Abstract:
The nature of the challenges that managers are facing is changing rapidly; however, the methods we use for manager development remain the same.
Leadership today:
- The environment is changing – it is more complex, unstable and unpredictable.
- The skills needed to lead have also changed – they require the development of complexity and agility in thinking.
- The methods used to develop leaders have not changed much.
Most managers get to the position through work experience – they mostly got promoted because they were experts in their domain. While this is important, the skills of leading people require other skills, and given the complexity of the environment, leaders do not evolve quickly enough or in the right ways to meet the new environment, and are not in tune with the expanded needs of the environment.
The challenge in the future:
- It is no longer just a leadership challenge (what good leadership looks like); it is a developmental challenge (the process of how to develop “bigger” minds, people who take personal responsibility).
- Managers should become experts in the “what” of leadership, while also being beginners in the “how” of their own development.
- Among the biggest challenges is how to overcome resistance to change that stems from learned behaviors and ways of thinking that were previously effective. The biggest learning challenge is overcoming the gap between what we see as a good goal and what we may very passionately strive for and what we know and can do.
- The need for quality human resources: how to attract and retain new people?
People management is a process in which, through the motivation of employees, we simultaneously create space for developing their skills. In order to use the potential of our people, we must know who to give what to in order to stimulate in them a sense of meaning, and developmental potential, enhance their personal development, and at the same time reduce the feeling of emotional pressure and inertia.
Four trends for the future of leadership development:
- Focus more on vertical development
There are two different types of development – horizontal and vertical. Horizontal development can be “transferred” (from experts), but vertical development must be earned (for oneself).
- Transfer of greater development ownership to individuals
People develop faster when they feel responsible for their progress. The current model encourages people to believe that someone else is responsible for their development – HR, their manager or coaches.
- Greater focus on collective rather than individual leadership
The development of leadership has reached the point where it is too individually and elitistly oriented. There is a transition from the old paradigm, in which leadership was a person or role, to a new paradigm, in which leadership is a collective process that spreads through networks of people. The question will change from, “Who are the leaders?” to “What conditions do we need for leadership to flourish within the network?”
- Greater emphasis on innovation in leadership development methods
There are no simple, existing models or programs that will be sufficient to develop the levels of collective leadership needed to better predict a complex future. Instead, it will require an era of rapid innovation where organizations experiment with new approaches that combine different ideas in new ways and share them with others.
This millennium is an age in which the old has not yet disappeared, and the new has not yet been born.
We are faced with the challenges of postmodernism. The postmodern world is the world of the Millennials, the generation born after the 80s who are climbing the hierarchy of power with new value systems.
The knowledge society is built on intellectual capital, on the philosophy of inventive management, on the idea of an organization that learns and on information technology, which is both a technological infrastructure and a key factor in changing the situation.
Understand the world we live in, adapt and change.
“One cannot manage change. One can only be ahead of it.”
– Peter Drucker
In a world of change, we must learn to listen and pay attention to future possibilities. The journey from “I” to “we” (from egocentric to ecocentric consciousness) has three dimensions: better connection with others, better connection with the whole system, and better connection with oneself. Creating the conditions that help leaders expand and shift their view of the system from “I” to “we” springs a new type of consciousness-based collective action. In this horizontal model, each individual element cares for the well-being of others and the well-being of the wider community with the future in mind.
The quality of the results that a system achieves depends on the quality of consciousness according to which people in the system act, the form comes from consciousness.
The success of our actions in creating change does not depend on what we do or how we do it, but on the inner place from which we operate.
We cannot transform the behavior of a system unless we first transform the quality of attention with which people focus on their actions within the system, both individually and collectively.
Decision makers in all institutions of a system must together stop observing the system exclusively from their point of view (ego consciousness) and start experiencing it from the point of view of other participants.
The goal: Create the future of the system that values the well-being of all and not just a few.
“The success of an intervention depends on the interior condition of the intervener.”
– O Brien
Most challenges that leaders have require them to let go of the past in order to connect with and learn from future possibilities.
The concept of presence was created by combining intuition (the feeling of future possibility) and presence (the state of being in the present moment).
Deep changes are needed today; we have to change the paradigm of thought and turn our egocentric consciousness into an ecocentric one.
The challenge for today’s leaders is to bridge the gap between ecocentric reality and egocentric consciousness.
Today’s challenge of reinventing work is not only about jobs and salaries but also about meaning, connecting work with passion and purpose.
