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Building
                              leader
                                 the new

                              Leadership challenges
                              of the future revealed




According to Hay Group’s Leadership 2030 research
the leaders of the future will need a host of new skills
and competencies if they are to succeed >>
Contents


Introduction                                                       2


1 The global balance of power is shifting                          5


2 Climate change and scarcity of resources is a mounting problem   6


3 The war for talent rages on                                      7


4 Accommodating growing individualization                          8



5 Embracing the digital natives                                    9



6 Harnessing technology to innovate                                10



Conclusion                                                         12
2 Building the new leader | Leadership 2030




                                       Introduction

                                       Leaders of the future will need to be adept conceptual and
                                       strategic thinkers, have deep integrity and intellectual openness,
                                       find new ways to create loyalty, lead increasingly diverse and
                                       independent teams over which they may not always have
                                       direct authority, and relinquish their own power in favor of
                                       collaborative approaches inside and outside the organization.



                                       To successfully develop this combination of       Megatrends are long-term processes of
Megatrends are                         skills and qualities – and adopt what is, in      transformation on a global scale with a broad
long-term processes                    effect, a ‘post-heroic’ leadership style – they   scope and dramatic impact. They can be
of transformation on                   may need to abandon much of the thinking          observed over decades and can be projected
a global scale with                    and behavior that propelled them to the top       with a high degree of probability at least 15
a broad scope and                      of their organizations in the first place.        years into the future. They affect all regions
                                                                                         and stakeholders, including governments,
dramatic impact
                                       But if they want their businesses to survive      businesses and individuals. And they
                                       and thrive over the next two decades they         transform economies, societies and policies
                                       have no choice. Unless they dramatically          at a fundamental level.
                                       change their leadership style, starting from
                                       today, their organizations will lose out          The six megatrends Hay Group singled out are:
                                       in the race for innovation, the march to          1 Accelerating globalization (‘globalization 2.0’)
                                       globalization and the war for talent. They        2 Climate change, its environmental impact
                                       will be, quite simply, unsustainable.               and scarcity of resources
                                                                                         3 Demographic change
                                       This is the conclusion Hay Group has              4 Individualization and values pluralism
                                       reached after working with Germany-based          5 Increasingly digital lifestyles
                                       foresight company Z-Punkt to identify             6 Technology convergence.
                                       the megatrends they believe will affect           Several of these have already been researched
                                       organizations and their leaders profoundly        intensively. But they have not, until now, been
                                       over the coming decades and analyzing             researched in the context of leadership. Nor
                                       the implications of each at a corporate,          have these six particular megatrends ever been
                                       organizational, team and individual level.        investigated in one single piece of research.




©2011 Hay Group. All rights reserved
Individualization                                            Digital lifestyle



   Demographic change                                         Technology convergence



     Globalization 2.0             Changing working               Climate change
                                       patterns


                                 Corporate environment


                                      Organization


                                 Personal and team level

                                     Leadership




Organizations will have to radically adapt   to manage through influence rather than
their cultures, structures, systems and      authority, which may not come easily to
processes in order to survive the new        many. Indeed, the demands the dramatically
world order – and managing in matrix         changing business climate will have on
structures, where information flows around   leaders at a cognitive, emotional and
the organization and around the globe in     behavioral level will be unprecedented.
a way that renders traditional hierarchies   We summarize the megatrends, and their
and reporting lines redundant, is one of     organizational and leadership implications,
the biggest challenges. Leaders will have    on the following pages.
4 Building the new leader | Leadership 2030




                                       Leaders will have to be multilingual,
                                       flexible, internationally mobile and
                                       adaptable. But, most crucial of all,
                                       they must be highly collaborative
                                       and have strong conceptual and
                                       strategic thinking skills


©2011 Hay Group. All rights reserved
1 The global balance of power is shifting

Increasing globalization is a given, with international competition
likely to grow fiercer and markets even more diversified.


