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The Rapid Transformation of Business Leaders Is Underway

The backgrounds of leaders and future leadership needs are changing rapidly.

Some recent studies reveal a dramatically changing face of business leaders already underway and what the leadership needs of the future will look like. I see these and other related observations coinciding with a broader shift in our society, and perhaps worldwide. It's towards heightened interconnection and interdependence, desire for diversity, collaboration as part of the DNA, and a major shift in attitudes about hierarchy and success.

One study of Fortune 100 executives, featured in the Harvard Business Review, found that the majority of senior executives today went to state universities, not the more elite schools. A Washington Post report of the study pointed out that "In 1980, just 32 percent of leaders went to a public university. By 2001 that had grown to 48 percent, and in 2011 the number reached a majority, with 55 percent of corporate leaders going to state colleges."

Moreover, nearly 11 percent are foreign born. And while women still deal with the glass ceiling, they have a more rapid rise to the top ranks, today. Nevertheless, it's significant to note that nearly 87 percent of corporate board seats are held by white workers. According to research by DiversityInc and the think tank Catalyst, six African Americans are Fortune 500 CEOs, and 7.4 percent hold corporate board seats; eight Hispanics are Fortune 500 CEOs, and 3.3 percent hold corporate board seats.

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Even so, it's clear that a shift is underway along many fronts. For example, in a Washington Post interview, Wharton professor Peter Cappelli pointed out that another one of the study's major findings was a "...sharp decline in the lifetime employment model among senior guys. The percentage of top leaders who spent their entire careers at one company dropped from 50 percent in 1980 to 45 percent in 2001 to less than a third in 2011."

Not only is the education background and employment patterns of top corporate leaders becoming more equal over time, the orientation and skills they will need in the future are also changing. And that's becoming increasingly visible as well. For example, a fascinating study by the Hay Group and German futurists at Z-Punkt identifies six trends that their research indicates will shape leadership needs in the years ahead. I think their findings align with similar shifts in the larger culture: an evolution in all sectors of society and in individual lives today—again, towards heightened collaboration, connection, emotional attunement to others, and diverse interdependence.

Consider the findings of this report, Leadership 2030. It speaks of the rise of the "altorocentric" leader. In a Washington Post interview by Jena McGregor, Georg Vielmetter of the Hay Group explained that "Altrocentric" means “...focusing on others. Such a leader doesn't put himself at the very center. He knows he needs to listen to other people. He knows he needs to be intellectually curious and emotionally open. He knows that he needs empathy to do the job, not just in order to be a good person” And, that “...leaders in the future need to have a full understanding, and also an emotional understanding, of diversity."

Also significant, Vielmetter pointed out, "...positional power and hierarchical power will become smaller. Power will shift to stakeholders, reducing the authority of the people who are supposed to lead the organization."

He emphasized that “the time of the alpha male—of the dominant, typically male leader who knows everything, who gives direction to everybody and sets the pace, whom everybody follows because this person is so smart and intelligent and clever—this time is over. We need a new kind of leader who focuses much more on relationships and understands that leadership is not about himself.”

Regarding the younger generation, Vielmetter adds that “With the Baby Boomer generation, you understood you climb up the ladder and you're the boss at the end. The new generation has less and less interest to do this....for them it's just not so important to become the boss. That causes a big problem for organizations. They offer people big jobs, and they don't want them. They value their private life more.”

Similarly, writing in the New York Times, Tom Agan, co-founder and managing partner of Rivia, points out that the younger generations of workers can have a significant positive impact upon workplace culture and leadership. That embracing it can enhance innovation and creativity, especially when joined with the experience of older workers.

Agan writes, "Social media permeate the personal, academic, political and professional lives of millennials, helping to foster the type of environment where innovation flourishes. So when compared with older generations, millennials learn quickly—and that's the most important driver of innovation."

And, “If corporate cultures don't align with the transparency, free flow of information, and inclusiveness that millennials highly value—and that are also essential for learning and successful innovation—the competitiveness of many established businesses will suffer. Millennials are becoming more aware of their rising worth. Coupling their ability to learn quickly with their insistence on having a say, they pack a powerful punch.”

Those who build and sustain highly successful companies are very much in tune with and leading the kinds of shifts the above studies and observations describe. One good example is Virgin Group CEO Richard Branson who has emphasized the business value of seeking a wide, diverse range of people. Branson writes in Entrepreneur, “Over more than 40 years of building our businesses at the Virgin Group, my colleagues and I have seen time and time again that employing people from different backgrounds and who have various skills, viewpoints and personalities will help you to spot opportunities, anticipate problems and come up with original solutions before your competitors do.”

All of these findings and observations have significant implications for corporate cultures and people's lives, ambitions and goals—today and tomorrow. What will be the impact on outlook, vision, and management perspectives from the ever-increasing diversity of people, in conjunction with a growing shift in worker's orientations to the job, to what they look for from management, and to what they define as "success?" All of the above are parts of a broader shift of mentality, values, outlook on life, and behavior. It will shape how people conduct their personal relationships, what they seek from their careers and from public policy, as well.

There are many moving parts, and they're all moving, as we speak.

 

dlabier@CenterProgressive.org

Center for Progressive Development

Blog: Progressive Impact

© 2014 Douglas LaBier

  

Douglas LaBier, Ph.D., is a psychologist and the Director of the Center for Progressive Development in Washington, DC.

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