My article in BUSINESS INSIDER published 25th of September 2018.
As noted in my other articles, over the past few decades, leaders have been seen as powerful individuals who head groups of people. Even as late as the mid-20thcentury, companies employed the authoritarian model of management which required employees to meekly and compliantly follow their leaders. Authoritarian leadership was gradually replaced with partner relationships between individual leaders and their subordinates. In transformational models, which are common today, leaders’ success depends on their ability to delegate responsibilities and propose exciting visions that appeal to their subordinates. What counts is communication and the ability to see potential in team members and maintain an egalitarian flow of ideas among co-workers. Today’s leaders inspire and motivate others by displaying commitment and passion through their actions.
Diversity kills the individual
For decades, organizations have adhered to the hierarchical management model that put leaders at the top of their hierarchy, in command of several to over a dozen direct reports. Such a small circle of executives would make all the key decisions, throw ideas around, let them clash, and make choices that would set the course for the entire organization. The intellectual capacities of the members of such inner circles would determine the performance of hundreds of employees, making the difference between the success and failure of their day-to-day activities. Many aspects of this model persist to this day, even in organizations whose leaders are no longer authoritarian. The companies that have successfully purged themselves of authoritarian leanings may still need to grapple with leader competencies, and specifically their mismatch with the world of rapid technological and other changes.
In my view, the two words that best describe the basic characteristics of modern markets are “volatile”and “rapid”. They apply to trends, consumer behavior, means of production, business models and consumption patterns. Such an environment puts into question the competencies of leaders and their immediate associates. Bluntly speaking, even at the moment they are made, decisions tend to be “dated”. Therefore, in the long run, hierarchies and traditional competency-based roles cannot live up to the challenges that arise in the world of “parallel” models and behaviors. Hence, the pressing need to take key decisions beyond the narrow circle of leaders. Considering the incredible acceleration of change, the most impactful and beneficial decisions may well be those made on the “fringes” of organizations, in areas most conspicuously influenced by customers. As mentioned repeatedly, customers are the key players in today’s economy. They are favored by the latest technologies, which have made them the champions of change. In addition, through their preferences, behaviors and purchase decisions, customers are unknowingly included in organization’s decision networks. Supported by and increasingly replaced with self-learning machines, leaders, organizational structures and even generally, people in organizations, increasingly lose their grip on decision-making. Even today, machines order raw materials to supply production lines (based on production schedules), forecast sales, requisition products for storage (using sales estimates based on customer behaviors) and design services (to meet customer preferences).
Read more in the full article.