New rules for a new world: future-proofing leadership

July 2021  |  FEATURE  |  BOARDROOM INTELLIGENCE

Financier Worldwide Magazine

July 2021 Issue

Following more than a year of unparalleled disruption to their operations, companies’ upper echelons are increasingly contemplating the nature and style of their leadership in what is likely to be a radically different future business environment.

Deep, far-reaching and unprecedented, the impact of the coronavirus (COVID-19) pandemic has disrupted the workforce and placed leadership disciplines under the microscope like never before, with established concepts now less than secure, under review and subject to revision.

Undoubtedly, how leaders behave during critical moments leaves a lasting mark on their companies and the people that embody them. Leadership needs to be consistent and effective. Leaders need to lead for the safety and welfare of their workers.

“The pandemic has wreaked havoc on the old ‘command and control’ style of leadership,” observes Lianne Picot, chief executive and co-founder of the People Leadership Academy. “Traditional leadership relies on people being present so that leaders can ensure they are doing the job they are asking them to do and to measure progress with the essential resource of industrial style work: time.

“But time became more fluid with remote work,” she continues. “People have had to shift their priorities with caring responsibilities and the workday is no longer as defined. Leaders have had to learn how to trust their people and let go of the control they once had.”

Thus, company leaders are reconsidering the interventions and working practices needed to best support and sustain their workforce, adapting their organisational structure to a new employment landscape.

“The biggest impact has been in running a company remotely, which requires a different operating model,” says Myles Milston, chief executive and co-founder of Globacap. “Traditionally, leadership has viewed remote working as an efficiency drain – communication would breakdown and employees would not do any work. However, the past year has shown us the opposite is true. Productivity has increased and communication is strong, showing that it is possible to keep everyone fully aligned while working remotely.”

Leadership in the ‘new normal’

The past year has proved to be a watershed in terms of working practices, with staff across all sectors and industries impacted to a greater or lesser extent. Many companies almost ground to a halt, with staff furloughed or facing redundancy, while others pivoted in order to maintain their capacity to deliver services.

Fundamentally, employers and employees have had to adapt to an unprecedented environment and confront new ways of working. Additionally, the impact on the physical and mental wellbeing of workers has been sharply brought to the fore, with people having to cope with significant challenges.

“We have seen employees taking more responsibility, working harder and operating efficiently,” says Mr Milston. “However, we have also seen the toll lockdown has had on happiness. As humans, we are social creatures, and we generally respond well to being given responsibility and trusted. The past year has highlighted this more than ever. Many companies have been forced to shift from the traditional model of top-down management, to empowering employees to operate independently, while also placing extra care around ensuring their happiness.”

Furthermore, these new models are likely to endure beyond COVID-19. “We need to embrace and embed the characteristics that have helped carry us through the pandemic in companies and in the world,” believes Ms Picot. “We need to accept that leadership has changed and that we can no longer rely on industrial structures where command and control flourished. Connection is crucial for our future.

“To build and maintain connection to work, companies and each other, our definition of great leadership must include being empathetic, building trust and communicating effectively,” she continues. “Fundamentally, we must believe that leadership is not about power and control but is about helping others bring their best selves to the work.”

Future-proofing leadership

As the world adjusts to the much talked about but less understood ‘new normal’, companies need to be thinking about what leadership will look like in the years ahead, the external forces that will shape future leadership profiles and the challenges involved in future-proofing leaders.

Defined by global futurist Jack Aldrich as “someone who takes the time to become aware of how fast the world is changing and the various trends that might affect a business”, a future-proof leader does a great deal more than just maintaining the status quo. He or she needs to be able to embrace complexity and ambiguity, be empathetic, compassionate and understanding – valuable traits in a world facing an uncertain and unpredictable future.

So, how can companies’ best future-proof leadership as well as upskill existing talent? According to Ms Picot, companies can take a large stride toward achieving these goals by implementing a number of key steps.