Yet the nature of globalization is changing           making, having more culturally-diverse
(hence the term ‘globalization 2.0’), largely         leadership teams and encouraging more cross-
due to a shift in the global balance of power         country and cross-functional collaboration.
to Asia and to the rise of a global middle class.     They will also need to be more agile, as the
Asian management practices and models will            best global companies operate like a flattened
become more influential; emerging nations are         matrix, where information and authority flow
increasingly trading between themselves; and,         in all directions.
despite the rise of a global middle class, regional
markets are behaving more idiosyncratically,          The strategic thinking and cognitive skills
with local ‘re-regionalization’ a feature of the      leaders will need to navigate this new
new world order. What’s more, the global              world order are unprecedented. Good
business world is getting riskier: greater inter-     implementation and execution are no longer
connectedness creates greater volatility, making      enough – if, indeed, they ever were. Also, the
financial crises, pandemics and cyber-terrorism       task is so enormous that it is beyond the power
increasingly likely.                                  of one single individual to accomplish, making      Food for thought
                                                      collaboration among a range of different people
While globalization is unstoppable, therefore,        essential even at the stage of conceptualizing      In the West the
its progress won’t be smooth. Organizations           challenges. What globalization 2.0 makes            number of jobs is
need to be aware of and sensitive to the              abundantly clear is that the days of one or two     falling; in the East
changing political and economic sensibilities         ‘heroes’ at the top of organizations dictating
                                                                                                          leaders are having to
in different countries – particularly emerging        strategy are well and truly over.
and developing economies – which could                                                                    learn how to manage
reduce global interdependence and accessibility,      So, as well as being multilingual, flexible,        in new markets as
at least in the short term. What’s more, while        internationally mobile and adaptable, and           Eastern companies
consumption patterns among the new middle             culturally sensitive, leaders will also have to     expand westward.
classes are converging, the values of those in        be collaborative and good conceptual and            How is accelerating
emerging nations may differ widely from those         contextual thinkers. Additionally, they will need
                                                                                                          globalization affecting
in the West.                                          the ability to lead diverse teams over which
                                                      they may have no direct authority and to find       your home market?
In practical terms, this means that international     new ways of engendering personal loyalty in an      How are government,
companies need to adapt their global strategies       environment where the old loyalties between         your company and you
for local markets – a process that will be helped     employer and employee are declining due to          personally responding?
by fostering local participation in decision-         the distance between them.
6 Building the new leader | Leadership 2030




                                       2 Climate change and scarcity
                                         of resources is a mounting problem

                                       The problems caused by rising CO2 emissions and
                                       temperatures will be aggravated by growing industrial and
                                       residential waste in emerging and developing countries.


                                       Meanwhile, the growing scarcity of strategic      And firms must accept rising costs
                                       resources such as water, minerals, metals         – both in terms of raw materials and
                                       and fossil fuels will cause price hikes and       more environmentally sustainable processes
                                       could trigger regional and global conflicts.      – as part of their license to operate.
                                       Greater environmental responsibility and
                                       accountability will be the inevitable corollary   Leaders will need outstanding cognitive
                                       and investment in clean technology will rise.     skills to balance the competing demands
                                                                                         of financial success, social responsibility
                                       Clearly, organizations that lower their           and environmental custodianship.
                                       eco-footprint will see direct benefits            They must also act as change agents,
                                       to their performance, bottom line and             advocating environmentally responsible
                                       competitiveness, so restructuring along           business practice within and outside the
                                       sustainable lines has become a strategic          organization, and forging new levels of
                                       imperative. There will also need to be greater    intra-and inter-company collaboration
                                       collaboration between organizations to            in order to encourage team, rather than
                                       find solutions to environmental problems.         individual, solutions.




                                       Food for thought

                                       How will climate change affect your organization in terms of the amount you
                                       will need to invest in employee benefit plans, health and safety and so on? And
                                       to what extent will reduced margins compromise your leaders’ ability to deliver?




©2011 Hay Group. All rights reserved
3 The war for talent rages on

The world population is growing and ageing, but there are
demographic imbalances. In the industrial countries of the West
and China, for instance, life expectancy is rising but populations
are stagnating or declining, whereas populations in developing
countries are booming.

