In my blogpost about power structures, I mentioned my strong belief in the need for diversity in management and politics. And I received some feedback from readers who are concerned that if we emphasise the need for women in leadership, we will actually separate men and women instead of bringing them together. But I think encouraging diversity is crucial for today’s society. In a diverse environment, modern impulses spread and grow faster. Having diverse leaders and employees means that companies can gain more balanced insights into situations and can develop new and unconventional ideas. At the moment, we have to deal with challenging developments that require a new, flexible type of leadership alongside new ideas. So, diversity and new types of leadership are closely linked – we need to push both within companies in order to keep up with our rapidly changing world.
What are some of the new developments?
In the last few years, I have seen several unexpected global developments that require us as individuals, in politics and as leaders in companies, to come up with creative ideas faster. Here are four examples:
- Rising concerns about the environment, resulting in the need for sustainable products and processes.
- Rapidly developing modern technologies, be it Blockchain, Artificial Intelligence, Internet of Things or others.
- Globalisation of trade and the production of complex products – you cannot produce modern technology in just one country, as you need resources and expertise from all over the world.
- Global migration: We’re now facing the highest-ever number of refugees worldwide. Aside from the economic and cultural challenges (and opportunities!) in the countries where they settle, this also means that their home countries are experiencing a major drain on their experienced workforce. In my opinion, these global movements cannot be addressed with walls and separation and need to be approached by nations working together.
Taking a second look at traditional leadership
So why do I believe that we need a new style of leadership to face these challenges? Today, the standard leadership format is still a patriarchal model. The leader has all the information and therefore can make all the decisions, while others further down in the hierarchy simply follow. Controls are in place to ensure that processes run according to the rules. In the best case, the regulations also protect the employees.
As the CFO of big companies, I’ve also followed this approach, assuming it would help me maintain control. The system is focused on a single, central leader who works in a stable hierarchical system and collaborates with other leaders. There is a great deal of dependency on this centre. The leader may become a bottleneck, with everybody desperately needing his or her limited time, information and resources.
Power, and holding onto it, is a crucial issue within this system. Very often leaders (women as well as men) in hierarchical systems use threats and intimidation, and keep information to themselves as a form of power play. Controls replace trust to make sure that the leader retains control. And quite often you see leaders looking for a homogeneous group to report to them, as this ensures their position and power.
This seems to have worked well so far – so what’s wrong about it?
It’s a good leadership model if you have a static, process-driven environment that needs constant and controlled improvement of what is already there. For many years, efficiency and effectiveness, optimising the existing system, standards, and central steering were the essential tools and measures for achieving improvements. The idea is that everybody knows what to do and where they belong. And the system works if you have a benevolent leader, a real “patron or “sovereign”.
Yet it becomes difficult when the leader builds a homogenous group where smart people aren’t really welcome; they might threaten the leader’s position. There is no room for innovative or disruptive ideas. As a result, smart people will get discouraged and may resign.
It becomes dangerous when fear of making mistakes or losing your job creates an environment where employees and leaders on lower management levels no longer dare to take risks. They avoid making decisions, hide their mistakes and don’t dare to admit that solutions proposed by higher-ups simply won’t work.
Is a new leadership model really the answer?
In light of the developments we are currently facing, to me it’s self-evident that we need to change the way we work. We need to react quickly, we need to share information, we need full transparency, we need to act globally, and we need to be open for disruption and unconventional ideas. This is how networks and small entities work, and what big organisations need to learn.
But how do you establish quick, transparent and flexible processes in bigger systems where you must consider the rights of your shareholders, those of additional stakeholders, and have to ensure that processes are compliant and harmonised? How do you avoid chaos? How do you avoid endless discussions in groups where diversity doesn’t automatically result in improved problem-solving?
What is – after all the mistakes I made in leadership positions, and my various experiences – my model of a good leader?
Unfortunately, I don’t have a brilliant solution that I can share with you right now. If I had one, I would write a nice, thick management book.
However, I do have some ideas about what a good leader should do: A leader needs to listen. A leader needs to deliver full transparency. In his or her own interest, a leader should look for smart people from all kind of groups, to get as many ideas as possible. A leader should love solving problems as he or she will constantly be confronted with them. Tasks that can be delegated should be delegated. Decisions should be made quickly – even if they come with a degree of risk.
In my opinion, diversity in leadership teams is part of the solution. If your team becomes more diverse, you immediately get ideas from new perspectives. As a leader you see distinctive styles of leadership and can learn from your peers.
The best leader is probably one who doesn’t want power, but who wants to help organisations, people and societies unlock their full potential. This concept does contradict classic notions of leadership, I know.
Coming back to my former blog post: While it’s true that modern technologies force us to take on different leadership roles, they also help us get to and settle into those roles more easily. And new types of leadership will eventually help us to solve problems like the need for sustainable production and products, and the effects of migration, together.