Only 12% of the Fortune 500 companies from 1955 are still in business, and last year alone 26% fell off the list’Deloitte 2017 Global Human Capital Trends

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LeadershipSpotlight

As the world becomes increasingly complex, those in leadership are not as technically and functionally skilled as their reports. Therefore, successful leaders will be those most adept in facilitating networks of expert knowledge workers and functional specialists. Four areas in particular are changing face.

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• US Bureau of Labor Statistics data shows that productivity growth is not keeping up with technological development and the gap is widening. This gap represents untapped business performance potential. Although technological development is accelerating, productivity growth is at its lowest rate since the 1970s. Even if individual employees are adept at taking advantage of technological advancement, organizations are not seeing this translated into improved productivity. Consequently, leaders of organizations and HR are questioning whether their organization’s structure and culture is hindering unlocking the potential that technological advancement offers. See figure 1.

ContextBusiness and HR leaders are not only facing dramatic changes in digital, economic, demographic and social landscapes, but are seeing these shift at an accelerating rate. Look at the mobile phone industry: a decade ago this market was dominated by Nokia, Motorola and Blackberry. They seemed fairly secure in their market positions. Where are they now compared with Apple, Samsung and Huawei?

How should business leaders position themselves in order to capitalize from these economic conditions and not be left behind? How to make a definitive move away from old-school leadership paradigms and be equipped to lead in this era?

Figure 1 Opportunity or challenge?

High-performing organizations operate as empowered networks, coordinated through culture, information systems, and talent mobility.’

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Organizational Structure

Rigid hierarchies and silo organizations (industrial models that have largely remained unchanged for the last century) made sense in more stable business settings where the degree and direction of change was more predictable. But with increasingly disruptive conditions, organizations need structures and cultures that facilitate agility. A big question for business leaders is how to enable fluidity of human capital and information. Legacy systems need to make way for more flexible structures that enable rapid learning and adaptability. Organizations leading the way are increasingly moving towards matrixes of task forces pulled together for specific projects and empowered to execute.

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Leadership Spotlight 2

Stakeholder Centered Leadership

Leadership Spotlight 3

Table 1 Leadership of yesterday and today

Diversity and inclusion have become a CEO-level issue around the world. The digital organization of today, which operates as a network of teams, thrives on empowerment, open dialogue, and inclusive working styles.’

‘New Class of Leaders

The boundaries of traditional leadership hierarchies are being challenged and a new class of leaders who can thrive in this kind of VUCA environment is called-for. Specific leadership competencies are gaining prominence such as building partnerships across functions and sharing leadership. Leaders need to be proficient at ‘crowd-sourcing’, leveraging internal expertise and facilitating networks of teams comprised of functional experts. Today’s younger employees are fluent in the language of the digital age, they expect information to flow transparently in the organization, and they want to be empowered to execute through learning. As such their leaders need to be tech savvy and skilled at removing bottlenecks to information flow, innovation and continuous improvement.

Appreciating and confidently leveraging diversity is another crucial competency for today’s leaders.

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Yesterday

Rigid organizational hierarchy around functions

Silo organizational structure

Top-down execution

Directive leadership styles

Performance management focused on year-end appraisal

Matrices of project based task forces

Fluidity of human capital & information

Empowered networks of knowledge workers

Leaders proficient in emerging competencies

Tighter & more transparent feedback loops

Today

Stakeholder Centered Leadership

Leading Change

Performance Management

‘Leader as Boss’ or ‘Leader as Facilitator’? As leaders increasingly need to leverage expertise that surrounds them, proficiency at equipping and mobilizing others are skills that separate exceptional leaders from the pack. Marshall Goldsmith aptly coins this change as the shift towards Stakeholder Centered Leadership.

On-the-job learning, continuous education, and micro-learning are the knowledge-acquisition styles of today’s employees, Millennials in particular. Top-down directed corporate learning is being replaced by employee-driven learning-on-demand.

These changes in organizational structure naturally have a knock-on effect on how performance is measured: annual reviews are less relevant in a fluid system of shifting teams. People are looking for transparent feedback on a more continuous basis, and regular check-ins with their supervisors (measuring less more often).

Organizations must move towards clearer goal setting, better measurement, tighter feedback loops, and continuous learning for their employees. Creating a coaching culture where employees feel comfortable giving and receiving feedback up, down and across the organization facilitates.

Transparency and feedback, empowerment and partnership, adaptability and agility, these are the key words for leaders of today’s organizations. Where there is challenge, there is opportunity. As described at the start of this brief, the rapidly changing landscape facing businesses has produced winners and losers. The question remains: how to develop leaders that turn these challenges into a competitive edge?

With so much business potential remaining untapped, leaders most skilled at building organizational readiness will become the front runners of industry. World No.1 leadership thinker Marshall Goldsmith has coached a who’s who of top global leaders on how to adapt their leadership styles to turn these challenges to their advantage.

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The focus has shifted from talking about people to talking with people in open conversations.’

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Leadership Spotlight 4

Stakeholder Centered Leadership