We're well into the 21st century and it's clear that the pace of change is accelerating in every possible way except perhaps our general acceptance of those changes.
It's almost trite to say how much change there is in technology, in business, and in leadership. Still I'm going to say it - the pace of change is astounding!
Industrial Age models spell death to all who want to hold onto those rules and structures. There's nothing left to do except to tranform into 21st century models of leadership - or die.
A bit melodramatic? Not really. The churn rate and demise of companies that don't transform is accelerating.
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US corporations in the S&P500 in 1958 remained in the index for an average of 61 years. By 1980, the average tenure of an S&P500 firm was 25 years, and by 2011 that average shortened to 18 years based on seven year rolling averages
At current rates 75% of S&P500 will be replaced by 2027
Innosight: Creative Destruction Whips Through Corporate America [i]
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Source: Innosight (2012)
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Out With The Old, In With The Bold
Innovative Apple Inc. is set to replace historic AT&T Inc. as part of the Dow Jones Industrial Average (DJIA) after the close of trading on Wednesday, March 18th. The implications of the shift are many. While I'm not an expert in financial markets, to me this shift signals a profound change in how we measure the future of our success and which companies get to design that future.
Hold on - this article isn't really about Apple (~39 years old) and AT&T (~130 years old) though the timing of the change couldn't be more perfect...
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...today's leaders face extraordinary new challenges and must learn to think differently about their role and how to fulfill it
McKinsey Quarterly: Leading in the 21st Century [ii]
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The question that I've been looking to answer is "what models of 21st century leadership are emerging as the most effective?" Here are a few examples of sharp contrast between "Old" (20th Century) and "Bold" (21st Century) leadership structures.
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"Old" 20th Century Leadership is often referred to as autocratic. Can we agree that this model has run its course?
Unconventional Leadership Defined
Semler has done away with the "boarding school" mentality that requires individuals to check in or check out at specific times. He believes that individuals should be in control of their own time. In fact he doesn't even want to know what office you're working from or which days you'll be there.
Employees at Semco set their own salaries based on data points provided by the company. They are also permitted to "buy back" their time while they are still fairly young with more time and less money in order to live meaningful lives rather than waiting until they are older with less time and more money. Future subordinates determine their future leaders. Board meetings have a few open seats for whoever decides to show up. Sometimes those extra seats are filled by members of the cleaning crew.
This is Corporate Democracy - and it's working...
Under Semler's vision, Semco has grown through tough times at 27.5% per year for 14 years and continues its growth trajectory. Semler credits the responsive company culture which is able to open and close areas rapidly for their strong growth.
Netflix and Zappos along with multiple companies in Japan and Holland have implemented variations of the Semco model.
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...leaders that succeed in te 21st century will be the ones capable of managing that paradox of need and want...
...it is not about getting people to do what you want them to do, it is about enabling them to do what they want to do
Morgan Witzel, Centre for Leadership Studies [iii]
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Companies with Two Heads
No - that's not a typo. Some companies such as Oracle, Whole Foods, Deutsche Bank, Samsung, and Chipotle really do operate with two or three CEOs. As with the corporate democracy model of leadership, multi-headed leadership structures are not applicable for every company.
This type of company structure is designed to increase scope and capacity while ensuring decision-making coverage if one of the CEOs is unavailable. Challenges with these types of leadership models include client confusion, disagreements at the top, and the introduction of inefficiencies into the organizational structure.
It's been said that a house divided against itself can't stand. However, there are companies that are divided at the top and are working well.
21st Century Leadership Mantra
Whether you're part of a fast moving corporate democracy, in a two-headed behemoth, or atop an autocracy, the 21st century leadership mantra - if there is one - seems to be:
