility, and collaboration extend across a wide constellation of stakeholders.

They discuss the growing movement towards stakeholder capitalism, the mindset shift from “inside-out” to “outside-in,” and how leaders can navigate this complexity through a focus on empathy, connection, and a systems-thinking approach. They discuss powerful tools like stakeholder mapping, an engaging, creative, practical tool that combines left and right brain thinking to visualise and calibrate relationships and assess the influence you need to have to create great outcomes. They introduce the principle of reciprocity as key to stakeholder focused leadership which helps leaders at all levels build trust and foster collaboration.

Whether you lead a small team or an entire organisation, this episode will help you think differently about the responsible use of power, adopting a service-orientated mentality, and how to create positive impact for the many rather than the few in an interconnected world.

Key Talking Points

• The evolution from shareholder to stakeholder-focused leadership
• Why hierarchy limits influence, and how to lead through connection instead
• The mindset shift from “I’m at the centre” to “I’m part of an ecosystem”
• Balancing healthy power: directing others vs. empowering others
• The role of humility, empathy, and collaboration in stakeholder relationships
• How to map your stakeholder landscape visually (not in a spreadsheet!)
• The principle of reciprocity, understanding what others need from you
• Using empathy and curiosity to rebuild spiky relationships
• Why leadership isn’t about who reports to you, it’s about who you impact positively

Welcome to Unleash youh Impact Unlock Others, a podcast about inspiring leadership. We hope to bring you grounded wisdom, stories from real leaders and leave you feeling inspired. Let's dive in.

So welcome once again to Unleash youh Impact Unlock Others. My name is Dave Morris and today I'm joined, as usual, by my erstwhile colleague, Rich Horton. Hi, Rich.

Hi, Dave.

Or I'm now, today's episode explores an interesting topic for me. Stakeholder focused leadership leading beyond the organizational chart.

Now, what we really mean by this title is exploring how effective leadership is in today's world requires a much broader lens. A lens that considers the needs, expectations and influence of multiple stakeholders, not just shareholders or direct reports in our team.

And it draws on insights and research that challenges traditional leadership boundaries. And it also feeds into a more connected, systems aware approach to leading.

And I know Rich, on the podcast, we've talked about systems thinking before.

The aim of this is to help leaders expand their definition of what influence navigating complexity and leading with greater strategic awareness looks like.

So, Rich, just to sort of further frame this, I've been looking at some research out there to see what's going on in the greater world around stakeholder focused leadership. And I got four interesting observations for you from those data points.

One is around leadership remuneration, which is often seen as a core signal of what businesses prioritize. And increasingly, leadership remuneration is incorporating stakeholder focused metrics.

The obvious ones are things like ESG metrics, environmental, social, governance metrics.

The second point, Rich boards in the UK recognise that stakeholder groups beyond shareholders are growing in influence and that could be employers groups, it could be regulators, it could be general society groups, customer groups, but there is a recognition that those groups now are growing in their influence.

The third point, companies are increasingly required or encouraged to report on non financial, that is stakeholder metrics and that is indicating that these disclosures are being taken more seriously and they're starting to evolve. I think that will carry on. And the fourth point I wanted to make is public sentiment in the UK strongly supports a broader stakeholder orientation.

So fair pay, workers rights, better pay for minority groups, all those kind of things, which is a driver of change in terms of how we look after and run our businesses. So with those four key points, anything you want to observe there or make a comment on?

Yeah, I think it's really interesting. So the word you used is stakeholder as opposed to shareholder.

So, you know, clearly shareholders have a stake in the future of the business because they're the ones whose money is on the line. So they're an important factor to think about.

But actually, if shareholders actually think that if their organization focus more broadly on stakeholders, the impact and the profitability of the business and the social value it creates is going to have a real impact on the bottom line, but it's going to have a broader impact than just the bottom line. I think that's the point we're trying to make, isn't it?

And if you go back to those two conversations I had recently with Karen Nolan and Daniel Walton around social value, I think there was evidence in both those conversations of why this is so important. And it does, it does have an impact on the bottom line. And a lot of businesses now are understanding that things like social value matter.

And I think that's the point that this research is making as well. There is a growing movement, there's still some problems to overcome. There's a long way to go on that journey.

But I do think that is a direction of travel.

So I think the more we can look at our own businesses and think, let's not think just shareholder return or profit or you know, driving income, because those things are important. No, most businesses are there to make a profit and that's absolutely fine.

But there is this need to think about a wider group of stakeholders that rather than just one group of stakeholders. And I think that's the point we're making today.

Yeah.

And I think actually when you think about it, if shareholders have and the people inside the organization have a broader lens and a broader focus, it moves the focus from being too money centric and potentially at worst greed focused. Because I think that's a fundamental danger of capitalism. I think driving wealth and driving profitability is really important.

But you do that with, within the context of thinking about the social value and the broader impacts and the ripple out effect that you create inside the community and inside the organization as well.

I think it's a different form of capitalism. It's not shareholder focused capitalism, it's stakeholder focused capitalism. And that's the difference.

Yeah, I like that.

So people might be thinking, okay, well what causes this to happen?

So I think if you look at historically what's happened inside some of our businesses and our organizations, we have what you and I have called an organizational chart centric way of leading, which basically means we structure our businesses on hierarchy and we structure them on hierarchy, which causes things like sailor mentality. It causes problems that actually we don't think beyond our initial view, if you like, of the business.

So We've got to move away from those types of ways of thinking about our business.

Yeah, I think fundamentally leadership isn't about position, it's about influence.

And I think there's a real danger that leaders, as you said, they can get focused on the organizational chart and that creates a perspective and locks people into a particular way of operating. And I think the other lens that leaders can have in terms of the way they approach their role is they become very task focused.

So you can be very organizationally chart focused and very task focused. But in our connected leadership model, the word connection is the word. That's, that's, that's the crux around what we're talking about here.

Actually, leaders need to think about themselves through the lens of connection, through the lens of the system that they're operating within and to think of themselves as influences inside that system.

So think about the ripple out effect that you want to, you want to create as a leader and think of all the stakeholders in its broadest sense that you have within your system and think about how you want to, to influence that system through those stakeholders.

So let's just take this approach then.

If we take a more ecosystem orientated approach to how we think about our businesses and we don't just think about it as an organizational chart led way of leading, what are some of the common pitfalls of leading in that way of leading with an org chart type of approach to leadership?

So fundamentally, I think, and this is something that we've addressed in the context of the leadership model, the connected leadership model that we've created, I think really good, healthy leadership creates a healthy relationship with power.

So fundamentally from a mindset perspective, actually when you're in a position of authority inside your organizational chart, so you have a position, you might be a chief executive, you might be ahead of function, you might be a director or whatever, that position invested within that position are a set of power levers, if you like, that enable you to have influence and impact through those power levers. And that's all well and good. So that's when actually as leaders and managers we take and we manage power.

We're very directive and we drive change in a very directive way. And that's fine. But if leaders just led from that lens and that perspective and that relationship with power, I think that can be very dysfunctional.

So the other lens through which to see power is when we give and share power. And what we seek to do is to make connections in the system and to empower and engage the key stakeholders inside that system.

So it might be that you empower the teams and capability inside your organization, but also when you thinking about power from that inverse lens perspective, by engaging the stakeholders, empowering stakeholders, and thinking about actually how can you work and collaborate with stakeholders to create influence, I think that's a really powerful way to operate and to look at the way you operate as a leader.

And it's not just about the internal people either as well. It's about not neglecting those external voices as well, isn't it?

Because customers, you've got partners in the supply chain for your business, you have got some businesses got regulators to consider. There's a whole range of stakeholders that actually we must not neglect those external voices.

And so your point about over focusing on internal hierarchy is the danger is we neglect the external voices as well.

Yes.

So I think the other thing to think about in terms of the lens through which you see yourself as a leader, it speaks to the three concentric rings in our leadership model. So we have self as the inner ring. Your team is a ring beyond that, the organization is another ring beyond that.

