Leadership in a Time of Rapid Change

How do leaders develop? Who becomes one? And how can they confront the challenges and tests of today? The following summarizes insights from nearly 50 executives interviewed on the topic of leadership challenges.

“The destination does not change because the seas are rough ”
-Gary Burnison, CEO, Korn/Ferry International

The changes leaders now face are immense. They include globalization, disruptive technologies, and the often clamorous call for a “green” revolution and a more sustainable future. They also include the growth of a global, fast-paced, “instant-gratification” consumer society alongside unprecedented demographic shifts. No one knows the longer-term impact of so many large-scale shifts happening at once.

These changes have strategic and tactical dimensions, and they also have a great many unknowns. They will affect nearly every aspect of business and society, and they will continue to do so for a long time. Each of these changes is also accompanied by the always complicated vagaries of the human dimension. Some people want change to happen more quickly, some want it to happen not at all. If ever there was a time for clear-eyed, courageous leadership, it is now.

The Job of Leaders
The job of a leader has never been easy. Not only must they set an organization’s destination and course, bring individuals and teams into alignment, and make certain the organization’s values are upheld, they must do these things in the face of risk, uncertainty and in real time. Leaders are individuals who rise to prominence. But leadership is much more.

Great business or organizational leaders cannot lead from the outside or be aloof. To impel people to act, leaders must connect with them on a human level. To be successful, leaders must find ways for people to identify with them, feel a sense of common purpose with them, and be willing to share their fates. The best leaders, as one executive said, are “people who are genuine, real and who care. They are people who believe in we, and not just me. They are not in it for selfish ends.” This means successful leaders must be part and parcel of the organizations they lead and must develop skills of listening and learning if they are to be successful at leading. Leaders coming into an organization from the outside must fit with its culture and values.

Listening and learning in order to lead are not small tasks, nor are they as easy as they might sound. Large organizations contain wisdom, as well as dissidents, in many locations dispersed throughout the world. Too many times leaders fail to pay sufficient heed to what is offered and what is said. This inability to listen inclusively could be a significant factor in explaining why global CEO turnover has reached 13.8 percent annually, according to Booz & Company.

Leadership in a Time of Rapid Change
Extraordinary leaders produce extraordinary results, even in periods of turmoil. And while leadership in a time of change is not a new concept, it is easy to ignore some of the most important implications regarding a leader’s role during times like these:

• When the environment in which an organization operates is subject to change, the people working within the organization must also change, along with what they do and how they do it. The job of leaders is to make certain the organization and its environment are in sync.
• When disruptions to the status quo occur, from new technologies or megaforces like globalization, they must be factored into the strategy, based on what is known at the moment. The job of leaders is to make sure that the organization is equipped for the present while making itself ready for the future, without deviating from established goals.
• Even in difficult, changing environments, people working within organizations must remain motivated and upbeat about their chances for success. The job of leaders is to make certain everyone believes they can succeed, no matter how difficult the task.

Leaders are by no means powerless against the forces of change, and there are numerous ways to change organizations. But it is the combined view of the executives interviewed for this paper that by far, the greatest leverage comes from investing in people. Consider the outsized contribution made by Steve Jobs, co-founder, chairman and CEO of Apple Computer and Pixar, now part of Disney. Not only did Jobs start companies that now employ tens of thousands of people, he is also responsible for commercializing two new industries – personal computing and computer-aided animation. These industries touch (and employ) millions of people around the globe.

The Jobs example demonstrates the powerful difference an individual leader can make but even more important, it illustrates the immense returns that can accrue from investing in leaders – their selection, education, training and development. Gary Becker, winner of the 1992 Nobel Prize for Economics, estimated that three-quarters of the world’s wealth can be found in its human capital, not in its physical assets. If a successful organization’s leaders and people were listed on its balance sheet, they would be its most valuable assets.

What Is a Leader?
Leadership is not about celebrity, charm nor is it about charisma. It is about inspiring through actions. It is about the contract with the organization to do a job. It is also about the day-to-day task of making the organization more productive in its mission. Although the problems leaders wrestle with on a day-to-day basis vary, the core components of a leader’s job remain remarkably constant over time. During interviews with leading executives, the following repeatedly came to the surface as the most important elements in the leader’s job:

1. Motivating and inspiring people and aligning the organization, its strategy, goals and values.
2. Identifying and developing talent for today and the future. Right people, right place, right time.
3. Grasping the changing nature of the organization and the forces acting upon it.
4. Creating processes and structures, including financial, that enable the organization to do more than react.
5. Communicating clearly with the organization and its various constituencies, such as customers, investors and analysts.
6. Empowering and creating accountability with individuals and teams, and evaluating how they perform.
7. Demonstrating the ability to continuously learn (what we call learning agility) combined with genuine courage and humility.

Of the items listed above, most relate to working closely, effectively and decisively with people. And yet, the development of a leader’s people skills is often viewed as an optional, “nice-to-have” that can be jettisoned at the first sign of belt-tightening. Increasingly, companies talk about the need for coaching and training and for tools to measure how leaders interact, but this concentration on leadership development has a long way to go before becoming institutionalized. Strengthening a leader’s people skills – including vital communication and listening skills – is critical. The cost of leadership failure is simply too high.

And while it comes toward the bottom of the list, several executives mentioned leadership courage and humility, especially with regard to selecting, grooming and promoting talent. Both attributes are key to developing direct reports and highly visible senior teams. There are many reasons why courage is important. One reason is highly evident in recruiting new talent. Courageous leaders choose the best-performing, most qualified candidates to become members of their teams; they are broadening the organization’s capabilities while deepening its bench.

A less-than-courageous leader who selects individuals of lesser ability to join a highly-visible senior team places the organization in harm’s way and can unwittingly send the organization into a steep decline. This downward spiral can be summarized thus: A-level players choose A-level players, but a B-level player tends to choose B-level players or less. When this happens, the top ranks of an organization are degraded and the organization loses capabilities where it needs them most, creating a situation from which it is difficult to recover without the intervention of the board or an outside force.

Conclusion
The world has rarely seen so many changes occurring at once and in so many areas around the globe. If things go right, and leaders emerge who are up to the task, several long-term, positive trends will continue. Millions – perhaps even billions – of people will emerge from poverty into prosperity. Wealthier, mature regions of the world, including the U.S., Europe and Japan, will begin transferring skills, responsibilities and leadership duties to new generations – sometimes with different values – on a scale that is unprecedented. And the world will grow more responsibly and sustainably, as it grows more affluent.

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