There are three main relationships we engage in as human beings; our relationship with nature and our planet, our relationships with other people, and our relationship with ourselves. When these relationships break, three rifts arise: ecological, social and spiritual-cultural. We will not make any significant progress unless we approach all three deep rifts in an integrated manner. An era of turbulence has begun in which individuals, institutions, and societies are faced with new types of challenges that require them to discard old patterns of response.
We need the ability to hold and develop our collective attention at the same rate that the reality around us is changing. Our attention and ability to pay attention is the sacred place we want to preserve, the source of our strength. We know that multitasking is just a myth. When we multitask, we only reduce the amount of time we spend on each task. Technology does not liberate. People release. First, we need to change the awareness and mentality with which we apply technology.
Our economies have developed based on challenges and responses to those challenges. If we look at the challenges as if we were looking in the rearview mirror of a car, then we will not see what is in front of us, which is the coming tsunami of turbulent changes.
How can we reconnect work (the profession we choose to pursue) with Work (what we really like to do)?
How can we build collective leadership capacity for system-wide innovation?
Connecting with an inner source of inspired energy is what drives significant innovation and renewal for people of all ages and cultures. The problem is that we have organized our economy and our economic thought on a very bad idea: that we should work for money. That idea kills creativity.
Most people see equity as money. But capital has many forms: it can be physical, human, industrial, financial, social, and spiritual. All these forms of capital share a common feature: we expect capital to generate profit or profit. The term profit comes from a Latin word that means “progress”.
Challenges of Leadership in the future:
Researchers state the following as the most common challenge for the future in leadership and education:
- The environment contains a large number of interactive elements
- Too much information
- Interconnection of systems and interdepartmental cooperation
- Solutions arise from dynamics within the system and cannot be imposed from the outside with predictable results.
- Dissolution of traditional organizational boundaries
- Hindsight does not lead to accurate prediction of results since the elements and conditions of the system are constantly changing.
- New technologies that disrupt old work practices
- Different values and expectations of new generations coming to the workplace
Education that includes a lot of content in a short time has become outdated for the development of leaders. While they were relatively effective for the needs and challenges of the last century, they are becoming increasingly out of sync with the challenges leaders face today.
The challenge is the parallel development of leadership skills (horizontal education) and at the same time, due to accelerated changes, work on vertical education. We’re getting to the point where we’re facing diminishing returns from teaching managers about leadership while they still have little understanding of what it takes to actually develop.
If there is no leadership, we collectively create results that no one wants. The essence of leadership has always been in sensing and realizing the future. The Indo-European root of the word leadership is leith = to go forward, cross the threshold, die.
The only real problem of leadership is the contradiction that we have an objective economic reality that acts as a global ecosystem, and on the other hand, we have individuals and leaders of institutions that are led by their institutional egocentric consciousness. That’s why we look at other people’s problems as externalities. Within companies, this means that leaders worry about their individual quotas while neglecting the well-being of the whole and the wider community.
Types of development:
Horizontal development is the development of new skills, abilities, and behaviors. Horizontal development is most useful when the problem is clearly defined and there are known techniques for solving it.
Vertical development, as opposed to horizontal development, refers to the “stages” through which people progress in relation to how they see the meaning of their world. From a technology perspective, it’s the difference between adding new software (horizontal development) and moving to a new, better computer (vertical development). Most people know that adding new software to an outdated operating system results in diminishing returns.
Our approach to the education of managers and leaders is that they develop horizontally and vertically at the same time.
Why is vertical development important for leadership?
A study conducted by Keith Eigel looked at 21 CEOs and 21 up-and-coming middle managers from a variety of companies, each with annual revenues over $5 billion.
The research showed that in a whole series of measures for leadership, there was a clear correlation between higher levels of vertical development and higher levels of efficiency. This finding has since been repeated in a series of precise studies on the assessment of individual competencies by managers.
The reason why managers at higher levels of cognitive development are more effective is that they are able to think in more complex ways.
According to McGuire and Rhodes (2009) of the Center for Creative Leadership: “Each successive level (or rung) has a greater capacity for learning, complex problem solving, and the ability to set new direction and lead change. Those at higher levels can learn and react more quickly because they have greater minds; people at higher levels are better able to see and connect more dots in more scenarios (which means they have better strategy).”
Why focus on competence development is not enough?
The development of competences is very often generic, there are too many of them, and their use after education is almost always questionable. Competencies alone do not add value to changing behavior.
