October 26, 2020
If you’re interested in exploring how to be a better business leader, I highly recommend an online course I recently completed, “Leadership in 21st Century Organizations.” The course, offered by the Copenhagen Business School via the Coursera platform, aims to address two key questions.
The first is, what is 21st-century leadership?
What is it?
What’s it composed of?
What are the main ideas?
And, the second question, how should it be different from 20th century leadership?
What will we set aside from the past, and what will we preserve?
The course is based on a Harvard business review press book, “Harder Than I Thought, Adventures of 21st Century Leader.” For those of you who have read, “Adventures of an IT Leader,” you will recognize both the authors as well as the book’s main character, Jim Barton, who moved on from his IT leadership role and now is the new CEO of Santa Monica Aerospace. The book and course begin with Jim facing a series of issues: the company’s hemorrhaging cash, it’s struggling to regain investors’ trust after an accounting scandal, and it’s seeking to transform its culture to become a more global competitor.
The idea behind the book and course is to critique and analyze Barton’s decisions, his actions, his successes and failures. And in the process, the reader/student is expected to develop their own idea about what constitutes 21st century leadership.
Moreover, the course is probably not like any that you’ve had before, in that “dramatized episodes” are the core of the curriculum. These dramatized episodes are scenes from the book read by professional actors. They’re designed to convey the situations more tangibly and also to be a lot of fun. Key topics include:
Synthesizing YOUR framework for 21st Century leadership
In addition to 9 mini quizzes which help to confirm retention of the leadership concepts, theories and best practices, the final assignment helps to bring your thoughts on leadership together into a personal framework – a framework meant to evolve over time, as you gain more leadership experience. You will use your framework as a basis upon which you can practice leadership, reflect on that practice, and continuously refine your understanding, as you go about having a positive impact on the world.
My 21st Century Leadership Framework (as of October 2020)
My response to the assignment is below.
Introduction
The central challenge facing business leaders is how to mobilize others to want to get extraordinary things done in organizations. It’s about the practices leaders use to transform values into action, visions into realities, obstacles into innovations, separateness into solidary and risks into rewards. It’s about creating a climate in which people turn challenging opportunities into remarkable successes.
There are certainly no shortages of challenging opportunities. All organizations confront their own threats and receive their own favorable circumstances. The abundance of challenges is not the issue. It’s how we respond to them that matters. Through our responses to challenges, we all have the potential to seriously worsen or profoundly improve the world in which we live and work.
Today’s business environment is more complex than ever. Potent forces have combined to create a landscape characterized by unprecedented degrees of VUCA (volatility, uncertainty, ambiguity, and change). According to a research report by The Conference Board, organizations whose leaders can operate effectively in a VUCA world are three times more likely to be in the top 20 percent of financial performance, compared to organizations lacking such leaders. What capabilities have these leaders developed? Is there a leadership framework which defines the capabilities required to lead an organization in the 21st century as well as to help assess an individual leader’s performance?
Leadership Capabilities Framework
In 2015, Harvard Business School published a leadership capabilities framework based on their research. It describes 20 broad capabilities, organized into 3 broad categories, that leaders need to be successful. These capabilities form a framework for my own approach to leadership. This framework can also be used to evaluate Jim Barton’s leadership performance at SMA.
Framework Category #1: Leading Yourself
Within this category of leadership, Jim Barton failed in some specific ways. First, his rationale for taking on a new leadership role at SMA is suspect. Although his financial services experience could be considered relevant from a regulatory standpoint, his lack of airline experience puts him at huge disadvantage from the start. Moreover, he didn’t have research & development experience which is critical in this instance so as to better understand and evaluate the various product design decisions that SMA faced such as whether or not to use new materials. There’s also little evidence that he cultivated a learning agility to address the various knowledge gaps in his background.
Communication has always been base capability in leadership. However, it’s even more critical and complex in the 21st century with the prevalence of social media and radical transparency. Unfortunately, Barton didn’t perform well either in this category. His decision to form a personal relationship with Veronica Perez was a bad one in many respects, least of which was that it undermined SMA’s public relations and communications team.
Without a well-operating PR and communications team, the ability to lead in a crisis, becomes even more difficult. No matter how effective one is as a leader, sometimes things go wrong. In such a crisis, a leader must make tough decision under the pressure. Barton’s previous leadership positions prepared him for some of the difficult situations that he faced at SMA. It was wise of him to seek consul from others during his decision-making process.
Finally, a critical capability within this leadership category is the ability to manage the boundary between public life and private life. With the advent of social media, this boundary becomes seemingly less defined. Barton didn’t do himself any favors by developing a personal relationship with the business news reporter, Veronica Perez. Although seemingly innocent at first glance, it unraveled and caused serious consequences for the SMA and Barton. In retrospect, this was a bad decision.
Framework Category #2: Leading Others
That being said, I do believe he did a good job in getting oriented and assessing his team. The Boston Consulting Group’s advice on how to manage the first 100 days as a new leader — traditionally viewed as a new leader’s opening window of performance – details key initial activities and debunks others. I thought Barton’s approach to meeting his team individually and as a group helped him form a good impression of this capabilities. Surprisingly, unliked most new CEOs, he didn’t make any significant changes to the team composition which may or may not have resulted in a different outcome. I would argue that his lack of an airline specific network severally limited his options is forming a new team.
