The Leader as Apprentice: Emergent Learning For A Fast-Moving World

34 min readJun 20, 2021

First Published November 1, 2019 (Pre-COVID!)

Leadership is a challenge even at the best of times. Every part of the process is indeed more strenuous than it first appears — from assembling a talented and committed workforce, to orienting the team around a shared vision, to creating a culture where individuals take the initiative in pursuit of common goals. Yet today’s disruptive business environment has made the demands of leadership ever more daunting — even as the necessity of clear direction increases. Old approaches fail to allow for much-needed internal agility, necessitating a new framework for adaptive leadership so that businesses can build pathways to success in a complex future.

Abstract

This paper tracks two distinct phenomena that are on a collision course: Widespread tech-based disruption in the business world, and the failure of leadership development models to provide adequate means of managing these changing demands consistently and sustainably. The future belongs to leaders that can quickly develop the continuous learning skills necessary for rapid progress and adaptation in a VUCA world. While some businesses try in vain to fight off the forces of change, the winners of tomorrow will be those who apply their talents and a mindset of lifelong learning to achieving progress on the open winding road ahead.

THE LIMITS OF OUR MENTAL SOFTWARE — RUNNING NEW PROGRAMS ON AN OLD OPERATING SYSTEM

Updates and upgrades are taken for granted in the world of software, as it is widely recognized that new opportunities and threats alike are best dealt with through adapted solutions. Yet many leadership programs are still designed to deal with the problems of yesterday, rather than the rapid changes of today or the radically new, and potentially disruptive, business models of tomorrow.

They also fail to bridge the gap between theory and practice — a particularly glaring deficiency as businesses aim to reorient themselves toward the challenges posed by technological advancement.

The shortcomings of these outdated approaches have been described succinctly (if rather coarsely) by Jeffrey Pfeffer of Stanford University, whose criticism in his book “Leadership BS” illustrates why current leadership training utterly fails to prepare managers and executives for the evolving commercial landscape of today — let alone tomorrow.1

Modernizing the field of leadership training is challenging enough; aligning it to expected future conditions is a tall order indeed. Yet this is the necessary step forward for modern business leaders, as they prepare their teams to thrive amid a high degree of variability.

While traditional management methods and skillsets offer adequate guidance for leaders operating in a predictable and a rather unchanging environment, the challenges ahead require a wholly new mindset where change is seen as an opportunity, and flexibility is of greater value than mere consistency and “hitting the numbers”.

Today’s leaders must be alert to the challenges posed by a disruptive and decentralized business environment, as they will be counted on to prepare, plan and plot the right course forward. By learning to jettison instincts and practices that were honed in a relatively stable environment, and replacing them with a fundamentally new understanding of the dynamic variables at play, those leaders can weather the storms ahead — maintaining some sort of stability and progress toward a worthy, and possibly unknown, destination.

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1 See, e.g., Getting Beyond the BS of Leadership Literature (McKinsey, 2016).

FLYING OVER UNFAMILIAR TERRAIN — HOW TO TRAIN THE LEADERS OF YESTERDAY

Leadership development programs tend to be based on an analysis of successful leaders, their personal qualities, the business strategies and tactics they employed, and their overall recipes for success. This approach has its merits, as history has much to teach us about why some methods succeed and others fail.

Yet looking backward also suffers from a major drawback: It essentially teaches people how to thrive in a world that has already disappeared. The qualities that spawned great achievements in the 1980s and 1990s may indeed have little relevance in an environment that scarcely resembles the commercial landscape of a generation ago. Even academics who study leadership have failed thus far to identify a prescriptive set of lessons to be drawn from past data.

To make matters worse, many leaders who struggle to remain effective tend to assume that their failure is a result of insufficient dedication to the leadership principles and skills they have been taught. Their response is to hold on ever more tightly to these very same outdated methods.

Indeed, recent research bears out these concerns. Consider the following findings from employee surveys and other sources across industry lines:

Just 41% of organizations agree that leadership development programs of at any hierarchical level (from lower management up to the boardroom) are effective. This finding comes despite clear interest in developing leadership skills; 90% of the same organizations provide targeted programs to build competencies among their top talent, but these efforts fail to equip them properly for the real-world challenges they must face.2
Coaching is often singled out as the skill that is most lacking in today’s leaders – despite its clear importance in building rapport, identifying performance gaps, and creating a positive culture where motivated and collaborative teams can work synergistically.3 One recent survey found just 17% of respondents ranking their leaders as ‘high’ or ‘very high’ in terms of their coaching skills, noting that many also had difficulty providing clear direction, or keeping themselves open to feedback and new ideas.4
Just 7% of CEOs feel that their companies are building effective global leaders, while only 10% said were able to identify a clear business impact from their leadership development initiatives. Among 500 executives surveyed worldwide, a mere 11% strongly agreed that their leadership-development interventions achieve and sustain the desired results.5

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2 Reinventing and Democratizing Leadership Development (Brandon Hall Group, 2018).

