Leadership for the 21st century – the intersection of the traditional and new

Industry 4.0: Its impact on leaders and the organisation

Whilst the essence of leadership hasn’t changed much, the context in which leadership finds itself is changing and as a result, the characteristics of leadership are changing.

What we are seeing today is that some leadership characteristics reflect the recent economic period in the UK – namely a downturn, austerity and defensive strategies. This results in a certain type of leadership expectation and culture: the adoption of strong leadership skills around “hand-to-mouth management”. This enables organisations to lead through turbulence and restructuring, to focus on short to medium term results and the ability to deliver in constrained environments.

Leaders have had less practice recently in risk taking, innovation, and in applying new and experimental dimensions to what they do daily. And what we are seeing in the context of Industry 4.0 is that these skills are required.

Disruptive technology means that organisations that have relied on tried and tested ways of doing business are suddenly finding that their core business models are disrupted and that new entrants are starting to bring new models, with greater agility and greater speed. The heritage organisations and leaders are finding it challenging to navigate.
 

Leadership challenge: Rapid disruption in an increasingly digital world

Leaders today often feel insecure about the pace of change in technology and their own level of comfort with that technology. We have a saying which is that you as a leader may not have been born a digital native, but it does not mean that you have to be a digital tourist either. In addition, more ‘enlightened’ leaders are immersing themselves in understanding the emerging and disruptive technologies that are impacting their industry. This doesn’t mean that we have CEOs becoming programmers, or that they understand the intricacies of blockchain, but it does mean that they have an understanding of the application of these technologies - what they mean and how they might be used for competitive advantage in their own business.

One of the best ways leaders are insulating themselves from obsolescence within technology is getting over the fear of saying, ‘I do not know’, or ‘I do not understand’, and rediscovering a childlike intellectual curiosity to go and immerse. This means understanding and applying that wider business and leadership context they already possess, saying, ‘if I understand the power of this type of technology, I can understand how to defend myself from it or how to harness it.’
 

Leadership programmes had better prepare to move rapidly into the digital economy

1. The need for sponsorship and the drive for development to come from leadership
   We are seeing that the drive for leadership development programmes is coming from learning teams, who identify the need for improving leadership. But starting these programmes sets up the organisation for failure. If leadership is going to change, the intellectual curiosity about what needs to be different needs to come from the top. What is often most successful in transformative leadership development programmes is when the C-Suite are actually behind it and are sponsoring and driving it, rather than it coming out of a learning team agenda in response to other data within the organisation.
2. The characteristics of a leadership development learning programme
   It is always great to send leaders to experience a three-day Zen retreat style leadership development programme - they can often gain meaningful and great insights about their organisation. However, they then return to work and the benefit of what has been learnt fades quickly, and then the learning from the leadership intervention is weak, to the point of insignificance. What is more impactful, and what we are increasingly seeing is leadership development programmes moving into the workplace. Rather than something done being on the side of business as usual, it is about how the application of leadership development impacts daily work and daily leadership.

Innovation and going on an innovation journey is key. What does this look like? Very often this a digital disruptive immersion to help with the education and appreciation of disruptive technologies. It is like coaching and helping leaders through a structured process of problem identification, so they can see the problems they have in their day to day. Leadership development programmes need to be about helping leaders challenge the norm.
 

Commander to coach: Empowering your workforce

One of the difficult parts in innovation, and the innovation journey, is defining a good problem statement. One of the things that we often see happening is leaders define a problem statement that already has an implied answer.

For example

‘I need to know how to implement a new CRM platform, in order to drive customer revenue’.

I need to implement a solution I have already decided on is not a problem statement. The problem statement is I have a problem with customer revenue and I need ideas of how to drive customer revenue. The answer might be a new CRM platform is required. It might be we need to address our brand. It might be we need to be looking at our product fundamentals.

Part of the leader’s journey going from commander to coach is asking people to solve problems without giving them the answer that they are expecting. If a leader provides a problem statement with an implied answer, effectively you are using that person as an advantage for your own idea. Instead as a coach, you want to open yourself up to the opportunity that there may be other solutions to the particular problem.

