Historically, leadership has been associated with command and control structures and a predominance of aggressive, results driven achievers who assert control within a hierarchical organization model. In an increasingly volatile and unpredictable business environment where organizational boundaries are blurred, effective leadership is still viewed as central to organizational success but the leadership characteristics, key competencies and qualities, as well as the overall approach to leadership development are changing.

Organizations need to continuously adapt if they are to survive and thrive in an increasingly volatile business environment. Ensuring successful adaptation against a backdrop of increasing uncertainty and complexity means future leadership becomes less about directive structured approaches seeking predictable outcomes and more about empowering others to make effective and timely decisions. Today’s winning organizations are horizontal, not hierarchical in structure. Collaboration, Communication and most importantly Creativity in approach to deal with new situations and business scenarios are becoming the key facets for leaders of the future. This wiki considers the current state of leadership, the key challenges as well as trends and puts forward the required competencies for leaders of the future and together with their development and identification.^[1]

It’s never been easier to start a business. However, staying in business and making profits is challenging. The ease of starting a business creates a broader level of competition with every business trying to woe their customers. Some companies focus on one product and try to be best in doing one thing. Apart from stiff competition, the speed in which economy and technologies are changing means, the successful business model of yesterday might not work today and prove to be a disaster tomorrow. So hindsight and all of the previous business experiences might not lead to foresight. The sad thing is that uncertainty always leads to a short-term focus. Companies are shying away from long-term planning but rather focusing on short-term gains. While this might feel right, but failure to strategically plan five to ten years into the future can end up destroying business.^[2]

Following are some of the key business challenges leaders are facing today

• Policies: rise in the environmental and ethical awareness of the nations, customer, employees, shareholders, and non-government organizations are bringing ever changing policies across energy, environment, labor, and financial sectors. The constant demand to become more “green” or the threat of increased costs due to new carbon taxes, are also adding to the uncertainty. There are now more constraints on financial sectors on their ability to lend and take risks after the 2007 market meltdown.^[2]

• Technology: is everywhere and it is one of the key aspects for any business to stay at the forefront. However, it is hard for businesses to keep pace with the speed at which new developments and inventions are happening in technology. The huge capital investment in technology is as much an asset as a handicap because a competitor will wait for the next-generation technology, which may only be a year or two away, and then use it to achieve an advantage. Of course waiting to be that competitor can be equally risky.^[2]

• Marketing: It is said that the only true constant is change, and in today’s world nothing is changing more, or growing faster, than information. Smartphone’s, social media, texting, email, twitter and other communication channels are making it easy for businesses and individuals to get their messages out. Figuring out the right marketing channels is important for businesses to be successful in the future.^[2]

• Diversity: The global economy is becoming more connected, creating a much larger and more diverse population of customers and suppliers. Understanding foreign cultures is essential to everything from the ability to penetrate new markets with existing products and services, to designing new products and services. Diversity brings many challenges, as it makes it far more likely that people do not agree, and the lack of agreement makes running a business very difficult. At the same time, the lack of diversity within many large company leadership teams leads to a narrow view of an ever-changing and diverse world.^[2]

• Values: Every business is struggling to be successful and meet the next quarterly earnings estimate. The temptation to cut corners and do whatever it takes to get ahead is eroding the trust which exists between customer, employees, business partners, and shareholders.^[2]

There are key trends that are driving the need for change in leadership approach and associated competencies.

• Globalization 2.0: Increased globalization driving the need for leadership that spans all cultures with economic power shifting away from ‘old’ and more established economies. The economic power is shifting to Asia with business growing between developing markets and a new global middle class on the rise as a result. A single centralized strategy will no longer be effective. Future leaders will need to be conversant with conceiving strategies on a truly global basis with globalization intensifying the requirement to deal effectively with complex external constituents e.g. culture, regulatory, political, media and economic. Influence and collaboration are key to meeting this requirement.^[3]

• Demographic Changes: The global population is growing and living longer with Western societies maturing to the point where they will begin to perform less effectively. This will drive skills shortages in many geographies and a potential war for talent. Different values and expectations of new generations are now also entering the workplace. Future business leaders will need to attract, develop and retain a global pool of highly diverse talent and ensure that they are in tune with their employees needs. Empathy with team members and their overall workforce will be vital qualities. A single rallying cry from the top will no longer be effective.^[3]

• Digital Era: New technologies are disrupting old work practices, shifting the balance of power away from organizations and their leaders. In the age of the internet, employees, customers and business partners can operate on any device (BYOD), anywhere, anytime and can easily pick and choose between providers and trade between themselves. This trend challenges the need for traditional workplaces and hierarchies and the boundaries between private and professional life is further blurred with the rise in Social Media use. For younger generations, the digital era has become a way of life whilst older generations may struggle to embrace new technologies. Leaders of the future will need the skills to manage diverse individuals with wide ranging digital competence and foster required collaboration among geographically dispersed and loose-knit teams.^[3]

