Organizations need new leadership for a new era of success
To outperform in this disruptive era, companies need to make five critical leadership shifts.
We are living through an era of unprecedented challenges and opportunities, such as the climate crisis, global health challenges, and changes in social values. Globalization and geopolitics are shifting the world’s tectonic plates, and how we live and work is being constantly reinvented by advances in technology and the emergence of generations who were “born digital.” Leaders must navigate this moment and create an organization that thrives during such unstable times. For decades, organizations were designed and managed for an industrial environment, geared toward preserving stability, scale, and predictability with a focus on maximizing earnings for shareholders. However, many organizations have recently decided that this approach is ill-suited to today’s complex challenges and especially ill-suited to the host of societal demands companies must now consider.
Organizations such as Allianz, Haier, Microsoft, and Nucor are transforming their industries with a new organizational approach that seeks to be open, fluid, and adaptable, unleashing the collective energy, passion, and capabilities of its people. This new model focuses on creating sustainable, inclusive growth, and the companies leading the way are developing new architectures featuring collaborative networks of self-managing teams that operate in rapid cycles and focus on creating value for their stakeholders. This new approach calls on leaders to make fundamental evolutionary shifts, beyond the standard expectation that they continually develop additional skills. They must also reimagine themselves, undertaking inner work to shift their mindsets and consciousness to see the world anew.
For decades, the attributes regarded as central to being a successful company have mirrored the qualities prized in leaders: focusing on earnings, demanding results, exercising authority and control, and being fiercely competitive. For organizations to thrive now, all of these leadership characteristics must evolve. For leaders, this means making five fundamental shifts in mindsets and ways of working (table). These shifts are beyond profit to impact, beyond expectations to wholeness, beyond the command to collaboration, beyond control to evolution, and beyond competition to co-creation. These shifts redefine leadership for a new era.
Beyond profit to impact: Companies must go beyond profits and seek to maximize value and impact for all stakeholders, including contributing to society and a healthy planet. To ensure that their companies successfully make this shift, leaders must evolve beyond being managers seeking incremental improvement to become visionaries with the courage to craft a resonant purpose and boldly imagine and pursue the future.
Netflix’s success was largely due to its bold intention to create a global entertainment distribution company that provides a unique channel for film producers and studios. This commitment to vision, purpose, and stakeholder impact was embedded into the company’s culture, and by 2019, 44% of its total business was production. In six years, the company had tripled revenue, increased earnings 32-fold, and upped its share price at a CAGR of 57 per cent. The CEO of one industrial company felt that his organization was strategically stuck, despite months of deliberations, and asked senior leaders to look back at the history of the company. They realized that the company’s success stemmed from a couple of industry-defining bold moves by its founders, but ever since the company had gone public, leaders had trapped themselves in the cycle of meeting shareholder expectations for quarterly results. Looking back gave them the courage to seek their own industry-shaping legacy: creating a learning ecosystem to revitalize metal-working trades.
Today’s leaders must move beyond their identity as professionals and show up as humans, with the courage to be, and to be seen as their whole, best, authentic selves. This means recognizing and acknowledging the deeper inner essence of others and being unafraid to reveal one’s own essence. Leadership practices can enable this shift, such as expanding awareness and consciousness, developing greater emotional regulation, choice of response, and adaptation to new situations, and practising well-being as a skill. These practices will help leaders move beyond task-driven and transactional relationships by taking the time to get to know one another and connect at a human level, sharing values, beliefs, hopes, and fears. The most important details in this text are that a Singaporean multinational invested in nearly 100 leaders and their teams over 18 months to help them shift towards wholeness and authenticity.
This effort helped leaders cultivate self-awareness, show up as themselves, empower others, build a feedback culture, and foster psychological safety. Armed with greater authenticity, personal resilience, and adaptability, the young leaders coped well with the pressure of leading their teams to a successful IPO during a global pandemic. This shift is important because we are wired for survival and our fear-based reactions send us into old habits to restore a false sense of certainty. However, if we can evolve, we can move beyond a state where fear limits beliefs and mindsets to one where people can tap into their deepest passion, wisdom, creativity, relationships, and expertise.