Industrial countries will suffer skills        attract, integrate and develop international
shortages and pressure on the welfare          migrants, older people, women and others
system, and migration will increase – not      with ‘caring’ responsibilities. This will
just from the more to the least populous       mean introducing family-friendly and
countries, but also as a result of armed       age-appropriate employment models, along
conflicts, disasters and environmental         with educational and development programs
problems. However, the ‘brain drain’ will      – not least those designed to transfer
increasingly turn into a ‘brain cycle’ as      knowledge between different generations.
growing numbers of migrants return home
and use their new skills to accelerate local   Leaders will need to understand, lead,
development. But talent will continue to be    integrate and motivate teams of increasingly
at a premium and retaining employees with      diverse employees. Fostering inter-generational
key skills will be a challenge.                and inter-cultural teamwork is essential, as
                                               is finding ways to engender commitment
Indeed, for organizations this means that      and loyalty among people of different ages,
the ‘war for talent’ will continue to rage,    from different cultures and with different
with knock-on effects on their innovation      values. Leaders will also have to adapt
capability. But they have an unprecedentedly   their organizations in order to encourage
diverse pool of potential employees to         more women and other ‘minorities’ into
draw on, and will have to work hard to         leadership positions.


Food for thought

Will ‘jobs’ as we currently understand them exist in the future? Or will we all
be contractors? What’s more, neither the young nor their older colleagues are
likely to be interested in working 12-hour days for very much longer
8 Building the new leader | Leadership 2030




                      4 Accommodating growing individualization

                      Individualization is the growing freedom of choice
                      expected by and granted to individuals within societies
                      and communities.

                      Careers play an increasingly important            into the conventional leadership mold.
                      role in the quest for self-fulfillment and        Individualization leads to decentralized
                      self-expression, a shift that is driving          workplaces characterized by flatter, more
                      greater convergence between private and           flexible, structures, cross-functional project
                      working lives and a desire by individuals to      teams and higher turnover.
                      integrate personal and professional goals.
                      Individualization has an enormous impact on       The post-heroic leader will need to balance
                      employees’ loyalty and motivation to perform,     the roles of boss, mediator and coach, allowing
                      with ‘soft factors’ such as recognition, self-    teams more freedom and autonomy while
                      development, self-direction, values-driven        keeping them focused on objectives. They
                      engagement and work-life balance often            will also have to recalibrate their criteria
                      taking precedence over traditional factors        for leadership and re-think their approach
                      like pay and promotion.                           to loyalty and retention, fostering good
                                                                        individual relationships with current and
                      Redesigning work processes to better suit         former team members to avoid a domino-style
                      individuals rather than the organization          disintegration should one person leave.
                      has now become de rigueur. This involves
                      establishing conditions that promote              Leaders will have to work harder at generating
                      independent work and time management,             personal loyalty, through accommodating
                      so allowing employees time for their personal     employees’ requirements, enabling self-
                      projects. What’s more, with creative output       directed ways of working and individualized
                      recognized as a main driver for economic          leadership. Developing relationships beyond
                      success, a new ‘creative class’ is springing up   the direct work environment to reflect the
                      – and, with longer education, career breaks,      continuing value to the organization of those
                      frequent job changes and even periods of          who leave its formal employ will also be key.
                      unemployment, they don’t necessarily fit          Departure no longer equates to ‘disloyalty’.


                      Food for thought

                      How can we train leaders to ‘zoom in’ in order to understand the unique needs
                      of their people while at the same time maintaining the appropriate ‘social
                      distance’? Will we have to separate the role of leader (collaborator, talent finder,
                      coach) from that of manager (task driver, performance manager, salary provider)?




©2011 Hay Group. All rights reserved
5 Embracing the digital natives

New media will continue to blur the boundaries between
private and working lives.


Individuals are ‘always on’, more and more           seniors. However, while technological prowess
business is conducted ‘virtually’, and power is      can aid innovation, digital natives’ over-
shifting to employees – particularly the rising      reliance on technology and their lack of social
class of digital knowledge workers, who can          skills equip them poorly for leadership roles.
work anywhere and forge large numbers of
loose digital connections with both personal         Leaders will have to learn to lead remotely,
and business contacts.                               but must guard against relying purely on
                                                     virtual communication. Combining virtual
Digital knowledge is fast becoming the               and face-to-face contact is important for
powerhouse of the global economy, its                both effective decision-making and fostering
instantaneous exchange facilitated by the            motivation and loyalty.
internet. Digital tools offer cheap, easy and fast
communication, co-operation, organization and        In an increasingly digitized world, power
production, and workplaces are no longer tied        shifts towards the digital natives, who are able
to bricks and mortar locations.                      to share information – positive and negative
                                                     – instantly with a global audience via the
Leaders must embrace the creativity, curiosity,      internet. This makes integrity and sincerity of
and open minds of ‘digital natives’, but offer       paramount importance in organizations. As
frameworks and guidance where needed. They           such, leaders have to provide ‘digital wisdom’
must also foster collaboration and knowledge         – clear, transparent and practical guidance to
exchange between them and older workers to           using new digital technologies – as well as role-
bridge the information gap. At first glance, the     modeling and fostering high levels of openness,
digital natives’ mastery of technology might         integrity and sincerity to preserve corporate
appear to better qualify them to lead than their     reputation in a more transparent world.




