Leaders need to be part of the network not apart from it

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Last week in Rio de Janeiro saw a gathering of the "informed elite".

That phrase is in quote marks because it's not one that I would ordinarily use, nor in fact is it one that even the person who used it wants to use, as I shall explain.

But it's the impending demise of that phrase that, for me, illuminated the 2012 Global Economic Symposium (GES).

Some background: GES is an annual conference that brings together politicians, bureaucrats, business leaders, academics and experts from around the world to discuss the economic and social challenges we face - and solutions to those challenges. It's a bit like the World Economic Forum in Davos, but without Bono.

I've been fortunate to be involved for the past three events, moderating the annual panel debate on technology related issues, which this year was titled, "Optimising information use through the internet and social media". You can read my submission to the panel here.

At previous events, I've been a little disappointed at the lack of discussion on IT and internet topics, given the fundamental role technology will play in tackling many of the economic problems of the world.

But this year was different - not in that there were more sessions focused on tech, but in the way the web and social media was infused through so many other discussions.

It's clear that among the leaders in Rio last week, there is a mix of fear and excitement around the way that technology is changing our lives, and in particular changing our relationship as citizens and consumers with institutions used to thriving on the mantra "knowledge is power".

In one session I listened to, on "Trust and citizenship in the age of engagement", there was one panellist, a US academic, who was thoroughly dismissive of social media and the power of the crowd, and unable to see how its disruptive nature is threatening the traditional hierarchies that generations have been conditioned to respect. Unable, or unwilling perhaps.

That panel was chaired by Robert Phillips, CEO of the European arm of Edelman, the global PR firm, and also a published author on citizenship and the rise of what he calls digital democracy.

You can read Robert's thoughts on GES2012 here (apologies if it seems like a bit of a love in when you notice he also mentions me in his article, but our views were pretty similar).

Robert it was who used the phrase, "informed elites" - derived from the Edelman Trust Barometer, an annual survey into attitudes about the state of trust in business, government, NGOs, and media across 25 countries. The study classifies us into "informed elites" and "the masses" - a distinction that made me cringe - and it turns out one that Phillips also would prefer to see removed from the study.

What became clear from GES - and the debate during the session I hosted characterised this too - is the degree to which the internet, social media, and access to information is reversing that distinction and terrifying plenty of those former "informed elites" in the process.

We are moving from a world based on vertical hierarchies and hierarchical controls, to one based on networks.

In the hierarchical world, the informed elites exist because - self evidently - they are better informed than the masses below them in the social, cultural and business hierarchy.

Edelman's research shows that trust in those elites - in governments and businesses in particular - has declined rapidly in recent years, while the fastest growing trusted group is "people like me". No surprise there you might say, given the banking crisis and the age of austerity.

But the forces behind the move from hierarchies to networks go deeper than that.

Thanks to the web and social media, we now have for the first time the informed masses. More information is readily, easily and cheaply available to all, and the more we learn about the elite, the less we like them.

Governments are responding with promises of transparency and openness, but such a policy is shown up for its discrete attempts to act as a new form of hierarchical control when we find out about the things that were meant to still remain secret - such as MPs' expense claims, and bankers' bonuses.

The informed elite cannot cope with the idea of the informed masses. If knowledge is power, shared knowledge means shared power. That's a threat.

History proves this. The closest analogy to today's dramatic growth in data volumes and the associated redistribution of information were the after-effects of the invention of the printing press by Gutenburg in 1440. That innovation saw 20 million books printed in the subsequent 50 years, and contributed greatly to massive societal changes that redefined relationships between church, state and individuals. We're seeing an even greater redistribution of information now - and hence, of knowledge, and ultimately of power.

It's no coincidence that social media has grown to such prominence at a time when global hierarchies consolidate upwards into global or regional interest groups. For example, as European countries move towards greater integration within the EU, so their voters feel further removed from governments they already distrust, and become even more alienated by a further level of political hierarchy over which we have seemingly even less influence.

In such circumstances, what do you do? You turn to people like you, who feel the same way. And how do you find them? These days, through social media and the web - tools that have never before been able to bring together people by their millions who feel, instinctively, that something is not right with the hierarchies that control their lives.

There was much talk at GES of the role of leadership, and the failures of leadership that led to the global economic crisis.

I felt such talk missed an important point.

Even with informed masses, you still need good leadership. But today, great leaders are part of the network, not apart from the network. That is a lesson that many of today's leaders have yet to learn.

The elite no longer have a monopoly on the solutions for the world's economic challenges.

Their control and status are being threatened by the bottom-up movement that the internet and social media represent. Top-down hierarchies are being swept away - and that is a challenge that many, perhaps even most, of the so-called informed elites are struggling to come to terms with.

I'm a great believer in the power of technology to improve the world and tackle many of its current problems. But we face a period of time when our leaders see technology as a threat, and the "masses" see it as an opportunity to reshape their relationships with institutions and hierarchies. There will be difficult times ahead as those forces balance out, inevitably, in favour of a networked society.

I expect the nature of the leaders attending GES in, say, 2020, will be very different from those attending last week. I put my trust in the network to make the transition - but for some among the elite, the process will be a very painful one.

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