Editor’s note: This article was first published in August 2015. Ray Carvey’s title (executive vice president of corporate learning at Harvard Business Publishing) and the “recent” report date from 2015.
The business world is as complex today as it has always been, but it never stops changing. Everything moves at a dizzying pace and nothing is the way it used to be. That’s why knowing how to adapt to the changes the business world demands today is vital.
Some experts estimate that in the coming years one in three companies will lose its independence, whether by going bankrupt or being taken over by another; one in three will be completely different from what it is today, devoted to something far removed from its current activity; and only a third of companies will carry on with an activity similar to what they do now.
The answer to this challenge will come above all from within companies, and it will come from those that know how to recognise and make the most of their own hidden strengths and those of their employees. These hidden assets are what will turn some companies from unsustainable businesses headed for collapse into practically unstoppable ones. That’s why having a leader in the company who can adapt to change and understand today’s complex world is vitally important.
Ray Carvey, executive vice president of corporate learning at Harvard Business Publishing, a subsidiary of Harvard Business School, says today’s management structures are very different from those of 20 years ago.
Carvey describes today’s business world as volatile, uncertain, complex and ambiguous, and says it’s crucial to maintain productivity through this period of change.
According to the recent Harvard Business Publishing report Leading Now: Critical Capabilities for a Complex World, cited by Business Insider, there are eight critical capabilities leaders must have to be effective today.
1. Effective leaders manage complexity
Leaders who know how to handle complexity are skilled at solving problems and making decisions in rapidly changing systems, the report says. Even before any kind of definitive information is available, effective leaders must assess how complex a situation is and choose the right courses of action.
2. Effective leaders manage global business
Carvey says managing a global business wouldn’t have been on this list 10 years ago, but today understanding global markets, and knowing that you’re in a global market, is key. Leaders must keep a global focus on a day-to-day basis. According to the report, this includes assessing what’s happening with consumers, competitors, the economy and politics in the markets where their businesses operate.
3. Effective leaders act strategically
Just as thinking globally is a necessity, a forward-looking approach is also essential. While older practices focused on developing long-term strategies, the report notes, today’s world requires a more continuous process: leaders must always be ready to adjust their strategies to seize emerging opportunities or respond to unexpected challenges.
4. Effective leaders foster innovation
With rising levels of competition, no strategy can sustain a company’s competitive advantage indefinitely, the report says. However successful something may be, there can always be an emphasis on innovation. Effective leaders understand this and focus on taking a business to the next level.
5. Effective leaders build networks
Successful leaders use networking for more than promoting their own careers, the report says. Rather, they see it as a way to benefit the organisation and build relationships with customers, suppliers, strategic partners and even competitors. However it’s used, though, effective leaders in this category must show a talent for collaboration, according to the report.
6. Effective leaders inspire engagement
It’s absolutely crucial to keep employees at every level of an organisation interested in and committed to the work they do. It’s all about giving them a sense of value. Simply retaining employees isn’t the goal: people can hold jobs for years, the report points out, but they won’t create value for their organisations unless they’re invested in their work. It all depends on the leader making sure employees really feel they’re making a difference.
7. Effective leaders develop personal adaptability
Once again, this is a matter of understanding the continuous change that’s taking place. Something that may have worked brilliantly in the past won’t necessarily work now. According to the report, leaders must set aside the “this is how we’ve always done it” mindset and adapt to change. Instead, they need to see reality with fresh eyes so they can spot and seize valuable opportunities.
(Read: 23 leadership quotes applied to business.)
8. Effective leaders learn with agility
Learning agility is the most useful trait, Carvey says. As business strategies and models evolve, leaders must evolve too. Effective leaders take the initiative in looking for opportunities to learn. The report says they continually experiment with new approaches, using techniques such as rapid prototyping, and take time to reflect on their experiences so they can learn from both successes and failures.
Bear in mind, however, that as the business world keeps changing, the key traits leaders need to succeed may change too. In a volatile environment, the ability to react to new scenarios is essential.
See also: 6 HR mistakes that can cost you your best employees
Featured image: John Phelan, CC BY 3.0, via Wikimedia Commons.
