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Digital technologies aren’t just strengthening customer relationships, reducing costs, and creating competitive advantage. They are changing how we organize work, and thus, how executives must lead.
And while unprecedented technological change might appear to present unprecedented challenges for leaders, that is not entirely the case. Similar technology-driven revolutions occurred twice in the 20th century, and each provides important lessons for leaders.
The first occurred in the 1910s, when American businesses adopted workflow analysis technologies such as time and motion studies and Gantt charts. These tools sharply restricted the breadth of individual jobs and created functional departments with hard boundaries. Harsh boss-knows-best leaders, who prescribed work in excruciating detail, inevitably arose.
The second occurred in the 1980s, when the Japanese challenged these CEO-centric practices. Japanese companies deployed quality technologies (like statistical process control) that made them competitive enough to bankrupt reputable American companies; for example, American Motors Corp.’s demise in 1987 reduced the auto industry’s “Big Four” to the “Big Three.” American executives didn’t oppose the new technologies so much as they resisted the organizational and leadership changes they required, including cross-functional teams and empowered subordinates.1
When change finally did come, decades of ironclad beliefs died out very quickly. Teams became basic organizational building blocks, “Break down the silos!” became the new dictum, and leaders learned that they didn’t have to demean subordinates to get good work out of them. Revolutionary technologies often expose shortcomings of existing organizational and leadership models, and the pioneering efforts of a few companies can provide effective examples for widespread emulation. Eventually, and with surprising rapidity, new ideas bury old ways. When I ask executives if they think teams were common in the decades before the 1980s they say, “Yes,” even though they really weren’t.
Digital technologies, too, are producing profound change in the ways we work. The transformations they are enabling, even requiring — such as the distribution of work over time and across geographies — have become quickly well established. Executives now run projects and businesses that span the globe, incorporating both internal and external teams. The new leadership challenge is how to effectively manage the “networked” organization.
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1. R.A. Heifetz and D.L. Laurie, “The Work of Leadership,” Harvard Business Review (Dec. 1, 2001).
2. By “legacy leadership models” I mean the major standard models that are taught implicitly or explicitly to business students and executives, such as transformational leadership, charismatic leadership, servant leadership, and Level 5 leadership, and also most standard personality profiling tools — such as DISC, Hogan, and TMP assessments — that are used in conjunction with such models.
3. This was one of the negative attributes in the standards of leadership J&J used to assess and provide feedback to executives during the past decade. J&J executives shared the standards with me while my employers were providing professional services to them.
4. C.A. Bartlett and H. Yoshihara, “New Challenges for Japanese Multinationals: Is Organization Adaptation Their Achilles’ Heel?” Human Resource Management, 1988, 27, no. 1: 19-43. In particular, see pages 25 and 26, which describe the challenge of assimilating foreign executives when the primary language of decision-making was Japanese, and the related overreliance on Japanese expatriates.
5. I’ve had direct conversations about this problem with participants in multiple executive programs and with senior human resources executives who are trying to solve it.
6. E. Sogbanmu, “Developing Global Leaders in Asia a Challenge: Unilever COO,” Future Ready Singapore, Oct. 16, 2014, www.futurereadysingapore.com.S. Majid, “Charting Your Leadership Map at Unilever,” HRM Asia, Nov. 20, 2014, www.hrasia.com.
7. “Leadership Development & Performance Management,” accessed April 20, 2017, www.jnj.com. See in particular “Over the past three years, Johnson & Johnson has undertaken a massive effort to transition from over 200 performance management systems globally, to one global system. In the successful launch of our Performance & Development (P&D) approach, we discovered that a globally consistent way of doing things successfully across the entire organization is possible. Approximately 71% of employees are being assessed using the new approach, including 100% of employees at the management level and above; the exceptions being those employees in manufacturing roles and covered by collective bargaining agreements.”
8. “Demystifying the Market for Executive Talent in Asia,” Corporate Executive Board Co. and Russell Reynolds Associates, 2015, www.russellreynolds.com. “Closing the Leadership Gap in Asia,” CEB Asia HR Leadership Council, 2011, www.cebglobal.com.