Leaders face an increasingly uncertain, unstable and disrupted future – but by recalibrating in three key areas, they can both support personal growth and prepare their organizations for long-term success
Leaders have rarely faced a more uncertain and volatile time. Generative AI is set to reshape the global economy, unleashing a wave of change not seen since the Industrial Revolution of the 1800s. At the same time, business is trying to decarbonize and reduce its environmental impact to protect the world’s fragile natural systems and stave off the worst effects of a changing climate. Leaders are also tasked with navigating geopolitical uncertainty, and domestic polarization. We are in an era of concurrent and interwoven shifts.
In the face of such towering challenges, the temptation might be to hunker down and refocus on the well-known and the familiar, keeping up with ‘business as usual’ for as long as we can. Yet that’s a non-starter. Change is coming whether we like it or not. And, as uncertain as our world today might feel, the stark reality is that it isn’t half as uncertain as tomorrow will be – let alone the day after. To ready themselves and their organizations for a new era of disruption, leaders need to adopt a mindset of growth and exploration. They need to be ready to move fast; to make bold decisions and be ready to leap into the unknown, in the knowledge that staying still is not an option.
That starts with changing leadership behaviors in three key areas that profoundly shape an organization’s fortunes.
1. Courage over convenience
Does your organization have the courage to confront difficult realities – or does it prefer convenience and a quiet life?
One of the biggest indicators of a leadership culture that has lost its way is the absence of honest and robust questioning; of a willingness to interrogate data or to challenge excuses for poor performance. Leaders seem to cherry-pick evidence that confirms the wisdom of today’s model. They close off their minds to the possibility of changes that would require them to leave a comfort zone based on what worked in the past.
This can play out as a highly politicized environment, where politics takes precedence over facts. If people find they need to sugarcoat bad news, explain away negative numbers, or find narratives that suggest things are working better than they seem, alarm bells should be ringing. That indicates that leaders are blind to market realities – and, worse, uninterested.
Such a dynamic can even emerge when things seem to be going well by all traditional metrics. A company might be growing, hitting its targets and delivering profits. That can leave leaders with no appetite for change: if it ain’t broke, don’t fix it. Yet that can mean overlooking changes in the market or operating environment that will disrupt the market in the medium term.
The status quo is convenient. Challenging it takes courage. But being honest about performance is the only way to ask the questions that matter: like whether the firm’s proposition is fit for tomorrow’s market, whether the firm is anticipating new customer needs, or whether innovative new competitors could pose a threat.
2. Kindness over niceness
The second critical sign that leadership has lost its way is if niceness prevails over kindness. The two qualities feel similar but should not be confused: they can point toward very different actions.
Consider a leader’s core responsibility for managing team performance. A well-liked team member may be struggling in their role. Seeking to be nice, the leader holds back from giving full and robust performance feedback. They give credence to flimsy explanations for the shortcomings, or even help supply excuses. They might even turn a blind eye to the problem. Or consider a recruitment process where an internal candidate is passed over in favor of an external hire. To be nice to the disappointed internal candidate – perhaps hoping to protect their relationship – their manager minimizes the decision, downplaying it as bad luck or the result of nefarious internal politics.
These are grave mistakes. In both cases, leaders have an opportunity and a duty to provide feedback. If they don’t, team members are denied an opportunity to adapt and grow. Kindness demands honesty, uncomfortable as the truth may be. It is the only way to help someone understand how they can raise their game, and give them a better chance when the next opportunity arises.
The increasing use of AI to automate different tasks and redesign today’s business models mean leaders are likely to face more tough conversations with their people in the near future. Some painful moments may be endured; many people may need to pivot and redirect their careers. Being honest and supporting people through such changes demands that leaders are animated by kindness, not niceness.
3. Reconciling long term and short term
The third area where leaders need to recalibrate is in how they reconcile the demands of the long term with the demands of the here and now.
Leaders need to recognize that the paths to success today and success tomorrow do not always lead in the same direction. Maximizing short term returns often means incremental adjustments to what’s already working. That might help us hit this quarter’s revenue or profit targets; but typically, such improvements are incremental refinements of a model that is basically working. They do not require us to get out of our comfort zone. In comparison, the steps needed to drive success tomorrow look big, complex and, difficult – with a highly uncertain pay-off that will only become clear much further down the line.
