When we look at the world of business today, one thing is certain: traditional management is being questioned. Many actors in the "management-leadership-community" agree that leadership must be redefined. In this article, you will read ten theses on why leadership needs to change.
What do leadership theories say about traditional leadership
Leadership theories have long foreshadowed this transition. While transactional leadership, which was based on engagement through reciprocity, was the focus of the leadership world until recently, today transformational leadership, which places the concept of meaning at its core, is gaining importance. Transactional leadership functions as described by classical management: setting goals, goal control, fostering and developing people form the core of this concept. Hierarchies as an organizational form, which resolve conflicts through delegation and exclude relevant contradictions, are part of the package. With the transformational leadership approach, leadership is now seen in a new light. Transformational leadership poses such high challenges to individuals that it quickly becomes clear that hardly any single person would be able to meet them. Therefore, leadership, as a bundle of roles, must also be distributed among several individuals. This renders the classical leader obsolete and makes the hierarchy as an organizational model obsolete.What do top-level executives say?
If we now look directly at the management levels and do not take the grand statements of management gurus as truths, a different picture may emerge. What opinions prevail there? The limitations of bureaucracies and hierarchical organizations are of course widely felt in the business world. However, it is not consensually agreed upon that leadership in the leadership world must undergo a radical change as a result. My experience shows that we have entered a space full of contradictions. Contradictory forces can be found at all levels. Those defending the old management are as numerous as those courageously advocating for new leadership and organizational models. There is only one thing that runs through it all: great uncertainty has taken hold. As a conclusion, it is permissible to say: we have entered a transitional space. The old and new models are in competition. Neither the old approaches are the solution for the future, nor are those models that present themselves as the new ones. They are still too weak, too contradictory, and upon deeper examination, not consistently convincing for those individuals who hold central responsibility for companies. Nevertheless, the change is unstoppable. It is only unclear where the journey will ultimately lead. In this case, we should discuss the solution models for the future in a very diverse and open-ended manner at this point in time. Here are ten theses that suggest a rapid and fundamental change, a true paradigm shift in leadership.10 Theses for a Fundamental Change
- We are experiencing a shift in our worldviews and paradigms Holistic thinking replaces mechanistic thinking. A new worldview is emerging. The old paradigm of the economy fades in the face of the pressing questions of a new understanding of the world: What is the purpose and goal of the company? What contribution is made to the development of the world?
- We operate in a complex world (VUCA World) The world is volatile, unpredictable, complex, and ambiguous, i.e., contradictory. It has always been this way, but the tendency towards significantly increasing complexity poses entirely new, largely unknown challenges for organizations and leaders. Hierarchies confronted with a VUCA world resemble the Tower of Babel. With it, they share a certain downfall.
- Profound changes permeate the business world One change follows another. Classical hierarchies can no longer keep up with the speed of change because the systems are too sluggish and rigid. Classical management is only truly effective in short stable phases. This plunges leaders and employees into constant stress due to overload.
- All fundamental contradictions must be negotiated Hierarchies can no longer exclude the fundamental contradictions (man-woman, old-young, preserve-change, community-individual). On the contrary, they fully manifest and shake up the old power structures. These contradictions require an entirely new quality of dialogue that is not feasible in classical organizations. The simple "right-wrong logic" is no longer valid and leads to perpetual confusion.
- Globalization and networking create extremely high density The consequences of globalization and increasing interconnectedness are experienced as a situation that can best be described by the term extremely high density. It leads to forced proximity, hindrances due to strong interweaving, and many unwanted collisions, i.e., conflicts. The situations are difficult to handle because the available time does not allow for a solution through traditional means.
- People's needs have changed Employees expect leadership qualities and no longer just work on instruction. They seek encounters on an equal footing, more self-responsibility, and opportunities for shaping. Team collaboration must be reorganized and made agile. Command-and-control systems only lead to demotivation and compliance. This marks the beginning of the end in our dynamic business world.
- Technological innovations bring pattern-breaking renewals Technological progress is increasingly incomprehensible and hardly rational. The changes brought about by new technologies cannot be strategically addressed through traditional means. Entire industries' business models are changing rapidly. Those who only react are already too late before the development project has even begun.
- Digitalization completely redefines work and production Digitalization reorganizes the economy. This brings enormous uncertainty and strategic risks. It is unclear how work can be defined in the future and which tasks can still be taken on by humans. The dice have already been cast. A kind of tolerated stagnation has set in at the top levels of bureaucracies. However, the penetration of digitalization only leads to creative fertilization where the gates are opened to vitality (agility).
- Sustainable Development sets new global priorities but also new boundaries What often began as a cheerful image project has in many places become a strategic emergency. Those who do not engage in economic activities with ecological side effects and ignore social impacts are considered naive and are punished for their folly in the world of social media. Sustainable business practices cannot thrive well in bureaucratic worlds.
- Growth acquires new meanings and is permeated by qualities Economic success has so far been equated with growth. However, when there is suddenly a debate about a possible "arrival," the economy and entrepreneurship must reinvent themselves. Growth is changing, that much is certain. The impacts on strategies are still unclear. Such questions can only be negotiated through stakeholder dialogue.