3 A New Age Demands New Leadership, by Heide Abelli (Association for Talent Development, June 2019).

4 Revamping Leadership Development (HR.com, 2018).

5 What’s Missing in Leadership Development? (McKinsey, 2017).

Clearly there is something to be desired from the current state of leadership training. Many of the most important leadership skills for a VUCA world — such as vision, judgment, mentorship, knowing when to give up control, knowing how to sense the future direction of a given industry, and learning how to respond to market conditions that aren’t fully formed yet — still don’t receive adequate attention within most leadership training courses. The statistics outlined above are a consequence of such incomplete efforts, as conservative organizational leadership philosophies continue to suck the oxygen from more promising and forward-looking strategies.

A more sensible approach involves framing the issue of leadership with an eye toward the future. Although the precise contours of the medium-term future remain hidden from view, general trends are beginning to emerge with real clarity. By adapting the lessons of the past to a new environment where decentralized leadership, futures thinking, and agile business structures are key to market success, we can throw away a great deal of bathwater while keeping the baby perfectly intact.6

CHAOS CREATES THE SURPRISE FACTOR — CATCHING NEW OPPORTUNITIES AS THEY APPEAR

An incrementally changing world favors leadership strategies that suddenly become obsolete when exponential growth opportunities begin to emerge as the dominant characteristic of the environment. Yet no entity can have a precise vision of what the future holds, and so the challenge of adaptation affects all businesses to more or less the same degree.

Given these relatively equal starting conditions, key determinant of success becomes the ability of any given business to identify opportunities quickly and capitalize upon them. Indeed, far from being an inconvenience, this never-ending process of re-invention and innovation acts a differentiating factor which businesses can use to their advantage — provided the right systems and mindsets are in place. When racing against a set of competitors, and an obstacle is thrown onto the track, the well-prepared racer can build a far greater lead than would have been possible if no obstacle had appeared at all.

By a similar token, disruption itself — much-feared by traditional businesses the world over — is the very process by which exponential growth becomes possible at all. By leaning into disruption and embracing the novelty that creates it, these same businesses can harness the potential tools created by hyper-automation with AI, Big Data moving closer to the edge, multi-experience conversational platforms, practical blockchain networks, democratization of expertise, distributed cloud networks, human augmentation, autonomous mobile technologies, and perhaps even soon, quantum computing.7 Indeed, those who view change as a threat will find it to be a threat; those who view change as an opportunity will find it to be an opportunity.

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6 For more on these concepts, see my recent white paper, The New Rules of Engagement: Why Agility Paves the Path Forward for Your Business (2019).

7 See ‘Quantum Supremacy’ Is Here, According to Mysterious Google Claims (Science Alert, September 2019).

The need for new leadership discovery and learning tactics becomes apparent as soon as one considers the vast amount of knowledge and expertise required to build and operate the powerful tools which are now available. In simpler times, leaders could maintain a relatively firm grasp on the inner workings of their businesses. Today — and especially tomorrow — the sheer number of interlocking cross-functional interfaces within a single business requires elevated levels of coordination between various types of operations. This challenge, combined with complexity of organizational processes, means that leaders who insist on being part of every decision will only end up slowing down operations considerably, thereby negating the very advantages that such modern methods confer.

Yet those same leaders may not realize that they are slowing down the performance and limiting the potential of their team. If history is any guide, the “illusion of certainty” among leaders will continue to grow even as the amount of industry knowledge doubles even faster.

The name of the game will be building dynamic organizational capabilities and enabling their execution through decentralized workflows. No single person can keep up with exponentially rising rates of knowledge growth — yet the business itself needs to, in order to remain relevant. One way for learning to occur at the rate of change exerted from the external environment, is for the leader to stop telling subordinates how to do their work – and instead reverse the arrow of causality. In a truly agile business, research teams and frontline personnel have the responsibility of telling the leader how the company can succeed as it moves forward.

This alternative — decentralizing the decision-making process in order to allow one’s own specialized talent to pursue opportunities as soon as they are spotted — requires a deep level of trust, as well as a mindset of coordination. These qualities, in turn, can only be generated by a unified culture where listening, initiative, and engagement are the norm.8 Organizational innovation focused around your current business culture may be the very first step in the transformation process.

Leaders should therefore delegate not just action, but also thinking, to personnel teams who are closer to both the technological side as well as the customer side of the business. Such a shift in responsibilities will go a long way toward solving another key problem faced by a majority of leaders today: They find themselves too busy with day-to-day affairs and lack the time to consider bigpicture solutions.9

There is a human tendency to hold on ever more tightly during times of great change, for fear of losing control of the situation. People may seek safety in numbers, forming bureaucracies for decisionmaking in order to provide cover in case of failure. These and other related temptations commonly affect leaders as well as rank and file team members — yet one immediately notices that they are aimed not at delivering what is best for the organization, but rather at deflecting personal risk and soothing the stress that comes with uncertainty.