• Technological Convergence: Advanced technologies are now joining forces to transform many aspects of everyday life. Leaders will need to stay abreast of the convergence of nano, bio, information and cognitive science (NBIC) technologies and be able to drive creativity. This need for innovation is already promoting an era of ‘Big’ collaboration not only between parts of large companies but across multiple businesses. Joint ventures between corporations is becoming the norm, blurring organizational boundaries and allowing unprecedented levels of knowledge sharing. Leaders of the future will need to stay in tune with the technological developments and have exceptional collaboration and influencing skills.^[3]

• Environmental Sustainability: As the global population increases and the impact of climate change grows, there is more pressure on limited global natural resources - oil, water, key minerals. Sustainability will become critical to survival with carbon reduction essential for competitiveness. Sustainability will need to be embedded into the corporate culture by future leaders with new forms of collaboration with wider range of other organizations, sometimes competitors to achieve strategic goals.^[3]

• Collective, Collaborative Networks & Individualism: Globalization and demographic change will drive customers and employees to adopt a wider range of career options and require companies to be closer to their markets and workforces and understand them at an individual level. New leaders will need to engage and collaborate with networks of diverse and highly individualized teams.^[3]

• Innovation in Leadership Development Methods: Responding to the key trends requires a change in approach to leadership development. Rapid innovation will be needed in which organizations experiment with and look for creativity that combine diverse ideas in new ways with technology used to drive the change. Leaders of the future will need to embrace this innovation with each person owning their development and a collective leadership culture permeating through an organization.^[4]

Many industries have entered into a period of increasingly rapid change, which will only continue to accelerate due to trends currently foreseen in the marketplace. Businesses of the future will recognize that over-arching bureaucratic mechanisms will no longer allow organizations to evolve swiftly enough to remain relevant and competitive. The days of 'heroes' at the top of a company dictating strategy which is then executed in a command and control structure are over.^[5]

The greatest challenge for future leaders will be keeping even with the pace of change, as well as dealing with the multi-dimensional aspect of problems faced in an ever interconnected world. To be successful, leaders must migrate from easily defined individual behaviors to competencies that will equip them to navigate an environment expected to be unpredictable, complicated, indefinite and unclear.^[5]

• Comfort with Ambiguity: In volatile times, people look to their leaders for encouragement and confidence that they will prevail during uncertainty. Through guidance and coaching, leaders empower staff to make decisions in line with the corporate vision, unlocking a rich capacity to deal with changing and difficult situations. Leaders that form and dissolve groups of experts in response to countless business challenges will increase the resilience of their organizations to instability.^[5]

• Adaptability: In the future, leaders must be flexible and productive even when the burdens of work are pulling them in multiple directions at the same time. They will have to respond to the demands of the moment, even if they are diverted away from day-to-day tasks and outside of their comfort zone. Constant evolution of the environment will require leaders to acclimatize themselves and others to continually changing circumstances.^[6]

• Self-Awareness: People with exceptional emotional intelligence are proven to have greater mental health, exemplary job performance, and more potent leadership skills. The effectiveness of a leader is deepened when they become aware of the impact their behavior has on others. Mindfulness, of self and others, by boards, executives and employees, may be the single most important trait of a successful company. It will be essential for future leaders to be able to process emotional input, while conducting on-going self analysis, to enable them to effectively navigate social environments.^[7]

• Collaboration: Rather than relying on authority or fear, companies are finding it valuable to develop managers that lead through persuasion and collaboration. The best companies will hire people for their inclination to collaborate over superstars that are not a cultural fit. Up and coming leaders promote collaboration by leveraging know-how inside and outside the organization to transcend the limitations inherent in isolated islands of knowledge. By constructing new levels of interaction across diverse communities, they facilitate behaviors which produce greater results from teaming, versus what can be attained through individual actions. The mission of future leadership will be too considerable for one individual, making collaboration across demographic lines and organizational borders fundamental to meeting future challenges.^[5]

• Innovation: Creativity and innovation are must haves to stay ahead of the competition and for identifying obscure solutions which address emerging opportunities or issues. Studies have shown transformation happens when prevailing concepts are organized into new patterns of thought by way of the masses linking across systems. Researchers have surmised that innovation exists within social networks, rather than in the genius of one individual. When employees are given opportunities to provide input into solution creation by playing to their strengths, teams and corporations will lead their rivals..^[5]