And then beyond that even is the community that you're serving through the organization. So I think, you know, you need to think of the context and the system that you're operating. And a really skillful leader understands, if you like.

So within that system, they think about what are the levers that I need to pull or to address in order to have influence within that system. And that's what I call healthy politics. So being political inside your system or inside your organization is not necessarily a bad thing.

But if you're being political inside your system, what you're trying to do is to influence for the greater good of the organization and the key stakeholders within that system. So you're not serving yourself and your own agenda. That's unhealthy politics.

But you're seeking to serve the best needs of the team and the organization within that system. Does that make sense?

It does, Rich, and it brings me to a point you made earlier on, which is you said leadership is not about position, it's about influence. And it's leading me on to my next question for you as well, is this involves a mindset shift.

And again, in very simple language, we need to understand what that mindset shift is.

So if we see ourselves not as a hierarchy, not as a position in a hierarchy, but as somebody who has influence over a whole range of stakeholders, what is the mindset shift we need to have in simple language terms to make that shift?

Well, I think fundamentally it's not seeing yourself as the center of the universe.

So, you know, so it takes some humility to realize actually that inside, inside this, inside this system, inside this constellation, if you like, actually you're not the center of the universe.

And you know, somebody who recognizes that and who operates from this place of humility, you know, recognizes the importance that stakeholders have in the context of this system. So in other words, you don't see yourself and your agenda as the most important thing.

You're thinking, you're thinking collectively and you're thinking for the greater good.

I'm guessing also it's about to reduce that silo mentality. It's also not thinking about your team being in the center of the universe either. It's about our team is just one part of the ecosystem.

And actually we've got to understand how our team interacts with the other parts of the ecosystem as well. So it's about that mindset shift as well, isn't it?

Yeah, I think I've seen it so often inside organizations where, you know, teams within the same organization almost see themselves as in conflict or competition with each other. And it's bizarre really. So the question you asked was what sort of mindset do you need to have to adopt this approach?

So I think the other mindset is a collaborative mindset. So you don't see yourself in competition with your stakeholders. You see yourself as engaging collaboratively with your stakeholders.

And look, what's the value that they can add and what's the value that they can have collectively and collaboratively with with me? So you see that you have a set of values and needs. You see that they have a set of values and deeds.

And what can you do collectively to work together to be greater than the sum of your parts?

So one thing that occurs to me, Rich, listening to you talk there, is that maybe the mindset we need to bring to this is not an inside out mindset, it's an outside in mindset. And I'll explain what I mean by that.

So if we adopt an outside in mindset, what we're doing is we're looking beyond ourselves, beyond our team, even potentially beyond the organization and saying, actually, what are the needs of all the stakeholders that we have to serve? And by understanding those, how does that then help me understand how to run this team, how to lead this team, how to lead within the organization?

Isn't that a more healthy way of looking at things?

Yeah, absolutely. And I think it goes back to the comment I made earlier about what does healthy politics inside an organization look like.

And actually, frankly, what do healthy politics look like in the context of the government of this country? You know, fundamentally, healthy politics is where we serve and we don't scheme.

So in other words, this service mentality, this is not victim mentality, this is not doormat mentality.

This.

This is about actually, what can I do to serve the needs of the organization and the stakeholders within the constellation of that organization, if that makes sense.

I totally agree with you, Rich. I think there's two things here.

Serving the needs of others and being collaborative in doing so are two really important mindsets that if we're going to solve some of the problems the world is chucking at us these days, we have to have both of those as part of our mindset, I think.

Yeah. So I think the other thing I would say just to build on that is.

So what we're not saying here is it's just all about service and it's all about collaboration, because there's times to drive and there's times to be directive, and there's time to create clarity and create focus and say, right, this is where we're going. So I think good leaders do that.

They create focus, they create clarity, and they create a sense of direction that's balanced by this collaborative approach where there's a shift in mindset around how you see power.

Definitely. So let's talk about some practical tools and techniques to bring this to life, then.

So if you were going to be a leader, listen to this Rich thinking. Okay, I get the point here. And I do need to look beyond myself, beyond my team.

