2015 Institutional Innovation Report
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Leading the New Organization
All organizations need leaders. But what is required to lead an exponential organization?
Rather than providing a formula for a successful leader, Kelvin Westbrook offered a set of questions that a board should consider in choosing a new leader:
Peter Beck, Executive Chairman of The Beck Group, observed that too often boards make poor decisions in picking a new CEO, allowing themselves to be swayed by a candidate’s reputation or likeableness. An effective leader should be able to change, or at least adjust, an organization’s culture. But every leader does not need to be a change agent. A board needs to understand where their company is, and what type of leader it requires at that point.
Gary Shapiro, President and CEO of the Consumer Electronics Association, responded by proposing that what kind of leader is best is totally situational. But he added that every leader must set the moral tone for a company and reinforce its values and culture. And while it is important to make sure that new people who are hired are in-tune with an organization’s culture, it is a mistake for leaders to just hire people like themselves, but rather, good leaders hire those who compliment their weaknesses. Everyone in an organization does not need to be a leader—and not everyone wants to be a leader—but it is a good idea to hire some risky candidates who have the potential for pushing an organization further. Still, organizations need people who run operations. Challenging them to “think outside the box” is usually not a good idea. Although growth is important, flexibility to respond to changing circumstances is more important, even if the organization is not “exponential.” Finally, almost every successful company focuses on its customers, and many good CEOs spend time on this. But it is also important for them to spend time thinking about the future.
According to Andy Billings of Electronic Arts, 70 percent of the capabilities of an effective leader are “classic skills,” while the other 30 percent are “situational.” Among the fundamental skills every leader needs are:
Successful leaders also need business acumen and customer awareness and a passion for quality and innovation. Finally, they must know a company’s industry and its business “stone cold.”
John Pittenger agreed that having a good set of values is the first requirement for a leader. The worst leader is someone who is highly talented but has bad values. And a leader cannot think of or treat individuals as commodities.
New leaders for new times. Returning to a theme from earlier Roundtables, Maryam Alavi asserted that the definition of a leader should not be confined to the one person at the top of an organization. In a time of constant change, leadership must be widely distributed. The best definition of a leader is anyone who can bring about positive change within a social system (including companies large and small).
The requirements for a successful leader in the 21st century are different than in the past. In the old model, leaders needed to be good at creating valuable content and creating an inspirational vision for the future. Today, leaders need to be good at reading contexts and managing them proactively. This requires emotional intelligence, as well as self-awareness, clear values, resilience, the ability to read and relate well to others, and to deal with ambiguity. In developing new leaders (which she does at the business school at Georgia Tech), Alavi is most concerned with making sure they develop strong life skills rather than imparting content. This kind of education does not happen in classrooms or through lectures, but rather by providing students with “learning experiences” that enable them to learn about managing themselves, a process that involves a lot of coaching and feedback.