Leadership 2.0: The Need For A New Type Of Leadership

Text by Joergen Oerstroem Moeller

Photo by Julia Revitt

One of the most illustrious – and successful – leaders, Field Marshal Montgomery, defined leadership in the following way: ‘Leadership is the capacity and the will to rally men and women to a common purpose and the character which will inspire confidence…but must be based on a moral authority – the truth.’ Field Marshal Montgomery went on ‘men is still the first weapon of war’.

These words cut across any kind of organisation – government institution, private institution, and business – and transcend much more refined and elaborate attempts because of simplicity, applicability and accentuation of moral authority – the truth.

They bring out the crucial factor in leadership: moral authority and human beings. Leadership is about bringing yourself as leader across to the people, to motivate them, to explain what we are doing, why we are doing it, not to let them down and instil confidence in the leader thereby enhance their belief in themselves and the organisation.

When I joined the Royal Danish Foreign Ministry in 1968, the spirit of leadership was to be summoned to the office of your superior and told in no uncertain language what to do – and that was that. No explanation. In the late 1980s and early 1990s when I enjoyed the privilege of being Permanent Secretary, this was a non-starter. The leader has to tell, obviously, what to do, but even more important to explain WHY we are doing this, what is the purpose, where can we expect to encounter obstacles and how to overcome them. If done in the right way the young employee leaves the office full of enthusiasm and is able to adjust and adapt to changing conditions without consulting his/her superior. The time spent by the leader to motivate and to explain was richly compensated by a much higher degree of efficiency and time saving of not having to intervene continually. It made it possible for the leader to concentrate on defining the overall course and direction or to use military vocabulary strategy – where are we going – instead of tactic – what are we doing.

There is a deep, but not always appreciated difference between management and leadership. Management is about running things efficiently without too much knowledge or attention to why we are doing it and where we are going. A throughout well-managed organisation may head for complete disaster if it goes in the wrong direction. One of the problems in today’s world is the proliferation of management schools and universities churning out managers while overlooking or forgetting to teach where we want to go. Management efficiency focus on cost-efficiency highlighting that everybody in the organisation must contribute to daily operation and demonstrate that it cannot be done more efficiently in a different way or by somebody else – justify your pay check in a narrow and short term view. The BIG risk is uniformisation with everybody running the same MBA programme through the company.

In a constantly changing world this is a dead end even if it works in the short term. Cost savings are often achieved by killing long term planning whose positive contribution will only be felt maybe a decade or two down the road. Future leadership (2.0) must tune into how to manage change, adjust and adapt to change, and how to implant these assets into the mindset of employees. Organisations applying leadership, especially leadership 2.0 must set aside resources and manpower for thinking outside the box of daily activities – at first glance waste of time, money, and manpower – but new paradigms, inventions, technology, human interaction will decide how the organisation looks in the future – how well it has adapted. The two classic examples are Kodak and Nokia. Both of them may have spotted the technological revolution inside their business (digital photos respectively the smartphone), but none of them adapted to this new technology preferring management instead of leadership 2.0.

New things make the organisation’s product line obsolete. Kodak and Nokia had spent years and billions of dollars to build a position, so ran the argument, why throw that platform away and jump into an unknown world? To change requires a costly and risky restructuring in addition to introducing a new way of thinking (cultural profile). So better stick to our bush and try to do things better (management) instead of doing things differently or doing something else that responds to the same need among consumers (leadership). What many organisations do not figure into their equation is that unless they do it themselves, competitors or newcomers will do it. Large organisations would be well advised to set up a kind of ‘guerrilla unit’ with the sole task of challenging decisions by top management.

Three blueprints are available. Command, control, and values. Control implies that very little leaves the organisation without some kind of control through supervisors or managers or leaders. That ensures a comparatively high quality level in conformity with the organisation’s policy but is costly, cumbersome, and drowns employees’ motivation. Why should ‘I’ devote a lot of attention and effort to my job when supervisors will vet what I have done anyway? Command means that very little is being done unless leaders pass the word down the line. A slow moving organization is the result. Changes depend on leaders spotting the need, so unless words come down from above, nothing happens. Values are more fluid as leadership instruments and embed a certain amount of risks, but the advantages are a fast reacting organisation with motivated employees who know, through communication of values – the cultural profile – what the purpose is and which instruments to apply. Almost all successful organisations are led by values and not control or command.