I need to think about a whole range of stakeholders, that their needs are important, and it will inform me about how to set this team up to be highly effective. What are some of the tools you'd recommend they start to use on a practical level?

So in our Pathfinder leadership program, I think we do it in Pioneer as well, if I remember rightly, that we encourage people to do what we call stakeholder mapping.

So stakeholder mapping, actually, what we're trying to do through this activity in the workshop is to get leaders to think of themselves within the context of the system, or the constellation, I like that word, the constellation in which they're operating. So they don't see themselves as the center of the universe, but they look for their connections, if you like, inside their system.

So in the context of the way the brain works. We've talked about this in the past.

You know, there's our left brain and there's our right brain, our left brain tends to break stuff down into its component parts. And the right brain is the part of the brain that tries to seek connections, looks for connections.

So I think traditionally leadership has been very left brained focused. So we both made the comments earlier that traditionally leadership has been focused on the organizational chart and been very task focused.

So that's an example of being very left brain focused. So what we try to do as part of our connect to leadership model, we recognize the left brain is very important and those two lenses are important.

But a right brain focused would see yourself as part of a system and understanding what are the connections within that system.

So with this stakeholder mapping, what we encourage people to do is to engage their right brain in terms of thinking about the stakeholders that they need to engage in the context of their role traditionally, say for example, in project management, when you do a stakeholder map, the first thing people reach for to create stakeholder mapping is a spreadsheet, you know, so they have a list of their stakeholders and a couple of measures where they think about, you know, what they need to do with their stakeholders, etc. But when we do stakeholder mapping, it's a much more creative right brained activity.

So what we get them to do, and there's various ways in which you can do this. So you could do it very simply by taking a pad of post it notes, okay? And on each post it note, write the name of a stakeholder or stakeholder group.

Okay? So you have a stakeholder per post IT note and then just put those out on the desk.

What we then do, okay, so you've created your list of stakeholders and then create another post it note that's you, okay? And put your post it note on the desk in front of you.

And the desk then represents the system within which you're operating as a leader and a manager. The next step with the post IT notes then is to create the post it notes on the table in relation to each other as you see them.

So in other words, the distance can be representative of how you see the relationship right now with that particular stakeholder group.

So for example, it might be that you're in a position where this particular group of stakeholders, I don't know, it might be the director of finance or something you might have a very distant relationship with.

So in relation to your post IT note, you put that stakeholder, you know, quite far away from your post IT note and you might surround your post it note with a collection of stakeholders where you have a, you know, a very close relationship with right now. The other thing that you can do is what we encourage people to do sometime is to cut the post it notes into different shapes.

So remember, this is a creative activity that represents the sort of relationship that you have with somebody.

So, you know, people have done things like, you know, that there might be a nice round circle that represents this particular stakeholder group that defines the relationship that you think you have with them.

Another, you know, say, for example, that finance director that you put over in the distance, you might, you might cut that post it note into a very spiky shape, because you have a very spiky relationship.

So at the end of that, at the end of that round of activity, you have a series of post it notes that relate to each other in the system that you have that, that have different shapes to represent the relationship. Okay, so. So that represents the as is.

Yeah.

And that can. That.

That starts to raise really interesting questions because people start to think, okay, well, the finance director is right over there, and I have quite a spiky relationship with them.

But actually, in terms of the influence that I need to create and the stuff that I need to get done, I really need to build my relationship with that person. Okay, yeah.

So what we then encourage people to do is based off that conversation and their reflection of their constellation or stakeholder map, we ask them to create a what if scenario. Okay, so in other words, you know, what would you, what, what would you like that stakeholder map to look like?

You know, so some people might say, right, okay, I'm going to bring that finance director much closer to me. And they might even just, you know, recut the shape of the post it note because they don't, they don't want that to be a spiky relationship.

They want that to be a really good close relationship. Much closer. And then that drives thinking, okay, so what do I then need to do to bring that finance director much closer to me?

