Leadership Through the Dip
Exceptional times demand exceptional leadership.
And make no mistake about it, these are unprecedented times.
Our world was until recently more joined up and interdependent than it has ever been before. Information spreads at digital speed and no economy is immune or unaffected by the force, velocity or impact when seemingly well-informed decisions turn out to be dramatically mistaken.
As harsh as the 2007 global financial crash became, it somehow felt that all the leading nations were in this horrible situation together. There is nothing like universal adversity to bring leaders much closer in their thinking and behaviour and also much more trusting of each-others motives.
With an aggressive and single-minded President Donald Trump at the helm of a highly charged and belligerent USA administration, the days of global collaboration and cooperation have already been long forgotten.
With his pulling out of the Paris Climate Accord, the unravelling of the NAFTA alliance, the kicking off of a vicious trade war with China, the European Union and just about anyone else he fancies, it increasingly feels like the days of working together for mutual benefit are unfortunately long gone.
With Turkey’s economy coming under savage attack from the USA, the Turkish lira has lost over 40% of its value this year. There had to be a predictable emerging market’s backlash. And it wasn’t long before China, Russia, Brazil, India and South Africa were soon feeling the chill wind of advancing recessionary times.
And that’s without mentioning the havoc that Brexit is causing.
Every nation is now looking after its own economic issues and the days of globalisation are drifting into our memory banks.
Businesses Must be Quick to React
Similar collaborative and cooperative behaviour and attitudes rarely exist in business, no matter how bad things get.
In the past a good enough strategy, with a good enough management team and a strong brand were good enough to ‘get by’; but in this new rapidly changing world these strengths alone will solve little.
Let’s be explicit. By management we mean strategy, process, procedure, task, execution, KPIs etc. all the activities that ensure things don’t go wrong. Every business practices management now and it is readily available to all. Each and every aspect of management has become commoditised and all your competitors have similar approaches and are subsequently playing by similar rules.
Management is no longer a differentiator and it no longer covers the cracks of a failing business. This over reliance on continuing to do the same things in the same manner but a little more efficiently every year is crucially locking out a new generation of potential leaders. They have different philosophies to tackling new and disruptive technology driven challenges.
This is far from an argument against management, it is still essential. Without management, you will go out of business very quickly. But in these times of transformation and high velocity change, management is no longer anywhere near enough on its own.
Many of the great corporate institutions still cannot escape the ‘pull of the past’ and even in times of crisis, far too many keep looking for answers back in their history and from previous experience.
It is what a management ethos will naturally lead you to do; forever looking at lessons learnt from years before and studying what the “best practice” from their industry is, gleaned from a string of previous successes and failures.
But that makes the gross assumption that what is being experienced now has been experienced before. And it just hasn’t.
The Land of Innovation
Having now had the opportunity to work with the leadership of many multinational businesses in many industries and sectors, it is clear that there are many talented managers and experts, but perhaps nowhere near enough leaders.
These experiences have left me with strong views on the way forward.
The primary one is that there is more talent than most know what to do with. A younger and better qualified, and more travelled generation with more naturally collaborative instincts are struggling to get anywhere near the top of their respective companies.
This is both worrying and dangerous. The really top talented ones are thinking of leaving, because they are in demand elsewhere and know they are in this new super connected smartphone world, that their bosses are not privy to.
In many respects if things don’t change a younger generation could well become, ‘nurtured here, capitalised upon elsewhere’.
These hard working, aspirational and ambitious employees have fallen victim of the ‘tall poppy syndrome’, where the best of the best, eventually heads elsewhere, to deliver on their obvious potential. Some are so frustrated that they look to other like-minded and frustrated colleagues and join the growing ‘start-up’ community.
Many governments have started to recognise this and are trying to further stimulate this entrepreneurial culture with many decent and well-intentioned initiatives. Many of the banks have also sensed the commercial, community and long-term opportunities that their active involvement will bring.