Food for thought

If you find and keep digital natives who work from home, will that put you
ahead of the curve in terms of reducing travel costs and office overheads and,
in turn, reducing your environmental footprint?
10 Building the new leader | Leadership 2030




                                       6 Harnessing technology to innovate

                                       Miniaturization and virtualization will drive the convergence
                                       between nano-, bio- and information technologies and
                                       cognitive sciences, spurring innovation and accelerating
                                       research and development in many fields.


                                       ‘NBIC’ technologies are already driving rapid     Despite their lack of detailed knowledge,
                                       advances in medicine, energy, environmental       leaders must be open to – and advocates
                                       protection and production processes, and their    of – visionary ideas. They must encourage
                                       potential for transforming other areas is huge.   innovation and collaboration and act as
                                                                                         orchestrators of expertise from within and
                                       Actionable knowledge of complex                   outside the organization in order to harness
                                       technologies will become a key business           the potential of converging technologies.
                                       competence, even in non-technological             Helping to counter doubts about these new
                                       fields. But the complexity of NBIC makes          technologies, the acceptance of which will
                                       inter-corporate knowledge exchange vital,         determine the success or failure of innovations
                                       and ‘business mash-ups’ (collaborations and       and new products, is crucial. Leaders may not
                                       cross-sector partnerships) will become more       be experts themselves, but they must know
                                       common. Adaptation will become critical           enough to keep projects focused and to hold
                                       for survival, and willingness to integrate        the ring between the competing views of
                                       other players in corporate endeavors              different team members. In so doing, they will
                                       will lead to more open structures and             have to work through informal influence across
                                       de-compartmentalized organizations.               functional and organizational boundaries.




                                       Food for thought

                                       Are you and your organization open to new ideas, or do you tend to
                                       reject them because you are conditioned by received wisdom? Do you
                                       adhere to ‘best practices’ or do you think more laterally about ‘next practices’?




©2011 Hay Group. All rights reserved
Actionable knowledge of complex
technologies will become a key
business competence
12 Building the new leader | Leadership 2030




                              Conclusion

                              Organizations and their leaders face a tough, but not
                              insurmountable, challenge, as those companies already
                              adapting or preparing to adapt to the new world order
                              demonstrate. And, as ever, the ‘Best Companies for Leadership’
                              are in the vanguard of post-heroic leadership approaches.


                              For example, the Top 20 are looking             and ensure their employees are able to strike
                              everywhere for leadership, innovation           a good balance between work and the rest of
                              and ideas – not just up the hierarchy.          their lives.
                              They are becoming more effective by
                              ensuring the diversity of their leaders and     But even their journey has just begun.
                              workforces reflects the growing diversity in    Adapting to a world being rapidly reshaped by
                              their markets. And they are improving their     these six megatrends is like entering uncharted
                              cross-cultural leadership and collaboration     territory. But organizations have to push on:
                              accordingly. They are also more socially and    there is no alternative. Old structures and
                              environmentally responsible than their peers,   leadership styles just won’t cut it any longer.




                                                              Unlock the future of leadership
                                                              – for more content, visit
                                                              HayGroup.com/Leadership2030
                                                              or scan the QR code
New leadership competencies

The new business world order will challenge leaders on three levels: cognitive,
emotional and behavioral.

Cognitive

Leaders need new forms of contextual awareness, based on strong conceptual and
strategic thinking capabilities.

They need to be able to conceptualize change in an unprecedented way, again based on
conceptual and strategic thinking.

Leaders need to exhibit new forms of intellectual openness and curiosity.

Emotional

Overall, leaders will need to be much more sensitive to different cultures, generations
and genders.

They will need to demonstrate higher levels of integrity and sincerity and adopt a more
ethical approach to doing business.

They must also tolerate far higher levels of ambiguity.

Behavioral

Leaders must create a culture of trust and openness.

As post-heroic leaders they must rethink old concepts such as loyalty and retention and
personally create loyalty.