Sahana Chattopadhyay shows the way out of such unfocused and short-term thinking: “This is precisely where facilitation and facilitative leadership play a huge role in keeping the group centered, present, and receptive. Effective facilitation enables individuals and groups to go deeper into the zone of discomfort, probe and sense, let go of old patterns, and co-create from the emerging future.”10 A clear emphasis on rewarding smart risks, independent of whether they actually pay off, can also remove barriers to action.

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8 For more on these ideas, see my white paper, How to Manage an Empty Office: Disruption and the Future of Labor (2019).

9 Reinventing and Democratizing Leadership Development (Brandon Hall Group, 2018).

10 See Facilitating Emergence and Sensemaking in Organizations (July 2019). The diagram included in this section has also been adapted from the ideas in this article.

EVERYTHING IS A PROTOTYPE –- FROM SHORT-TERM THINKING TO DESIGN THINKING

A reliance on blue ocean ideation and experimentation is particularly well suited to the fast-moving business climate of the present moment, though it nevertheless represents a significant shift for most companies. The traditional approach, still adhered to by many, involves essentially committing to a single practice or set of dynamic capabilities, which is then tweaked repeatedly over time until an idea passes the necessary tests (or is unable to pass them).

Yet more aggressive testing environments and dynamic practices, in which ideas are quickly evaluated and cast aside if found inadequate, rests on sound principles of logic and efficiency. Testing ideas with customers early in the process allows for a constant stream of impartial feedback, which can then be learned from and converted to fresh ideas that benefit from previous failures. In essence, faster testing allows for a greater number of iterations in the design process, which in turn lets the company explore and hone new concepts from other angles, thereby incurring less risk.

Phil Gilbert, General Manager at IBM Design, has described the process well. “Design thinking is the scientific method for the 21st century,” he said, explaining why he is determined to remake IBM’s ideation process according to this approach. He further argues that, in the world of design, “everything is a prototype” rather than an end in itself, because all products will eventually be superseded by alternatives that are more advanced.

This framework for progress can be liberating for designers who may otherwise be tasked with bringing a single product idea to a near-perfect state. Yet it fits nicely alongside Gilbert’s thoughts on Design Thinking. “Today, we call it ‘permission to fail’,” he said. “I prefer ‘permission to learn’. But it’s permission.”11

Gilbert’s embrace of design thinking has put his company on a new path forward, showing that even large companies can benefit from a deliberate reframing of their internal processes. His mission is to “change the habits of a huge company as it tries to adjust to a new era, and that is no small task.”12

IBM is among the companies making a deep commitment to Design Thinking in recent years, going so far as to remake its entire ideation and product development process. Yet for leaders to reproduce IBM’s successful push forward, they must first learn how to differentiate between objectives that are worthwhile and attainable, and those that are little more than fool’s gold.

As we will see, in order to provide timely guidance along with effective coaching, the leaders of tomorrow must update their mental models to accurately engage with the world of today and tomorrow. In such ways, leaders can train themselves to recognize the right patterns — and be ready to pursue new opportunities at a moment’s notice.

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11 As stated in “Today is a Prototype for Tomorrow”, video published by SAP TV.

12 As described in IBM’s Design-Centered Strategy to Set Free the Squares (The New York Times).

A SYSTEM UPGRADE FOR LEADERS — STAYING LITERATE IN INCREASINGLY COMPLEX TIMES

To effectively implement the shift in strategic thinking described above, a complementary shift in dynamic planning and execution must also be in place. Design thinking, agility management, and an anticipation of future business models each have specific roles to play. The table below shows these kinds of features flowing from leadership that instills the right outlook and mentality throughout the organization.

The combination of two new but interrelated concepts can put business leaders into a mindset where change can be readily capitalized upon through proactive adaptation. The first was articulated by Bob Johansen, as part of his exploration of what he calls The New Leadership Literacies.13 In essence, he argues that while specific near-term predictions are too difficult to make accurately, an extrapolation and analysis of likely trends can form a valuable picture of the future business landscape a decade down the road.

The general concept will be familiar to gamblers and statisticians the world over: When playing with a pair of standard dice, any attempt to predict the outcome of a single roll will most likely end in failure. Predicting the cumulative outcome of the next 10 or 20 rolls, however, is far more manageable.

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13 See his speech on The New Leadership Literacies: Thriving in a Future of Extreme Disruption and Distributed Everything (video, June 2018).

By the same token, instead of using guesswork to gamble on the next big thing, Johansen recommends using an expected future situation as a starting point, and then working backwards to figure out how we are most likely to reach that point. By reverse-planning back through the intermediary steps, business leaders can plot a rough course of an executable strategy that can in turn be used to guide decision-making in the present day — particularly when new opportunities arise.14

The advantage of such an approach is that the path forward can be illuminated, while the inability of traditional business models and leadership methods to reach the necessary milestones likewise becomes immediately apparent by working through the business systems and capabilities required for the future outcome.

Johansen points out that the same technological advances which necessitate change (large-scale data processing and networked communication, for example) also provide the tools needed to implement that change. As examples, one may consider online niche education for specific skills, decentralized business operations that allow independent teams to remain coordinated, and open data systems to encourage information sharing both within and between companies.

