The 21st Century Business Leader Must Play 4 Roles—At Once
Just as the “hardware” (technology) of business operations have transformed since the turn of the 21st century (think: email, social media, remote working, etc.), so has the “software” (style) of corporate leadership. Traditional and increasingly obsolete leadership models are quickly being replaced by those that speak to the needs and demands of contemporary executives, workers, customers, and investors.
So, what are some vanishing “traditional” leadership styles?
Authoritarian. Possessing roots in the Industrial Revolution of the late 1700s, the Authoritarian style is just what it sounds like. CEOs are the “Big Bosses” under this scheme. They issue directives to their minions lower on the hierarchical pyramid. Usually obsessed with time management, price-per-unit, and other measurable efficiencies, the authoritarian-led organization is expected to run like a Swiss watch. The problem is people aren’t machines, and the top-down structure provides little to no off-ramps should those at the top make poor decisions. (Plus, it's often hard on workers to be led so drastically this way.)
Transactional. Transactional leadership is based on the principles of reward and punishment. The transactional leader often assumes that workers are not self-motivated, have little to no ingenuity, and thus must be poked and prodded into performing their tasks by either the promise of benefits (pay, perks) or the threat of retribution (demotion, termination). The transactional manager believes subordinates must be closely monitored and, when necessary, even micro-managed.
Delegative. Sometimes called the “laissez-faire” approach, this is the mirror opposite of the Authoritarian/Transactional model. Here, management sets a goal, then trusts their underlings to achieve it. While the delegative approach promotes innovation and creativity, it can often leave a company rudderless. It is infamously the favorite style of the “absent landlord” boss who prefers enjoying long lunches or playing golf over dealing with the nitty gritty of running a successful business.
Participative. This is the kind of “egalitarian” business model that became fashionable in the late 20th century. There are no titles under this arrangement. Everyone is of equal rank, everyone has equal say, and everyone’s opinion is equally valid. It’s quite “democratic”—but like political democracy, it makes decisive change difficult to achieve. Also, scaling a business becomes increasingly hard under this model, as no one has ultimate authority to make even the most vital of decisions.
While vestiges of these traditional leadership styles can still be found throughout Western businesses, a new hybrid paradigm has been developing. Dubbed “Agile Organizations” by the business consulting firm McKinsey & Company, these companies are designed to maximize productivity and profits by retaining final authority among organizations leaders—while still making employees part of the creative process. CEOs and other top managers wishing to benefit from such a modern arrangement must simultaneously play four different roles, each critical to organizational success.
These roles are:
Visionary. A good leader knows where the company is going and can communicate such information throughout the workforce. But unlike with the Henry Fords, Walt Disneys, and Steve Jobs’s of decades past, this vision doesn’t spring from the imagination of a single individual or even from the consensus of C-Level executives. Rather, it comes from discussing possibilities and potentials with people at every level of an organization, then synthesizing such ideas into a mission—complete with measurable milestones—into which everyone can both buy into and work towards.
Architect. Once a company goal has been articulated, the modern leader creates a space or a working environment fostering the creation and testing of creative solutions directed toward this end. Rather than attempting to engineer a rigid, unyielding machine that produces products, delivers services, or generates sales, the modern leader sets a stage upon which participants can not just perform, but improvise to discover best solutions.
Coach. The more knowledge and skills people possess, the more they can contribute to an organization’s success. The modern leader therefore encourages subordinates to expand their skill sets and, when possible, provides the means for them to do so. This can pertain to everything from establishing a process for internal advancement to arranging for outside, third-party continuous education and training to increase the value of everyone in a company.
Catalyst. In science, a catalyst is a substance that sparks a chemical reaction without changing itself. In this same way, catalysts are people who, in business, unleash a company’s creative energy. They do this in four ways:
Removing roadblocks preventing teams from delivering creative solutions.
Improving communication and collaboration throughout the organization.
Connecting people’s individual ambitions and aspirations with a company’s larger goals.
Fostering openness and inclusion, so everyone feels they have a personal stake in the company’s success.
Please note: Part of this openness should include pay transparency, which is now state law here in California. As my recent article on this subject indicates, in a 21st century company, any company’s people must feel valued and understand how their compensation fits within their larger organization.
If you’ve been trained in earlier, dying forms of company leadership, changing your ways can be difficult. We can help. As company leadership, culture, and compensation specialists, we empower businesses of all types to produce leaders with the skills and mindsets to take on today’s challenges. For more information, please contact me at laura@conoverconsulting.com.