Building the 21st Century Leader

This story appears in the February 2007 issue of Entrepreneur. Subscribe »

As an entrepreneur, leadership is the most important part of your job. But in a constantly changing business climate, you can't model yourself on leadership archetypes from the past and expect to meet the challenges of today's workplace. Barking orders at your subordinates a la the domineering 1950s boss won't get your staff on your side. And the buddy-buddy, hang-loose management style of the 1990s won't get results fast enough to keep pace with the competition.

So what are the traits the 21st century leader needs to succeed? Some of the factors that make a great leader haven't really changed. The abilities to innovate, execute and be a strong role model for your staff will always be essential. But in addition to these qualities, a new leadership style is emerging, with skills uniquely tailored for success in today's environment. One management consultant has dubbed this new leader The Enlightened Warrior.

Today's successful business leader is decisive, insightful and constantly challenging company conventions to keep ideas flowing, says management consultant Mark Stevens, author of Your Management Sucks. This Enlightened Warrior is the model of the 21st century leader.

Enlightened, Stevens says, in the sense that a modern leader identifies opportunities before the competition, taking in information from all sides to spot possible new directions. The warrior side symbolizes a passion for achieving a goal and also a willingness to go on the attack--against the competition, and against weaknesses in yourself and the organization.

"You need to wage constructive war continuously," Stevens says. "It's not just firing people who aren't doing the job, but [also] saying, 'What are we not doing right?' and then acting on it. It's a war on complacency."

Several new factors in the current business environment demand this kind of creative thinking, leadership experts say. One is the increasingly rapid pace of technological change, which opens up new possibilities for nearly every business. Two big changes are people-focused: the growing diversity of the nation's work force and the anticipated worker shortages as baby boomers retire.

Coping with these trends will take some stretching for many CEOs. Here's a digest of the key traits that are crucial in our changing workplace.

Adaptability: If you could have only one skill in your toolkit, this is the one you need right now, says Marty Linsky, co-founder of consulting firm Cambridge Leadership Associates in Cambridge, Massachusetts. With the marketplace changing practically overnight, CEOs need to be ready to learn fast and shift on the fly.

"The whole idea that change is the norm rather than the exception is not a tweak, but a profound change in your job as a CEO," Linsky says. "Your job now is to help the organization develop the capacity to adapt, rather than stake out a vision and drive toward that."

The tough part is knowing what should change at a company and what can't be altered without negative consequences, Linsky says. "Adaptability is a very complicated process," he adds. "You're making hard choices, including sometimes giving up values or beliefs, or ways of doing business that may even have been crucial to earlier success."

Linsky says leaders need to design their whole company for adaptability, not just possess the trait themselves. Build an environment where workers are encouraged to express their points of view and to raise tough issues before they become crises. Have an organizationwide emphasis on learning from mistakes.

"I know one global bank where the CEO literally selects the biggest mistake of the year from which they learned something important and sends the person responsible [for the mistake] around the globe to talk about what they learned," Linsky says. "You don't see that much."

Putting flexibility first helps leaders break out of established problem-solving patterns to explore new options, says Rick Lepsinger, co-author of Flexible Leadership: Creating Value by Balancing Multiple Challenges and Choices.

"What's needed is to really understand the situation and not necessarily do the thing that has worked before, but ask, 'What's working here?'" Linsky says. "Different situations require different behaviors."

Self-Awareness: Before leaders can tackle the challenges at their organizations, they have to look in the mirror, says Ken Blanchard, co-author of the management classic The One Minute Manager, and more recently author of Leading at a Higher Level. "The journey of leadership is first taking a look at yourself," he explains. "Then you're ready to deal one-on-one, then you can take over a team, and then an organization."

Alan Gilburg, principal at the Gilburg Leadership Institute in Holyoke, Massachusetts, agrees. Leaders need to look within and root out negative patterns. Gilburg says two types are common today: autocrats who like to make big decisions but don't take responsibility for fulfilling their goals, and abdicrats who shift key decisions onto others when they should be leading. "It's not about the tools and techniques," he says. "It's about the user of the tools."

Once you've assessed your leadership strengths, you can play to those, work on improving weak areas, or hire people whose strengths will complement your own.

People Skills

Everybody says their employees are their top priority, but management consultants say few companies' actions show it. Changing work force dynamics make managing people an increasingly crucial skill for leaders, says Trudy Bourgeois, president and CEO of the Center for Workforce Excellence in Lewisville, Texas.

