There is no doubt that the past couple of years have been challenging for everybody, but especially for leaders of all sorts of organizations. As if the pandemic, and all the dislocation and sudden shifts in working patterns it unleashed, were not enough, much of the world now finds itself in the sort of inflation-wages spiral that many economists and politicians thought had been consigned to history.
Leaders who might have thought they deserved a bit of a break after steering their businesses through a once-in-a-generation crisis, now find themselves facing down another. And all the time they know that just succeeding in financial terms is no longer enough. They need to show they are doing good by their employees, their wider community and, above all, the planet.
If this looks overwhelming, the good news is that those past couple of years have demonstrated that many leaders have proved themselves to be adaptable and resilient — and so have created a platform for further change. The management consultancy PA Consulting says its teams have observed that there are “concrete ways of leading that make a tangible difference to the health and happiness of an organisation and wider society.” And research it has just published appears to back this up. The study, A New Way To Lead, says that leaders recognize four behaviors that are especially important for success. They are:
Nurture human optimism — helping people adapt to new and complex situations with innovation and creativity.
Empower teams to innovate — giving people the space and permission to imagine and deliver value-creating responses.
Build evolving organizations — creating environments where aware, inclusive and responsive teams are able to make a success out of change.
Seek inspiration in surprising places — applying new perspectives and a broader sense to existing technologies and evolving challenges.
These behaviours are seen as vital because the modern world is characterized by disruption. But along with this come what the study calls “four forces of opportunity.” These forces — purposeful, inclusive business; customer trust and transparency; innovation-based business change; and technology acceleration — are affecting everyone and so cannot be ignored. Indeed, the right leadership approach can transform them into competitive advantage, while a failure to engage with them can result in organizations being left behind.
The PA study reports that those questioned — more than 300 leaders in the U.S., the U.K., the Nordics and the Netherlands — split between survivors — leaders who are just about hanging on and content to stay “as is” — and revivers — those positively adapting and reinventing what they do. The former are focused on cost reduction and sustaining the pace of change, while the latter concentrate on continued acceleration, transformation and investment in growth and innovation.
According to the report, revivers are more likely than survivors to recognize the value of all four of the behaviors identified earlier and are more focused on looking beyond their own industries for inspiration and on building evolving organisations. They are also more likely to act with more urgency to make a stronger link between business and societal outcomes, more focused on leaving a positive legacy, more willing to change their leadership styles for the greater good and more likely to believe that the leaders of tomorrow will be more empathetic than today’s.
The split between revivers and survivors in the survey is put at 56% and 44% respectively. But the authors reckon that it is possible to transform leadership behavior — by taking five steps:
Work in the growth zone — leaders looking to keep up with the relentless pace of change need to see leaning into acceleration as part of the answer.
Cultivate kindness — leaders need to empower people to try new things and to take risks safe in the knowledge that they will not be targeted as a result.
Catalyse internal disruptors — give them more prominence as part of encouraging diversity in all forms in order to drive new thinking and actions.
Make authenticity everything — harness the power of purpose to move from platitudes to plausibility, so inspiring all stakeholders.
Create and embrace liminal spaces — shape new ways for people to connect, fostering a mindset that is comfortable with ambiguity.
Charlene Li, chief research officer at PA, was struck by three key themes that came out of the study. The first was a need to nurture human optimism — “not optimism at all costs but in a very realistic way.” This echoes other research indicating that teams that characterise themselves as optimistic are more effective.
The second was a need for kindness. This, she said, was rather counter-intuitive, but it was supported not just by the research but also by experience. “Covid inserted a strong dose of humanity” to workplaces where it has previously been typical and expected for employees to leave their home lives at the door. It had become more accepted that it was not a sign of weakness on the part of a manager to be seen as thoughtful, empathetic or humble. Moreover, kindness created psychological safety that enabled employees to take risks. “The best leaders in history have always understood this,” Li added, citing such examples as South West Airlines and Home Depot.
Finally, she pointed to the importance of the already mentioned “liminal space.” This is a psychological notion that describes the process by which people move from the familiar to the less so. Employees typically want to develop, but at the same time they find it disconcerting leaving something with which they have grown comfortable. Leaders need to respond to this, especially at a time when there is a lot going on, by seeing change not so much as something that needs to be got through as quickly as possible but as something likely to be continuous. As a result, employees need to be given the chance to explore its possibilities rather than rushed through it.