The past few years have taught us some valuable lessons on the fragility of companies who can’t innovate and their ability to survive deep economic turmoil. The leadership strength, ability and trust required to guide organisations through the minefield of recession are traits that leaders cannot now simply hang up. The lessons observed from the leaders whose organisations have innovated and thrived over the last few years now need to form part of the curriculum for the next generation of innovation leaders.
Many organisations are facing talent and leadership shortages with a consistent theme in articles I’ve read recently being the lack of availability of business-ready talent. In addition to that the leadership required post recession (I say ‘post recession’ in an effort to appear optimistic) is very different to that just a few years ago. Organisations now operate in a globally competitive, fast paced and multi-faceted marketplace. Filled with ultra-savvy consumers with product research, data and price comparison instantly available, even at their fingertips via smart phones and tablets the world we operate in conspires to make innovation a vital core component.
An organisations dirty laundry, unacceptable practices and perceived imbalances now conspire to make the leadership role even more complex. Not only do leaders have to manage the business side of running and driving a successful organisation they must now balance the public face and brand value of their organisation, all of which have become even more visible, scrutinised and considered when customers and consumers make their decisions. The recent banking crisis and outrage at consistently high bonuses even in the face of what seems like poor or under performance is a perfect example. RBS is a case in point where the public simply don’t understand the rationale behind bonus payments to senior executives when the bank has made a loss. The public perception is one of ‘repay your debt to us before giving yourself bonuses’.
So, as a leadership case in point, Stephen Hestor, RBS’s latest CEO is now challenged with rebuilding both the retail and the corporate/investment side of the bank for the future. However, in order to do that he has a 3rd challenge, which is how to repair the damage to the brand and the trust with both employees and customers? A challenge some would say he has been unfairly left by RBS’s last leader, Fred Goodwin. However it highlights a key trend for 21st Century leadership, which is the management of public scrutiny and integrity of leaders.
Being realistic, recovery from the recession is likely to be slow and the lessons learned are likely to last a lifetime. The challenge for the next generation of leaders is how they become wiser as a result of the experiences gained over the last few years and how that insight embeds itself into organisational best practice for the future.
There can be no doubt that the world has become incredibly diverse, complex and uncertain and that trend is likely to continue at an incredible pace. Disrupting existing business models and creating entirely new ones will now form a large part of the leadership challenge, as will building organisational cultures comfortable operating in a world of uncertainty. Radically rethinking the fundamental drivers of employee value and customer value in order to create new brand experiences will take priority.
With product differentiation becoming increasingly difficult and in some cases and sectors almost impossible, the need to differentiate will be won, not by what an organisation does or sells, but by ‘How’ it does it and that firmly means the leadership challenge is around people, culture, vision and beliefs. In order for that to happen the focus will be on values based around authenticity, sincerity, two-way open dialogue and ownership. These will be values that will become increasingly important in the leadership battle to distance an organisation from the recessional fall-out and the competition.
The lack of current leadership talent will only serve to impede organisational performance for the foreseeable future and slow down recovery from the current financial situation. Whatever organisations are doing to develop current leadership capability doesn’t appear to be working and doesn’t bode well for the future leadership required around the globe. The leaders of tomorrow will be very different from the ones today as their leadership skills will be built in a different context and from different experiences and perspectives. The lessons from the last few years of recession are a perfect example. How leadership is taught and learned will be critical to future success as the old way of teaching theory in an ‘academic’ way simply doesn’t work. Learning from real world experiences creates something I call RWA, ‘Real World Ability’ and by default is not something grounded in academia. This is an approach more akin to a set of guiding principles and frames of reference by which a 21st Century leader can adapt to the context of his/her current situation and create a relevant, contemporary solution, direction or opportunity. This is in stark contrast to the traditional method of management and leadership, which is largely based on set responses to specific situations and doesn’t account for the increasing pace and complexity of the world we now operate in.
However, just because the world we operate in is full of layered complexity the leadership metrics used don’t have to be. The trick to everything when building anything from organisations, brands, products or experiences is, keep it simple. Make it sexy but above all, keep it simple! The same goes for how we approach leadership development. Creating vastly complex, multi-level metrics to score and evaluate talent development only serves to increase confusion about how individuals contribute to their organisation, their own leadership growth and how it is assessed. Think about it. If a customer asked why they should choose your company, product or service your response wouldn’t be as long as your arm and filled with hidden complexity which the customer would find difficult to evaluate. So why should anything you want your people to buy into be any different?
The challenge is turning what we know about leadership, how to develop it and what we think will be needed on it’s head because so far Gen X has lead Gen Y but the tables are rapidly turning.
Some organisations are already experiencing the challenges of Gen Y managing and leading Gen X and these challenges will accelerate as we move in to Gen Z leaders. That means the leadership styles; communication methods and engagement techniques will be completely different. How an organisation handles this in the 21st Century will be defining!
The organisational support required for such a shift is extensive but absolutely necessary. This is unavoidable and is already happening and those that don’t prepare for it will not survive. Understanding the other leadership factor that comes in to play with Gen Y and future business models is also going to be critical to 21st Century success; the hierarchical model just won’t work!
The talent of Gen Y will be around knowledge and that type of employee simply doesn’t respond to top down leadership. The pace we live our lives at now means Gen Y will also not wait around to climb the corporate ladder so time served management and leadership positions simply aren’t part of their career path. The next generation of leaders will need to do so in a much flatter, less hierarchical, more collaborative way. The strategy for future success will be based much more around genuine values, real purpose and a mission that captivates people to want to be part of the journey. With that in mind something I call ‘Collaborative Leadership’ will be key. Especially where organisations are spread globally and localised culture doesn’t easily align with organisational culture. The traditional approach of training and corporate compliance just won’t work. So, solving the challenge of letting Gen Y lead in different ways whilst maintaining alignment will be the key. Part of that new approach to collaborative leadership will be the sharing of power by spreading empowerment across an organisation. In essence, recognizing leadership as a key component of people at all levels of an organisation, creating organization-wide leadership. The next generation of leaders will simply need to create the right accountability to make this happen rather than retaining control because of a lack of accountability.
In some respects we almost need to completely rethink what we mean by ‘organisation’ and ‘leadership’ in order to head into the future. We almost have the opportunity to start again, to get a fresh sheet of paper and ask ourselves not “how do we change what we’ve got?” but “what should it look like and how do we build it?” What I think it should look like is an organisation built around shared leadership, a collaborative and autonomous collective, united around a single vision. Visions bold enough to attract the attention of the best talent and captivate the attention of customers old and new. That then needs to correspond to the organisations specific strategy and business model depending on the sector/market it is operating in.
In order to operate in an uncertain future adaptability is key. That requires flexibility and transferable leadership depending on circumstance and individual expertise.
21st Century leadership won’t be about a single person at the top issuing direction to everyone below. Leadership will be the result of interaction and positioning based on collective qualities and strengths at any given time. If everyone is aligned, collaborative and focussed on an agreed vision then at any given time there will be a case for specific individuals to take the lead depending on their ability and the situation. In a knowledge and talent driven economy, leadership requires even more so, the recognition by followers, thereby making it mutual. One cannot exist without the other, as it’s a symbiotic relationship requiring both parties to recognise each other in order to exist and create a sustainable future.
The journey will be tough but for those that get it right it will be an amazing adventure.