Values should be based on five ‘cores’. Core business: What is the business we are in? Core value added: Why should customers prefer our product compared to that of our competitors? Core message: How do we want customers and employees to perceive the company? Core working methods: How do we do things here? Core need: What is the underlying demand we are trying to fulfill?

Any leader must pursue trust, fairness, fulfill promises and live up to expectations created by him/her. The leader is there to lead and can be relied on to support the employees. Mistakes are unavoidable in any good organisation for the very reason that it is only by trying to do something in an unusual way that the organisation can gain experience, and sometimes it backfires. Four golden rules should be remembered. First, any fool can obey orders, the art is knowing when not to do so. Second, mistakes are to be analysed and learned from (avoid repeating them). Mistakes should not be used to stigmatise the employee behind the decision. Third, a successful Danish businessman always responded to demand for hiring more employees in the following way: No, do things differently. Fourth, sometimes the lesser risk there seems for the future of the organisation the more risk there actually is (as in the case of Kodak and Nokia), so run the risk now.

Fairness is alpha and omega and it is not the same as equality. Employees compare the reactions from above and judge leaders according to the degree of fairness with regard to promotion and freedom to act on one’s own initiative. To praise is much more important than to scold. People grow when praised, but feel small when scolded.

Consistency and transparency fall in the same category. No leader will get anywhere near success if the smallest thread of capriciousness can be ascribed to him/her.

Analyses show that as soon as people move into doing work that require cognitive skills, pay (money) does not act as an incentive except for comparing what ‘I’ get to what somebody else gets (fairness factor).

Instead, three crucial items pop up. Autonomy, mastery, and purpose. Autonomy means that leaders give employees the freedom to act alone on their own initiative provided that it is done in accordance with the principles governing the organisation (values, cultural profile) and leads to results. It is no use to check that the employees are sitting in their offices during work hours if output is low. Mastery plays on the individual’s excitement and happiness when in control of what he/she is doing. Any artist or sport’s star will confirm the significance of mastery. The more people feel that they master the topic the more they work with motivation and the better is the result. They gain confidence, daring to do something and try something new – risk taking. Purpose is obvious in the sense that people must know how they fit into the larger picture. Only if they can see and understand how what they are doing contributes to the more sophisticated workings of the organisation can we count of a high degree of motivation. Before all major battles, Field Marshall Montgomery would talk to all higher officers personally, explaining how the orders to their unit fitted into the larger battle plan.

In the era of social networking the leader is up against an enormous amount of information, some of which employees compare to information flowing from the leadership. The leader 2.0 must engage in the game of shaping perceptions. Nowadays this may be the most powerful parameter in exercising power. And leadership is exactly that; power over human beings however reluctant we are to acknowledge that and power over events is not to be kicked around. To be on the crest of the wave of how a society develops is indispensable. In this context the leader 2.0 should consider how to turn the increasing non-personal relationship to his/her advantage. Social networking neglects the instinctive desire among human beings to join groups and work with others. Human beings are social animals and leadership exercised with a touch of being seen and being felt as a person will enhance motivation and loyalty. One of the icons of today’s world, Mark Zuckerberg, stated recently that “I will only hire someone to work directly for me if I would work for that person.” The human factor, fairness, and the flat pyramid!

Leadership in all ages and all sectors depend on the ability to deliver results through autonomy, mastery, and purpose. If employees join the organisation because of common and shared values and feel attached to the organisation as a result value based leadership becomes possible. The leader must be seen, heard, and felt. He or she must always radiate confidence irrespective of how the situation looks – otherwise the employees cannot be expected to believe in the way the organisation is run.

About the author

Joergen Oerstroem Moeller is a Visiting Senior Research Fellow, Institute of Southeast Asian Studies, Singapore, Adjunct Professor Singapore Management University & Copenhagen Business School and Honorary Alumnus, University of Copenhagen.

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