How we think about leadership has evolved to reflect what works in practice. What’s out: ideas about leadership that focus heavily on the leader, his/her personality type, management style, and the ability to maximize the output of one’s followers without considering people, culture, or desired outcomes. What’s in: ideas about transformational leadership that prioritize stakeholders’ needs and a leader’s ability to engage and empower them by working toward a common goal. A fresh take on transformational leadership that expands the leader’s relationships with followers to include all stakeholders is critical to leading and creating change in complex adaptive systems.
Complex Adaptive Systems: What are they and why should leaders care?
Today’s leaders must make decisions in environments that are
evolving at an exponential pace and in non-linear directions—environments known
as complex adaptive systems (CAS). CAS are highly interactive human systems, in
which one decision or action impacts another, creating an unpredictable chain
reaction. CAS can include people, communication loops, processes, money flows
Technological and social developments, such as the Internet of Things and the emergence of an increasingly contingent workforce—40% of all workers by 2020 will be contractors vs. full-time employees with benefits —have helped forge a shift from connected systems to complex ones. Whereas connected systems entail problems that can be contained and resolved by engineering, complex systems involve situations that defy boundaries and require working with people in multiple and sometimes infinite feedback loops to contain—think Ebola or cyber threats. Globalization only serves to intensify and further complicate these relationships.
What does this mean for someone aspiring to be a change catalyst? CAS show us that leaders must consider a holistic range of factors when making decisions. They need to take account of external issues, such as the competitive landscape, relationships, customer trends, attitudes, geography, environmental impact, technology, and governmental influences. They must also think about internal dynamics, principally their employees, but also organizational constraints, boundaries, culture, attitudes, skill types, structure, practices, and processes. In both cases, they need to put people first.
Complexipacity & Generative Leadership: What are they and why are they important?
While CAS create a prerequisite for leaders to think holistically before acting, the willingness to embrace and capitalize on change is what sets a transformational leader apart. Transformational leaders don’t just confront a wave of disruption head on—they launch it and ride it. They thrive on change because they have in spades what futurist David Pearce Snyder defines as “complexipacity”—a capacity for dealing with complexity. Leaders endowed with complexipacity look for convergent trends and mashups, fashioning new solutions by combining existing ingredients in unprecedented ways.
Entrepreneurs (those who lead change from outside an organization) and intrapreneurs (those who do so from within) are two types of transformational leaders who evince a high degree of complexipacity. Astia, for example, is an organization that identifies and invests in female supernovas who are poised to entrepreneur change through innovative high-growth start-ups. The League of Intrapreneurs supports change catalysts who work from within businesses to find scalable solutions to problems such as climate change or poverty.
The ability to embrace and adapt to complexity, however, is not enough. Transformational leaders need to be able to execute change through all levels of an organization by making it the rule rather than the exception. In business lingo, transformational leaders need to be “generative” leaders—people who effect change by integrating it into daily operations. By institutionalizing change, generative leaders create businesses that adapt, innovate, and outperform. In other words, transformational leaders inspire their peers to view change as an opportunity (rather than an obstacle) and as progress (rather than a setback).
Being a transformational leader is not for the faint of heart. Transformational leaders need to balance the interests of early adopters as well as those of the naysayers. They need to be willing to pivot on their approach without losing strategy and vision. And they need to know when to stop.
The Role of Transformational Leaders in a Complex World: Putting people first
So what does the world’s growing complexity mean for someone seeking to bring about change? CAS show us two things: first, any decision made by a person in a business will have human ramifications in some form; second; change begets more change. Transformational leaders must therefore put people—not just internal employees but also external audiences—at the center of their decision-making equations. Simultaneously, generative leaders must help their teams embrace change as the new normal. Transformational and generative leadership together offer the key to realizing positive, sustainable, revenue-generating outcomes in CAS.
Finally, as the global economy spurs the growth of a highly mobile, contingent, and knowledge-empowered workforce, leaders must change the way they think about their followers. The transition from a leader-shareholder relationship to a leader-stakeholder one is an unavoidable shift and forms the subject of my next posting. Stay tuned.