Coaching programmes can help leaders provide the space for people to take a problem and find a solution that may differ to their own, but this can be difficult for leaders as they like a degree of predictability. In addition, in terms of the development of leaders and getting them to move from commander and coach, it is about allowing people to be able to apply their talent and intellect to an unpolluted problem statement. This has to move outside of the leadership realm to look at organisational culture and recognition.

In an organisational culture where an individual leader is recognised for his/her own personal success, in what they have done and delivered themselves, the temptation is always going to be, ‘right, I’ve now got to take what’s in my head and get others to do it in my pattern’. If an organisation says, ‘we now need to reward leaders for the success, the capability, the energy, the commitment, the output, the innovation coming from their teams’, it is different. At that point, the incentive is there to say, ‘I will be rewarded and I will be made successful if the team beneath me feels empowered and able to actually execute on the problems that we have, and feel enabled to make a difference’.

Leadership therefore has a cultural dimension to it, looking at what the organisation values in its leaders and how the organisation asses, rewards and celebrates its leaders for the success of the people they are responsible for.
 

Defining leaders: Delivering financial Results

I believe that financial results matter when you have shareholder expectations and investors. They matter when you have a workforce that is dependent on those financial results for their own standard of living and compensation. But leadership should not be all about financial results. What I am seeing increasingly is that leaders have a responsibility for the wellbeing and the humanistic system in which their workforce is operating within. Especially as workforces are going through significant transformation.

There is also a responsibility on leaders for the wellbeing, resilience, succession planning and creation of the next generation, for the future of the leaders who are going to succeed them. In addition we are seeing the impact that leaders and their organisations are making on society which is very important. It is very important to the workforce. We hear all the time about how the workforce is increasingly demanding a sense of meaning and a sense of purpose in coming to work. I believe that many of our best leaders at all levels, be it generation X, baby boomers, millennials, or the incoming generation Z, actually share this passion for making a difference and feeling that what they are doing matters, and has a positive impact on society.

Therefore, financial results are important because they allow organisations to continue to make a difference and have an impact. Nevertheless, making an impact that is meaningful for an organisation and its workforce to my mind is above all else the role of a leader.
 

Organisational transformation

Finally, leaders are critical in delivering transformation. When we look at the delivery of change projects in organisations, first was project management - recognising that the delivery of projects could not happen in a haphazard fashion and that we needed some degree of controlled environment in which to operate. Organisations then realised that the results of these projects were not being adopted and accepted by the wider business, unless there was change management. And so change management came along saying, ‘let’s actually now look at the people who are going to use the outputs of this project, who are going to adopt them and change their way of working’ - and a science for change management was born!

What I am seeing today is the biggest barrier of the successful failure of programmes, even with project management and change management in place, is organisational leadership and the leadership environment where that change is being delivered into. Let me give a couple of examples. We are seeing a number of clients looking to embrace agile and enterprise agility as a way of working. Enterprise agility requires a different mind-set of how to deliver change. It requires the ability to prioritise what happens next, to have work pulled through a value chain, rather than planned eons in advance and delivered through big phase gates of traditional programme management. From a leadership perspective, if the leaders are not aligned with that way of working, what you get is – ‘what are the milestones, where are the stage gates, where are the plans?’ The leadership environment kills the agile way of working, and it reverts to traditional methods which are no longer appropriate for the types of programmes organisations are trying to run.

Having leadership aligned and willing to adopt and change the wider organisational practises, to actually allow transformational change to happen in the way that it needs to happen, is a critical step in order to unblock transformation.

The other thing that I would identify is that the nature of leadership is also part of what needs to change in organisational transformation. How leaders interact with each other, how they collaborate and operate, alongside the organisation’s appetite to risk will need to change. Thinking of attitudes towards failure and how you learn from failure, leadership need to embrace the ‘fail fast, fail cheap’ philosophy, rather than ‘I set you an objective and don’t dare fail’. This is a leadership mind-set shift that is essential in order to enable successful transformation in the digital age.

Listen to the full interview [podcast] with Phil Coleman.

Read more on the Deloitte 2019 Human Capital Trends report.