The Next Decade Will Be a Leadership Game Changer

Mar 05, 2021

Article: 70%, my thoughts: 30%.

Fixed Leadership Styles Are Dead

Fixed leadership styles tend to block feedback when it’s most needed and look for old solutions to the novel problems. The new unprecedented levels of turbulence require different approaches from CEOs and Boards, which, among others, should be giving power to the people in charge (i.e. actively and heavily delegating) and rather monitoring and observing instead of trying to actively lead. The value of the leadership becomes showing the direction, not attempting to continue holding all the strings.
Most national governments and international organizations can’t deal with the crisis [MK: in my opinion, Russia has done a remarkable job of not killing its economy during the pandemic], losing their legitimacy and leading to conflicts and resistance. The worst part is that firms (especially large ones) are looking for other partners (each other?) to deal with the mess the governments have made.
Digital communications (now ubiquitous) require more effort than in-person communications to provide broader context of strategic tasks. Decisions need to be documented better for further review by a broader reader base. Strategic initiatives, while being data-driven, have to originate with humans, and humans need to have more information than ever to make proper decisions.
Employees need explanations and transparency from their leaders; command-and-control approaches will never work for most businesses relying on human capital.

While online shopping has continued its victorious growth globally, physical retail locations are closing in droves, significantly and irrevocably changing consumer behaviour patterns.
Consumers started looking at durable goods while shopping; such goods should better be eco-friendly, too (but the price is still the king). Donation and reselling (due to the extended useful life of tools) is becoming the norm.
Experiences beat products. As more people are working from home, the number of things (including clothing) for everyday use has dropped substantially, bumping up savings and creating a huge unrealized demand for travel and cultural experiences.
MK: while this is all true, I want to point out the fact that BNPL (buy now – pay later) services are the fastest growing segment in consumer finance. People are smoothing their expenses to create predictable cash flows.

The S/ESG framework component has got a new addition: emotional and physical health and wellbeing of employees. While it’s challenging to lead people who’ve just faced an unknown enemy, it’s even harder to lead people who are exhausted. Proactive behaviours of companies to absorb the shocks and the post-shock apathy can go a long way towards maintaining a fight-capable workforce.
It’s fair to assume investors will be looking for more corporately “sustainable” companies, which usually means some attention to ESG practices and punishment for not following them. No investor wants the assets they put money into to become stranded (or the stock to become illiquid), so there will be higher focus on G/ESG.
A good outcome of this extra pressure for sustainability from within will be the focus on the long term, including future shareholders. Boards will need to judge CEOs based on their collaboration and integration abilities, practically meaning that the CEOs’ results are not the company’s results per se, but rather the success of at least all their direct reports. [MK: Extra judgement must be made on how fast companies can transform into collaborative knowledge centres, but let’s be honest – it’s much easier said than done.]