Wednesday, September 07, 2005

Leadership

Leadership

CEOs that treat their employees, suppliers, and communities well, and who inspire their employees by example, deliver better results.

"Farsighted, tolerant, humane and practical CEOs returned 758% over 10 years, versus 128% for the S&P 500."

I'm hopeful that we are in the middle of a permanent shift in our perception of leadership, from cigar-chomping drill instructors to caring community builders. In today's frictionless world, where job security is an oxymoron, and talent can work wherever (in terms of both company and geography) it chooses, persuasion and influence trump command-and-control.

Of course, being a nice guy isn't enough. Leaders will still need the ability to understand the forces at work in their environment and take advantage of the resulting opportunities.

"Leaders and those who aspire to lead benefit from having a sense of history," says HBS professor Nitin Nohria. "Not because history repeats itself. History's real value is that it allows you to imagine what's possible.

I can't predict what the next 25 years of business will look like, but I do know that demography, technology, government regulations, geopolitics, labor conditions, and social mores will powerfully influence the opportunities available. And already, we can see some clues to the future. We clearly know that government is playing a bigger role than it used to. We have certainly gone through a major shift in geopolitics. We don't know how this new struggle will pan out, but history teaches us that geopolitics will have a more profound consequence than we might immediately recognize.

In terms of technology, breakthrough innovations in IT and pharmaceutical development may have run their course. We think of these as growth industries, but they might well be maturing. In demographics, what will happen as retiring baby boomers start withdrawing their money from the market? And then there are the dramatic changes in Asia. Just as Japan created lean manufacturing, is there a new management innovation that's coming from India or China, but hasn't yet been given a name?

In each of these dimensions, there are very important changes afoot. They will coalesce and create opportunities for entrepreneurial leaders to launch new businesses, for managers to maximize the value of existing businesses, and for leaders of change to rescue businesses that have fallen into decline. The one thing that we know for certain is that context is vitally important; it will shape the opportunities in these new times."

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