Leading Off: How to tackle 21st-century challenges: A leader’s guide

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ESSENTIALS FOR LEADERS AND THOSE THEY LEAD

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Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms

Welcome to the latest edition of Leading Off. We hope you find our insights useful. Let us know what you think at [email protected] and [email protected].

—Alex and Axel

The challenges of leading in today’s business environment are evolving quickly in their scope and complexity: technology is redefining how we work, business is more global than ever, and employees’ values and expectations are shifting as the generational makeup of the workforce changes. To realize sustainable growth in a world of flux, companies need a new type of leadership that is more open and adaptable. This week, we look at how organizations can support their current and future leaders and how leaders can navigate this moment of disruption.

AN IDEA

An image linking to the web page “The art of 21st-century leadership: From succession planning to building a leadership factory” on McKinsey.com.

Cultivate 21st-century leaders

The biggest hurdle to creating resilient and high-performing teams is developing a deep bench of leaders who can excel in a turbulent world, according to McKinsey global managing partner Bob Sternfels , senior partners Daniel Pacthod and Kurt Strovink , and senior adviser Wyman Howard. They note that CEOs face a growing number of critical issues to manage, and the personal attributes and best practices associated with strong leadership have changed substantially over time. Some of the most important traits for current and future leaders include maintaining positive energy, selflessness, curiosity, grit, and even a sense of humor. CEOs should also be able to convey vision and possibilities both inside and outside of the organization and engage authentically with employees, customers, and other stakeholders. Companies should prioritize investing in their own “leadership factories” and providing on-the-job training for 21st-century leaders to develop these skills. The authors say: “The organizations that treat leadership development as a core capability and proactively address the needs of both existing and aspiring leaders can raise their overall resilience and substantially improve the odds that they will be able to withstand disruption—whatever it is, and whenever it appears next.”

A BIG NUMBER

3.4x

That’s how much more likely companies are to be healthy when they emphasize an empowering leadership style, according to recent data from McKinsey’s Organizational Health Index. “Leaders should make sure those closest to the work have the autonomy to make their own decisions,” say senior partners Aaron De Smet and Arne Gast and their coauthors. Leaders must also recognize that the classic model of “Do it because I said so” no longer applies. The authors note: “In this era of disruption, leaders can be challenging and decisive while being supportive, consultative, and empowering. But badgering people, micromanaging them, and applying positional authority to pressure people to do more and do better is no longer effective.”

A QUOTE

“I would encourage leaders to be as normal a person as possible.”

That’s former Novartis CEO Daniel Vasella on how to embrace the CEO role. Vasella, who has counseled hundreds of global CEOs, stresses that leaders don’t need to build walls around themselves and keep their employees at a distance. “People like to see that bosses admit when they’re wrong, that they are comfortable asking questions so they can learn, and that they are grateful for good answers from the people around them, who may in fact know more than they do about a particular issue,” he says. “This complementarity of capabilities and knowledge is very important to be aware of so that it can be used to the benefit of the enterprise.”

A SPOTLIGHT INTERVIEW

An image linking to the web page “Leading from the inside out: Why CEOs must make time for self-reflection” on McKinsey.com.

Lead yourself before you lead others. That’s a fundamental lesson for current and future leaders, says McKinsey senior partner Ramesh Srinivasan , coauthor of The Journey of Leadership: How CEOs Can Learn to Lead from the Inside Out. In a recent episode of The McKinsey Podcast, Srinivasan and one of his coauthors, senior partner emeritus Hans-Werner Kaas, emphasize that leaders must be self-aware and learn how to balance contrasting qualities, such as courage and curiosity or confidence and humility, so they can be more effective in guiding their organizations and employees. “We call it human-centric leadership,” Srinivasan says. “Our belief is that leaders need to reflect on their purpose, who they are, how they show up in the world, and how they can inspire their teams and the institutions they’re leading.”

CULTURE IS KEY

An image linking to the web page “Five bold moves to quickly transform your organization’s culture” on McKinsey.com.

Fostering an inclusive culture is an essential step to motivate today’s employees, many of whom are yearning for greater connection to their work. Senior partners Brooke Weddle and John Parsons and their coauthors identify several “power moves” that leaders can take to involve employees in culture changes that make them feel more engaged, purposeful, and productive. These include exposing their teams to new ideas and best practices that may not have been previously considered, encouraging employees to volunteer for culture-change roles, and embedding new rituals and routines into the workplace to break old, unproductive habits. The authors note that it’s critical “for leaders in culture transformations to widen the aperture for teams and individuals in their organizations. They must find space for creativity, build enthusiasm for it, and inject it into employees’ everyday activities.”

Lead by embracing a new approach.

— Edited by Eric Quiñones, senior editor, New York

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