The recent research paper, Global Employment Trends for Youth from the International Labour Organization provides stark insights into the challenge that the young face when it comes to employment.
Between 1997 and 2017, the youth population grew by 139 million people, while the youth labour force shrank by 35 million people. This dynamic is also reflected in a declining youth proportion of the overall global labour force, from 21.7 per cent to 15.5 per cent. The youth labour force participation rates have deteriorated in the past 20 years from 55.0 per cent to 45.7 per cent.
Compared to older workers, young workers are more comfortable with new technologies and likely to adapt faster to such technologies.
The way in which young workers engage in the labour market is also changing, with a clear move towards less secure forms of work and while young women and men are ready to ride the wave of new technologies, they value stability and security in their working lives.
Technology can be divisive but also inclusive.
Realising potential opportunities for youth in a technology-rich labour market requires a more risk embracing mindset to developing better opportunities that capitalise on their different approaches.
We must start to view the next generation of leaders as a huge asset and not impatient and entitled novices.
Many countries are seeing that the advancement difficulties that a generation that thinks and behaves differently face, has fertilised fervent breeding grounds for start-ups that are innovative and visionary. They have been ground breaking and pioneering but most struggle with early stage funding and the banks must remain tuned into taking such risks despite economic downturns.
With the banks aligned to a more positive disposition to those without long track records of success, most have courageous and insightful initiatives that are making a tangible difference to young entrepreneurs but it’s far too early for them to ‘bear fruit’ or necessary returns yet.
These fledgling projects should not be ditched because of a dip in the economy. They will be a strong part of the medium-term solution and should not be seen as part of the short-term expediencies.
Being unique, special and different is an inherent strength of these youngsters’ start-ups and an invaluable ingredient in the recipe for survival in the downturn.
Many of these young entrepreneurs have yet to feel that asking for help is a sign of strength not weakness. It is something that needs to be addressed.
Not feeling able (or sometimes willing) to ask for help (to therefore not risk being seen as a failure) leads to two things:
• Zero collaboration
• Great small companies rarely become great medium or big companies.
To get to the very top you need to share. Collaboration is the new leadership.
And you need someone to lead the way, forget the fact that they may be young and inexperienced, or perhaps do not have the high academic qualifications.
If you’re capable, you’re qualified.
Where are Your New Ideas Coming From?
In unprecedented times the only way out of the darkness is leadership; inspired leadership at that.
By leadership, I mean – vision, people, teams, culture.
Management is IQ and Leadership is EQ. Management is the hardware and Leadership is the software.
Leadership is not management; it is how you inspire and energise your people towards your vision – show not tell. This approach through role modelling, naturally creates more leaders for the organisation, in a virtuous circle that means the best talent continues to be drawn towards wanting to stay and deliver for the business.
These new age leaders want to belong to something that wants and appreciates them, and want to believe in a leader that also wants and appreciates them.
We are witnessing a new generation that thinks and acts differently to the past and has a different set of values.
This new generation are sometimes described as acting with a sense of entitlement and not having the work ethic of previous generations, these are sweeping generalisations and unhelpful.
They’re not born of the ‘permission culture’ of the past, and are pioneering a new path. But that alone won’t stop them from migrating away or going off to start their own enterprises. They need to feel that they ‘belong’ and that their voices will be heard and matter.
A sometimes-ultra-cynical business media is not helpful, and all the more optimistic young business people deserve a little more balance. Let’s recognise the need to be just that little bit more positive about the authentic hard-working approach to business and life at work that most exemplify.
Just how optimistic are YOU?
Do you energise your people or depress them?
Are you driven by fear of failure or the desire for success?
Do they come to you with new ideas or share problems with you?
The historical business dilemma is no longer about talent, it’s clearly about leadership and consequently, corporate culture.
What’s Your Honest Favoured Approach? Leadership or Management?
There is always one question that I always get asked at conferences when it comes to leadership – Are leaders born or made?
In my humble experience, it’s neither. Leaders are found.
