If you were a sales leader 10 years ago, you had approximately 10 key pieces of data to monitor on a regular basis to ensure you were on target with your goals (HBR source?). When you saw key performance indicators like customer retention numbers, the sales pipeline and profit margin trending in the right direction, you knew you were likely to achieve your goals. The indicators were clearly relatable to the ultimate outcome you wanted to achieve, so you knew that when you could executed your key priorities, you could logically predict your results.
The Evolution of Leadership
Now, the average leader has about 80 available key performance indicators to monitor on a regular basis (HBR source?). This sheer number of individual pieces of information to consider can lead to uncertainty over which drivers are really important to hitting your sales and profit goals. Customers are better informed than they ever have been. Technology is rapidly advancing which creates new, unforeseen possibilities and challenges. The world economy is more connected than ever before, so a new company that is founded in India may have implications on your organization in North Dakota. And for the first time in the history of our world, the youngest generation (Gen Y) knows more about what is changing our world, the digital and social revolution, than any other generation in our workforce.
With all of this to consider, how can a leader today make a logical decision about the right priorities to pursue to achieve their goal? How do you decide which goals are really important? How do you know which problems should be tackled first? Unfortunately, the answers to these questions are probably not the same as they were last decade, last year or even last week. That is how quickly the world is changing and how quickly an organization must evolve to keep up with these changes.
Understanding Our Evolving World
In order to understand why yesterday’s management best practices are no longer sufficient for today’s world, it is first important to understand how leadership principles have evolved over time. Throughout history, leadership approaches have reflected the advancement of different industries as well as societal changes. As new economies develop, management approaches evolve to drive new types of workers. Research continues to shape our understanding of what motivates people to perform at a higher level. Scientific discoveries about how people think and feel teaches us how to tap into their need to achieve. Simply stated, as the world changes, so does the way in which we manage, lead and coach people.
Management In The Industrial Age
In the industrial age, we saw the rise of a manufacturing approach to leadership. The focus was on creating consistent production processes to ensure predictable outcomes in the delivery of quality products. Precise planning and execution became paramount, and so tight controls on workers were put into place. Little focus was placed on human relations and the needs of the workforce in order to increase productivity. In general, this era was marked by a top-down, authoritative style of leadership.
Management In The Service Era
In the 1970s, manufacturing started to become less of a dominant force in our country’s economy and service-based businesses began to become a more dominant player on the landscape. As we entered the era of increased service-based businesses, we saw a shift away from the authoritative style of the past and the rise of servant leadership as a way to engage new kinds of workers. With the emphasis on meeting customer needs, leaders also began to understand the importance of taking care of the workers that were serving their customers. So they began to take active interest in the needs, goals and motivations of their employees.
Management In The Knowledge Era
In the last two decades, we have entered a knowledge economy where capturing and deploying information drives much of the country’s most significant business growth. Thomas Friedman, author of the seminal work on globalization The World is Flat, states that, “Several technological and political forces have converged, and that has produced a global, Web-enabled playing field that allows for multiple forms of collaboration without regard to geography or distance - or soon, even language.”
As noted by Friedman, there are numerous reasons why our world is more complex than ever. Most notably, the increased access to information has made it easy for a young student in Bangladesh to have the same access to data as a seasoned American CEO. When everyone has easy access to the same information, it essentially levels the playing field. No longer does someone have to spend years in the best graduate schools to gain more knowledge. No longer does twenty years on the job mean that someone knows the most about their business. Those that know how to acquire and use information are suddenly equipped with enough data to make reasonable decisions on their own. They do not have to look to an authority figure to tell them what to do because they are just as knowledgeable or even more knowledgeable as the person in charge.
The Amount of Information Keeps Growing and Growing
In addition to access to information being so readily increased, the sheer amount of information that is available now is staggering. Indeed, it is estimated that 5 exabytes of unique information will be created this year which is more than the previous 5,000 years combined (need to check data). With information being created at such a faster rate than it was even a decade ago, this means that today’s business leaders are faced with a constant barrage of data to consider. Add to it the fact that many pieces of data are updated “real-time” and it becomes evident why many leaders feel overwhelmed because of each of these pieces of data translate into different inputs that can impact the decisions they are making and the strategies they are setting.
Overall, the “flattening” of our world means the inputs that affect our businesses are numerous, disparate and ever-changing. In essence, we have entered an era of complexity that is marked by a constant barrage of data and unpredictable consequences.