Leadership as an area of study is still in its early beginnings. Leaders are grappling with the change from the siloed, hierarchical management styles best suited in an industrial era. We now face the challenge of a new shift towards a model where no single individual has formal control.
This shift will require business to break down boundaries between organisations. It will force competitors to become collaborators, and create an environment where team members can become more transient and distributed. All whilst seeking a higher purpose.
Drucker Forum 2020
How do you demonstrate leadership in an ecosystem, when it is harder than ever already?
This was the subject of the panel at GDPF2020, titled: Ecosystems Leadership. New Scope, New Skills
Led by Mary Meaney, Senior Partner at McKinsey & Company, the panel held a fascinating conversation covering topics such as trust-based leadership, the importance of purpose, and creating a culture of curiosity, learning, and collaboration.
Meaney summed up the current environment for many leaders in her intro to the session, asserting, ‘The pace of change will never again be this slow.’ A recent McKinsey Global Study found 80% of leaders operating most of the time in a reactive state of mind.
To prosper, leaders needed to shift their mindsets:
- From reactive to creative
- From command and control to trust and empowerment
- From certainty to discovery
- From scarcity to abundance.
The new game
‘Leadership in an ecosystem world requires a fundamental shift in thinking,’ said panellist Peter Oswald. ‘You can’t really lead an ecosystem, as it consists of many autonomous parts’, each of which potentially having a different purpose, goal, organisation structure and incentives.
Oswald called the new approach ‘Collaborationship’. To display collaborationship, he suggested three key focus areas:
- Building trust between stakeholders
- Building shared purpose
- Building empowerment.
Amy Edmondson argued that there is a difference between trying to demonstrate leadership of the ecosystem, as opposed to demonstrating leadership in the ecosystem.
The boundaries between organisations will become more fluid. As working together on complex goals increases, cross-organisation teaming will become the norm. This change will bring a new and complex set of problems to solve, challenging leaders to become fluent in a set of behaviours that rarely come naturally. When things break down – and in complex ecosystems they often will – Edmonson warns against making the ‘fundamental attribution error’, blaming individuals for outcomes that may be due to the system or situation.
As a leader, it is so important to create space for others to do great work. To create an environment of psychological safety for all members of the ecosystem, leaders will need to model the behaviours of curiosity and humility, being willing to view things from another’s perspective and to take an interpersonal risk.
The new metrics for leadership
One of the key principles of leadership in an ecosystem world will be our ability to develop organisations which unite through a higher purpose.
Raj Sisodia, a founding member of the Conscious Capitalism movement, believes we need to rethink the fundamental questions of business.
The modern organisation will need to move beyond the ‘we need to make money for shareholders’ of old, and seek to serve a higher purpose, something that aligns with the real problems and challenges that we face in the world and creates value for all stakeholders
In the same way, leaders in the past were measured on their results, efficiency and outcomes. The measure of future leaders will be to generate value for stakeholders as a whole and create a positive impact on customers.
Cultures in the past were predominantly rooted in performance-based incentives and metrics, and these days it’s much more about trust and authenticity, and genuinely caring for human beings.
Modern leadership will need to adapt accordingly. Leadership in the ecosystem will need to show the collective what is possible, create a uniting vision, and motivate the collective to get the project over the line. But it must be able to do so with genuine care for the individuals involved. As Sisodia put it: ‘You cannot be a selfish person and lead, because you will use other people to achieve your personal goals. That’s the definition of a tyrant, that is not a leader.’
A new balance
Traditional leadership styles will need to soften from the tough-minded, results-driven environments of the past. Instead, we need to focus on creating environments and collaborations which balance growth with happiness and joy.
Kim Dabbs lives this through her role at Steelcase, delivering the company promise in the communities where they live and work.
Kim suggested that leadership was the ability to look through a lens of understanding and shared humanity. ‘People are beautiful abundant beings who want to give back. They want a higher purpose’.
INSEAD Associate Professor Jennifer Petriglieri believes we need to lower the bar for leadership and make leaders human again. We don’t always have to chase the big noble goal. Sometimes it can be just about making your local environment a happier and better place to be.
Leadership for the new world
‘The system we have created has self-selected the current group of leaders who focus on numbers. We are now moving into a more purpose-led world which requires new forms of leadership,’ noted Sisodia.
Leaders need to go beyond work and seek to understand the motivations of the individual outside the office as well. We need to find ways to switch off. Our performance management systems will also need to change.
In a situation where 70% of professionals are in a relationship where both individuals work, it is inappropriate for leaders to expect themselves and others to commit themselves 100% to their work. It creates unnecessary stress and unbalances relationships.
The ecosystem world will challenge leaders in ways we haven’t thought of yet. There is great potential to improve how we do business which benefits the collective.
Oswald closed out the session with a challenge for us all. ‘Leadership is bringing out the greatness in others. We’re moving more and more into a narcissistic world, and we need to focus less on what we’ve done, and more on what we’ve enabled.’
About the Author:
This article is one in the Drucker Forum “shape the debate” series relating to the 12th Global Peter Drucker Forum, under the theme “Leadership Everywhere” taking place on October 29 & 30, 2020 in Vienna, Austria.