• Cognitive Skills and Strategic Thinking: An unprecedented need for cognitive skills and strategic thinking will be required to set a clear vision for survival in the new world order. Critical thinkers will not succumb to “conventional wisdom” by challenging and questioning typical viewpoints. They anticipate imminent problems and opportunities by collecting game-changing insights obtained through surveillance at the boundary of their corporation and industry. A strategic leader will collate data from multiple sources prior to determining their own point of view, and is able to be decisive even in light of dissimilar outlooks or imperfect facts and figures. When required, future leaders will swiftly plot a new course when findings infer their hypotheses are incorrect and they seek to gain insights from both success and failure.^[5]

• Communication: Tomorrow’s leaders will be strong communicators that instill trust by being candid and genuine, while providing clarity of purpose. Listening skills and understanding will be vital for them to stay attuned to employees’ values to determine what motivates performance beyond salary and promotion. It will be paramount for leaders to build positive relationships that engender dedication and allegiance among different genders, cultures and standards.^[5]

Weak bench strength was identified as the greatest leadership challenge by HR executives attending a series of roundtables hosted by Mercer, Oliver Wyman and Harvard Business School Publishing. Of 30 executives attending, over 40% indicated having a shortage in bench strength that is required to meet future market growth and business requirements, as well as a lacking talent pool to be able draw upon for succeed leaders leaving critical roles.^[8]

Increasingly, organizations are recognizing leadership is embodied in the company culture and through the capabilities of all its employees, not just a few people. Current and anticipated business challenges and trends are leading HR and senior business executives to form new views on what defines leadership. A fresh perspective of the competencies that must be nurtured to grow leaders of the future will demand an assessment of effectiveness of traditional development practices.^[8]

Role of Business Schools

When asked about the role of business schools and MBAs in developing future leaders, half the respondents to a survey by the Institute of Leadership & Management were neutral when it came to the effectiveness of educational institutions in growing leadership capacity. MBAs were viewed to be of value in establishing an individual has a certain level of knowledge, but they do not address the experiential learning required to comprehend how to thrive in company within the interconnected business world. Possession of an MBA indicates a person is academically able to lead, but it is not an indication whether he or she can definitely do so. A balanced mix of skills and experience is what distinguishes persons with the potential for future leadership.^[9]

Effectiveness of Current Practices

HR and L&D departments are becoming increasingly important to building a pipeline of talent capable of leading through chaotic business change. However, it seems managers and senior executives are coming to believe the leadership programs in place today are insufficient to develop a capacity to face the demands of even their current roles.^[10]

The most common development methods currently in practice are:

• Training - Classroom training should not be the only part of a leadership development initiative, as developmental experiences are likely to have the greatest impact when they can be linked to or embedded in a person’s ongoing work activities.^[10]

• Job assignments – An effective form of leadership development that provides experiential opportunities of growth via performance of work tasks. Development through role assignments can be as simple as providing people with insight in how to take advantage of growth opportunities in their current job, or as sophisticated as systematic program of job rotation.^[10]

• Action learning - Important real-time organizational problems are tackled with objectives to deliver measurable results, associate learning to a specific aspect of leadership or to develop more general competencies.^[10]

• Executive coaching – A useful form of one-on-one learning that is goal focused and aimed at invoking behavioral change. It can be a short-term intervention to grow specific leadership skills or a more extensive process involving a series of meetings over time. Coaching is most effective when it involves joint collaboration to assess, challenge and support the actions of an individual while providing accountability for attaining and sustaining development goals.^[10]

• Mentoring - A commitment by a senior person to a long-term relationship with a less experienced resource to enable long-term support for personal and professional growth. Organizations are recognizing the value of mentoring affiliations and are increasingly looking for methods to formalize these types of relationships as part of their leadership development efforts.^[10]

• 360-degree feedback - The use of 360-degree feedback to assess leader competencies has become a pervasive tactic used by companies to grow more effective leaders. A trend in the field of leader development over the lastt 20 years, 360-degree feedback is touted to one of the most notable management innovations in recent history.^[10]

While the above-mentioned methods will remain important into the future, many HR professionals are questioning if they are continued in their current formats, they will be sufficient to develop leaders to the levels needed to meet the challenges of the coming age.^[10]

HR executives are responsible for assisting organizations in finding and developing leaders that will propel their companies forward – and then for helping those leaders to succeed. The challenge of comprehending the essence of leadership, while creating and deploying effective leadership development practices will likely be greater than ever before. These practices will be required to become better integrated with organizational business challenges and systems. Requiring a ROI will encourage greater rigor and clarity in the creation of leadership development programs and how their business impact can be measured.^[4]

Leadership development has long been thought to be working out what competencies a leader should possess and then helping individual managers to develop them. Many executives have grown weary of the competency model as the sole means for developing leaders, because they do not distinguish between vertical and horizontal learning.^[4]