The biggest myth in western developed societies is that leaders are only at the top of the organisation. This is nonsense, it’s managers that are at the top of the hierarchy.
Leaders are everywhere.
Look for those that can influence and persuade without authority. Leadership is not about rank, authority or the hierarchy – they are your true leaders. Identify them, energise them and give them the recognition they deserve. Don’t worry about their age or how much experience they have.
If they are capable of doing the job well, then they are qualified. They should be spotted early, supported and developed and then ‘fast tracked’ to executive positions. There is much to learn from the way the technology industry in the USA and China have taken risks and invested in young precocious talent, and it has paid off handsomely.
‘Old’ Europe’s enduring business malaise is due in no small part to it continuously worshipping at the altar of management for many years, consequently creating cautious and risk-adverse corporate cultures.
It has bred an approach of slowly wanting always to ‘make sure’ and then make sure again, borne out of not wanting to lose.
In contrast, the role of leadership is to be positive, optimistic and uplifting; balancing EQ (emotional quotient or intelligence) with IQ. If management affects what you do then leadership affects how you feel whilst you’re doing it.
What has become apparent is that it is imperative not to waste a good recession or crisis because THIS is the time to re-invent your culture and unleash the young leaders within your businesses. They might just have the courage and endeavour to break away from the pull of the past and identify far more exciting and lucrative ways forward.
Let’s be clear. When all around are polishing their management books and tweaking processes to try and make sure that mistakes aren’t going to happen again.
The more progressive businesses are inspiring their people to do things differently, and give that extra 15% discretionary effort that all employees have to give but rarely feel engaged or recognised enough to do so. This new energy and mindset will drive innovation and bring new working practices better suited to the agility and rapid deployment demanded to thrive in today’s fast-moving markets.
The answers to the challenges faced by most businesses lie within the organisation itself and yet time and again their young people are rarely consulted and rarely listened to.
If they were fully engaged and recognised the game could change forever – and quickly.
What Might You Do Differently?
When a recession really starts to bite, it might be the right time to take an honest review of whether some of the business’s issues have been exacerbated simply because the approaches have not been unique, special or different, despite some being very successful for a very long time.
Whilst having operated well for years but perhaps having failed to set themselves up to compete with a wave of newer, hungrier and leaner competitors.
It might be a time where “good enough” may no longer be good enough.
Facebook’s Mark Zuckerberg has a strong view, “The biggest risk is not taking any risk … In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”
Therefore, it’s an excellent time to ask yourself some tough questions about your business. Is it strong enough and different enough to ride the turbulence? Is it time to take a few calculated risks with your leadership team and promote some that can think and behave very differently from the recent past. It just might be the right time to shake things up a bit, and bring much more diverse backgrounds into the executive team.
Finally, ask yourself the toughest question, that only authentic leaders will dare answer truthfully. Are you still the right person to lead this business?
Every progressive business desires stability at the top but an active succession plan is absolutely fundamental for success. Marketplaces are too fast moving, aggressive and unrelenting for the top team to be in place for more than a decade anymore; there needs to be credible younger candidates to take the top roles at any time.
Only then will you be in the position you need and deserve to be.
From Best Practice to Next Practice
- Never accept the status quo as the only way forward
- Value work life balance
- Embrace those that embrace technology
- Understand the consequences of implicit bias
- Don’t let fear drive decisions
- Make bold appointments and back them
- Find a bright young mutual mentor and listen to them
- Clearly state the path to executive appointments (making it inclusive)
- Create some excitement about the next generation
- Balance attitude with experience on all senior appointments
The first signal of a downturn is the perfect moment to engage a new generation of business leaders, and note that their lack of experience in doing things the old way might just be the essential missing ingredient for a new way forward.
A new generation of leaders will replicate what is starting to happen all over the business world, they will not be denied for long. They are already better joined up and might just bring that missing ingredient of collaboration both inside their respective businesses but probably with new partners across the world as well.
“Every success story is a tale of constant adaption, revision, and change.”
– Richard Branson