“Leadership is the critical force behind successful organisations. To create vital and viable organisations, leadership is necessary to develop a new vision of what they can be and then mobilise the organisation to change towards that vision.” –Warren Bennis and Burt Nanus, Leaders, Strategies for Taking Charge, 2007
Here is the story by By Harbir Singh and Michael Useem:
The financial situation for Japanese automaker Nissan Motor Company Ltd could not have been more dismal.
Its global market share had shrunk from 6.6% in 1991 to 4.9% in 1998, and even in its home market only about 10% of its models were proving profitable. The company had chalked up losses in seven of the past eight years, and it was now paying a billion dollars annually just to service its US$19bil debt. An enraged shareholder at Nissan’s annual meeting on June 25, 1999, demanded that Nissan president Yoshikazu Hanawa resign: “You’ve made mistake after mistake in your management decisions.”
Not that Nissan’s management had not been trying to make the right decisions to stanch the losses. It had earlier set an ambitious target of taking a quarter of Japan’s auto market by 2000. It was one of those aspirational goals that executives use to concentrate the mind and excite the ambitious. But to achieve that, Hanawa had said that the old way of making and selling cars would no longer work. A new strategy was needed.
The new leadership paradigm
Leadership (from the senior suites to the front line) is a primary driver of business success. Leaders set the tone, define direction, design the architecture, build the culture, execute plans, monitor results, manage resources, develop people, and so on. In short, leaders touch and shape every aspect of organisational life. And yet doing this is more challenging than ever, due to the accelerating pace of change and escalating complexity of the world around us.
The leadership paradigm that worked for centuries is no longer adequate to manage in today’s fast-paced and complex times. The traditional leadership model is based on hierarchy and such principles as centralisation, uniformity and control. Such principles were useful during the early days of the Industrial Revolution when management had to manage and control masses of untrained people in rather predictable and stable markets.
The disruptive digital age
With the digital age, leadership style has greatly changed. We now live in a digital age in which technological innovation changes the playing field every couple of years, customers and employees are educated and have many options, markets are global, and competition fierce. So leaders everywhere are rethinking what it means to lead.
Leadership, in today’s world, is about harnessing the collective genius of people. It is about rallying everyone behind the mission and vision and creating the conditions in which everyone performs at the peak of their ability.
Effective leaders tear down walls. They bring people together. They build trust. They transform attitudes and behaviour. They remove the barriers that keep people from being engaged and effective.
New leadership assumptions
No one in the organisation is smarter or faster than everyone — intelligence and wisdom exist at all levels of the organisation. Certainly one person cannot think for or do the work of many. The challenge, therefore, is to create a work culture that taps into the collective intelligence of the workforce rather than relying on a few people at the top. Research proves that the more the diversity of opinions and input, the better will be your decisions.
Success in today’s world requires collaboration — we are interdependent. The work of an organisation can only be accomplished by many people working together. Collaboration drives innovation, customer responsiveness, and speed.
In fact, the number one finding, from IBM’s most recent survey of 1 700 top executives from around the world, is that CEOs “are creating more open and collaborative cultures — encouraging employees to connect, learn from each other and thrive in a world of rapid change. Collaboration is the number-one trait CEOs are seeking in their employees, with 75 percent of CEOs calling it critical.” (Leading Through Connections: Insights from the Global Chief Executives Study, IBM, 2012)
People work for customers not bosses —customers are the beneficiaries of the work of employees. This is where the ultimate accountability should lie. The better the line of sight and more information employees have about their customers, the better they will perform. For that reason, many innovative companies are either reducing the number of managers or even eliminating them entirely. I am not suggesting you get rid of all your managers. I am suggesting that you strengthen the relationship between your people and those whom they are in business to serve.
The best leaders are empowers and not controllers. In traditional organisations, managers set goals, make decisions, measure progress, evaluate performance, etc.
They are the thinkers and planners, and employees are the doers. Consequently, they fail to tap the tremendous intelligence and creativity of their people. The new leadership paradigm changes to role of leaders from controlling people to creating the context in which teams of people are able to make decisions, solve problems, and significantly contribute to the mission or goals of the organisation. Workers are partners and not subordinates.
People want to succeed.
They want to make a positive contribution. The motivation does not have to come from without. By thinking of employees as partners rather than tools or costs on a balance sheet, leaders are able to remove barriers and create an environment that unleashes the potential of their people.
Do you want to improve the leadership in your organisation? It begins with understanding your assumptions about good leadership. Then you can measure where you are, determine where you want to go, and decide how you will get there.
Mandeya is an executive coach, trainer in human capital development and corporate education, a certified leadership and professional development practitioner and founder of the Leadership Institute for Research and Development (LiRD). — firstname.lastname@example.org, email@example.com or +263 772 466 925.