The New 21st Century Leaders - Bill George - Imagining the Future of Leadership. By Bill George | 8:25 AM April 30, 2010 (Editor’s note: This post is part of a six-week blog series on how leadership might look in the future. The conversations generated by these posts will help shape the agenda of a symposium on the topic in June 2010, hosted by HBS’s Nitin Nohria, Rakesh Khurana, and Scott Snook.) During the last half of the 20th century, business leadership became an elite profession, dominated by managers who ruled their enterprises from the top down. Influenced by two World Wars and the Depression, organizational hierarchies were structured along military lines, with multi-layered structures to establish control through rules and processes.
People climbed the ranks in search of power, status, money and perquisites, as described in William H. In the last quarter of the twentieth century the stock market became increasingly short-term, causing corporate leaders to concentrate on quarterly earnings, often to the exclusion of long-term growth. What happened? Time to rebalance. The New Psychology of Strategic Leadership.
The Idea in Brief Firms typically cluster around a few strategic positions, leaving others unoccupied. The intense competition on those occupied mountaintops makes it hard for firms to gain attractive returns. Superior opportunities lie on the unoccupied mountaintops. Because they are “cognitively distant”—far from the status quo—they’re hard to recognize and act on, and therefore competition is weak.
Strategists are trained to analyze economic forces when they want to identify superior opportunities. But analytics usually won’t uncover the kinds of ideas that overturn the status quo. Recent research on human cognition suggests that leaders would do better to use associative thinking to spot, act on, and legitimize distant opportunities. This article explores ways to jump-start associational thinking—and to bring stakeholders along on the journey.
Michael Porter opened his classic “five forces” article with these sentences: It would be difficult to imagine a more appropriate opening here. Leadership through the crisis and after survey - McKinsey Quarterly - Organization - Talent. A new survey investigates how individual leaders lead and how that has changed in the past year. For example, respondents say that during the crisis they have seen far more leaders focus on monitoring individual performance—even though they see that as one of the least helpful ways of managing the crisis. The survey also asked about the organizational capabilities and leadership behavior organizations will need to thrive during the recovery and about the ways companies are approaching employee development and gender diversity in the crisis. The kinds of leadership behavior that executives say will most help their companies through the current crisis, such as inspiring others and defining expectations and rewards, are the same ones they say will help their companies thrive in the future.
The executives’ assessment of what’s needed for the long term hasn’t changed over the past year. Corporate capabilities Leading now and in the future Women matter Developing female leaders Looking ahead. Disconnect Found Between CEOs, Top Officers. The Ambidextrous CEO. The Idea in Brief Balancing the needs of core businesses and innovation efforts is a central leadership task. Unfortunately, most CEOs cede that responsibility to core-business heads, because innovation efforts are typically embedded in their units.
The result is that competition for resources and attention usually gets resolved in favor of the established business. On the basis of an in-depth study of 12 top-management teams at major companies, the authors suggest that CEOs take a very different approach. Specifically, they should: engage the senior team around a forward-looking strategic aspiration, hold the tension between the demands of innovation units and the core business at the top of the organization, and maintain multiple and often conflicting strategic agendas. When leaders take this approach, they empower their senior teams to move from a negotiation of feudal interests to an explicit, ongoing debate about the conflicting interests on which the future of the business depends.
Are You a Collaborative Leader? Artwork: Geoffrey Cottenceau and Romain Rousset, Vide-cartons, 2006 Watching his employees use a new social technology, Marc Benioff, the CEO of Salesforce.com, had an epiphany. His company had developed Chatter, a Facebook inspired application for companies that allows users to keep track of their colleagues and customers and share information and ideas. The employees had been trying it out internally, not just within their own work groups but across the entire organization.
As Benioff read the Chatter posts, he realized that many of the people who had critical customer knowledge and were adding the most value were not even known to the management team. The view into top management from the rank and file was just as obscure, Benioff knew. For instance, the company’s annual management off-site was coming up, and he could tell from talking to employees that they wondered about what went on behind closed doors at that gathering. The meeting began with the standard presentations. Adaptability: The New Competitive Advantage.
The Idea in Brief Traditional approaches to strategy assume a relatively stable world. They aim to build an enduring competitive advantage by achieving dominant scale, occupying an attractive niche, or exploiting certain capabilities and resources. But globalization, new technologies, and greater transparency have combined to upend the business environment. Sustainable competitive advantage no longer arises from positioning or resources. The ability to read and act on signals of change The ability to experiment rapidly and frequently—not only with products and services but also with business models, processes, and strategies The ability to manage complex and interconnected systems of multiple stakeholders The ability to motivate employees and partners Slideshow: See what 50 years of volatility looks like in five major sectors. We live in an era of risk and instability. Market leadership is even more precarious. All this uncertainty poses a tremendous challenge for strategy making.
Mental Nimbleness for Executives and How to Enhance It. The more the business environment changes, the faster the value of what you know at any point in time diminishes. In this world, success hinges on the ability to participate in a growing array of knowledge flows in order to rapidly refresh your knowledge stocks. John Hagel, John Seely Brown, Lane Davison While new knowledge flows are important, they are not enough!
A major challenge that confronts business leaders is seeing how change and innovation, external to their own organization, can lead to new possibilities to create and deliver value to customers. This requires business leaders to enhance their adaptive potential and their ability to make mindshifts. The illustration below is a New System of Engagement. It outlines how social software can help executives engage the rapidly changing business environment and to see and seize the potential brought on by change and innovation. It takes effort to put a system of engagement in place and use it–but consider the alternative.
Mindshift Innovation in a Nutshell