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14 Interestingly, the same process of jumping forward can be used to identify sensible leadership strategies for the years ahead. Given the exponential rate of knowledge growth in the world today, no one person can keep abreast of all that is relevant to them. Decentralized leadership is therefore the only way to ensure that decisions are made by those who have a direct understanding of the issues involved.

Other business analysts have recommended a similar approach to strategic planning. The “zoom out/zoom in” method involves constructing “two parallel time horizons — one that’s six to 12 months out and another that’s 10 to 20 years.”15 The longer timeline is intended to reveal the ultimate destination, while the shorter timeline helps businesses focus on what they can do right now to move them closer to their eventual target.

Some leaders may hesitate to make the adaptations necessary for such a strategic pivot, choosing instead to remain with tried-and-true formulas which have worked well for them in the past. As a result, their experience of a VUCA world will be the one that is commonly felt and understood, as seen in the left column below. Their more far-sighted counterparts, who embrace reverse-planning and new ways of organizing internal operations to execute strategy, will experience a far different impact of VUCA, as seen in the right-hand column:16

The future-oriented approach outlined above can help leaders assemble a kind of roadmap to determine which sorts of opportunities to anticipate. How to identify them, and what to do when they present themselves, are questions that require an additional set of skills. These form the subject of a recent book by Rita McGrath, which labels these opportunities “inflection points”. In it, McGrath offers in-depth analysis of what to do with these inflection points, as well as how to spot them — and why they are often missed.17

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15 Zoom Out/Zoom In: An Alternative Approach to Strategy in a World That Defies Prediction (Deloitte, May 2018).

16 Recreated from The New Leadership Literacies, by Bob Johansen (published September 2017).

17 Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen, by Rita McGrath (published September 2019).

An inflection point is “a time in the life of a business when its fundamentals are about to change,” to take the definition used by McGrath. Often these are experienced as a single moment in time — but her book presents three rules of thumb to challenge this passive interpretation:18

What you experience as a big, dramatic inflection point has almost always been gestating for a while.
This creates opportunity: if you see it early — or even better, spark it — an inflection point can be a strategic boon.
You can use tools from the discovery-driven growth playbook to maximize your opportunities.

Adapted from RocketSource. The S Curve of Business: The Key Levers to Sustaining Momentum for Your Brand.

A premium must therefore be placed on the ability to see or create an inflection point, as a means of jump-starting a new era of growth within an organization. Both Johansen and McGrath make the astute observation that, particularly in complex environments, revolutionary insights are far more likely to come from the edges of an organization rather than from the top. Specialists in niche fields, and those who deal directly with customers, tend to be the first to discover the game-changing potential that a new technology or business model can bring to the organization.

As McGrath points out in a recent article: “Especially if you’ve been successful for a long time, that’s one of the harder things for leaders to do — to be humble and say, ‘There may be people who know more about what’s happening than I do. Let me ask them.’”19

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18 Ibid., introductory chapter.

19 How to Stop Making Assumptions — and Start Seeing Around Corners (article, May 2019).

It therefore follows that hiring and/or contracting a diverse group of employees can widen the net even further. Blind spots tend to be shared by those whose perspectives and life experiences are similar, while heterogeneous groups tend to cover for individual members’ weaknesses.

However, as with the idea of delegating ideation to those lower in the organization, many traditionally minded leaders may hesitate when it comes time to go against their hiring instincts. While considering the relative merits of instincts versus insight, leaders may find it worth keeping in mind that their intuitions came into being (and were then further developed and solidified) during times of relative predictability. The fact that the fundamental rules of business have changed in this era of disruption should be reason enough to treat one’s own instincts with a measure of skepticism moving forward.

Knowing when to take a new approach — and how to trust it, absent the reassurances upon which we have come to rely — requires yet another specific talent that is underappreciated in most of today’s popular leadership training courses. In order to see a thing clearly, one must sometimes learn to forget what it looks like. Mindset, once again, is a precursor to vision: The eyes do not see what the mind cannot comprehend.

STRANGERS IN OUR OWN HOUSE — HOW KNOWLEDGE CAUSES BLINDNESS

Familiar objects inspire familiar associations. In order to save mental energy, our minds create categories for things; upon seeing a motorcycle, we take it for granted rather than examining it with fresh eyes. Most of the time, this ‘mental shorthand’ helps us navigate successfully through a busy and distracting world. Yet it also blinds us to valuable connections that we might otherwise see.

Psychologists and magicians alike have entertained audiences for years by taking advantage of this kind of “inattentional blindness”, wherein ordinary people are reliably fooled by changes which are plainly visible yet fail to register in their minds because their focus is elsewhere. A highly instructional example can be found in “The Colour Changing Card Trick”20 , whose inventors cleverly illustrate just how much of the big picture we are liable to miss when our attention becomes too narrow.