You know what, what sort of stakeholder engagement activities do I need to go through to transform and to shift that relationship? So it encourages people to think of the system that they have to operate in, what that system looks like.

And I think in my experience, that's a much more creative, engaging way than creating a spreadsheet of your stakeholders, because, you know, you can see it laid out on the desk. Actually, this is the system that I'm operating within. And this is the impact or the impact I'm not creating inside the system.

Yeah, well, they say a picture paints a thousand words, don't they? And I think that's Very true.

When you're doing an exercise like this, I remember I've done this in reality, I remember 12 years ago or so I took over as running the men's teams at my tennis club. And I took over at a very short notice, not really understanding who all the stakeholders I would then have to engage with were.

And I did a little exercise like this, Rich, where I actually started to think, okay, well who are the stakeholders?

And you know, there was people like trustees of the club, there was the committee at the club, there was the coaching team at the club, there was the parents of juniors I wanted to bring into the teams, there was the juniors themselves, there was the league officials, there was a whole bunch of people, some of who I did know, some of who I didn't know at all. And I had to start to understand what the needs of all these people were and what sort of relationships I needed to create with them.

So this type of exercise is perfect for that because as you said, you map this in two ways. One is what does this look right now look like right now? Yeah. And what would I like it to look like in say six months time or a year's time?

And that's exactly, that's exactly the exercise I did at the time. It was so helpful for me to see where I needed to direct my energy and my relationship building skills. Yeah. So that's a great tool.

That's a really great practical tool, Rich, I think for people to use to start to consider stakeholder focused leadership. Is there anything else that you think they recommend they do as well?

So just one more thing, I think in, in follow on to that stakeholder map.

So when you created your ideal system, if you like, you know what you'd like it to look like in six months, I think what you then need to do is to think, what am I going to do? To practically engage with some of those key stakeholders. And I think so let's take that. Sorry, I'm not picking on finance directors.

I'm not saying all finance directors are awkward and difficult, but let's just take that finance director as an example.

So the danger sometimes is when we have a spiky relationship with somebody, we often see the relationship, that relationship, as we're in competition or conflict with that person. So I think it's really important to start to develop empathy for the position that they're in.

So there's another activity that sometimes we go through in a workshop where we get them to think empathetically about that person. You know, what are the drivers and motivations of that person.

So get them to, if you like, walk around in the shoes of that finance director, you know, just for a few minutes to think about actually from their perspective, you know, they're the custodians of value and finance inside the organization. So it's possible they might have a very different mindset to you.

And when you engage with that person, you're going to have to, you're going to have to step into their world and engage with them from that perspective. So what is it actually that you can offer to them that would speak to some of their challenges and motivations?

Sometimes in the context of stakeholder engagement, we call it the principle of reciprocity. So in other words, you're thinking, actually what is it that I can have to offer to that person to help them with their challenges and motivations?

So if you help with them, step into their world, empathize with them, they're much more likely to respond with positive reciprocity because you've engaged with them positively. Does that make sense?

Yeah, it does make sense and I think you could take this a stage further.

So if, if you are doing that exercise and you think, I'm trying to think empathetically about this particular person, this particular stakeholder that I need to have a better relationship with, but I'm really struggling. Maybe the actors, ask them for a conversation and go and ask them, what does the world look like from your perspective?

What are the challenges that you have got that I might better help you with. That's a really positive way of engaging with them and having influence, let's be honest.

Yeah, but yeah, have a conversation and get in a room with them, basically.

Get in a room with them. Yeah, absolutely. So is there any other sort of top tips or tools that you'd recommend? These are two great top tips.

You know, stakeholder, map your environment, work out who's involved, what their needs are, think about them empathetically, what their drivers and their needs are that you might be to help them with? Anything else, Rich, that you think practically brings this to life?

No, I don't think so. I think you said.

The third thing I was going to say really is, you know, so you've understood the system, you thought empathetically and from the principle of reciprocity, in terms of how you're going to engage with this person, the third thing is to go and have an open minded conversation, ask questions.

Yeah. Okay. So when you've run workshops in our 12 month programmes around stakeholder awareness and Stakeholder management.

