Leaders need different capabilities to face a world where systems of production, governance and management are being transformed.
The advent of a Fourth Industrial Revolution brings conditions of ‘radical uncertainty’, where leaders cannot describe accurately the characteristics of the situations they are in. Past approaches to problems may not be relevant and the consequences of their actions are not predictable.
In our research with heads from a cross-section of organisations, they told us that in such conditions, they can influence events better through a different set of capabilities. Our work suggests that a move is needed away from 'heroic' individualistic leadership (ego leadership) towards a leadership that recognises the organisation as a system nested in a broader ecosystem (eco-leadership).
To achieve this shift five key capabilities are required in additional to the more conventional ones:
1. Shape the conversation
Leading is a conversation. Leadership 4.0 is as much about facilitating and enabling as directing. Today’s leaders need to use the right language and actively show that they are listening. When a leader speaks, the effect is not only to describe a given reality, but also to change that social reality. Leaders shape and develop an organisation by deliberately making sure that the right conversations are happening between the right people. Crafting a story about who we are, where we are going, why we are doing this, who we are doing it for, is a more effective form of influence than hierarchical authority.
2. Cultivate collective intelligence
Build networked knowledge. Knowledge exists in networks and collective capabilities as much as in individuals. Diverse groups produce better solutions than homogenous groups. Leadership is less about providing the answer, more about releasing and connecting the knowledge that already exists. Leaders must identify gaps in their understanding and fill these gaps with the views of others, both internally and externally. Create the conditions in which others can take up leadership roles. Decentralised problem-solving is key to success.
3. Nudge the context
The right environment creates the right behaviours. Leaders are like farmers. Farmers don’t grow crops, they create the situations for crops to grow. Leaders need to understand the context and trends influencing their organisations and bring the voices of customers and stakeholders into it. Leaders must influence and persuade without relying on formal authority, and use external stakeholders and the voice of customers to pressure their organisations. By regularly making links between the everyday actions of individuals and teams with the overall strategy and purpose of the organisation, leaders can create the right conditions for success and fill the void left by an absence of hierarchical power.
4. Co-create structure
Structures must respond to changing situations. Responding to an uncertain and fast-changing world requires agility. Formalised and overly rigid structures create sources of conservatism, and risk becoming a constraint in a volatile world. The idea of the perfect structure is misleading. Structures should be shaped by the desired outcomes and in collaboration with those involved. Leaders must create structures that enable agency and participation by delegating responsibilities and embracing temporary structures but still being prepared to accept responsibility for the overall outcomes.
5. Pluralise participation
Embrace conflicting value systems. Organisations have a range of different and sometimes incompatible value systems within them - these differences can be a rich source of creativity and innovation. Leaders need to actively work with the plurality in their organisations and actively encourage collaboration and debate by creating the psychological safety needed for new voices to speak up without fear of criticism or ridicule. Encourage employees to bring more of their external identities into the organisation to develop new thinking. The task of the leader is to create a feedback-rich environment - seek feedback frequently and encourage others in the organisation to do the same
Social change needs new leadership capabilities
Not everything about leadership has to change. Styles of leadership change through history and differ across cultures. The Fourth Industrial Revolution and the technology and economic changes that it has brought are a key early driver of fundamental social change. This social change requires a new set of leadership capabilities: We characterise this as Leadership 4.0.
This is the second of two articles on new research carried out by Jon Stokes, Associate Scholar at Oxford Saïd, and Sue Dopson, Professor of Organisational Behaviour. The first in the series considered the changed context for leaders today. Download the full report.