Daniel Simons and Christopher Chabris famously raised awareness of this phenomenon in the wake of their 1999 “Selective Attention Test”21, for which participants were asked to make a careful count of the number of basketball passes completed by one group of players. Their single-minded concentration blinded fully half of all participants to the strange spectacle of a person in a gorilla costume walking through the middle of the frame, stopping to beat their chest in front of the camera, and continuing to walk out of the picture.

In a Scientific American review of inattentional blindness and related phenomena, neurologists Vilayanur S. Ramachandran and Diane Rogers-Ramachandran point to “a general principle at work”. “Our brain is constantly trying to construct meaningful narratives from what we see,” they write. “Things that do not quite fit the script or that are not relevant to a particular task occupying our interest are wiped wholesale from consciousness.”22

These narratives may even be buried in the brain at a subconscious level, increasing the need for specialized training that can decouple persistent mental associations. Threats and opportunities alike are in danger of being missed, unless leaders find a way to develop in themselves and in their teams an ability to step back, detach, and consider familiar situations with a modern approach that is unbiased by prior knowledge or tradition.

In the business world, there are major costs associated with leaders not being able to see what is in front of them. Our current era of business is filled with examples of wildly successful companies whose main achievements sprung from the simple realization that new services and technological advances can have applications that reach far beyond their original intention.

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20 The relevant video by Richard Wiseman is a remarkable example of this phenomenon in action — and also features a cameo by a gorilla, as an homage to a classic in the genre (see next footnote).

21 See the original video here.

22 How Blind Are We? (Scientific American, 2005).

Only by pausing to really consider the motorcycle — and mentally combining it with other features of our world, such as cellphones and restaurants — could a business like Uber Eats be conceived. Similar feats were achieved by Netflix (combining DVDs and the postal service, before switching to high-speed downloads), Google Maps (combining satellite imagery with the internet), and countless others.

To build these massively successful enterprises, technical knowhow was certainly a prerequisite — but the main innovation was conceptual. As Blaise Pascal has said, “Small minds are concerned with the extraordinary, great minds with the ordinary.”23

The high-flying startups and fast-growing businesses of the current age are the ones whose ideas are original and fluid, leading them to make full use of connections that others have missed.

Those connections appear not as a bolt from the blue, but as a result of a thorough process of de-familiarization that involves learning to circumvent one’s own biases. Only by training oneself to remove mental shortcuts and see objects with fresh eyes, can genuinely new perspectives be experimented with.

To outline the type of internal reorientation necessary, Sahana Chattopadhyay proposes a new emphasis on what she calls ‘Transformational Learning’. “We need to move from intended learning to emergent learning,” she writes. “Intended learning happens from a place of knowing and against a set of specific goals. Emergent learning happens from a place of reflection and sensemaking.”24

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23 As highlighted in To Change the Way You Think, Change the Way You See (Harvard Business Review, April 2019).

24 Reinventing Organizational Learning — Towards Transformative Learning (May 2019). The accompanying image has also been adapted from ideas in this article.

By exploring the possibility of new connections, original structures can be built — even if their final purpose remains obscured for the time being. To take but one example, Facebook currently operates on a business model of targeted advertising leveraged around a gargantuan trove of data about people’s personal qualities and interests. Yet it began with far more modest ambitions: To provide an internet-based platform through which friends could stay in touch.

As with the internet itself, the key insight for Facebook was in the originality of the basic idea; monetization would come later, in due course. At the outset, nobody knew what shape the platform would ultimately take, and so no clear business model could have been decided on during the beginning stages.

For such reasons, forward-looking businesses should take it upon themselves to indulge in fast, inventive, and promiscuous internal experimentation. Ms. Chattopadhyay drives the point home:

“Holding space for emergent learning is one of the pre-conditions for creating a thrivable and antifragile organization, one which flourishes in the face of change and disruption by leaning into the emerging future.”25

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25 Six Enablers of Emergent Learning (July 2019).

Adapted from: Reinventing Organizational Learning — Towards Transformative Learning, by Sahana Chattopadhyay

For many leaders, one particularly difficult concept to embrace is the need to act on ambiguous information, in the pursuit of uncertain goals. Yet as Ms. Chattopadhyay stresses, there is no such thing as a sure deal in a VUCA world:

We will never know everything, have all the information, or complete clarity regarding any decision we need to make. We will have to build the plane as we fly. We just have to develop our capacity to hold space for ambiguity … the obvious and measurable can often delude us into focusing on the wrong problem.

The ability to thrive in ambiguity also comes with an element of play. Children are quintessential explorers of the unknown, making delightful discoveries as they flow with life. We lose this ability as we grow up and crave predictability, plans, and processes …. We go off the rails when — in the face of uncertainty — we disregard all disconfirming information, cling to what we already know, and act from our old habits.26

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26 Ibid.

She adds that, whenever this mindset of experimentation may become untethered to traditional business goals, it can be brought back into focus through a kind of “collective sensemaking, which will always be much more accurate than any preplanned action could have been.” Once again, this reliance on team insight and ingenuity depends in large part on having the right mindset already in place across departments within the business. How to develop such a highly functioning team environment with Design Thinking is a separate question entirely, and well worth exploring.

