How Businesses Need to Change Their Leadership Style in a Tumultuous World
Here is how to develope organizational leaders to meet the challenges ahead.
Well, it´s official. 23,000 people from 21 countries deem 2016 to have been a bad year for the world according to a new YouGov survey and most Americans and Europeans are pretty pessimistic that things will improve in 2017.
We are certainly living in tumultuous times with an increase in nationalism and ideological extremism.
Here are four key trends that will have an organizational impact this year and beyond.
The media is full of apocalyptic stories about robots taking over our jobs. Studies such as Deloitte and Oxford, Bank of America Merrill Lynch (BOAML) and Boston Consulting Group predict that 35-47 percent of jobs currently carried out by humans will be automated by the next decade. A Bank of England study suggests up to 80,000 million US jobs will be displaced, and automation will threaten 77 percent of jobs in China and 69 percent of jobs in India according to a World Bank report.
If predictions come true, future generations of robots will be less clunky, more artificially intelligent and living alongside us in offices hotels and homes, giving us legal advice, delivering our pizzas, working in our factories, nursing us and beating us at board games. Even Wall Street trading jobs will be displaced by "servers running trading algorithms."
This Fourth Industrial Revolution will not be without consequence. Francis Collins, head of the Human Genome Project, predicts a rise of technological resentfulness and Neo-Luddism where "anti-technology movements will be active in the U.S. and elsewhere by 2030."
2. Uber-nomics and the gig economy
I was in Brazil recently and I ordered an Uber car. Uber has been operating in Brazil since 2014. The twenty-something driver is typical of the modern worker: in the mornings he studies, in the afternoons he drives for Uber and in the evenings he works as a swimming instructor.
Welcome to the gig economy. There are currently more than 55 million Americans freelancing which is 35 percent of the US population. This People Hour Survey predicts that by 2020 one in two of the working population in the UK and US will be self-employed.
These new ways of working are also bringing traditional forms of resistance. Trade Unions are demanding better pay and conditions for contract workers and New Zealand recently outlawed zero contract hours. Moreover, traditional sectors that are impacted by the shared economy are taking to the streets. 2016 saw a steady rise of protests by traditional taxi drivers against the uberisation of the taxi business.
3. The ascendency of the millennials
By 2025, the millennial generation will make up 75 percent of the workforce according to Brookings research. A recent GALLUP study indicates that millennials are the most likely generation to switch jobs and that 60% of millennials are open to new job opportunities which is costing the US economy $30.5 billion annually.
It seems the millennial generation are also particular about their working environment. An Accenture survey discovered that only 15 percent of 2015 US college graduates aspired to work for large companies, choosing instead to work on their own or for smaller organizations. Moreover, millennials embrace the concept of informal management styles, flexible working and continuous learning.
4. Deglobalization and the rise of anti-establishment views
There has been a steady shift of anti-establishment sentiment, starting with the Arab Spring and continuing with Brexit and the election of Donald Trump.This represents a swing away from established elites toward "insularity and nationalism". This may continue to play out on the European stage with the possibility of the Front National leader Marine Le Pe winning the presidential election in France this year.
Resistance to a globalized world order seems to be an ideological factor. The Economist reports, "As globalisation has become a slur, nationalism, and even authoritarianism, have flourished." The post-war ambition for a globalized world order seems to be waning, especially with China "increasingly turning inward for growth".
The shift toward protectionism and tariffs will have a profound impact on global trade and companies will need to make urgent strategic reassessments in this highly volatile environment.
In this era of displaced labor through technology and the shared economy, organizational leaders need to urgently respond. They need to revise strategies and business models, redesign organizational structures and patterns of working, rethink how they resource humans and machines, manage unprecedented degrees of staff resentment and conflict and work out levels of R&D investment and training on the hoof.
Organizational leaders are going to have to be more adaptive and decisive in their decision-making. At the same time, organizational leaders need to be consistent and clear-headed. Writing in the Harvard Business Review, John Coleman explores the need for organizational leaders to balance agility and consistency. This hybrid of responsiveness and responsibleness is the 2017 World Economic Forum theme at Davos.
Implications for developing leaders
Traditionally, leaders are developed pyramidically. New entrants are assessed for their leadership potential and they access job group defined leadership training programs when they hit the grade. These programs are traditionally classroom-based, programmatic interventions that are designed using skills and competencies.
Recent research labels this the horizontal approach to developing leaders. The problem with this approach, is that it fails to develop responsiveness and adaptiveness (the very qualities that leaders need to face the modern challenges).
Future leaders need to think and act outside these presuppositions. That horizontal glass container needs to be smashed to allow a more pluralistic approach to developing leaders where leaders learn to think and act for themselves. Commentators call this vertical learning.
Here are three vertical learning approaches to help develop responsive leadership:
1. Personalized learning
Organizations need to abandon their obsession with top down, programmatic, mass-produced leadership development training. It is expensive and ineffective - - Rajeev Peshawaria calls it, "the great training robbery." Programmatic training should be replaced by personalised learning where development needs are individually identified ideally in partnership with the supervisor.
Related: Why Leadership Development Needs to Be Updated
2. Experiential learning
Organizations should ditch theory-based, classroom approaches to leadership and focus on "living laboratories", such as work-based learning, job shadowing, supervised leadership assignments and business simulations that replicate the everyday work context.
Related: Boardroom blues? Try experiential learning.
3. Learning to learn
Rather than imposing skills and competencies that reinforce predetermined notions of what makes an effective organizational leader, it is better to teach the leader how to learn to be adaptive and responsive. Providing tools for the leader to self-appraise emotions, personality and the way they handle such things as change and conflict can help them understand their preferences; and introducing tools such as scenario planning and systemic thinking and cultivating a passion for ongoing learning can all contribute to self-directed, vertically developed leaders who disregard traditional decision-making models and adapt and respond in the moment.
We are living in tumultuous times and organizational leaders need to be able to respond to this. We need to break the horizontal glass that contains and defines our leaders and develop them more vertically to be the adaptive and responsive organizational leaders that the World Economic Forum covets.
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