Collaboration – cross-generational, cross-functional and cross-company – will be
their watchword.

They must lead increasingly diverse teams.
Africa                           Frankfurt                         Middle East
Cape Town                        Glasgow                           Dubai
Johannesburg                     Helsinki                          Riyadh
Pretoria                         Istanbul                          Tel Aviv
                                 Kiev
Asia                             Lille                             North America
Bangkok                          Lisbon                            Atlanta
Beijing                          London                            Boston
Hong Kong                        Madrid                            Calgary
Ho Chi Minh City                 Manchester                        Chicago
Jakarta                          Milan                             Dallas
Kuala Lumpur                     Moscow                            Edmonton
Mumbai                           Oslo                              Halifax
New Delhi                        Paris                             Kansas City
Seoul                            Prague                            Los Angeles
Shanghai                         Rome                              Montreal
Shenzhen                         Stockholm                         New York Metro
Singapore                        Strasbourg                        Ottawa
Tokyo                            Vienna                            Philadelphia
                                 Vilnius                           Regina
                                 Warsaw                            San Francisco
Europe
                                 Zeist                             Toronto
Athens
                                 Zurich                            Vancouver
Barcelona
Berlin                                                             Washington DC Metro
                                 Latin America
Bilbao
                                 Bogotá
Birmingham                                                         Pacific
                                 Buenos Aires
Bratislava                                                         Auckland
                                 Lima
Bristol                                                            Brisbane
                                 Mexico City
Brussels                                                           Melbourne
                                 San José
Bucharest                                                          Perth
                                 Santiago
Budapest                                                           Sydney
                                 São Paulo
Dublin                                                             Wellington




Hay Group is a global management consulting firm that works with leaders to
transform strategy into reality. We develop talent, organize people to be more
effective and motivate them to perform at their best. Our focus is on making
change happen and helping people and organizations realize their potential.
We have over 2600 employees working in 84 offices in 48 countries. For more
information please contact your local office through www.haygroup.com

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Hay Group Leadership 2030 Whitepaper

