I’ve written extensively about the Big Shift in institutional models. I’m going to focus here on the Big Shift required for leaders of the new institutional models. The Big Shift challenges our most basic assumptions about what we need from our leaders.
Transformation of institutional models
I’ll resist diving into Big Shift that is transforming our global economy and society – I’ve written about some of my research on this here and here. Even though this Big Shift has been playing out for several decades, we’re still in the very early stages of this transformation.
As I’ve discussed in more detail here (pdf), this Big Shift will require a profound transformation of the institutional models that govern all our large institutions around the world today. For the past century, the institutional model that has prevailed is scalable efficiency – the key to success is to do everything faster and cheaper at scale. While this model led to enormous success in the past, it is now producing diminishing returns. Our approach to scalable efficiency is becoming more and more inefficient.
The institutional model that will flourish in the future is a very different one – scalable learning. In this model, the focus is on helping all participants to learn faster in terms of how to deliver more value to all stakeholders. To be clear, learning in this context is not learning in the form of sharing existing knowledge, like in training programs. It’s about learning in the form of creating entirely new knowledge that never existed before. In a rapidly changing world, this is the most valuable and necessary form of learning. In this new institutional model, this form of learning is not confined to research labs or innovation centers – it is the focus and priority of every participant in the institution.
So, what are the implications for leaders? Leaders will need to transform as much as, if not more than, the institutions they lead. Let me outline some of the key dimensions of leadership transformation:
Push to pull
I’ve written a whole book on this one – The Power of Pull. Leaders of today are adept at push approaches – they develop forecasts of demand and then focus on pushing all the right people and resources into the right place at the right time to meet that demand. In a world where forecasts become more and more challenging, leaders need to embrace a pull approach – drawing out the right people and resources whenever and wherever they are needed. In my book, I explore three levels of pull. The most powerful level of pull is the third one – drawing out of each of us more of our potential. Leaders need to focus on how to draw out more of the potential of the people they lead.
Answers to questions
The mark of strong leaders in the past was that they had answers to all the questions. Whatever the question, we could count on the leader to have the answer.
In a more rapidly changing world, we need leaders who have the most powerful and inspiring questions, who will freely admit that they don’t know the answers, and who will ask for help. This sends an important message to the people in their organization: questions are necessary and we all need to ask for help in seeking answers to the questions. This will help to spawn a new culture since scalable efficiency institutions discourage questions and regard asking for help as a sign of weakness.
Pressure to passion
How do today’s leaders motivate performance from their people? It’s all about extrinsic rewards – if you do well, you’ll advance and earn more income but, if you do badly, you’ll lose your job. In a world of mounting performance pressure, the extrinsic motivation is increasingly about the threat of losing your job. This just increases the pressure on everyone and feeds the fear.
Leaders will need to shift their focus from extrinsic motivation to internal motivation. Fear can produce some results in the short-term, but it will lead to increasingly dysfunctional behavior over time. The only way to thrive in a world of mounting performance pressure is to cultivate a very specific form of passion – the passion of the explorer (pdf)– that will generate excitement about new challenges and the opportunity to learn how to address those challenges and create more impact. Leaders will be measured by the amount of passion they are able to generate in the people they lead.
Squeezing to leverage
Today’s leaders focus inward on the organizations they lead. It’s all about what they own and control. Since these resources are fixed, the only way to get more out of them is to squeeze harder. That’s the essence of scalable efficiency – success depends on doing everything faster and cheaper.
Leaders will need to expand their focus, driven by a growing awareness that the connectivity created by digital infrastructures is making it more and more feasible to connect with, and mobilize, resources outside the organization to deliver more value to stakeholders. I’ve described this as leveraged growth. We live in a world where more and more value can be created with fewer resources and much more quickly than ever before. But leaders will need to find ways to motivate third parties to come together under their leadership.
Controlling to shaping
Leadership today is largely about command and control. Leaders operate in hierarchical organizations where the key is to be clear about what needs to be done by whom and when. Process manuals rule the day. The scalable efficiency model is driven by the assumption that all tasks need to be tightly specified and highly standardized so they are done in the same efficient way throughout the organization.
Going forward, leaders will need to pull back and develop the talent to shape their environments. This definitely does not involve tightly specifying all activities. Instead, it involves looking ahead and framing really big, inspiring opportunities that will help to focus and motivate participants to come together and act and address those opportunities. This involves mastering shaping strategies, which I have discussed here. It also involves crafting powerful opportunity-based narratives, which I explore here and in my new book, The Journey Beyond Fear.
Action to reflection
Leaders today are focused on action. As soon as one activity is completed, attention shifts to launching the next activity. The level and pace of activity becomes a key metric for performance.
Of course, action is necessary for impact, but leaders are going to have create more time for reflection. Participants need to step back on a regular basis and reflect on the impact that they have achieved with their actions. What actions produced even more impact than expected? Why? What actions produced less impact than expected? Why? By taking the time to reflect on impact achieved, participants can learn much more quickly about how to evolve actions to achieve even greater impact.
Uniformity to diversity
Leaders today are under increasing pressure to embrace diversity. Unfortunately, for many of them, diversity just means bringing more diverse participants around the table. Once they’re seated at the table, the message to all participants is to follow the leader and strive to be as much like the leader as possible, and the leader tends to be an older, white guy. Questions are discouraged and challenges are viewed as insubordination. Diversity of people is OK as long as we enforce uniformity of behavior and action.
Leaders need to understand that diversity is not just the “right” thing to do, but the necessary thing to do if we are truly committed to scaling and accelerating learning. But, here’s the catch. Scaling and accelerating learning requires us to embrace diversity of behavior and action, not just diversity of participants. Leaders need to foster cultures where unexpected questions are welcome (see above) because they can lead to new insight and where participants are encouraged to challenge each other in a quest to achieve higher and higher levels of impact.
Followers to leaders
The success of leaders today is measured in terms of the number of followers they are able to control. In a world of accelerating change, the success of leaders in the future will be measured in terms of the number of leaders they are able to cultivate and unleash. We are in desperate need of more participants who are excited about crafting new initiatives and mobilizing others to help them achieve greater and greater impact.
I’ve only skimmed the surface here, but hopefully I’ve drawn attention to a transformation challenge that is not yet on the agenda of most leaders. When they talk about transformation today, most leaders focus on the transformation that their organization must make. They rarely address the transformation that they themselves must make. If the leaders do not transform themselves, the participants in their organizations will dig in their heels and resist any efforts to transform the organization because they see that their leaders are not willing to change and will still demand what they have always demanded from their participants. Transformation starts at the top.
There’s no doubt that this is very challenging, but the rewards are significant. Leaders who make this journey will find that they are moving beyond a world of mounting performance pressure and entering a world of exponentially expanding opportunity, not just for themselves, but for all their participants and stakeholders. This could motivate even the most resistant leaders to break the mold.
The leaders of the future will not be those who have the greatest expertise, but instead it will be those who have the greatest motivation to scale and accelerate learning throughout and beyond their organizations.