In this fast paced, ever changing world, who would make a good Leader? What is valued most? Is experience in a specific field (that we call Expertise) relevant? What traits would position a Leader to be successful in the future?
World is changing at a very rapid pace. Gone are the days when the changes were cyclical in nature. Today, we are faced with structural changes most of the time. There was a time when an average product life cycle was five years and a business model used to be relevant for atleast 18-20 years. Today, a product is outdated as soon as it hits production and a business model needs to be reinvented every three to five years (or maybe sooner depending on the nature of business). To stay ahead in the race, every company is looking to cannibalize their own products (Example being Samsung with a clearly focused tagline – “What’s Next?”. This tagline has driven the innovation in the company with Samsung launching new models even before the current ones completely percolate into all the markets).
Today, we are seeing three major trends in the world:
Transcending industries: Boundaries between industries are being erased. A company is transcending multiple industries and is foraying into multiple products by leveraging their core strengths. Example being Apple - In which industry do we say Apple is operating in? They are a hardware company, software (within Software, they have an Operating system, Office software, Apple maps, apps), Cloud computing, Music distribution, Telecommunications, Consumer electronics and are foraying into Television with soon to be launched Apple TV (beyond the current version that they have). Another way to think about it is to ask who is a competitor for Apple? We would end up listing multiple companies across multiple industries.
Surprise competition: Competition could be coming in from anywhere and any source. It is not always from a direct competitor. Did camera companies ever expect to see competition from mobile companies? Today, many people opt for camera phones as against buying a separate camera resulting in severe pressure on revenues of camera companies. Similarly, Google search is coming under pressure from Apple’s Siri voice based search; Call center companies are under pressure because of advent of social media that is redefining customer contact/experience; most recently, within India, many of the major bookstores are facing stiff competition from Flipkart (similar to Amazon story); movie industry coming under pressure from television/digital cable; single screens from multiplexes and so on. Could Airtel Money be a competitor for credit cards? (Going back to the previous point of transcending industries – is Airtel a mobile company or a financial company?)
Globalization: Globalization led to huge number of opportunities and challenges at the same time. While it had introduced many new markets and multiple cost bases, it brought in challenges like complexity of dealing with multiple currencies (foreign exchange risk), multiple regulations & regulators, multiple cultures & dealing with different talent/global teams; different customer tastes etc.
In such a scenario, who would be best to lead, say, a telecom company? A Leader with thirty years of experience in the telecommunications industry or one who has traits to be successful in a changing environment? What value is experience, when today telecommunications companies have more revenue from data based services as against voice calls? Average age of the consumer much lower and consumer preferences changing at a very rapid pace?
I believe following traits would be critical for a leader to be successful in the future:
Learning ability: It is critical for Leader to continuously learn from diverse areas and fields. As the opportunities are spread across businesses/industries, Leader has to be constantly open to learning – about new markets; new technologies; business models; cultures; languages (if required); impact of regulations/political changes; new risks etc. Learning could occur from different sources – Reading, Networking, Social media; Videos (Youtube is a great source); Podcasts etc.
Adaptability: With so much of change, Leaders have to constantly adapt and embrace change. Gone are the days, where a Leader puts together 5 year plan and sticks to it. Today, even a yearly plan has to be adapted to changing environment. Hence, embracing change becomes critical to the success of the Leader. This requires the Leader to be willing to change and then to lead the rest of the organization through change management.
Business Savvy: Every Leader has to understand the underlying business model of her business thoroughly and be able to assess the impact of changes occurring in external environment to her business. Keeping the financial goals in mind, she should be able to identify the requisite capabilities she has to build in the Organization. Most important aspect though is in identifying the impact based on external changes. More often than not, this gets missed until very late.
Develop Talent: Biggest differentiator for companies today is the talent they have in the Organization. With innovation happening at a rapid pace, any other value differentiator gets lost very quickly. However, the talent within the organization could make a difference to the success or failure of the company. Hence, Leader who is genuinely interested in the development of people; puts together coaching programs and builds the requisite capabilities would lead her organization to success.
Risk taking: Leader cannot wait for the right opportunity to push forward his business. He has to take risks and create opportunities. While some risks may pay off, others may not. That’s ok. A Leader who takes risks has higher probability of success than a Leader who does not.
I strongly believe that the above traits are more critical for the Leader to be successful than experience in a specific field. It is always great if we can get an individual who has immense experience and has the requisite traits. But if we have to choose one, I choose the required Leadership traits over relevant experience/expertise. What do you think?
Good article, Bharat. A term that I like is 'learning agility' that I picked up from Marshall Goldsmith. For more on that and on the leadership traits needed today/future, pls visit http://www.youtube.com/watch?v=m0ARtWgAEvs
ReplyDeleteShankar.
Bharat, when I make these comments I think you understand that I am not discounting your well rounded research and thoughts and expertise that goes into your articles. Having said that these are my observations :)
ReplyDeleteDo you think that just because the technology is changing fast we don’t need experts in current and older technologies?
I think these are two different things you highlighted in your article Bharat. Qualities of an expert vs. the qualities of a leader. They are not independent but at the same time they are different. Also there is nothing that says that just being an expert in something currently will prevent you from learning new things and become an expert in a future field.
So coming back to the notion of not needing experts I would imagine you are talking beyond IT. 10-20 years from now no matter what the latest diseases are at that time will be you will still need expert doctors working on individual organs. And then there is the collaboration and other generalist doctors who will pull together the rest. You will be surprised IBM’s mainframe business is still the fastest growing segment in IT. 10-20 years from now you will still need experts there. They just need to learn the nuances of future trends like impact of Big Data and all. Again if you don’t learn and respond there is no place for any kind of expert for every long in any industry. My company is still supporting products we built 7 years back. The revenues we get from them is huge. If we don’t have experts to support them then it is lost revenue.
To put it differently apart from execution related failures Leaders usually fall into two traps. A leader who focuses solely on long term and fails to realize the short-term needs. And to the opposite a leader who is purely looking for short term gains. We have seen very closely both these kinds of leaders within the last decade. Sony, RIM & Nokia not responding fast enough to emerging trends and losing out to Samsung, Apple. Though they survived couple of years they are now fast loosing. On the other hand Adobe, HP purely looked at future trends and lost existing market share.
If you are talking about leaders who are experts only in certain domains. Yes we still need them. Without taking names we saw the damage done by generalist CEO’s who don’t have a clue of the domains they are working in. If you look at IBM, Apple, Oracle and any other major corporation which is performing you will see a CEO who is an expert in certain domain. I don’t say that it does not work at all to have a generalist but it depends upon the domain they are working in. At the same time having a CEO who is expert in his domain also does not guarantee success.
That is where I agree with you that a leader should have all the qualities you mentioned in your article. We should not lose sight of those leadership traits no matter how good you are technically. You need experts to take care of existing needs and a combination of experts and generalists to look for trends and new markets. That is the mix and choice a great leader has to make and should get right for the company’s existence. In my opinion IBM is the only company that achieved it consistently with very few exceptions.