  • 1. Building leader the new Leadership challenges of the future revealed According to Hay Group’s Leadership 2030 research the leaders of the future will need a host of new skills and competencies if they are to succeed >>
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  • 3. Contents Introduction 2 1 The global balance of power is shifting 5 2 Climate change and scarcity of resources is a mounting problem 6 3 The war for talent rages on 7 4 Accommodating growing individualization 8 5 Embracing the digital natives 9 6 Harnessing technology to innovate 10 Conclusion 12
  • 4. 2 Building the new leader | Leadership 2030 Introduction Leaders of the future will need to be adept conceptual and strategic thinkers, have deep integrity and intellectual openness, find new ways to create loyalty, lead increasingly diverse and independent teams over which they may not always have direct authority, and relinquish their own power in favor of collaborative approaches inside and outside the organization. To successfully develop this combination of Megatrends are long-term processes of Megatrends are skills and qualities – and adopt what is, in transformation on a global scale with a broad long-term processes effect, a ‘post-heroic’ leadership style – they scope and dramatic impact. They can be of transformation on may need to abandon much of the thinking observed over decades and can be projected a global scale with and behavior that propelled them to the top with a high degree of probability at least 15 a broad scope and of their organizations in the first place. years into the future. They affect all regions and stakeholders, including governments, dramatic impact But if they want their businesses to survive businesses and individuals. And they and thrive over the next two decades they transform economies, societies and policies have no choice. Unless they dramatically at a fundamental level. change their leadership style, starting from today, their organizations will lose out The six megatrends Hay Group singled out are: in the race for innovation, the march to 1 Accelerating globalization (‘globalization 2.0’) globalization and the war for talent. They 2 Climate change, its environmental impact will be, quite simply, unsustainable. and scarcity of resources 3 Demographic change This is the conclusion Hay Group has 4 Individualization and values pluralism reached after working with Germany-based 5 Increasingly digital lifestyles foresight company Z-Punkt to identify 6 Technology convergence. the megatrends they believe will affect Several of these have already been researched organizations and their leaders profoundly intensively. But they have not, until now, been over the coming decades and analyzing researched in the context of leadership. Nor the implications of each at a corporate, have these six particular megatrends ever been organizational, team and individual level. investigated in one single piece of research. ©2011 Hay Group. All rights reserved
  • 5. Individualization Digital lifestyle Demographic change Technology convergence Globalization 2.0 Changing working Climate change patterns Corporate environment Organization Personal and team level Leadership Organizations will have to radically adapt to manage through influence rather than their cultures, structures, systems and authority, which may not come easily to processes in order to survive the new many. Indeed, the demands the dramatically world order – and managing in matrix changing business climate will have on structures, where information flows around leaders at a cognitive, emotional and the organization and around the globe in behavioral level will be unprecedented. a way that renders traditional hierarchies We summarize the megatrends, and their and reporting lines redundant, is one of organizational and leadership implications, the biggest challenges. Leaders will have on the following pages.
  • 6. 4 Building the new leader | Leadership 2030 Leaders will have to be multilingual, flexible, internationally mobile and adaptable. But, most crucial of all, they must be highly collaborative and have strong conceptual and strategic thinking skills ©2011 Hay Group. All rights reserved
  • 7. 1 The global balance of power is shifting Increasing globalization is a given, with international competition likely to grow fiercer and markets even more diversified. Yet the nature of globalization is changing making, having more culturally-diverse (hence the term ‘globalization 2.0’), largely leadership teams and encouraging more cross- due to a shift in the global balance of power country and cross-functional collaboration. to Asia and to the rise of a global middle class. They will also need to be more agile, as the Asian management practices and models will best global companies operate like a flattened become more influential; emerging nations are matrix, where information and authority flow increasingly trading between themselves; and, in all directions. despite the rise of a global middle class, regional markets are behaving more idiosyncratically, The strategic thinking and cognitive skills with local ‘re-regionalization’ a feature of the leaders will need to navigate this new new world order. What’s more, the global world order are unprecedented. Good business world is getting riskier: greater inter- implementation and execution are no longer connectedness creates greater volatility, making enough – if, indeed, they ever were. Also, the financial crises, pandemics and cyber-terrorism task is so enormous that it is beyond the power increasingly likely. of one single individual to accomplish, making Food for thought collaboration among a range of different people While globalization is unstoppable, therefore, essential even at the stage of conceptualizing In the West the its progress won’t be smooth. Organizations challenges. What globalization 2.0 makes number of jobs is need to be aware of and sensitive to the abundantly clear is that the days of one or two falling; in the East changing political and economic sensibilities ‘heroes’ at the top of organizations dictating leaders are having to in different countries – particularly emerging strategy are well and truly over. and developing economies – which could learn how to manage reduce global interdependence and accessibility, So, as well as being multilingual, flexible, in new markets as at least in the short term. What’s more, while internationally mobile and adaptable, and Eastern companies consumption patterns among the new middle culturally sensitive, leaders will also have to expand westward. classes are converging, the values of those in be collaborative and good conceptual and How is accelerating emerging nations may differ widely from those contextual thinkers. Additionally, they will need globalization affecting in the West. the ability to lead diverse teams over which they may have no direct authority and to find your home market? In practical terms, this means that international new ways of engendering personal loyalty in an How are government, companies need to adapt their global strategies environment where the old loyalties between your company and you for local markets – a process that will be helped employer and employee are declining due to personally responding? by fostering local participation in decision- the distance between them.
