Organisations are significantly increasing their investment in new digital technologies. Yet, it would be easy to fall into the trap of believing that changing your IT is the secret to changing your organisation. In Oliver Wyman’s 2019 State of Financial Services report, we talk about how companies can “start again” by leveraging new greenfield technologies. We believe this also requires a parallel transformation of leadership if organisations are to truly thrive in tomorrow’s digital landscape.
We are encountering a period of unprecedented disruption and not just in financial services. The implications of change are more widespread, rapid, and deeper than we have ever experienced outside of a world war.
Organisations across the spectrum are responding by making step-changes in digital investment with new technologies, advanced analytics and innovation hubs. We often hear of firms declaring an appetite for becoming more flexible and agile to cope with the level of change. But the traditional centralised command-and-control, specialist-orientated leadership styles still dominate and limit the rate of change.
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Unless today’s leadership styles change, organisations will remain too slow, too risk-averse, too inflexible, and too detached from real-time feedback to capture the opportunity to change and start again. They will lack the speed, adaptability, and innovation required for personal and organisational success. Bluntly, an inability to change the way in which leaders and managers lead will limit the benefits of investment in new technologies.
So how can you drive the necessary leadership reinvention? Below are four suggestions:
- Apply structure and process to actively drive leadership change. A leadership reinvention will not happen by itself. You cannot expect long-serving individuals to change their ‘successful’ ways of working simply because they have been on an agile leadership course or put into a squad.
For leadership to change, you need a structured approach that creates the right environment for change. It takes conscious design (detailed diagnosis of what aspects of leadership need to change), experimentation (real-world practice embeds new behaviours), and iteration (sustained change in behaviours comes from repetition over at least 90 days). Experience has shown that as much time is required to transform leadership as is required to building a new business.
- Talent, digital and business heads must collaborate to drive leadership transformation. Leadership transformation is not the sole reserve of human resources departments. Neither is it something that business heads should attempt by themselves. Talent, digital, and business heads need to work together to structure experiments and new approaches to leadership development.
- Take the risk of dedicating your leaders full time to “starting again.” Genuine leadership change does not come from working off the side of a desk alongside the day job. The current model where senior leaders commit part-time to sponsor key initiatives within a transformation programme merely reinforces the old ways of working that will fail to deliver. We know that this approach will not change leadership behaviours, whatever the investment in new technology.
Leaders need to be jolted out of the existing hard-wired behaviours. This demands a more radical shift in their environment (which is difficult to achieved purely from training courses, business schools, and competency frameworks). It requires dedicating your leadership to working full time in critical areas of a transformation programme or greenfield initiative. It means taking the risk of moving some of your best leaders away from their day jobs, so they can do something critical for the business: Build the business of tomorrow and, crucially, change their way of leading.
- Use the greenfield and transformation for leadership change. Experiential learning environments foster lasting change. Greenfield initiatives correctly set up can provide an invaluable space to transform leadership. These will only facilitate leadership change if a new license to operate is established from the outset. If you want to create greater empowerment and faster decision-making, you cannot just change the governance model and expect it to happen. You need an environment where leaders can experiment and practice with their new levels of empowerment and risk-taking until they become new behaviour. The culture should enable people to try out new team compositions, structures, and decision-making. This requires an environment, designed as an area of true psychological safety to allow leadership change, where people are supported to take risks and try out new ways of working.
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Starting again is increasingly relevant for many and an urgent necessity for some. It requires new systems and technologies but crucially it must be combined with reinventing the way people at all levels lead. Some leaders may find this a daunting prospect. Putting yourself full time in a space where traditional leadership styles are less effective and previous seniority doesn’t count for much can be uncomfortable. It requires a willingness to learn and a deep sense of humility. People will need to know that the wider organisation “has their back” if they are to let go of the fear that their career could be jeopardised if the initiative fails.
It is hard, but it can be done. Many may decline the offer of a full-time move to a greenfield initiative, but those that seize it could be laying the foundations for the organisation, as well as themselves, to start again.