Leading The Capability Revolution

January 11, 2013 • Global Business, LEADERSHIP, Strategic Spotlight, STRATEGY & MANAGEMENT

These are revolutionary times, we believe, and our established notions of leadership, many of which are more romantic than functional, must change too in this brave new world if our organizations are to continue to be effective. Existing bureaucratic models of business, organization and leadership, all of which have served us extremely well for the better part of modern history, will become progressively ineffective and unfit for purpose. This article considers the legacy of established leadership models, characterised by the importance attached to the heroic few to secure success. It considers further the leadership requirements of organizations seeking to develop organizational capabilities fit for purpose for the post-bureaucratic future.

Teach an MBA class and you soon learn, no matter what the background or career aspiration of the student, they are champing at the bit to lead. They become frustrated quickly by what they perceive as a lack of opportunity offered by employers to exert influence and instigate change. Managers too, blanche at the prospect of being labelled a follower, but are sufficiently worldly to realize there is a pecking order and careers for the most part means getting in line and climbing the greasy pole before being able to exercise formal authority and thereby effect change. In contrast, the senior executives with whom I work – those who have made it to the top of the hierarchy and enjoy the greatest influence over change – admit in candid moments that their world is becoming increasingly lonely, with all eyes being on them to provide clarity of direction in an increasingly complex, turbulent and uncertain environment. They would like more bottom-up contribution to decision-making, and are exasperated by the inability of their workforces to ‘level up’.

The hierarchical gap between the bottom and the top of our organizations was once an essential feature of effective organization. However, political, economic, social and technological change within the operating environment is transforming our organizations and the capabilities they require for success, including the ways in which they are led. Technological innovations especially are levelling the competitive playing field between firms. Efficiencies alone will not nearly be enough to secure success in future.

The onus is upon firms to set themselves apart strategically from their competitors by developing distinctive organizational capabilities. These developments have far-reaching implications for how we think of leadership as a resource through which organizational capabilities are created and sustained. Traditionally, managers and leaders have been seen as different, with the former being responsible for implementation and the latter being responsible for initiating change. However, in the rapidly changing and complex operating environment of most organizations, the lines between management and leadership are becoming increasingly blurred.

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