  • 8. 6 Building the new leader | Leadership 2030 2 Climate change and scarcity of resources is a mounting problem The problems caused by rising CO2 emissions and temperatures will be aggravated by growing industrial and residential waste in emerging and developing countries. Meanwhile, the growing scarcity of strategic And firms must accept rising costs resources such as water, minerals, metals – both in terms of raw materials and and fossil fuels will cause price hikes and more environmentally sustainable processes could trigger regional and global conflicts. – as part of their license to operate. Greater environmental responsibility and accountability will be the inevitable corollary Leaders will need outstanding cognitive and investment in clean technology will rise. skills to balance the competing demands of financial success, social responsibility Clearly, organizations that lower their and environmental custodianship. eco-footprint will see direct benefits They must also act as change agents, to their performance, bottom line and advocating environmentally responsible competitiveness, so restructuring along business practice within and outside the sustainable lines has become a strategic organization, and forging new levels of imperative. There will also need to be greater intra-and inter-company collaboration collaboration between organizations to in order to encourage team, rather than find solutions to environmental problems. individual, solutions. Food for thought How will climate change affect your organization in terms of the amount you will need to invest in employee benefit plans, health and safety and so on? And to what extent will reduced margins compromise your leaders’ ability to deliver? ©2011 Hay Group. All rights reserved
  • 9. 3 The war for talent rages on The world population is growing and ageing, but there are demographic imbalances. In the industrial countries of the West and China, for instance, life expectancy is rising but populations are stagnating or declining, whereas populations in developing countries are booming. Industrial countries will suffer skills attract, integrate and develop international shortages and pressure on the welfare migrants, older people, women and others system, and migration will increase – not with ‘caring’ responsibilities. This will just from the more to the least populous mean introducing family-friendly and countries, but also as a result of armed age-appropriate employment models, along conflicts, disasters and environmental with educational and development programs problems. However, the ‘brain drain’ will – not least those designed to transfer increasingly turn into a ‘brain cycle’ as knowledge between different generations. growing numbers of migrants return home and use their new skills to accelerate local Leaders will need to understand, lead, development. But talent will continue to be integrate and motivate teams of increasingly at a premium and retaining employees with diverse employees. Fostering inter-generational key skills will be a challenge. and inter-cultural teamwork is essential, as is finding ways to engender commitment Indeed, for organizations this means that and loyalty among people of different ages, the ‘war for talent’ will continue to rage, from different cultures and with different with knock-on effects on their innovation values. Leaders will also have to adapt capability. But they have an unprecedentedly their organizations in order to encourage diverse pool of potential employees to more women and other ‘minorities’ into draw on, and will have to work hard to leadership positions. Food for thought Will ‘jobs’ as we currently understand them exist in the future? Or will we all be contractors? What’s more, neither the young nor their older colleagues are likely to be interested in working 12-hour days for very much longer
  • 10. 8 Building the new leader | Leadership 2030 4 Accommodating growing individualization Individualization is the growing freedom of choice expected by and granted to individuals within societies and communities. Careers play an increasingly important into the conventional leadership mold. role in the quest for self-fulfillment and Individualization leads to decentralized self-expression, a shift that is driving workplaces characterized by flatter, more greater convergence between private and flexible, structures, cross-functional project working lives and a desire by individuals to teams and higher turnover. integrate personal and professional goals. Individualization has an enormous impact on The post-heroic leader will need to balance employees’ loyalty and motivation to perform, the roles of boss, mediator and coach, allowing with ‘soft factors’ such as recognition, self- teams more freedom and autonomy while development, self-direction, values-driven keeping them focused on objectives. They engagement and work-life balance often will also have to recalibrate their criteria taking precedence over traditional factors for leadership and re-think their approach like pay and promotion. to loyalty and retention, fostering good individual relationships with current and Redesigning work processes to better suit former team members to avoid a domino-style individuals rather than the organization disintegration should one person leave. has now become de rigueur. This involves establishing conditions that promote Leaders will have to work harder at generating independent work and time management, personal loyalty, through accommodating so allowing employees time for their personal employees’ requirements, enabling self- projects. What’s more, with creative output directed ways of working and individualized recognized as a main driver for economic leadership. Developing relationships beyond success, a new ‘creative class’ is springing up the direct work environment to reflect the – and, with longer education, career breaks, continuing value to the organization of those frequent job changes and even periods of who leave its formal employ will also be key. unemployment, they don’t necessarily fit Departure no longer equates to ‘disloyalty’. Food for thought How can we train leaders to ‘zoom in’ in order to understand the unique needs of their people while at the same time maintaining the appropriate ‘social distance’? Will we have to separate the role of leader (collaborator, talent finder, coach) from that of manager (task driver, performance manager, salary provider)? ©2011 Hay Group. All rights reserved
