Today’s business world is rather exponential than linear. Speed is increasing. Many changes are of disruptive nature. Things can be true, and at the same time they can be false. What is illegal in one country could be legal in another country of the global village. There is not only one solution to a problem but a multitude of possible solutions with no clear favorite inclusive of the fact that some solutions might even contradict each other. Things which you thought were secure can now change without warning. In short: We live in a VUCA world.
The difficult thing for leaders is that leadership in a VUCA world has not yet been developed. Even worse, most of today’s leaders have been trained – at universities, business schools, on the job, by their mentors etc. – on leadership models, theories and instruments that stem from a disappearing world. What was the corporate world like when you started your career?
Leaders have been brought up in a world, where hierarchy was an intelligent way of organizing decision making: All information was routed upwards in the hierarchical pyramid, and therefore the best decision could be made at the top, where the highest level of information and transparency was. Information was the source of power. In today’s world, in which information is abundant, easily accessible and free of cost, how can that work? You cannot ‘hide’ information anymore to build the basis of your power construct. And you cannot cope with the sheer amount of information available anymore. Now decision making at the top often means that the decision is taken where there is the lowest level of information about the customer, the product, the sales process, the machinery or the assembly line. Power of information is going into reverse to front-line staff.
Leaders have been brought up in a world, where management by objectives (MBO) was an intelligent way of empowering your subordinates rather than telling them exactly what to do (and how) in a structure of highly divided labor and then meticulously controlling each step, you would agree on an objective and let people find their way of best achieving it. MBO even got incentivized and brought to perfection through performance management systems, often linked to variable bonus pay. In today’s fast changing world most objectives agreed upon in January are obsolete by March, yet they cannot be changed in the performance management system. The subsequent conversations that leaders are forced to have with their team members are understandably considered a farce by everyone involved.
Leaders have been brought up in a world, where budgeting was the most intelligent way of planning future costs and predicting the bottom line. Usually budgets were planned in a more or less linear way, extrapolating last year’s costs, taking into account the foreseeable challenges of next year. In today’s world your budget very often is not realistic by the end of quarter one. There is no such thing as predictability of numbers any more. Yet, leaders get judged by the question whether they are ‘in budget’ or ‘exceeding budget’. In a volatile world you should ask every time you make a spending decision whether this is the best way to spend the company’s money NOW.
The aforementioned examples (and many other examples you might think of) lead to more and more frustrated staff, employees and managers alike. Leaders, what to do now?
Let go! You are not in charge of having all the information. You are not in charge of knowing it all. Not in charge of making the best decision. Nor of planning everything to the last detail. Or of predicting the future. Your job is to let go the old patterns and behaviors. Your job is to empower people in a modern way. To give them a purpose and a guiding star. To help them grow. To guide them in taking over responsibility themselves. To coach them to make the best decisions themselves. To stabilize your teams. Encourage them to do what they know is best for the customer. Help them to organize themselves in short-term networks, built around a contribution and then move on.
Scary? Not at all. Rewarding! If you want to know more how to get there, talk to us. We are just an email or phone call away. Together with Inspired Executives, we have helped senior leadership teams of small and midsize organizations find and implement modern ways of leading their companies into the future. The time is now. Contact us.