BUILDING AN AGILE TEAM — HOW TO PLAN FOR A FAST-MOVING WORLD

Rita McGrath reminds us that “snow melts first at the periphery”27 — an observation worth remembering for leaders in all industries. Change is indeed felt first at the edges of an organization, with those at the center often the last to know about new conditions on the outside. Yet traditional hierarchies nevertheless place the most important decision-makers in these insulated spots, where many of them tend to speak more than they listen.

Put simply, a reversal is in order. Leaders should be curious rather than aloof, aiming to be fully present and inquisitive when new information becomes available to them. Smart leaders recognize that, since what they know is only a tiny fraction of what it is possible to know, the most valuable new ideas are likely to come from somewhere outside their own experience.

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27 Introduction to Seeing Around Corners, by Rita McGrath.

The best business leaders may not even understand precisely where these new ideas are coming from. Thanks to advances in AI, their employees may well be working alongside silicon-based assistants that detect patterns and opportunities which may otherwise be missed. Future projects may succeed in further integrating AI with human thought, accelerating this expansion of knowledge while moving even farther away from traditional processes of ideation.28

By asking the right questions, knowing when to defer to greater expertise, and generally ‘learning how to learn’, leaders can improve their decision-making ability even in situations where much of the relevant information is unavailable or inaccessible. A committed mindset of experimentation and prototyping will enable a leader’s lifelong learning faster than most structural changes or business strategies ever could. Such efforts generate an invaluable cycle of internal growth, which can be understood as ‘learning in the flow of work’.

Indeed, as I have argued elsewhere, “the primary driver of success in an innovation-based economy [is] the ability to learn …. Future dominance in industry will be achieved by those companies that optimize for faster rates of learning — and then leverage that knowledge to create a new generation of disruptive products and services.” For such learning to occur, experiments must be frequent and cheap, with their results logged, distributed internally, and learned from.29

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28 Microsoft invests $1 billion in Elon Musk-founded OpenAI (Engadget, July 2019).

29 The New Rules of Engagement: Why Agility Paves the Path Forward for Your Business (2019).

At the heart of this approach must necessarily be open lines of communication with an engaged team of specialists across fields, who are given freedom and encouragement to bounce ideas off of each other and then experiment with the resulting concepts. Related structural adjustments, such as potentially replacing a Chief Information Officer with a Chief Innovation Officer, could further set the tone for an organic and communal development effort. The aim would be to move away from the paradigm of working toward pre-determined goals — and towards a new, open-ended model of unstructured creativity.

Such a decentralized approach brings considerable added benefits, even apart from the improved strategic outcomes it allows. Team members feel much more loyalty when their opinions are sought and taken seriously. They also take far more ownership in projects that they had a hand in designing, as opposed to assignments that were imposed upon them. Moreover, such teams tend to attract and retain higher-level talent, because they represent a vehicle for creative minds to meet without restriction.

Last but not least, the open and decentralized approach restores the original meaning of the word ‘leader’ — i.e., a person who inspires others to work together toward a common goal. Centralized decision-making is more managerial in nature, collapsing the potential for lateral thinking and initiative into a select few who are deemed worthy for the purpose. By contrast, imagine if all your teams could be ambidextrous problem solvers!

A truly effective leader rarely needs to tell people what to do, as their team already knows the over-arching objective, buys into the culture, maintains open lines of internal communication, and works proactively to push the ball forward. By now it should be evident that such an arrangement is essential to future organizational success, as it is the only way that teams can outgrow the limits of the knowledge base of their leaders.

It should also come as no surprise that better leadership development is closely correlated with increased employee engagement and retention, as well as increased customer satisfaction and retention. This trend is likely to grow even stronger as the coming ‘gig economy’ for employees creates a rotating workforce, requiring extra effort to generate true synergy and camaraderie.30

Success, of course, means team members learning to ask the right questions. These may include practical as well as theoretical questions, such as: “How does new technology enable us to interact with our customers in a new end-to-end way along the customer journey?” or “What opportunities do data and analytics provide in terms of personalized marketing, and hence hitting the right customers with relevant messages?”

The questions may also be strategic in nature: “Is there a need to strengthen the competencies of a group of specialists (e.g. data scientists)?” and “Should we find these competencies through new talents or perhaps partnerships with other companies?”

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30 See How to Manage an Empty Office: Disruption and the Future of Labor (2019).

Each of the above questions was proposed by Mai Britt-Poulsen31, yet there are others — particularly with respect to organizational culture — which leaders themselves would be well advised to consider. Rather than mimicking the specific cultures of influential organizations from the past or present, the winners of tomorrow’s economy will be the ones who have learned the deeper lesson from those success stories: To thrive, one must first learn to develop entirely new capabilities that overlap with the core business’s overall aim. Far from a merely decorative element, culture will be the behavioral engine that both drives and directs productivity.