Generation X and Y workers know they're in demand as the American work force shrinks, Bourgeois says. Leaders need to learn how to keep this new wave of younger workers happy, or risk losing them. Many women leaders have an edge here, as they tend to focus on relationships more than male CEOs.

Among the traits younger workers want from leadership are authenticity, accessibility and respect for their individuality. "They want personal credit for the results they get for the organization," Bourgeois says. "If a leader says, 'Under my leadership, we . . . ,' [employees will] stand right up and say, 'You didn't do crap.' Leaders need to develop their ability to connect with the most diverse work force in history."

Aside from adjusting to a new generation's sassy attitude, one of modern leaders' prime responsibilities is helping their people adjust to the changes sweeping their workplaces. Whether it's a change in direction, a merger or a job reassignment, employees are nervous when change comes, says Doug Staneart, president and CEO of The Leaders Institute in Fort Worth, Texas. "The number-one thing I've seen that makes a great leader now is they have a need for change, and they allow people in their organization to feel safe about that change," he says.

Staneart takes clients through a four-step program to learn how to help workers embrace change. He says first, leaders must establish trust and reduce conflicts by airing them honestly. Only then can a leader start to gain buy-in and cooperation with a planned change. Once the team is onboard, leaders should step up efforts to recognize and reward the potential of their staff.

At clinical-test monitoring company Coast Independent Review Board in Lake Forest, California, CEO Darren McDaniel, 36, says he has helped his employees cope with the company's explosive growth--from annual sales of zero to $7 million in four years--by constantly evaluating and rewarding their performance. He says annual performance reviews, or even quarterly ones, are not enough input these days, adding, "I have people who've been promoted five times and tripled their income in the past 18 months."

Purposefulness: Experts are split on whether having a strong vision is a good thing. "Leadership is about going somewhere," Blanchard says. "You need a clear vision that's about who you are, your picture of the future, where you're going."

But Linsky counters, "Vision is as much a constraint as a resource. In my observation, CEOs get invested in their vision, and then they don't see contrary data."

What's better these days, Linsky says, is for leaders to have a strong sense of purpose they can express to their workers--a compelling reason for everyone at the company to come to work. "It's about building the world's best automobiles or enabling people to be safe in their homes," he says. "It's a purpose outside yourself, which is very different than vision."

Decisiveness: The days of holding endless meetings to discuss possibilities are over, says Stevens. At the current pace of change, fast action is what matters. The desire to reach consensus or get buy-in from all parties has to be curtailed at some point, and the leader has to make a decision.

Stevens recalls one founder and CEO who had stepped back into a chairman role. Unfortunately, the new CEO let the company stagnate. Stevens investigated. "I told him, 'Your company has become a debating society,'" he recalls. "Nothing ever happens." The chairman stepped back into the CEO role, but Stevens says it was too late to turn the do-nothing culture around. The company ended up being sold.

Women leaders, in particular, often need to work to boost their skills in this area. With her women clients, founder and partner Janeé Harrell of Amplyfi Consulting in Dallas encourages an attitude she calls "Stand and Not Quiver."

"I recommend women get very data-driven and approach men very directly and decisively," Harrell says. "Base it on facts, and gain the respect you deserve."

On the plus side, women tend to be confident in relying on their intuition, which can serve them well in cutting to the chase, says Bourgeois. "It's good to be intuitive, because the world is changing so dramatically that the data isn't there to support good business decisions all the time," she explains.

The ideal management style for the 21st century, Bourgeois says, blends typical female and male traits--you'll need both intuition and a focus on the bottom line, both people skills and analytical strength.

Collaborative Skills: The problems today's companies face can't be solved if department leaders stay in their own silos, says Cynthia McCauley, senior fellow at the Center for Creative Leadership in Greensboro, North Carolina. CEOs need to create cultures that foster idea exchanges among all corners of their organizations and beyond. "We need more managers who can work across boundaries--with vendors, external partners, across business units," she says.

At Cristek Interconnects, a military-contracting manufacturing business in Anaheim, California, founder and president Cristi Cristich, 45, says she developed a soft-skills matrix to encourage collaboration and approachability among her staff. The matrix sets goals defining exactly what a successful, collaborative employee should be doing: recognizing and rewarding teams, promptly resolving staff issues, modeling collaborative behavior and actively assisting others in collaborative work. According to Cristich, "These are soft skills that have bottom-line results." The 21-year-old company projected $15 million in annual sales for 2006, up 10 percent from the previous year.

