How Leadership Has Changed

With globalization, technological innovation and the growing number of linkages among people, activities and events, today’s pace of change is relentless. The people of the world mix and mingle as never before, forging new partnerships and creating more culturally diverse workplaces. Increasingly, groups of companies collaborate to investigate new opportunities and exploit new markets. Technology brings new surprises every day, some that can shake up entire industries in a matter of months. With the Internet and the rise of social media, consumers, media and other stakeholders have gained incredible power, which they readily use to reward or punish companies often at lightning speed.

In these volatile, uncertain and often controversial times, effective leadership is critical. As Harvard’s John Kotter observes: “Leadership is very much related to change. As the pace of change accelerates, there is naturally a greater need for effective leadership.” But has leadership itself changed as well?

I think so. Of course, the fundamentals of effective leadership will always be critical. The best leaders have a vibrant vision with the ability to cut through today’s clutter of information to communicate that vision to multiple stakeholders in a memorable way. The best leaders also work hard and are committed to the success of their organizations. Most important, the best leaders are honest and forthright, recognizing that integrity will always be their most precious asset. However, the best leaders have three additional and equally critical strengths. These new strengths build on the traditional strengths of effective leadership.

First, to thrive in these times of great uncertainty, the best leaders lead through influence, not the power of their position. The hierarchical, command and control structures of the past are gone. The days of simply telling someone to do something are gone. In addition to influencing their employees, the best leaders also influence people outside of their firms to create, capture and distribute value through a network of organizations. At Ivey, we call this network of partnerships an enterprise. And since no single leader directly controls all parts of the network, leadership is distributed. That’s why influence is so important.

To earn that influence, leaders have to secure the trust and respect of all organizations that make up the enterprise. That calibre of engagement requires empathy and exceptional communications skills. Leaders must also excel at identifying potential partners and then initiate, maintain and continually enhance these relationships. All of this places a new premium on the value of integrity.

In addition, it is crucial for leaders to understand and appreciate other cultures. What may look good to us as North Americans may look totally wrong to someone in Asia and vice-versa. I am not saying that a leader must know every cultural nuance, but she or he must appreciate that these sensitivities exist and are often very important. How else can a leader evaluate the potential impact of a development in a far-flung place? Or the likelihood of success with a new partner from another country? How can they help their organizations to create culturally inclusive workplaces if these sensitivities are not taken into consideration?

In other words, the leader’s job is one of continual negotiation and persuasion, based on mutual trust and respect. That is not easy, nor is it simple. Influencing outcomes is much more demanding and complex than dictating actions.

The second key strength that leaders must possess now is the ability to make decisions quickly, despite ambivalence and uncertainty. In this era of globalization and technological innovation, the boundaries that used to distinguish industries and companies are blurring. Real-time competition is a reality. Leaders no longer have the luxury of long planning horizons.

At the same time, a fire-hose of information is gushing toward us like never before. Managing this knowledge, figuring out what is important and what is not, requires sound judgement. It also means that leaders often have to act fast, or miss out on an important window of opportunity.

Despite these pressures, however, the best leaders are open, transparent and careful about their ethical, environmental or political actions. Never before have missteps, rumours and ill-considered words become so easily and so instantly accessible to millions of people. Even members of traditional media track social media channels, including Twitter, Facebook and blogs, in search of the bad news that will make the best headlines.

Third, I believe that the best leaders see and appreciate the big picture. Some would argue that good leaders have always had that ability. But, let’s remember that the picture itself has changed. The canvas is much larger, more complex and more changeable.

I remember the days when if you excelled at finance, your chances of making it to the top were better than those of your colleagues in other departments. You did not have to understand marketing – an agency handled that. You didn’t have to talk to customers – the sales representatives handled that. And you did not have to worry about what was happening in another industry. Chances are those events would have absolutely no impact on your company.

That is not the case today. Leaders cannot afford to stay safely tucked away in an ivory tower. They must understand how the different parts of their enterprise work. They must stay on top of developments in other industries. They have to get outside their offices, and talk and listen to their employees, their customers, their stakeholders, their investors and their partners as much as they can.

To understand what is really going on, both inside and outside their companies, the best leaders are receptive to new ideas, criticisms and different perspectives. They ensure they get the right information, not a sanitized version of events. No-one, including your employees or partners, likes to admit that they made a mistake. It is natural to sugar-coat the bad news. But if you do not have all the facts and the truth, how can you solve the problem?

In today’s complex, ever-changing environment, leaders with integrity, vision and commitment offer timeless assets to any organization. But today, the best leaders also lead through influence, make decisions quickly and stay on top of the big picture. In this way, as John Kotter observes, they not only manage change, they “cause change”, by “establishing the vision for the future and setting the strategy for getting there.” At Ivey, we call this new brand of leadership, Cross-Enterprise Leadership. It is absolutely essential to organizational success today.