Within the “leading others” category, a key capability is that of collaboration. Within this topic area, I thought Barton did a fair job. He leveraged a prior relationship with his old friend, Ace Jackson, who is a union leader, to help SMA more forward.
In addition to collaboration, another key challenge facing leaders is how to motivate and inspire the workforce. Academic research of management practices related to motivation include the X, Y and Z theories of human motivation which related to Maslow’s hierarchy of needs and how human behavior and motivation are factors in productivity. They describe how management style is influenced by the perception that managers hold of their employees. In my experience, I subscribe to Dr. Steven Kerr’s “On the Folly of Rewarding A, While Hoping for B” theory which is certainly evident at SMA as evidenced by when one of SMA’s R&D staff members, Rajit Palepu’s, gave his critique of the merit pay system. Barton certainly could have done a better job at aligning desired behavior with appropriate incentives to help with motivation.
With the appropriate incentive scheme in place, managing talent becomes easier albeit a very important job of a 21st century leader, then, is to attract, retain, and continue to develop the talents and skills of the people within the organization. I didn’t get the sense that Barton had a structured approach to upskill and reskill the SMA workforce which was particularly important considering the strategy it was pursuing in terms of new manufacturing methods, new product materials and an entirely new product category.
Framework Category #3: Leading the Business
A leader operates within a framework that outlines her or his responsibilities, range of authority, and access to resources. This framework is referred to as “governance.” Governance empowers a leader to lead a business organization and having a foundation of sound governance is a precondition for effectiveness as a leader. The board of directors is a significant aspect of governance. Unfortunately, Barton inherited a suboptimal board and his actions to recast it were of good intention but not well executed. Moreover, I don’t believe he a good way to describe “what makes a great corporate board.” In the September 2002 issue of the Harvard Business Review, Jeffrey A. Sonnenfeld describes how to build an effective board:
Another key capability in terms of leading a business, is one’s ability to lead change. Kotter’s famous 8-Step Change Model is a simple and practical schematic for facilitating transformation. The initial step, “Create a Sense of Urgency,” certainly didn’t need any input from Barton and SMA was already facing serious challenges before he accepted the role. Regarding the other steps, Barton could have done more “to address barriers” and “create short term wins” in order to better improve SMA’s odds of a successful transformation.
Related to leading change, the capacity to innovate has become extremely important to business success in the 21st century. And it’s the CEO’s job to establish the environment in which the organization can innovate effectively. In essence, a leader should promote the mindset and processes that allow the organization to innovation better than its rival. Fortunately, there is an established body of knowledge that is available to help accelerate innovation at firms of all sizes. It would have better served Barton if he had been more disciplined in how he interested innovative thinking and practices into SMA’s DNA.
Of course, without the ability to execute, great innovative ideas are never realized. When companies fail to deliver on their promises, the most frequent explanation is that the CEO’s strategy was wrong. But the strategy by itself is not often the cause. Strategies most often fail because they aren’t executed well. Things that are supposed to happen don’t happen. Either the organizations aren’t capable of making them happen, or the leaders of the business misjudge the challenges their companies face in the business environment, or both. From my perspective, Barton misjudged both conditions at SMA.
In conclusion, the topic of culture – or the way we do things around here – undoubtedly needs to be considered with leading a business. Indeed, many management scholars (e.g., Druker) and successful business leaders (e.g., IBM’s Lou Gerstner) have said that culture is very important to the success of a modern organization. My personal experience and opinion regarding this are that leaders need to methodically assess the existing culture, envision a desired future state culture and then systematically address the gap between the two states if one exists. Without this intentional design, an organization and its CEO will fail. Although Barton did well in seeking counsel from peers, he should have been more deliberate about address the SMA culture.
Appendix 1
The table below helps to orient leadership topics within the Leadership Framework’s 3 primary categories.
Appendix 2
In 1992, Joseph L. Badaracco published, Four Spheres of Executive Responsibility, in the California Management Review journal. He argues and presents evidence that the “search for a grand unifying principle of management morality leads to frustration and often cynicism. The moral dilemmas of management are, at bottom, clashes among different, conflicting moralities, among very different spheres of responsibility:
Each sphere is, in many ways, a nearly complete moral universe— its own world of commitments, human relationships, strong duties, norms of behavior, personal aspirations, and choices that bring happiness and suffering to others.
Moral claims arising from different spheres of responsibility often collide with each other, creating difficult, sometimes anguishing dilemmas for business executives. There is, unfortunately, no final, supreme principle for resolving conflicts of responsibility.
Appendix 3
Amit S. Mukherjee, a professor of leadership and strategy at Hult International Business School, published the “5 Musts for Next-Gen Leaders” in the April 2020 MIT Sloan journal.
He writes, “current and aspiring leaders must respond to this new wave of change in five key ways”
Appendix 4
In How to Lead: Wisdom from the World’s Greatest CEOs, Founders, and Game Changers, David Rubenstein interviews past and present leaders and discovers a set of recurring patterns which correlated with “business success.” These are: