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July 02, 2018 Monday 04:31:57 PM IST

Recasting the Pyramid

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In the age of globalisation and technological innovation, leadership has become a crucial component in the success or failure of organisations. This means that leaders themselves must possess a diverse and broader set of skills than in the past, while laying far greater emphasison adaptivity and the ability to embrace, comprehend, and respond to complexity.

Leaders also have to be prepared to investas much effort in understanding the external environment in which they compete, as they do in managing internal structures of governance and operation. Within this background of fast change and organisational response, three general trends have emergedthat are influencing leadership and leadership development.

HOLACRACY

Holacracy is a comprehensive set of practices for organising, leading, and running a business enterprise. It substitutes the current top-down organisational structure with a new way of exercisingcontrol by allocating power. It is a new operating system that aidsrapid evolution in the core processes of a firm. Studies show that when a city becomes bigger, efficiency per resident increases substantially. Conversely, when firms get bigger, efficiency per employee normally decreases.


Forty-four-0ld Tony Hsieh, CEO of online shoe and clothing retailerZappos, tried to identify how to structure his company more like a city and less like a bureaucratic establishment. Tony shifted from a usual tiered structure to a flatter one, which empowers employees to act more like entrepreneurs and self-direct their work instead of reporting to a manager who tells them what to do. (Interestingly, the spectacularly frugal entrepreneur, who is worth close to a billion dollars, moved from a lavish condominium on the 23rd floor of a luxury apartment building toa dusty Las Vegas trailer park, where he lives in a 240-squarefoot silver Airstream trailer.)

Akey difference in the Zappos model is that an individual can fill multiple roles throughout the organisation. Anyone can resign from any role at any time and isfree to migrate to other roles. Only about five people in the organisation have the authority to fire someone.

Moreover, every employee is truly authorised to contribute in thegovernance process at Zappos where the organisational chart literally changes probably 50 times a day. And it’s all updated in real time.

According to Hsieh, Holacracy is the only business model that will ensure long-term sustainability of a firm. He stated that of the businesses on the Fortune 500 list when it was first published in 1955, a whopping 88 percentno longer exist.


AGILITY

According to a study done by the UK-based Institute of Leadership and Management, the most significant characteristic of future leaders is agility. For succeeding in the future, leaders will need to become more agile, open, and able to adapt to diverse needs created by changing workplaces.

Agile leadership helps to forestall and adapt to volatile circumstances in ways that will be beneficial for the individual and others. While not everyone can display the same levels of leadership agility, agile leaders are unquestionably more effective leaders. An agile leader would be able to make decisions on the spot even in the absence of convincing data.

With more than two billion users, Facebook had all the reason in the world to sit back and let the money roll in. In 2016, it created more than $27 billion in revenue, about 80percent of it from mobile ads. It would never have realised this profitability if CEO Mark Zuckerberg hadn’t had the vision to monetise the platform while guaranteeing the user experience continues to be highly dependable and engaging.


Sustaining that balance requires continually presenting new features and testing them persistently. It has lately introduced new mobile ad setups, comprising 360-degree videos, interactive advertisements, and the capability for users to buy tickets to shows, trips, and more, straight from their newsfeeds. They are keeping abreast with the cutting-edge technological developments while also ensuring minimal interference with customer experience.

To keep users involved, it has introduced new features such as Facebook Live and Stories, which reflect the user experience of Snapchat. Agile leaders continuously spend in innovation and at the same time confirm that it doesn’t come at the cost of either engagement of its employees or reliability of the product.

INTENTIONALITY

Intentional leadership is a method that aligns anticipated outcomes, core values, and the central purpose for a substantial increase in results. While organisations usually follow skills-focused training or thecarrot andstick method to fight sinking performance, Intentional Leaders dig beneath the surface to identify what controls behaviour and outcomes.


When an organisation is experiencing below-parperformance, it can often be traced to its peoplebehaviour. Often this happens because employees just aren’t seeing the big picture. IKEA, the Swedish furniture major with revenues of over $46 billion, is one organisation that pushes a higher purpose, putting real element behind it, thus making a difference in leadership culture. IKEA keeps its vision statement simple yet powerful:“A better everyday life”.

Top management describes this vision not just to its employees, but also to its customers. Basically, the firm considers the affiliation between IKEA and their customers as a partnership. IKEA uses terms like “we” and “together” to appeal to customers, which, in turn, makes it easier for employees to see the impact the organisation’s vision has on the success of the business.

This statement tells the IKEA workforce precisely how the vision should affect their workday. Employees know to focus on systems and practices that drive down costs, thus making products more affordable. This sets a clear direction for every moment of work.

For Ingvar Kamprad, the founder of IKEA, who passed away earlier this year, the pursuit of efficiency was an act of faith. Kamprad’s famous maxim “wasting resources is a mortal sin at Ikea”, which is akin to a Biblical commandment at the company, lies at the heart of leadership of intent.


By specifying that IKEA aims to offer a wide range of well-designed, functional products, the vision statement gives the company’s design team a clear way to think about design. It creates criteria and standards towards which they can work.

As companies respond to an increasingly challenging environment worldwide, the clearest inference is that workplaces will undergo an even more intense makeover and that leadership development will become a progressively vital element of corporate strategy.

Change, it seems, is inevitable, but with a flatter structure, agility and right intentionality, young leaders need not fear the new world order.



Dr. Manu Melwin Joy

The writer is an Assistant Professor at School of Management Studies, CUSAT

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