Leaders must keep one foot in today and the other in the world of tomorrow.
During the last two years, my conversations with senior executives have taken a new turn. Leading at the top has always been difficult, lonely and filled with ambiguity. Many of the specific business challenges, such as balancing growth and profitability or being globally consistent yet regionally responsive, remain the same.
But in the confines of coaching, almost all leaders state that leading today is harder than ever before. Afraid to admit to a weakness they find it difficult to talk about, but with remarkable consistency, they all express fear and anxiety that they are ill-prepared to meet the challenges facing them today.
Most companies now struggle to deal with technological innovations that are putting the foundation of their industries at risk. Technology, media and retail are only the beginning. The reality is the shelf life of any business model is shorter than ever before.
According to management lecturer Richard Foster at Yale, by 2020, more than three-quarters of the S&P 500 will be companies we have not yet heard of. As a result, the job of CEO has fundamentally changed. Rather than creating business plans, they must create new businesses. Leaders must simultaneously keep one foot in today while keeping another in the world of tomorrow.
Disruption, change and uncertainty demand stronger emotional connections between leaders and followers. Yet today the very base upon which leadership is built — trust and authority — is eroding. A growing gap between the economic classes, increasingly high executive compensation and greater transparency into the lives of leaders via social media have caused followers to be more cynical about their leaders than ever before. Executives now begin positions of leadership not with authority but with a trust deficit.
As if this weren’t enough, most of the executives I work with feel perplexed by not only increasing disruption and greater cynicism, but what feels like an eroding sense of authority within their own organizations. With global, matrixed organizations becoming the norm, it is harder to make a difference externally and internally.
This dynamic is apparent in how people talk about their leaders and their organizational cultures. Strong leaders are described as collaborative, inclusive, engaging and inspiring. Work groups are expected to be team focused, democratic, matrixed and participative. Everyone expects to have a voice.
In today’s world, leaders need to develop and master three capabilities more than any others. I refer to these as the three A’s and find they provide the foundation for success in business leadership.
Agility, or the ability to lead nimbly in the face of uncertainty, is the key to thriving in disruption. Agility is more than the ability to act quickly or be responsive. It requires a strong sense of purpose that enables leaders to know what they stand for. Being rooted in a sense of purpose clarifies when to be open to change, when to stand one’s ground and how to act when faced with completely unknown territory. Purpose is the fulcrum upon which leaders pivot.
Agency is the ability to make choices and enact them in the world. It means that rather than taking the path of least resistance, or being swept up in the dysfunctional routines of the business, a leader determines for himself or herself what ought to be done and then does it. In a rapidly changing world where leaders have less and less bestowed authority, a strong internal sense of agency is critical.
If agency is about accepting the responsibility to take action, authenticity is about doing so in ways that are consistent with the leader’s own convictions and the challenges facing the business. Authenticity is thus a double-sided obligation — it means being true to yourself and also to the people around you. In the context of the trust deficit, authenticity matters more today than ever before.