Why do organizations need new leadership?
Historically, leadership was designed around order, stability, control and scale. However, these strategies don’t work in a (business) environment so filled with disruptions: Research from Deloitte points out that the pace of change, the influx of new technologies and changing demographics among employees and customers that provoke a shift in expectations requires a combination of traditional leadership expectations and new capabilities to not barely survive, but thrive in the economy of the 21st century.
Whereas all these developments should have been enough for leaders to adapt ‘business as usual’, the COVID-19 crisis has created the ultimate imperative for companies to reconfigure their way of doing business — and an opportunity to finally transform it for the better. To the extent that leaders are willing to do so, they can look forward to a positive future for their organization, rather than just grinding through the present.
So, how do we lead organizations in a world that is becoming increasingly complex, uncertain and dynamic? How do people want to be led under these circumstances? And most importantly, how do we lead ourselves to create synergy among our personal and professional goals?
It is not surprising that the majority of executives find it difficult to respond adequately to profoundly changing circumstances. In fact, only 30 percent of executives interviewed as part of Deloitte’s 2019 Global Human Capital Trends Survey say that they are effectively developing future leaders to meet evolving challenges. Leadership in the 21st century is not simply a question of exclusively managing commercial interests of shareholders anymore. Instead, the 2020 United Nations Global Impact Report highlights that business will be about responsible value contribution for diverse stakeholders, including not only the economy, but society and earth.
The problem in realizing this aspiration is that the micro- and macro-structures of many organizations were not designed for high-speed dynamics and differing demands. That means that although an organization is doing exactly what it was created to do, meaning to create product and services for customers, a crisis occurs: Innovations fail to materialize, customers migrate, and revenues decline. In our globally technologized pandemic economy, this happens at breakneck speed. The reason for this is that, in crisis, humans tend to resort to the very methods and tools that triggered the crisis to create psychological safety by doing what they know well. It was Albert Einstein who mentioned in this context that the problems we created with a certain way of thinking require a higher order logic to be resolved. Organizational leaders are the ones who have to break this pattern by searching for and adopting new mental models to inspire new ways of thinking.
The key challenge we identified in our community of diverse leadership experts is that many organizations struggle with the sheer amount of promising new leadership concepts that emerge as fast as they disappear again. To help executives navigate through the buzzword jungle and choose a form of leadership approach that is right for them, their employees and their companies, we studied a mix of modern leadership approaches and extracted the fundamental ideas that underlie all of them.
Due to the myriad of leadership styles circulating under different names in different contexts, we further refined our search for the essence of new leadership based on the following criteria.
Each leadership style we investigated had to be:
Supported by a pool of scientific data and academic literature to ensure the validity of the leadership concept
Follow a human-centered approach
Have a substantial record of success in their application based on feedback from diverse leaders we worked with
Frequently used among Fortune 500 CEOs
Below are leadership approaches that tick all the boxes:
Transformational Leadership (Bass)
Dialogic Leadership (Dietz)
Servant Leadership (Greenleaf)
Authentic Leadership (Avolio/George/Walumbwa)
Systemic Leadership (Luhmann/Senge)
Creative Leadership (Richardson)
Clear Leadership (Gervase/Bushe)
Responsible Leadership (Sanford)
Evolutionary Leadership (Alznauer/Van Vugt)
Established and emerging leadership
In times that are characterized by great complexity and uncertainty, leadership should not be another area that challenges us. Therefore, we looked for similarity among the diverse new leadership styles above and derived 17 New Leadership Principles that capture their shared essence, providing a true north for leading oneself, people, business and beyond.
The rapidly evolving, technology-driven business environment clearly requires the toolbox of modern leaders to expand. Based on the 2019 Global Human Capital Trends survey from Deloitte, this does not mean to substitute old concepts with new ones. Instead, the Future of Work requires an integration of perennial and new leadership ideas. That’s why our new leadership approach is not a replacement, but an extension for conventional leadership.