- The role of leader is prone to more upheavals than others.
- Allianz SE has identified four key characteristics of successful leaders.
- Businesses can't control external trends, but with astute leadership, they can control how they react to them.
Business models, the nature of work and the composition of workforces are changing radically. Only companies that transform continuously will remain competitive. Successful transformation depends crucially on whether a company’s leaders have the right mindset and skills.
For companies in the midst of digital transformation, the ability to adapt is the single most important skill, according to a 2016 Harvard Business Review article. Adaptation has to start with people. New roles emerge and old roles evolve; others that have existed for decades are disappearing. Companies need to be able to develop and cultivate new, digitally integrated skills.
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While almost all jobs are subject to change, there is one kind of role which will change more than most in these times of uncertainty, volatility and complexity: the role of the leader.
Out of your control
The drivers of change are largely out of our control. Take demographics. For the first time in history, companies are now employing up to five generations simultaneously. Globally, generation Z and millennials – with their rather different career needs and aspirations – will soon dominate the workforce. Work patterns are changing, with more people working from home or on the road or in flexible arrangements. In a globalized world, more people are working across geographies and many teams are international. Technological innovation and changing customer expectations underpin the need for continuous business transformation. The boundaries between sectors and functions are blurring. Networks play bigger role in the workplace.
In this rapidly changing environment, companies need to adapt if they want to remain attractive employers, and hence relevant and competitive. Leaders are pivotal. Leadership can influence levels of employee engagement, for good or for ill, by up to 70%. It is critical for the success of any company.
The mindset of future leaders
Leadership starts with the right mindset. At Allianz, we have identified four characteristics that we believe will be indispensable for our leaders in the future:
1. Curiosity. Leaders need to cultivate a “growth mindset”, as described by the American psychologist Carol Dweck. While a “fixed mindset” is one that is resistant and closed off to new information, people with a growth mindset see challenges as opportunities rather than impediments; they shift from know-it-all to learn-it-all, while always being curious to develop new skills and innovate. According to Dweck’s research, employees in organizations where a growth mindset prevails are 34% likelier to feel a strong sense of ownership and commitment to the company, and 49% likelier to say that the company fosters innovation than are those from companies stuck in a fixed mindset.
2. Resilience. Most of us don’t find constant and rapid change easy to deal with. Leaders need to be resilient in order to cope with these changes rather than get sidetracked or intimidated. Research by Zenger Folkman found that the most resilient leaders are viewed as the most effective leaders.
3. "We" mentality. This kind of mindset goes beyond collaboration across teams. Leaders need to be bridge-builders and lead beyond their own functions, units and borders.
4. Flexibility. Especially in global companies, adaptability both in terms of content and culture will be key.
Skills for the future
The right mindset will be the basis for leadership in the future. Mindset alone, however, is not enough. Leaders also need to have the right future-oriented skill set to be effective.
If transformation is continuous, the ability and courage to constantly and radically challenge the status quo and manage change effectively will be fundamental. Future leaders will be able to work in an agile manner; they will be IT-savvy, digitally literate and able to build business models on the basis of data analytics. Digitally literate leaders are more likely to provide input to grow the business and more likely to grow themselves than those with limited or no digital skills.
In this agile and less hierarchical world, technical skills alone will not be sufficient. Emotional intelligence will play a much larger role, and the combination of both types of intelligence will be essential for leaders to be successful in the future.
The more diverse the workforce, the larger the need for being able to lead inclusively. Inclusive leadership is indispensable to ensure all stakeholders are being taken along on the transformation journey. According to research by Deloitte, teams with inclusive leaders are 17% more likely to report that they are high-performing, 20% more likely to say they make high-quality decisions, and 29% more likely to report behaving collaboratively.
What is the World Economic Forum doing about the Fourth Industrial Revolution?
The World Economic Forum was the first to draw the world’s attention to the Fourth Industrial Revolution, the current period of unprecedented change driven by rapid technological advances. Policies, norms and regulations have not been able to keep up with the pace of innovation, creating a growing need to fill this gap.
The Forum established the Centre for the Fourth Industrial Revolution Network in 2017 to ensure that new and emerging technologies will help—not harm—humanity in the future. Headquartered in San Francisco, the network launched centres in China, India and Japan in 2018 and is rapidly establishing locally-run Affiliate Centres in many countries around the world.
The global network is working closely with partners from government, business, academia and civil society to co-design and pilot agile frameworks for governing new and emerging technologies, including artificial intelligence (AI), autonomous vehicles, blockchain, data policy, digital trade, drones, internet of things (IoT), precision medicine and environmental innovations.
Learn more about the groundbreaking work that the Centre for the Fourth Industrial Revolution Network is doing to prepare us for the future.
Want to help us shape the Fourth Industrial Revolution? Contact us to find out how you can become a member or partner.
Needless to say, all this comes on top of the more standard leadership skills, such as empowering your team, coaching and giving feedback, which will remain equally important in the future.
The right framework
While we cannot usually control the trends that are reshaping our industries, we can control how we react to them. Companies can guide these reactions by building the right framework of incentives and support structures. HR functions play a pivotal role in guiding these actions and integrating them into recruitment and talent management strategies, and enabling all colleagues equip themselves with the required mindset and skills.
Only in such an environment will current and future leaders succeed with ongoing and parallel transformations.