How to be a great leader in a complex world

Ted Bililies
Managing Director, AlixPartners
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We live in a complex world. Over the past decade, the half-life of knowledge and technology has plummeted, the world economy has turned out to be an interconnected house of cards, and destabilizing factors – from economic inequality to health epidemics to terrorism – have shaken up all sectors of society. It is these conditions that have created the environment of complexity in which leaders from the public and private sectors are now operating.

Complexity means more than just “very complicated”. It involves both interrelatedness and unpredictability, as in complex systems – from computers and computer networks to society and social networks, and from financial markets to the climate system. Being systemic, complexity transcends self-contained categories – it’s the grey between the black and white, the nuances beneath opposing positions.

In this context, businesses and organizations are facing frequent – even continuous – disruptive change and constraints to growth. On an individual level, such complexity can feel like information overload, chaos, ambiguity – a recipe for confusion and anxiety. All of this makes it particularly challenging for leaders who are responsible for making high-stake decisions that provide clarity amidst the confusion.

And given the increasing interdependence of our economic, political and social systems, the role of business leaders has shifted from action primarily aimed inward and down on their business to action upward and out – into the community, society and the international economic and political arenas. Whether they recognize it or not, leaders of large, geographically dispersed organizations are an integral part of a global network of forces and decisions that impact the whole system.

What it takes to manage complexity

So what does it take to lead in a complex environment? First and foremost, it takes maturity. Mature leaders handle complexity well because they themselves are more complex – in their thinking, identities, emotional management, behavioural repertoire and social competence.

Mature leaders don’t have simple views of themselves. They don’t oversimplify their role or their personality. Mature leaders have changed and developed over time and they are aware that there has been an evolution.

Being a business leader in a complex world means understanding that the role goes beyond the confines of an individual company – these leaders also have a responsibility to help define wider societal goals, in their local communities and indeed beyond.

By reflecting on this role, considering the implications, and broadening the conversations they have to encompass this idea, leaders can expand their identity and, in so doing, broaden their scope of concern and influence. This will in turn help them be more effective amidst the complexity.

Think of how Bill Gates went from being a software developer and entrepreneur to a globally recognized philanthropist and humanitarian. Think also of how Joan Bavaria progressed from working at the Bank of Boston as a young mother to founding Trillium Asset Management and putting social investing on the map.

A journey into the unknown

Dealing with complexity means grappling with more ambiguity than most of us are comfortable with. It also means letting go of simplistic rules and certainties that have the advantage of making us feel steady and secure – ideologies, for example – in favour of nuance, underlying themes, overarching principles, and finding what might be called “a third way” when dealing with challenges that tend to have “two sides”.

Even dealing with slow growth and incremental progress requires a greater degree of self-management in the form of patience in the face of uncertainty, the ability to maintain and communicate an optimistic view, and the strategic vision to grasp the less obvious opportunities and persevere to achieve them. This is an uncertain and tough terrain – contrast this reality with the abundance of the dotcom boom.

This new terrain is both cognitively and emotionally more difficult, but journeying across it expands our understanding of others and of ourselves, even as it takes us to a higher level of leadership.

The whole is greater than the sum of its parts

Given that the demands many leaders face today are beyond the limits of any one individual’s capacity, one of the most important qualities is an interest in collaboration, leveraging shared efforts and group processes.

Whereas in the mid-20th century, the caricature of the heroic CEO was not too far from reality, in today’s complex systems, leadership itself must be viewed as more of a network phenomenon. As such, the best thing executives can do is to promote an environment that encourages deep dialogue, recognizes diverse perspectives, and values pooled creativity that cuts across boundaries. To create these conditions, leaders must be skilled at building trust, listening, seeking to understand, and having the humility to acknowledge uncertainty and the need for others. Tapping resources in this way magnifies and complements a leader’s strengths and power, allowing them to better manage complexity and have a positive impact.

The point is that a greater degree of sophistication in a person’s understanding of and management of self and the world – what we might call “complexity of self” or simply “maturity” – directly influences how a person leads teams, negotiates, manages change, makes decisions, handles competing priorities and stakeholder interests, navigates relationships, and deals with emotional stress. Complexity of self is achieved by seeking growth and development, welcoming challenging experiences that stretch one’s understanding and equilibrium, exposing oneself to multiple perspectives, seeking and accepting feedback, listening and reflecting and, importantly, taking the risk of acting amidst uncertainty with the best of intentions for the good of the whole system, not just one’s own domain.

Author: Ted Bililies, Managing Director, AlixPartners.

Image: A man stands in the middle of Grand Central Terminal as he speaks on a cell phone in New York, September 25, 2013. REUTERS/Zoran Milich

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