Talk to leaders today and they will tell you their role is constrained and undermined as never before.
Leaders are still accountable, but they are less in control.
The transformation of our systems of production, governance and management brought about by the Fourth Industrial Revolution mean that many leaders today operate in conditions of ‘radical uncertainty’: a context in which they 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.
Our research with heads from a cross-section of organisations revealed a surprisingly unanimous view: living with uncertainty is now a permanent state of affairs. This is no easy task.
To lead today requires a new and varied set of skills, which those we interviewed told us they are using. We are calling this Leadership 4.0. Leaders must:
- Lean into uncertainty: Leaders must get comfortable with the inherent unpredictability of events, with ambiguity and with paradox. They must act decisively but also resist the rush into action.
- Develop the narrative: In uncertainty we have a limited ability to describe what might happen. Future outcomes cannot be quantified and optimising is not a realistic strategy. A leader’s job is to help make sense of things. Providing a credible narrative offers a way of doing this.
- Enable a sense of purpose: People are looking for a sense of belonging in a complex world. In order to attract and retain the best talent, a company's purpose must be meaningful to employees and shareholders as well as the broader community of stakeholders.
The context in which leaders are expected to deliver has radically altered. Hyper-connectivity has produced a shift in power. Today’s leaders are more vulnerable to events outside their control. Three common challenges were highlighted:
- Engaging the enemy: Responding to internal opposition takes up much more time and energy; internal dissent and conflict are the new norm. The ideal of organisational loyalty and unity around shared values is more precarious in a contested world.
- Leading in the open: Today’s leaders are under scrutiny as never before. Widely available data, new forms of media and demands for transparency have led to a progressive loss of privacy. Perceptions of character and competence are regularly examined publicly.
- Working with plurality: Today’s workplace is diverse beyond the capacity of any individual to comprehend all of its variations. Greater diversity is a positive force, but leaders today are increasingly expected to manage conflicting and sometimes incompatible value systems.
The case for change
When leaders were asked what they thought they needed to get better at, our research uncovered two central themes:
- Leaders must accept that they are accountable for results but not in control of them.
- Leaders must learn how to shape the context of the work that they and their colleagues are undertaking, rather than always acting from the front.
In many ways this is about the redistribution of power. Hierarchical power has been replaced in large measure by collective power and the skills to harness and shape this are very different from the skills developed in the context in which many current leaders have grown up.
We propose that leadership of a different order is required. We view leadership not as a quality of a persona but as a shared property of the wider system in which a leader operates. Using situational and contextual intelligence is in many ways more useful than using conventional forms of power.
This is the first of two articles on new research carried out by Jon Stokes, Associate Scholar at Oxford Saïd, and Sue Dopson, Professor of Organisational Behaviour. The second in the series considers the new capabilities that leaders will need. Download the full report.