  • 11. 5 Embracing the digital natives New media will continue to blur the boundaries between private and working lives. Individuals are ‘always on’, more and more seniors. However, while technological prowess business is conducted ‘virtually’, and power is can aid innovation, digital natives’ over- shifting to employees – particularly the rising reliance on technology and their lack of social class of digital knowledge workers, who can skills equip them poorly for leadership roles. work anywhere and forge large numbers of loose digital connections with both personal Leaders will have to learn to lead remotely, and business contacts. but must guard against relying purely on virtual communication. Combining virtual Digital knowledge is fast becoming the and face-to-face contact is important for powerhouse of the global economy, its both effective decision-making and fostering instantaneous exchange facilitated by the motivation and loyalty. internet. Digital tools offer cheap, easy and fast communication, co-operation, organization and In an increasingly digitized world, power production, and workplaces are no longer tied shifts towards the digital natives, who are able to bricks and mortar locations. to share information – positive and negative – instantly with a global audience via the Leaders must embrace the creativity, curiosity, internet. This makes integrity and sincerity of and open minds of ‘digital natives’, but offer paramount importance in organizations. As frameworks and guidance where needed. They such, leaders have to provide ‘digital wisdom’ must also foster collaboration and knowledge – clear, transparent and practical guidance to exchange between them and older workers to using new digital technologies – as well as role- bridge the information gap. At first glance, the modeling and fostering high levels of openness, digital natives’ mastery of technology might integrity and sincerity to preserve corporate appear to better qualify them to lead than their reputation in a more transparent world. Food for thought If you find and keep digital natives who work from home, will that put you ahead of the curve in terms of reducing travel costs and office overheads and, in turn, reducing your environmental footprint?
  • 12. 10 Building the new leader | Leadership 2030 6 Harnessing technology to innovate Miniaturization and virtualization will drive the convergence between nano-, bio- and information technologies and cognitive sciences, spurring innovation and accelerating research and development in many fields. ‘NBIC’ technologies are already driving rapid Despite their lack of detailed knowledge, advances in medicine, energy, environmental leaders must be open to – and advocates protection and production processes, and their of – visionary ideas. They must encourage potential for transforming other areas is huge. innovation and collaboration and act as orchestrators of expertise from within and Actionable knowledge of complex outside the organization in order to harness technologies will become a key business the potential of converging technologies. competence, even in non-technological Helping to counter doubts about these new fields. But the complexity of NBIC makes technologies, the acceptance of which will inter-corporate knowledge exchange vital, determine the success or failure of innovations and ‘business mash-ups’ (collaborations and and new products, is crucial. Leaders may not cross-sector partnerships) will become more be experts themselves, but they must know common. Adaptation will become critical enough to keep projects focused and to hold for survival, and willingness to integrate the ring between the competing views of other players in corporate endeavors different team members. In so doing, they will will lead to more open structures and have to work through informal influence across de-compartmentalized organizations. functional and organizational boundaries. Food for thought Are you and your organization open to new ideas, or do you tend to reject them because you are conditioned by received wisdom? Do you adhere to ‘best practices’ or do you think more laterally about ‘next practices’? ©2011 Hay Group. All rights reserved
  • 13. Actionable knowledge of complex technologies will become a key business competence
  • 14. 12 Building the new leader | Leadership 2030 Conclusion Organizations and their leaders face a tough, but not insurmountable, challenge, as those companies already adapting or preparing to adapt to the new world order demonstrate. And, as ever, the ‘Best Companies for Leadership’ are in the vanguard of post-heroic leadership approaches. For example, the Top 20 are looking and ensure their employees are able to strike everywhere for leadership, innovation a good balance between work and the rest of and ideas – not just up the hierarchy. their lives. They are becoming more effective by ensuring the diversity of their leaders and But even their journey has just begun. workforces reflects the growing diversity in Adapting to a world being rapidly reshaped by their markets. And they are improving their these six megatrends is like entering uncharted cross-cultural leadership and collaboration territory. But organizations have to push on: accordingly. They are also more socially and there is no alternative. Old structures and environmentally responsible than their peers, leadership styles just won’t cut it any longer. Unlock the future of leadership – for more content, visit HayGroup.com/Leadership2030 or scan the QR code
  • 15. New leadership competencies The new business world order will challenge leaders on three levels: cognitive, emotional and behavioral. Cognitive Leaders need new forms of contextual awareness, based on strong conceptual and strategic thinking capabilities. They need to be able to conceptualize change in an unprecedented way, again based on conceptual and strategic thinking. Leaders need to exhibit new forms of intellectual openness and curiosity. Emotional Overall, leaders will need to be much more sensitive to different cultures, generations and genders. They will need to demonstrate higher levels of integrity and sincerity and adopt a more ethical approach to doing business. They must also tolerate far higher levels of ambiguity. Behavioral Leaders must create a culture of trust and openness. As post-heroic leaders they must rethink old concepts such as loyalty and retention and personally create loyalty. Collaboration – cross-generational, cross-functional and cross-company – will be their watchword. They must lead increasingly diverse teams.
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