First, they need to get the board on board. Leadership starts with the board. It is not only the board’s responsibility to ensure a company is on track with a good strategic plan, it has to take risk management seriously. It is also important to get the board behind taking on future-proofing its leadership because the company is going to have to invest time and money in order to do it well. This investment needs to be built into the budget and the executive director and chief executive’s operational plan.

Second, companies need to develop a roadmap. A roadmap is a practical guide for what a company needs to do in order to future-proof its leadership. It is an overall picture with a detailed itinerary that is fully focused on leadership development in an organisation. It is the ‘what’ and the ‘how’. Moreover, when a roadmap is created, there must also be an evaluation process that enables progress to be measured.

Third, companies need to equip current leaders and staff with leadership competencies. Historically, senior leaders were taught how to lead via expensive leadership development programmes. While this was important for their professional development, the hope that what they learned would be disseminated among others did not happen, or they were not able to put it into practice as they were the only ones who had learned it.

Finally, companies need to create stretch opportunities. It is important that companies enable staff to be able to try out leadership both within their own work and within the organisation itself. If we create a culture of allowing for learning and failure rather than micro-managing and overemphasising perfection, this enables people to do their best work and take responsibility for it.

“The more leadership is grown within organisations, the more leaders we will have across all sectors,” suggests Ms Picot. “And that is how we will not only address leadership gaps and produce the next generation of leadership, it is also how we will achieve the social change we are all working toward.”

Women and leadership

While the majority of people’s lives and work have been negatively affected by the COVID-19 crisis, there is strong evidence that the pandemic has had a regressive effect on gender equality, disproportionately impacting women in the workforce. This risks stalling efforts to build more diverse leadership.

According to research by Korn Ferry, female job loss rates due to COVID-19 are about 1.8 times higher than male job loss rates globally, at 5.7 percent versus 3.1 percent respectively. Boiled down, women make up 39 percent of global employment but account for 54 percent of overall job losses.

“Ironically, while the pandemic has elevated characteristics of leadership that are often particular strengths of women leaders, it has also wreaked havoc on our progress toward equity in leadership,” observes Ms Picot. “Women have left the workplace and leadership roles in epic numbers and have experienced significant setbacks in accessing leadership roles due to having to take on unpaid care work within their homes.

“This trend needs to be reversed in order to make the shifts in leadership that will be required for the future,” she continues. “Women world leaders have demonstrated their abilities to take their countries forward during the biggest health and economic crisis we have seen in a generation. It is time for us to recognise women’s potential for doing the same within companies too.”

Essentially, a key component of the future-proofing of leadership is for companies to be more committed to elevating women to positions of leadership at all levels, including elite executive roles, empowering both them and future generations of female leaders.

Leadership bridge

For the majority of companies, the emergence of COVID-19 has been a major test for those at the helm, in many cases turning well-established leadership disciplines on their head. While some leaders have looked the crisis in the eye and risen to the challenge, others have struggled to cope.

A survey by McKinsey & Company at the height of the pandemic certainly bears this out, with 78 percent of respondents stating that their company responded to the crisis appropriately and 80 percent indicating that leaders acted proactively to protect their health and safety.

“Virtually overnight, the pandemic dismantled carefully built power structures defining leadership in companies,” asserts Ms Picot. “The leaders that have been most successful in the crisis are those who did not rely upon those power structures for their team’s interactions and results.

“Leaders who had established trust as the foundation of their leadership style have fared better than others that tended toward micro-management,” she continues. “Flexibility, creativity and the ability to empathise have all been key drivers of successful leadership during this time of change and crisis.”

As the dust settles and the long-term impact of the pandemic becomes clearer, the stark reality is that companies must be prepared to throw out established leadership sensibilities in order to survive and thrive. Only then can they build a future-proofed leadership bridge between the leaders of today and the leaders of tomorrow.

© Financier Worldwide

BY

Fraser Tennant