It is more effective to think simultaneously about competencies and meta-competencies, such as:
- learning
- agility
- self-awareness
Transfer of larger development ownership to an individual
According to social psychologists, people’s motivation for growth is highest when there is a sense of autonomy over their own development.
Organizations have inadvertently nurtured dependency for years. The language that individuals are “sent” for training or that a 360-degree assessment is “done on them” shows that many managers still see their development as the property of someone else: HR, the training company, or their own managers.
This model has resulted in many people feeling like travelers. The challenge will be to help people get back into the driver’s seat of their own development.
Paraphrasing the book “Why should anyone be led by you” by Rob Goffee, in an organization where everyone is trying to develop someone else and no one is developing themselves, we might question whether we are really approaching development from the right starting point.
Leadership development can become accelerated if employees better understand what development is, why it is important to them, and how they can take the reins of their own development.
Redefining Leadership
A starting point for organizations can be to help their people redefine what they mean by leadership. There has been a major trend among organizational theorists to shift the focus from leadership as a person or role to leadership as a process.
For example:
- Everyone who gets into a position and supports the five conditions necessary for effective team action – trust, conflict, commitment, accountability, results (Hackman, 2002)
- “Leaders are all people in the organization who are actively involved in the following activities: the process of producing direction, alignment, and commitment.” (McCauley and Van Velsor, 2004)
The key difference in the definitions mentioned above is that leadership can be exercised by anyone; is not tied to a position of authority in the hierarchy. Heifetz actually believes that it is far easier to practice leadership from a position outside of authority, without the limitations that authority brings.
More importantly, these definitions do not tie the act of leadership to an individual. Leadership can be freely distributed in networks of people, crossing barriers and borders. Who the leader is becomes less important than what is needed in the system and how we can produce it.
If leadership is viewed as a collaborative process rather than an individual skill set, senior executives must consider the best way for leadership to flourish in their organizations.
The following factors would also be present in an organization where people take greater ownership of their own development:
- Recognition by senior management in a complex environment that business strategies cannot be executed without employee empowerment and engagement (and that traditional horizontal development will not be sufficient)
- Understanding of senior management that they need to use new development methods and that they will have to lead by example
- Employees should be educated about the results of research, how development occurs, and what are the benefits for them
- That everyone in the company understands why they develop better when they are in charge of their own development
- Alignment of reward systems to emphasize both development and performance
- Creating a culture where it is safe to take the kind of risks that are necessary for the organization to move forward
“People who develop the most are also those who want to develop even more.”
– Clayton
Alderfer’s Existence, Relations, Growth (ERG) model of human needs established that the need for growth is distinct from the need for physical well-being and relationships. Alderfer found that the need for physical well-being and relationships is satiated when satisfied (the more we get, the less we want), while the need for growth is not (the more we get, the more we want).
The implication for development is that if we can help people start down the path of true vertical development, the impetus for even greater growth will gain momentum.
In addition, social psychologists have long identified that a sense of autonomy (ownership) is crucial for people to feel intrinsically motivated. If the development experience is combined with a sense of autonomy over the development process, individuals are likely to receive a significant boost in their motivation to continue.
The role of learning and development (L&D) professionals within organizations will remain crucial. However, it can become more than a development partner whose main role is innovating new structures and development processes.
This could mean that instead of being like a traffic cop who selects and directs people to programs, the future L&D professional could become more like a community organizer who directs the people, processes, systems and structures that interconnect networks of people and spread a culture of development throughout the organization.
The most effective leadership development programs shift responsibility for leadership development away from human resources and toward the current leaders of the organization. GE, for example, expects both the CEO and senior managers to spend a significant amount of time at their leadership university (Crotonville) training future leaders. For L&D professionals, this would mean partnering with senior leaders to build the right culture of development, a task that would require great skill and development for those who rise to the challenge.
The fall of the heroic leader – the rise of collective leadership
The story of the development of leadership in the 20th century is the story of an individual. It began with the discovery of “what” makes a good leader and was accompanied by the development of practices that helped a generation of individuals to get as close as possible to that ideal. The workplace context rewarded individuals who could think through a situation analytically and then direct others to implement those well-thought-out actions.
The leadership was not easy, but the process itself was relatively clear. However, in the last 5 years, this model has become less effective, as there has been a divergence between the challenges of the environment and the ability of individuals to resolve them. The complexity of the new environment increasingly represents what Ronald Heifetz calls “adaptive challenges” in which it is not possible for any individual to know the solution or even define the problem.