A recent summary of prevailing attitudes in business culture drives the point home:

How your company works should be aligned with its market and strategy, not the latest trend, business book or Harvard Business Review case study. This means taking a clear stance as companies on how people work together, and making this as varied and as competitive as our markets. What’s more important than product/ market fit? Culture/market fit …!
If you’ve identified that your market strategy is all about delivering the most seamless customer experience, then your culture should value collaboration more than individual control.
If winning in your market means elevating a tool into a work-of-art like Apple by prioritizing form and function, then you need a culture which values beauty and elegance above convention.
If remaining competitive means a flawless, reliable product — then you need a culture that values process over creativity.32

As with everything else in the business world, the ideal culture for any given company is likely to change over time, given an evolving marketplace and shifting consumer demands.

Moreover, actually creating the ideal corporate culture is a separate major challenge, as simply calling for change is likely to end in disappointment. The nature of leadership is such that other people are far more likely to take their cues from the leader’s actions than from his words. Only by developing a genuinely new leadership approach, from the outside-in, can a leader hope to spark the kind of meaningful change throughout their organization that can establish a true Culture-Market Fit.

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31 Leader, Do You Have Lifelong Learning on Your Agenda? (September 2019).

32 Why Culture/Market Fit Matters (More Than Anything Else) (Innov8rs, September 2019).

BRINGING THE REVOLUTION HOME — THE STRATEGIC IMPACT LEADER OF TOMORROW

A forward-looking organization should incorporate learning sessions — not just for teams, but for internal leaders to improve their own skills. Specialized workshops and toolkits can isolate opportunities for leaders to make their impacts felt, offering built-in performance support to reinforce positive lessons. These resources can feature pointed questions for leaders to engage with, on topics such as how to create buy-in during periods of business transition, how to relate business efforts to a local context, and how to generate a leadership culture throughout all levels of the organization.33

Such efforts can provide monumental benefits for businesses that would otherwise focus only on training their own managers to be leaders. Rather than attempting to retroactively teach newly promoted employees to lead teams, a more comprehensive initial investment can ensure that the most impactful team leaders are promoted in the first place.

As many observers in today’s economy have come to realize, coaching is a key element in such development efforts. By acting as a mentor, developing rapport, focusing on potential, and encouraging initiative, leaders can unlock the full intellectual and productive power of a diverse workforce.34

Moreover, word choice and body language often overshadow the intended message of interpersonal communication, highlighting a further set of skills that leaders would be wise to develop.

A mental model can illuminate the most valuable target for leaders — and by extension, the personnel around them — in the economy of tomorrow. As we can see below, such a model borrows much from futures thinking, which involves looking at old problems in new ways, while putting resources into flexible strategies of ideation and experimentation.

Source: SEAC, co-designed with Erickson (2019). E3 Training Program SEAsia Leadavation Center Co., Ltd., Bangkok

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33 See Leadership Learning: 8 Ways to Improve It (May 2019).

34 For a further exploration of these ideas, see A New Age Demands New Leadership (June 2019).

Several rules of thumb are worth embracing in the VUCA world, most of which require boldness and confidence. Among them is the inclination to see the business model as the product itself, as long as it enters the market at the right time. Highly scalable models should be a goal for the organization, as it attempts to build a strategy for growing at least one order of magnitude. Other important mindsets are listed below, including the willingness to confront riskiest assumptions first, through evidencebased experimentation and inquiry.35

Such priorities, if internalized and spread throughout the organization, can prompt a dramatic shift in outcomes, allowing the business to pivot from incremental efforts that are limited by diminishing returns, to disruptive efforts that ride the latest waves (or even cause them) for vastly greater impact.

The list of recommended changes is indeed long, and for good reason: Research indicates that when leaders embrace only a few token changes, their chances for success improve only modestly. By contrast, full-scale implementation of an entire suite of forward-looking mental and organizational innovations typically generates a seismic organizational shift, opening the door to lasting success in tomorrow’s economy.36

Facilitating workshops, proactive coaching, experimental mindsets, scaling growth — these tools and habits are the keys to agile organizational development. With them, your business can develop real synergy in pursuit of building dynamic capabilities. Without them, real agility and exponential growth will likely remain out of reach.

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35 The accompanying image has been adapted from Start with Mindset (September 2019).

36 What’s Missing in Leadership Development? (McKinsey, 2017).

STEP FORWARD, NOT BACKWARD — THE NEW RULES OF THE ROAD

For a business to become adept at pursuing multiple avenues of research and development at the same time, its leaders must first become proficient in the same skill. An entirely new mindset for pattern recognition, professional relationships, and organizational structure is needed to open new doors. While this dynamic view of leadership development seems inherently complex at first, it can be broken down into central parts and principles. The leaders of the future — called X-Factor Leaders by some — have the following traits in common:37

Leadership development in the 21st century should aim for these goals, lest their subjects find themselves adrift — either stuck in old ways of thinking or using business models that were not designed with today’s disruptive landscape in mind. An over-emphasis on traditional business metrics can also dampen progress, incentivizing short-term achievement at the cost of genuinely creative solutions that could otherwise pay massive dividends down the road.