The strong temptation is to defer those decisions. Tomorrow’s problems can wait, we tell ourselves. We don’t need to take that call; someone else will take it eventually, and they can pay the price. But when we transfer costs to the future, we are creating a mortgage for the future. The repayment costs can be crippling.
At a time of huge change, the challenge for leaders is to shape a clear vision of the future, before working back to plot out the steps that take the organization forward. It allows leaders to make informed decisions based on an understanding of where trade-offs may be needed – such as forgoing short-term profitability in the interests of the long-term. It is a constant negotiation between the needs of today and tomorrow.
The rise of ESG in recent years demonstrates this conundrum. The vast majority of businesses never set out to do irreversible harm to the environment or their communities. Yet without powerful incentives to consider long-term value, their natural course of action was to maximize short term returns, and worry about the long term when it arrived. We live with the results today.
The challenge of reconciling today’s decisions with a long-term vision of the future can show up in a wide range of decisions with major implications for businesses. In the pharmaceutical sector, it can help frame critical decisions. How can a company generate the revenue needed to ensure long-term investment in research and development – something that is both critical for the business’s long-term success, and to the health of patients in the future – with the imperative to reach as many patients as possible today? Other organizations are grappling with questions such as how to accelerate the pace of technology transformation: leaders know they need to move fast to shape the business’s long-term future, but need to be sure the business still generates sufficient cash every month, or risk running out of money.
Short-term pressures are real and substantial. But long-term considerations cannot be wished away. Leaders need to rebalance decision-making with a greater grasp of the long-term implications of our decisions.
The spark for change
What does it take to trigger the process of change in how we lead our businesses? Human nature makes us averse to change. We are wired to maintain things as they are, to seek stability and continuity. We often fail to pre-empt change, but react only when there is a clear and present danger – a ‘burning platform’ for change.
The burning platform is a metaphor based on the story of a North Sea oil rig that caught fire, leaving a rig worker with no choice but to jump into the icy seas below. Against the odds, he survived. The fire had sparked a radical change in behavior.
In business, the threats we face rarely seem so clear and present. We might discern them somewhere on the horizon: “Maybe that will be a problem in a few years,” we tell ourselves. But in a period of increased uncertainty and volatility, a fire may already be burning. We have just failed to spot it. As leaders, we need to understand the forces that have the potential to explode today’s business models – and then act to avert catastrophe.
A collective movement
Even if we as individuals grasp the urgency of change, the reality is that change is never just about one individual. It is not even about one organization. The reality today is that change is about the ecosystems we operate in. As human beings and as businesses, we are always part of a bigger ecosystem; how we integrate and interact with others defines how we rise or fall.
The technology revolution has made this clearer than ever. We have access to unprecedented amounts of data, increasing transparency about many aspects of the business world. This has underlined that getting the best out of the value that a business creates means creating the conditions for collective movement: movement that involves suppliers, customers and multiple other stakeholders.
The pharmaceutical industry is among those facing that new reality. The old model could be framed in terms of one-on-one interactions: between the patient and their prescribing physician, and the physician and the industry that provided therapeutic solutions. Now, there is a stronger role for payers; regulators must be satisfied; and the voice of patients is rightly louder, too. The challenge for a pharmaceutical company is working with those stakeholders in a collective way to find the best solution for everyone – particularly, in the end, for patients.
Other companies have their own ecosystems of stakeholders, but the implication for leaders is the same. Delivering change means raising our eyes to look beyond the walls of our organizations, and understanding how we can engage with a wider ecosystem to effect change.
Act before it is too late
It is worth recalling that the most famous use of the burning platform metaphor was probably in a 2011 memo by Stephen Elop, then chief executive of Nokia. A giant of the early years of the mobile phone era, the Finnish firm was by that point already in crisis, falling behind in a market disrupted by the emergence of Apple and Android smartphones. Diagnosing the internal causes of Nokia’s crisis, Elop wrote:
“I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally.”
Radical moves ensured that Nokia survived, yet Elop’s memo stands as a warning of the perils of leadership that fails to anticipate change. Far better to spot where a fire might be sparked and move quickly to prevent it, than to face a risky plunge into icy seas.
Leaders today need to choose courage over convenience, kindness over niceness, and rebalance the long- and the short-term. They would be well-advised to heed Elop’s warning – and act now to ensure their businesses are ready for the opportunities and threats that may be just around the corner.
Fernando Zallocco is global head of talent, Boehringer Ingelheim. Vishal Patel is head of global markets, Duke Corporate Education