Technical learning to develop new skills, abilities and behaviors is horizontal development. It is most useful when a problem is clearly defined and techniques are known for solving it. In contrast, vertical developmentrefers to the “stages” that people progress through as they “make sense” of their world.^[4]

Researchers have demonstrated that adults continue to progress (at varying rates) through predictable stages of mental development. At each higher level of mental capacity, people “make sense” of the world in more complex and wide-ranging ways. When a person’s mind has been stretched thru vertical development, perform better in more complex environments because they can think in more complex ways.^[4]

While many companies will state they need leaders at all levels of the business, but their stated objective is inconsistent with their practices when only high-potential managers are trained and developed. Many employees have the perspective their personal development is owned by someone else, i.e., their own manager, HR, training consultants, etc. Social psychologists indicate a human being’s motivation to grow is highest when they feel a sense of autonomy over their own learning and development. If the experience of development is combined with a sense of self-sufficiency over the professional growth process, an individual’s motivation to succeed is more likely to increase.^[4]

The last fifty years of leadership development has been the story of the individual. Whole generations of people advanced as a result development practices that moved them toward the ideal leader, as defined by the understanding of leadership in their time.^[4]

Organizational theorists are shifting the focus of leadership from a person or role, to leadership as a process. The key distinction in mindset is that leadership can be enacted by anyone; it is not tied to a position of authority in the hierarchy. It is believed leadership becomes more straightforward and uncomplicated when it is exercised from a position outside of authority More importantly, this definition of leadership does not tie to the acts of an individual, but is free to be distributed throughout networks of people, across organizational boundaries and geographic locations. Identification of a leader becomes less important than determination of what is needed within the system and how it can be produced.^[4]

While it will be easy for organizations to repeat the leadership practices that they have traditionally used, continuing to do so makes little sense if those methods were created to solve the problems of the past. Innovation will be required to move leadership development from a retrospective reaction to a forward sensing process.^[4]

L&D innovators must be prepared to experiment and fail in the creation of new approaches to gain insights for the next round of development program evolution. They will look to find collaborators inside and outside their own organizations who they can join with in creating learning models that push the limits of existing practices. In the future, leadership development networks will need to increase the number of perspectives brought together, by going beyond the L&D development community to engage other stakeholders for formulation of transformative innovations.^[4]

Different skill sets will be required of L&D professionals to transfer them from being authors of leadership development programs to becoming the social facilitators of transforming ideas harvested from all the stakeholders in the system. Great breakthroughs may not turn out to be the practices that are created, but the social networking process that is deployed to continuously identify new practices to deploy across the community.^[4]

The strength and depth of the leadership talent pool

Demographic changes and globalization will drive persistent talent shortages in the future. Workforces will evolve as an aging populace retires and international demand for skills increases. Organizations will have to go to battle to obtain resources drawn from an extraordinarily diverse pool of potential employees. Generation of a strong leadership pipeline requires concentration on the attraction, development and retention of leaders across all levels in the organization.^[1]

One of the most undervalued facets of executive talent management is the effort and discipline required to deploy and sustain a process to drives positive results. The process includes compilation and review of information pertaining to potential and emerging leaders, provides insight as to their readiness to take on new roles and responsibilities and supplies development opportunities and other support to help them succeed. Each organization must determine its own unique business needs to ensure a proficient talent management process. Three factors will underpin success:^[8]

• Executive engagement and ownership - talent management requires a community of executives, versus single chains of command, to engage in a shared accountability for leader development.^[8]

• Process resonance and simplicity - the leader development process must be simple and closely integrated with other key people processes. It should align with the decision-making culture of the organization and with business and workforce strategies.^[8]

• Right tools - effective talent management requires strong data management and decision support technology to transform information into knowledge. Globally accessible technological solutions will be used to produce accurate insights, presented in an executive friendly format.^[8]

The real challenge is in creating a process that top leadership buys into and actively supports to ensure it will endure. Those administering the process must determine the point at which executives believe the value derived exceeds the effort invested, where they are willing to set aside their individual interests and make talent-related decisions to benefit the overall organization.^[8]

http://www.newworldofwork.co.uk/2013/12/12/how-to-be-a-better-leader-practical-steps-and-exercises/

The following resources provide some views and discussions on the future of leadership:

• Daniel Goleman on The Future of Leadership (YouTube)
• David Gergen: What does the leadership of the future require? (YouTube)
• Business leadership - uncovering modern trends
• IBM THINK Forum Preview (YouTube)
• IBM THINK Forum Interviews (IBM)
• What we value in our Leaders (Capgemini)

The following references have been used in preparing this wiki: