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Effective leadership isn’t ageless or immutable. Periodically, new technologies overturn established modes and sweep aside executives who don’t adapt.
For most of the 20th century, after transformative technologies made it possible to measure the minutiae of human work, leaders concentrated on maximizing productivity and efficiency, many taking a command-and-control approach. But this autocratic style failed disastrously when upstart Japanese companies used newer technologies — focused on quality — to enter Western markets. In the mid-1980s, unwilling to make the organizational and leadership changes required by this shift in competition, American companies went bankrupt at rates not seen since the Great Depression. Those that survived augmented their long-standing functional silos with teams that enabled cross-functional collaboration, while their leaders learned to empower employees to make decisions.
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Today, business is being transformed again — this time by digital technologies. They render some elite skills obsolete and widely distribute others; make work more thought-driven than muscle-powered; shed light on unpredictable customer needs that create disproportionate value; reveal information regardless of the merits of concealment; and affect — and are affected by — environmental conditions near and far. They also connect companies and employees by distributing work across geography and over time.
Current and aspiring leaders must respond to this new wave of change in five key ways.
1. Truly champion inclusivity. Senior executives are (still) mostly white Western men — and they are the ones who identify and develop their companies’ future leaders. Thus, their demographic profile, behaviors, and mindsets are self-reinforcing. People who don’t conform — including women, LGBTQ employees, racial minorities, and those from different cultures and nations — get fewer opportunities to rise to senior leadership positions.
It’s an anachronistic model. Digital technologies distribute mission-critical work to all kinds of employees from other organizations and distant cultures. They have also accelerated a widespread shift from physical work to knowledge work. This means if talented people feel estranged from their leaders, they can withhold intellectual contributions and even walk away.
I’ve surveyed 700 midtier to senior executives, mainly from multinational organizations, and conducted formal and informal interviews with top leaders and high-potential employees at select U.S., European, and Asian companies. My research suggests that leaders across the world are failing to motivate people who don’t resemble them, ascribe to their traditions, or work in similar settings.
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2. S. McChrystal, T. Collins, D. Silverman, et al., “Team of Teams: New Rules of Engagement for a Complex World” (New York: Portfolio/Penguin, 2015).
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7. “Welcome to the Crisis Era: Are You Ready?” CEO Pulse on Crisis, PwC, 2017, www.pwc.com.