Instead, “adaptive challenges” require cooperation between different stakeholders, each of whom holds a different aspect of reality, and many of whom must adapt and grow themselves in order to solve the problem. These challenges often cross departmental boundaries, reporting lines, and employees at all levels must collaborate and share information, create plans, influence each other, and make decisions.
Leadership has long implied heroic individuals as examples of great leaders who could lead and inspire organizations.
The future is composed of a complex, chaotic environment, due to which the approach of distribution of leadership through a smart network of stakeholders is more suitable for solving problems than the individual decisions of an authoritative leader.
What encourages vertical development?
Horizontal development can be learned (from experts), but vertical development must be earned (for yourself).
When faced with increased complexity and a challenge that exceeds your knowledge and abilities at your current level, you are motivated to take the next step (McGuire & Rodos, 2009). In addition, development is accelerated when people are able to identify the assumptions that keep them at their current level of development and check their validity.
McGuire and Rhodes describe vertical development as a three-stage process:
- Awakening: A person becomes aware that there is a different way of understanding the world and that it is possible to work in a new way.
- Unlearning the old and realizing the new: Old assumptions are analyzed and challenged. New assumptions are tested and experimented with as new possibilities for the daily work and life of an individual.
- Progression: Appears after practice and effort, when new ideas become stronger and begin to dominate over previous ones. The new level of development (leadership logic) begins to make more sense than the old one.
Torbert and others have found that cognitive development can be measured and enhanced not only at the individual level but also at the team and organizational levels. McGuire and Rodos (2009) pointed out that if organizations want to create lasting change, they must simultaneously develop a leadership culture and individual leaders. Their method uses a six-stage process, which begins with raising the culture of senior leadership before targeting middle managers in the organization. While personal vertical development affects individuals, vertical cultural development affects organizations.
The challenge for organizations looking to accelerate the vertical development of their leaders and cultures will be to create processes and experiences that incorporate these developmental principles into the workplace.
Kegan’s levels of adult development:
| Level | Kegan level | CLL Action Logics |
| 5 | Self-transforming | Interdependent-Collaborator |
| 4 | Self-authoring | Independent Achiever |
| 3 | Socialized | Dependent-Conformer |
- 3-Socialized Mind: At this level we are shaped by the expectations of those around us. What we think and say is strongly influenced by what we think others want to hear.
- 4-Self-Creating Mind: We have developed our own ideology or inner compass to guide us. Our sense of self aligns with our own belief system, personal code, and values. We can take a stand, and set boundaries in the name of our own “inner voice”.
- 5-Self-Transforming Mind: We have our ideology, but now we can step back from that ideology and see it as limited or partial. We can think about more contradictions and opposites and no longer feel the need to gravitate toward polarized opinions.
The coming decades will increasingly see managers take on challenges that require them to engage in strategic thinking, collaboration, systems thinking, change leadership, and “comfort with ambiguity.
“These are all abilities, which become more pronounced at level 5. Yet according to studies by Torbert and Fisher12, less than 8% have yet reached that level of thinking. This may in part explain why so many people are currently feeling stressed, confused, and overwhelmed in their jobs. A large number of the workforce are performing jobs that cause them to feel they are in “over their heads””
– Kegan, 2009.
Every economy has two main sources of value creation: the production side and the consumption side. Any creation of economic value results from the quality of our experience, the experience of users, consumers, and citizens. Entire economic creation without consumption would be worthless.
Therefore, consumers should be placed at the beginning of the process, their real needs should be jointly assessed, which would mark the beginning of the entire value-creation process. This results in fairer rules of the game for producers and consumers, along with the opportunity for an open, transparent and inclusive conversation between these groups; this would create a common starting point for innovation and economic development.
Today’s customer doesn’t want things, he wants the needs and experiences that they fulfill. Use is more important than possession.
Ecological cleavage (depletion of resources), social cleavage (inequality and poverty) and spiritual-cultural cleavage (depression) derive directly from a model of economic thought that defines land, human beings and money as commodities. But the Earth is not a commodity, and neither are human beings.
We did not create the Earth, it was given to us. Instead of just “taking, making, selling, exploiting and throwing away” our role is to be good stewards who will pass on what we have been given to the next generation in the same or better condition than the one in which we received it.
When consciousness becomes complete, thoughts become sincere.
When thoughts become honest, hearts become right.
When hearts become right, personalities become noble.
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Scharmer, Otto: Prijelaz ekonomije iz egosustava u ekosustav