Some Things Don't Change

There are some basic skills leaders have always needed. The only difference is that now these skills are even more crucial. A few key classics:

Walk the walk. The days when CEOs could give themselves fat bonuses while cutting workers' pay are over--that maneuver cost American Airlines CEO and chairman Donald Carty his job in 2003, and that's only one example. If you're not staying late to make the big project deadline, employees won't either, says Evan Wittenberg, director of the Wharton Graduate Leadership Program at the University of Pennsylvania in Philadelphia. The ethical standards you model will be picked up by employees, he notes. "You've got to lead the organization in a way you'd want others to emulate when you're not around."

Innovate. Too few leaders are creating organizations designed to encourage innovation, says Lepsinger. If there isn't a system in place to share new ideas and move those ideas along to become salable products, innovation will be stifled. He says, "You need to get everyone trained to think out of the box and be creative."

Execute, execute, execute. One of the biggest leadership gaps these days is between vision and execution, says Lepsinger. Too many leaders spend their days dreaming about the big picture, while research shows more than half of workers despair of being able to execute on the boss' sweeping vision. "We find that vision doesn't drive execution of the business results," he says. "You need to develop an operations strategy and execute that strategy."

Cristich learned this lesson rather painfully after taking two years off from her company to run for public office. When she returned, she found that though she had articulated a well-thought-out, big-picture vision, her 100-person staff had floundered on execution without her day-to-day input.

"I've made a point over the past couple of years of holding myself accountable," Cristich says. "I'm making sure I'm setting the right example, that I'm engaged as deeply as I need to be in the key execution pieces."

Top Dog
Peaked in: 1950s-'60s

Description: The head honcho of the postwar era spent most of his time barking orders at his dronelike workers. The Top Dog's ideal employee was known as an Organization Man--most of them were men. Embodying conformism in his gray flannel suit, he worked without complaint to fulfill the boss's every desire.

Top Dog often came up through the ranks and was a former Organization Man himself. Once on top, it was his turn to take all the credit for his loyal employees' ideas.

Because job-hopping was considered bad for the career back then, Top Dog could scream and rant, knowing most workers wouldn't dare leave. And work/life balance? Not in the Top Dog's vocabulary.

Catchphrase: "It's my way or the highway."

Drawback: The command-and-control style didn't foster creativity or innovation. As a result, many companies led by Top Dogs floundered in fast-changing markets.

The Unleader
Peaked in: 1999

Description: More than anything, the Unleader wanted employees to be creative and feel comfortable at work. Yelling was out, and staffers were encouraged to voice their ideas and feelings. Then, nobody moved until consensus was achieved. There were endless delays while the Unleader pondered the options, resulting in many wasted opportunities. Goals were often murky, organizational charts either absent or confusing.

Unleader companies were easily recognized by their casual, fun-loving style. Suits were banished in favor of Hawaiian shirts and shorts. Though workers were generally expected to toil 24/7, the occasional break for a kid's soccer game was OK. Dogs hung out under desks while their owners dozed in nap rooms. The company provided free pizzas, and foosball tables adorned break rooms.

Catchphrase: "It's all good."

Drawback: The Unleader wasn't so great at crafting successful business plans or watching the bottom line. Most companies headed by Unleaders quickly went bust.

New Attitude
A hands-off leadership style worked at A&A Optical Co. when the Dallas eyewear-distribution firm was small. But when second-generation owner and longtime salesman Robert Liener, 46, steered the company into a rapid-growth phase, he had to rewrite his leadership script.

As the 35-year-old company climbed from $2.6 million to $8 million in sales over the past four years, employees grew increasingly confused about their roles. When an aggressive sales manager began filling the leadership vacuum and workers started viewing him as the company's leader, Liener knew things needed to change. His fixes:

Go higher profile. Liener realized that employees wanted more direction from him, so he stepped up his leadership role, overcoming his fears of offending some with his views. Communication used to be sporadic; now he makes sure to contact every employee several times a month, encouraging their feedback. "I was getting behind the scenes too much," he says. "Once I started giving direction and sharing the vision, the productivity level of every person rose dramatically."

Define expectations. When A&A had a dozen employees, roles could be loosely defined. When the count jumped to 60, confusion set in, so Liener worked with Dallas consultant Janeé Harrell of Amplyfi Consulting to define job parameters. Identifying employee strengths also led to several reassignments. Says Liener, "Now everyone knows who to report to and has a detailed job description of [their] responsibilities and accountabilities."

Eliminate rivals. Liener realized his sales manager, though effective in some areas, had to go because of the challenge the employee posed to his own leadership efforts.

Keep learning. Liener sees developing his leadership potential as an ongoing task. He says, "Not a day goes by when I'm not learning how to manage people, grow people [and] develop the organization."