Leadership Crisis

Leadership is almost certainly the most written about and discussed topic in organizational literature- even more so in today’s turbulent times.

What is beyond doubt is the fact that we have a global leadership crisis. Today, more than ever, in the uncertainty, and change we all face, organizations need more integrity and emotional intelligence, and our leaders have far too little of it. This may be the greatest limitation on our ability to navigate the turbid and unclear waters we all seem to be treading in. Certainly, we need more abundant and better qualified leadership to get us through the challenging times ahead. Yet, we are moving into a period where the leadership pool is getting smaller and younger. While this presents obvious challenges, this also perhaps presents us with a great opportunity.

The opportunity lies in the fact that we do know far more today about the importance of leadership continuity and the key leadership characteristics that contribute to the long-term success of institutions. Leadership undoubtedly makes a big difference. We have all, I am sure, at some stage worked with, for and alongside people some of whom are inspiring, some mediocre and some that don’t deserve to be leaders to begin with.

The growing crisis in leadership that we face today is observable from at least three different perspectives.

Firstly, with respect to demographic evidence, in the next decade, the percentage of 35 to 44 year olds will decline significantly in most countries and at the same time evidence suggests that competition between companies to attract and retain top talent will intensify. However, in the absence of any clear indication on the leadership qualities of those who are to enter the pool, nothing definite can be said about the shape of things that will emerge.

Secondly, with respect to the anecdotal evidence, we can clearly see a deteriorating confidence level in leadership in almost every principal field of endeavor whether it is business, education, Government or religion.

Finally, there is evidence that is emerging that presents serious concern about the need for quality in our leadership pool.

1. Companies are indeed at risk on many fronts – not just geopolitical or financial, but vulnerability to natural disaster, regulatory change, technology change, loss of market share, new competition, law suits, complexity of global markets and now corporate fraud!

2. Employees are constantly looking for newer and deeper meaning in their work. On average one out of every two employees the world over is disengaged at their workplace. They lack the enthusiasm, drive and passion for their work. Furthermore, the gloomy economic outlook, increasing job insecurity and layoffs have dampened levels of employee morale and made matters worse.

3. Environmental degradation is affecting all mankind on a global scale. Ozone layer depletion, global warming and loss of biodiversity are concerns of global significance that urgently require leadership intervention at the highest level.

4. The growing demand growth for energy especially from countries like India and China in the face of tight supply conditions continues to heighten the energy crisis.

5. There is a growing radicalization of religious beliefs inhibiting Governments’ from developing foreign policies that are acceptable and based on strong economic fundamentals.

6. Today, there is far more globalization and interdependence than we have witnessed in the past. We have all been victims in varying degrees to the financial meltdown on Wall Street. As the world becomes far more integrated, we will require a different kind of leadership.

Companies have to find solutions focused on sustainable development encompassing economic security and prosperity, social development and advancement and environmental sustainability. Business enterprise can no longer suck in the resources of society and environment beyond its self-sustaining capability. Today, society and environment are seriously questioning the existence of irresponsible and non-responsive business enterprise.

Industry has also realized that organizations with strong environmental and social credentials get the social sanctions to operate, carry less risk, achieve greater efficiencies and are better positioned to take advantage of opportunities in a global marketplace. Never before in human history has the need to create a true symbiotic relationship between business enterprise, society and environment been felt more than it is today. So much so that the sustainability of business enterprise as the engine of human development is completely dependent on this symbiotic relationship.

Business enterprises will have to transform from a transactional intelligence of demand and supply economics to emotional intelligence of building, nurturing and caring. It will have to allow the benefits of economic growth to sustain the ecological and social environment and spur the evolution of technologies that drive balanced growth.

This is a major change and requires leadership of a very different kind. Jim Collins discovered in his extensive research that the most powerfully transformed leaders share a paradoxical combination of personal humility and fierce resolve. Ensuring success of business will require transformational and sustainable leadership. Success going forward will be measured by a new understanding of integrating business, social and environmental issues, much like how economic thinkers are looking at integrating economic development with human development indices as a true measure of growth of any economy.

Contributed by - Nishchae Suri - President, SOIL