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Six principles of fluid leadership

Most executives in India want their technology investments to achieve too much, too soon, losing sight of why their companies undertook the complex journey of disruption in the first place. They view technology as a tactical exercise rather than the long-term value generator that it is. This attitude persists because many leaders are still using the irrelevant teachings passed down from the industrial economy.

Principles of the industrial economy are much less applicable today because businesses are functioning in a Human Economy - an age of creativity that calls for a new paradigm of leadership. The kind of leadership that creates long-term value and invests in employee and stakeholder engagement, one that builds a learning organization, which is lean and innovates quickly. And, most importantly, a kind of leadership that creates a successive management pipeline that will ably respond to current and future business challenges.

leadership in complexity

How have the rules changed?

The world is witnessing a radical recasting of the business and technology dynamic. The World Economic Forum is calling this the Fourth Industrial Revolution, where technology is at the core of every business. We’ve identified this as a shift to TECH@CORE, an enterprise change driven by an exciting new era of business opportunity and disruption.

In India, many business leaders express frustration over the complexity and convergence of the factors that are changing the nature of their business. One is the perfect storm made up of multiple variables (relevant to the subcontinent) like the macroeconomic environment, customer expectation, emerging competitors, public perception, regulatory impact, shareholder angst, talent expectations, and emerging tech that are smashing into businesses.

Second, digitization is lowering the barriers to entry for new businesses, opening the door for new disruptors and competitors. Digital-native businesses leverage the ‘plug and play’ approach with their access to on-demand digital assets and elastic infrastructure. Consider the case of Paytm’s payments bank that is expected to hit 500 million Current Account, Savings Account or CASA accounts by 2020, that’s more than double their current count of 200 million wallet users. The company identified an untapped space in India’s payments sector that could be unbundled and disrupted. Paytm pursued this space at the perfect time -  the confluence of digitization and the financial sector, to become the leader in digital payments in India.

Third, unlike ever before, digital-native businesses are hyper-focused and lean in their setup, which ensures that they legitimately compete with well-established enterprises. The former can also scale rapidly, at lower costs, and architect highly-personalized experiences for their wide network of customers.

In this scenario, legacy business leaders are on a back foot because they still harbor a factory mindset when it comes to the adoption of digital technologies. They tend to choose economies of scale over continuous innovation.

Robert Safian, editor and managing director of Fast Company coined the term, Generation Flux to explain how the velocity of change in our economy has made chaos the defining characteristic of modern business. This chaos makes it difficult for leaders and executives to answer core questions, such as:
  • Which technology is worth their investment?
  • What will give them a competitive advantage?
  • What skills are needed to win in the new world order?
  • How do they weigh potentially risky decisions vs. the decision’s potential opportunity?

But first, beware of the anti-pattern

It’s important to recognize the anti-patterns or common responses to a recurring problem that are usually ineffective and counterproductive. In business, many of these anti-patterns negatively shape the promise of technology and pose a risk a company’s digital future. Here's the list of the antipatterns -
  1. The 'watch and wait' strategy - Many Indian business leaders acknowledge the promise of digital while not wholeheartedly investing in it. Instead, they’re waiting for others to succeed or fail, hoping to learn from them when really, they’re wasting precious time and falling further behind.
  2. Skill gap check - A lot of leaders tend to assign today’s complex digital challenges to long-standing team members with years of experience but without the right digital-ready skills. If a company does not invest in training and upskilling, they cannot expect long term employees to just ‘know it’ when the time comes.
  3. Commitment to agility - Leaders need to commit to the agile approach of self-organising teams, iterative development, continuous integration and evolutionary architecture. Else, the conversation remains stilted at an IT (narrower) level and does not expand itself to encompass agility at an enterprise (broader) level.
  4. Innovation governance - It’s encouraging to see the rise of in-house innovation labs, startup accelerator initiatives and interesting industry connect programs. However, many corporate cultures still value control, repeatability and maximised efficiency over the rapid test-learn-repeat cycle, which can strangle any possibility of true innovation.
  5. Outdated organization - Many leaders still reply on ‘top-down’ broadcast (authoritative) over a networked world of small teams that value original thought (innovative). Such an approach does not foster the creativity needed in this digital age.
  6. Tried and tested vs. bold redesign - Many leaders push the digitization agenda only to a limited extent which is indicative of a fragment digital strategy. A strategy that has a specific shelf life and is bound to fail. Today it seems every Indian business is in a race to have a mobile app whether they need one or not - this is a perfect example of a business without a comprehensive Digital platform Strategy.

The new leadership paradigm

The answer to much of this outdated leadership is a new paradigm that I call Fluid Leadership. It draws from my 18 years of experience, and from a first of its kind report by Thoughtworks, ‘The Next Big Disruption: Courageous Executives’ that reveals what sets top business leaders apart from their competition. This report outlines many of the characteristics of successful leaders in the age of complexity.

One of the most fundamental characteristics of Fluid Leadership is how willingly this type of executive embraces instability. This means she is ready to calibrate everything she knows, along the way. Another important nature of fluidity is to know the ‘one size fits all’ approach does not exist, even within the same domain. For most, simply because of the pace at which business need to adapt, fluidity is more of a learned skill, and constant application, validation, and improvement are needed to excel at it. Like my colleagues, Guo Xiao and Chris Murphy point out in their article -

“For corporations, the challenge is the ever-widening gap between the exponential growth of technology-driven market opportunities and the linear progress we’re capable of achieving within traditional organizations. Closing this gap requires new ways of thinking and working. It requires a shift from a mindset of sustained competitive advantage, to one of limited transient advantage. It requires a mindset and culture of rapid experimentation, learning, and adjustment.”

Here are the few foundational skills that Fluid Leaders would need to succeed -
  1. Value creators - When leaders engage and collaborate across business, government, and the broader stakeholder ecosystem, they employ balanced motivations to create maximum value.
  2. T-shaped - Fluid leaders exhibit skills beyond their primary domain. They invest in acquiring new skills and keep themselves abreast of everything from geopolitical landscapes to global economic trends to humanities and demographics, apart from being significantly invested in technical advancements.
  3. Contextually aware - Leaders should understand the differences within and between sectors - of language, culture, and key performance indicators.
  4. Relentless networkers - According to an HBR article, effective leaders learn to employ networks for strategic purposes. And fluid leaders are nothing, if not effective. They cultivate relationships across sectors, draw from them while advancing their ambitious agenda of technology-led innovation.
  5. Focused on essentials - Fluid leaders choose their battles and relentlessly pursue the principle of doing less. They have enviable clarity of purpose and the perseverance of going the distance. For everything else, they create and nurture, independent and empowered teams.
  6. Bold futurists - One of the more striking characteristics of fluid leaders is their genuinely optimistic nature about the future of humankind and the role of technology in this future. Such leaders pursue technological investments from the perspective of possibilities and opportunities, rather than the mitigation of risks.
What I have shared are broad strokes, because there still does not exist a single template for successful leadership, in the new age of flux and chaos. The only right move is for leaders to adopt, adapt, and acquire new skills that are relevant to the new business dynamic.

This article was first featured in CXO Today.

Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.

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