Have you got any sort of things that have surprised you or, you know, insights you can share with us?

I would go back to the, to the stakeholder mapping, actually, because I remember we ran this workshop relatively recently and sometimes when I explain the stakeholder mapping, it's quite a difficult exercise to explain, actually.

But, but when you explain the exercise, sometimes people don't get it because, you know, because a typical way to approach stakeholder engagement, as I said, is to create a stakeholder spreadsheet. Okay. So they think, you know, what, why, why am I putting spread post it notes out on the table?

So, you know, sometimes they don't understand why they're trying to, why we're trying to do this in the creative way that we're doing it. But I ran a workshop recently, did exactly the same exercise and personally done this stakeholder mapping on the table. He said, this is gold dust.

I can now understand why this particular issue is playing out in this way because he understood the system and he said, right, I'm now going to go away and have a conversation with such and such. So it's a really powerful tool, I think, for changing the lens through which you see your system. Yeah.

And you can use this tool with your team. So let's just say you were trying to educate your team about stakeholder engagement wider than just the team that you're in.

If you do this exercise as a team, it starts to help people understand. Who do I need to go and have conversations with? What are the actions? Actually, we need to prioritize.

There's a whole range of stuff that comes out of this, isn't there? If you do this as a team and you can guide your team through.

That exercise, it's a very powerful team tool, I think, and it's much more interesting to do than populating a spreadsheet. Sorry, I've got a thing for. Yes, sorry, I'll have to stop dissing spreadsheets.

Spreadsheets have their use inside an organization, but for these sorts of things where you're thinking systemically, actually think about how you can use creativity to change the lens through which you see your system.

Well, I think you made a point earlier on, Rich, which is why I know you're having a bit of a pop at spreadsheets. They're not my favorite thing either.

But.

But to be fair, you made two important points and I think this is why this exercise is so powerful. This is about serving the needs of other people and it's about collaboration.

And by actually producing a visual of what you're trying to achieve gets you to understand who do I need to collaborate with and what are the needs of those people. So it really feeds into those two critically important things that you need to do if you're going to do stakeholder management.

Well, yes, absolutely. And I think the point you made earlier is a picture paints a thousand words.

Yeah, it's a well known saying, but I think it's so true. It really is so true. And okay, maybe I'm. Because I'm right, brain dominant. I love doing that kind of thing.

I find it's a natural thing for me, but it does. It just gets you to look at things in a completely different way.

And I think the point you made about connection, it helps you build connection, connection with people, connection with the world around you. And that's so important if we're going to do stakeholder management and stakeholder landscaping, really, really well.

So, okay, Rich, I'm going to wrap this conversation up sort of.

If I'm a leader listening to this podcast and thinking, yeah, I do want to lead more effectively, I do definitely need to think about stakeholders in a much wider context. I do need to think of my businesses like an ecosystem rather than an organizational chart.

Where would your sort of top tips be in terms of a starting point?

I think very simply, just what we've been building on, create a stakeholder map. Do that with your team because that engages the team and helps them to think systemically.

Think from the principle of reciprocity and empathy in terms of how you're going to engage with your. With your stakeholders and encourage your team and yourself to go out and engage with your stakeholders.

See it as a collaborative, not competitive process.

Yeah, some really great top tips there. And I think I'll end with a comment here. Leadership isn't about who reports to you, it's about who you impact positively.

So anybody listen to this podcast, please reflect on what your stakeholder landscape looks like. Please again share this episode with anyone who's feeling stuck.

If you think they're stuck in that hierarchical thinking and need to think differently, please share this episode with them or anybody who's looking to just lead with a much broader impact going forward. And we know from the research I looked at, which we talked about at the beginning of this podcast, you.

There's a big need to do this to solve some of the problems we have in the workplace and the world in general. So, Rich, thank you for your time again today. Really important topic this. I'm sure we'll come back to it in the future as well.

Yeah. Thank you.

So for the time being, it's goodbye from me. And, Rich, thank you for your time today.

Yeah, thanks, Dave. Bye.