More than anything, success in tomorrow’s world hinges on the mastery of intangible qualities such as coaching, lateral thinking, communicative skills, and a genuinely strong culture of initiative and team-building.

Although many of today’s leaders may find it difficult to make time for such personal and professional reinvention, the time has actually never been better. Technological advances that aid in doing business have also allowed for the introduction of new methods and techniques for leadership level training. Communications technology creates the potential for improved decentralization, letting teams make decisions without the explicit approval of executives.

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37 Adapted from The Four X Factors of Exceptional Leaders (strategy+business, September 2018).

Such a setup also opens the door to a system of content curation which can filter out unnecessary information, thereby freeing up more of the leader’s time for new initiatives.38

A key problem that remains is in deciding on a business model and culture that is right for one’s business, given its talent and experience. Contextualized and project-based training can help businesses explore their unique strengths, as they develop new mindsets and processes wherever there is fertile ground for intellectual mobility.

Although the business world now moves more quickly than ever before, the trick is to follow where it is going — not where it is at any given moment. Standout executives do more than live comfortably with chaos: They take ownership of complexity by creating simple, strategic and operational narratives around it that can be readily understood and embraced by those who work for them. Those narratives are then built upon by experts within their own organization, who generate new ideas and follow them where they lead.

This need for simplification often meets both cultural and bureaucratic resistance, particularly within an Asian context. Yet where it has been tried in earnest, it has succeeded in dramatic fashion. Haier, the Chinese appliance maker, is a particularly vivid case in point. Frustrated at the company’s inability to stand out among its competitors, managing director Zhang Ruimin implemented farreaching internal reforms to incentivize customer feedback while also encouraging team-based initiatives within the company.39

Zhang’s mindset shows how seriously he takes the notion that his company’s most important resource is the people who make its products: “We encourage employees to become entrepreneurs because people are not a means to an end, but an end in themselves; our goal is to let everyone become their own CEO … to help everyone fully realize their potential.”

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38 See Why Content Curation Needs to Be Part of Your Learning Strategy, and How to Get Started (September 2019).

39 See The Haier Road to Growth, strategy+business (PwC).

Haier is now an unquestioned international leader in appliances, with a reputation for quality and innovation that would have seemed difficult to believe before Zhang took control in the 1980s. To make this omelet, however, Zhang had to break several eggs — 10,000 of them, in fact. “By eradicating our middle management layer — and laying off more than 10,000 middle-level managers — we have destroyed the original hierarchical structure. So we are [now] merely a platform for entrepreneurs.” All the businesses have to succeed as innovative entrepreneurial enterprises, or they will be kicked off the platform,” he said.40

Such adaptive skills and methods can remove the structural bottleneck that is holding back innovative teams, unleashing the full potential for growth in a time of disruption. Although many leaders may balk at the idea of reorienting themselves to such a non-traditional mindset for growth, Haier’s extraordinary success stands as a constant reminder that such an approach is possible, effective, and very well adapted to the economy of today and tomorrow.

It is also worth considering that Haier’s subsequent success allowed it to grow far larger than would have otherwise been possible, more than offsetting the number of people who were let go during its restructuring phase. The company is now consistently recognized as the world’s leading seller of major appliances41, although a short-term mindset (or a focus on incremental growth) would have negated the possibility of reaching such an achievement.

The Haier story perfectly embodies the observation that businesses either decide to innovate, or decide to stagnate. Phil Gilbert’s belief that “everything is a prototype” nicely dovetails with Zhang’s commitment to the ideals of learning and change.

These two leaders recognize that learning is about experimentation, which in turn involves a risk of failure on the road to discovery. Likewise, leadership itself is a constant work in progress, where observation and adaptation drive opportunity for improvement. Lifelong learning for leaders is about understanding that true value can only be generated by one’s team, and the task at hand is to find ever more refined ways of putting their skills and insights to good use.

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40 As recounted in the book Leading to Become Obsolete, by Paul Michelman (MIT Sloan School of Management, 2017).

41 See Haier: From #1 Home Appliance Brand for 10 Straight Years to #1 Ecosystem Brand (VC News Network, republished by Reuters, March 2019).

Source: John Reaves. (2019). cWave LLC. New York, USA.

As we see in the diagram above, the lifelong pursuit of continuous learning is at the core of all creative operations. It is therefore an essential driver for emerging leaders as they guide innovation. The pace and value of that innovation in turn depends on leadership qualities that are well adapted to the present moment. Only by generating trust, buy-in, and initiative across departments can leaders shape the kind of organizational culture necessary to achieve results through effective planning and execution.

Yet even with the right processes in place, the right emerging opportunities must still be recognized and pursued at the earliest moment. By applying the new leadership literacies to identify key inflection points on the road ahead, ambitious leaders focused on lifelong learning can get to work on building the future as an apprentice with their teams– rather than standing by and letting others do it for them.

William Malek, Senior Executive Director
SEAC-HMI Innovation Management Research Center