In times of rapid change and great disruption, the challenge for leaders is how to lead effectively, ensuring that your enterprise flourishes. It’s helpful to understand the leadership and strategic skill sets that will empower your organisation to ride the waves of change.
Rapid change and technological disruption
We’re surrounded by accelerating change via technological and social innovation, globalization, geo-political conflicts and anthropogenic climate change. In the business world we have to deal with flow-on effects of digital/technological disruption, turbulent markets, and increased financial, social and environmental risk.
First, don't panic
The thing is, change has always been there: businesses and industries have been appearing and disappearing for centuries. In living memory we’ve seen brands disappear (think Pan Am and Ansett) while their industries have gone from strength to strength. We’ve seen old business models (taxi cabs and hotels) under threat from new business models (Uber, AirBnB). We’ve seen old production/distribution models being decimated by digital technology (Kodak, Blockbuster) and companies that have had to reinvent themselves (Ericsson, Nokia – yes they’re still there in some form).
However there are some industries and business models that surprise us with their resilience. Everyone predicted the death of the bookshop in the face of online retailing. Some book retailers did hit the wall, but those who have creatively reinvented themselves are doing well. The Australian wine industry manages to keep going, adapting to changing climatic conditions and global market forces. Thank goodness for that!
Don't get me wrong: I’m not a change denier. The world is full of change, and we need to be always alert to improving our fitness for change, and our ability to anticipate the future. I’m just suggesting that we take a few deep breaths and don't panic!
Understand the great disruptions of our time
Lynda Gratton, Professor of Management Practice at London Business School and researcher on future work trends, identified five forces influencing the future of work.
A low carbon economy – with impacts and opportunities for business
Advances in technology – extending human capabilities in terms of health and longevity, work and productivity
Increasing globalisation – changes in dominant economies, production and consumption
Demographic changes – with the Boomers going into retirement, and increased longevity
Societal change – increased urbanisation and lone or small households with virtual relationships, increased remote working arrangements
I think that understanding the shifting landscape is always going to be a work in progress, and I would add a few things to her list, including digital disruption specifically, as it is so fundamentally changing the way we operate, and the externals of geo-politics and climate change. When you think about it, this is not the future, this is all happening now! We already have companies taking up the sustainability challenge, robotic cardiac surgery, global supply chains and markets, politicians trying to raise the retirement age, shifting global political and market alliances, industries created and destroyed by climate change, mass migrations and people living online lives.
Identify leadership competencies for disruptive times
A really interesting 2018 study, from Management Research Group, identified three competencies associated with the ability to manage disruption: being a fast learner and able to adapt rapidly to change and challenge; the ability to work with people from a diversity of culture and background; and a tolerance for ambiguity. They then surveyed 2,500 European leaders who had been rated by others as highly effective in these three competencies, to see what leadership practices made them effective.
The results included an unexpected mix of business and interpersonal skills, and of contrasting leadership styles. The most effective leaders had both technical and innovation skills. They were strategic thinkers who made logic and evidence-based decisions. They demonstrated strong leadership, setting clear expectations for staff and taking charge. However they also had a greater sensitivity to others and a ‘win-win’ mentality. They were willing to allow others to challenge their authority. In other words, they were both strong and flexible, leading and letting others lead. These results are interesting because they are saying ‘it’s not just about collaborative cultures and self-driven teams: it’s also about strong leadership that takes charge!
Develop complexity thinking skills
I believe that developing complexity thinking is essential. I like to think of complexity as a special case of systems thinking. It’s like systems thinking with a few curly bits thrown in. Forget linear cause and effect, the future world is about multiple causes and effects, with amplification of effects creating uncertainty of outcomes. You can see this at work in social media. One person tweets: it goes viral, reaching 2 million people within 2 days. Another tweet goes nowhere, shared by only 2 people, your mother and your best friend. It’s hard to predict where amplification will occur.
Solving the complex challenges of today’s business environment requires the ability to think across boundaries. To take a current example, think of the Murray-Darling Water Catchment. Solving this knotty, ‘wicked’ problem involves a multidisciplinary, multi-partnership approach involving farmers, townships, indigenous communities, governments at all levels, industry, people upstream and downstream, and the interests of the river itself. There are multiple causes, multiple effects, and solutions that are multifaceted, but all centred around this one issue. See the work of Suzanne Benn (UTS) on thinking across boundaries.
Lead through disruption
I don't have all the answers here by any means, but I do believe that you can develop your leadership fitness to respond to the challenges and opportunities of disruptive technologies and other changes. However we do need to change some of our ideas about leadership development in order to prepare leaders for the future.