(NEW CLIP OF INTERVIEW IN PORTUGUESE ADDED AT END OF THIS POST) During my recent stay in São-Paulo, I was interviewed by Patricia Bispo, who runs an excellent site dedicated to people and leadership issues. Her questions helped me clarify my thoughts on the future of leadership. Here are, in English, the key parts of the interview:
Patricia Bispo – Changes happen at an increasing pace and the emerging “Open Source Economy” is a closer reality. How will it impact organizations?
Didier Marlier – The main impact will be the blossoming of “intelligent organizations”, where the strategic reflection, innovation and creativity will stop being the privilege of an elite at the top of the pyramid (or in R&D departments) but will be deeply engrained into the culture of the organization: All employees will be invited to be a living part of the “strategizing process”.
The best metaphor I can think of is the human body: All of our organs are aligned and live behind a shared purpose: our survival and well being. Likewise, the intelligent organization will intellectually and emotionally align its organs (its employees) behind a shared and superior purpose.
Second, all the organs of our body have a sort of permanent feedback system (through pain, hunger, thirst, sensation of cold or warmth etc…) on how they are positioned vis a vis the purpose. The same has to happen in an intelligent organization: if the purpose is truly engaging and compelling, there will be no need for “bosses” to tell people what to do. The employees, fully mobilized by the purpose of their organization will look for the information they need and seek to know how well they are doing in fulfilling their objective of supporting and preserving the body which hosts them: the enterprise.
Finally, like for the human body, the organization’s organs will be intimately connected: the brain rapidly dies if our heart stops beating, the heart itself would be useless without the oxygenation made possible by the lungs but none of this would happen without the work of the digestion etc… This all suggests a connected organization where each part understands and respects the others. Like in the human body, each part of the intelligent organization understands its interdependence with the other organs. Going from a pyramidal organization, a legacy from the past, towards a more organic and intelligent type of organization will be one of the major challenges of the Open Economy.
PB – Will all businesses in the world, no matter their geographical location or business area, be hit by this trend?
DM – The Open Economy started a long time ago: as our colleague Gerd Leonhard likes to say, Johannes Guttenberg and his printing press were the very early warning signal that the knowledge revolution would impact the whole world. Later, the software industry repeated “Guttenberg’s trick”. The Open Economy rapidly went beyond Apache or Linux and hit very hard the record, the movie, the TV industry. It is now strongly impacting the newspaper, book business with the announced death (which I hope is an exaggeration) of the paper editions in both. It hit the phone industry with companies like Skype and soon maybe O3B. Companies such as Local Motors may change the rules of the game in the car industry, the electrical car (an aberration in environmental terms) may however completely modify the existing orthodoxies in the world of electricity production and storage (in the US and UK some start to see electrical cars as batteries on two wheels, able to store the green electricity produced by windmills for example…). The chemical, tourism, pharmaceutical industries are also touched… It is therefore probable that most sectors and geographies will be impacted by the emergence of the Open Economy.
PB – What leads you to believe that the Open Economy will impact all of the sectors of the world’s economy?
DM – Three factors may explain why the Open Economy will impact, in different ways, most sectors of the economy. The first one is Technology: No need to tell you how advances in technology have and will profoundly affected many sectors of our lives. Take O3B -a venture between Google and several other partners-: it pretends to provide free WiFi access to whole continents or subcontinents like Africa and India. Can you start imagining what will happen if the whole world becomes truly connected without possibilities of censorship for local governments? The world will truly become a “Global Village” as Marshall McLuhan once called it. We are increasingly connected and interdependent.
Second, as the famous futurologist Alvin Toffler predicted in the 70’s, the XXIst century sees the emergence of the “Third Wave”, the one of knowledge (after the first one, agriculture and the second, industry).
Third, the economic crisis of 2008 has left profound wounds in the “collective unconscious” of the people, certainly in the USA and Europe or Japan. The worse is probably still to come: the crisis of 2008 seems to have broken a sort of implicit, moral contract that those democratic nations had with their citizens. The uprising we see in Northern Africa but also in Europe and even apparently in some regions of China, go beyond the traditional “Left/Right” ways of looking at political leadership. New values are emerging and different popular expectations too. People and Nature demand now another way to live the economy.
PB- Do you foresee significant changes in the way teams and organizations will be lead?
DM – As business futurist Gerd Leonhard says it, “Leaders will transform from directors into connectors”. The old “Seniority equals superiority” is on its way out. The exaggeratedly famous “Generation Y” (which is about to become the new fashionable business buzzword) expected to become the largest part in the workforce in… 2014, will not take its orders as the others and will want to understand the “Why” more than their predecessors. Leaders will have to be more engaging than in the past and will therefore have to master the three agendas of leadership:
“Logos” or intellectual agenda: They will have to co-create clarity (and not simply give orders), meaning (creating shareholder value isn’t sufficient) and ownership about the strategic intent, if they wish to engage their people to “strategize” in an intelligent organization.
“Ethos” or behavioural agenda: As Marcial Losada and his colleagues have demonstrated in the University of Michigan, the quality of our internal dialogue has a direct impact on the quality of our strategic decisions. Losada could predict the results of a strategy by observing the quality of interaction between the leaders, during their meeting.
“Pathos” or emotional agenda: If strategy is the GPS of the car and the processes its engine, we are still missing the fuel. Leading on Pathos means emotionally engaging our people in the purpose of the organization. And this is done through authenticity, with metaphors, stories, strong and symbolic gestures. Leaders who will continue to hide themselves behind a “pseudo rational” agenda, by fear of reducing the distance between themselves and their teams, avoiding to show their vulnerability will be the dinosaurs of the Open Economy.
PB – What are the new characteristics that leaders will have to integrate in their toolkit, to succeed in the Open Economy?
DM – Dave Snowden, a professor and consultant suggests that leaders need to integrate new contexts in which they will have to act decisively. For him, historically, we are accustomed to evolve in simple contexts (where things are predictable, where the link between cause and effect is linear and clearly established). There is also, following Snowden, a complicated context, where the link between cause and effect, although linear, is difficult to explain. This is the realm of the expert leader, the specialist. Superior knowledge is the license to operate for leaders here. Things are predictable only to the ones who can analyze and understand them. In this world, strategy is about guessing the future. But the Open Economy also brings two other contexts for which we are less well prepared: the complex (unpredictable, non linear, where there may not necessarily be a link between cause and effect). In such a world, leaders have to lead when they don’t know… They have to let solutions emerge. The last context is called chaotic and leaders have to rapidly and decisively take a stand although they do not ave all the information they need to do so. The Open Economy is a blend of those four contexts. Leaders will have to be very agile and adaptable.
PB – How will leaders be able to accompany and support the transformation caused by this renovation process?
DM – leaders will have to work on several axes:
- Create intelligent organizations: meaning that they will have to reduce the “Distance to power”, connect far better with their people, independently from hierarchy, explain and be the apostles of their organization’s superior purpose and engage their people into serving it. They will have to develop and equip their teams so that they are able to contribute to the “Strategizing process” instead of maintaining “strategy as a product and moment” anchored at the top.
- Encourage their whole organization to “scan the periphery” in search of opportunities and threats of disruptions: As a business partner and friend of ours, the professor and consultant Nick van Heck, likes to say: “Disruption is what happens to the ill-prepared”. It will be our job, as leaders, to keep our organizations curious, exploring and in the same time working on the day to day business, what French CEO of Brazil based Coatis (a SBU of Rhodia), Vincent Kamel calls “Redesigning the plane while flying it”…
- Identify and challenge our orthodoxies: the human brain has the tendency to store in its “automatic memory” a maximum of data. When driving today, you probably listen to the radio, think of your next meeting and… drive. Driving has become an almost unconscious and automatic process. What a difference from the first day you sat behind the steering wheel: all of your attention was focused on the steering wheel, the cars, pedestrians, bicycles around and you still had to think of the clutch, gas, gearbox and break…in business the “automatic pilot” is also at work when it comes to redesign a new strategy or being innovative and creative… 80% or more of our thoughts at work are based on these old and unconscious orthodoxies… This can be deadly in the fast moving context of the Open Economy.
- Choose and promote people brighter than we are helps us deal with the challenges of the Open Economy: How many “aging leaders” still have nowadays an issue in seeing the younger wolves in the pack, taking more space? It is a human feeling but so dangerous in the complex world of Open… The leaders of tomorrow will make theirs Gandhi’s quotes: “I must follow my people for I am their leader”.
PB – Who will have difficulty to follow such an evolution?
DM – The aggressive leader, the one who still believes that “seniority equals superiority”, the leader who hides himself behind the Distance to Power, the heroic leader who won’t admit his mistakes and will refuse to show vulnerability to the point of becoming unauthentic. Such leaders will not enjoy the Open Economy.