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August2022
McKinseyExplainers
Whatisleadership?
Leadershipisasetofbehaviorsusedtohelppeoplealigntheircollectivedirection,toexecutestrategicplans,andtocontinuallyrenewanorganization.
2Whatisleadership?
Allleaders,toacertaindegree,dothesamething.Whetheryou’retalkingaboutanexecutive,manager,sportscoach,orschoolteacher,leadershipisaboutguidingandimpactingoutcomes,enablinggroupsofpeopletoworktogethertoaccomplishwhattheycouldn’tdoworkingindividually.In
thissense,leadershipissomethingyoudo,notsomethingyouare.Somepeopleinformalleadershippositionsarepoorleaders,andmanypeopleexercisingleadershiphavenoformalauthority.Itistheiractions,nottheirwords,thatinspiretrustandenergy.
What’smore,leadershipisnotsomethingpeoplearebornwith—itisaskillyoucanlearn.
Atthecorearemindsets,whichareexpressedthroughobservablebehaviors,whichthenleadtomeasurableoutcomes.Isaleadercommunicatingeffectivelyorengagingothersbybeingagoodlistener?Focusingonbehaviorsletsusbemoreobjectivewhenassessingleadershipeffectiveness.Thekeytounlockingshiftsinbehaviorisfocusingonmindsets,becomingmoreconsciousaboutourthoughtsandbeliefs,andshowingupwithintegrityasourfullauthenticselves.
Therearemanycontextsandwaysinwhichleadershipisexercised.But,accordingtoMcKinseyanalysisofacademicliteratureaswellasasurveyofnearly200,000peoplein81organizationsallovertheworld,therearefourtypesofbehaviorthataccountfor89percentofleadershipeffectiveness:
—beingsupportive
—operatingwithastrongresultsorientation—seekingdifferentperspectives
—solvingproblemseffectively
Effectiveleadersknowthatwhatworksinonesituationwillnotnecessarilyworkeverytime.Leadershipstrategiesmustreflecteachorganization’scontextandstageofevolution.Oneimportantlensisorganizationalhealth,aholisticsetoffactorsthatenableorganizationstogrowandsucceedovertime.Asituationalapproachenables
leaderstofocusonthebehaviorsthataremostrelevantasanorganizationbecomeshealthier.
Seniorleadersmustdevelopabroadrangeofskillstoguideorganizations.Tentimelesstopicsareimportantforleadingnearlyanyorganization,fromattractingandretainingtalenttomakingcultureacompetitiveadvantage.A2017McKinseybook,LeadingOrganizations:TenTimelessTruths(Bloomsbury,2017),goesdeeponeachaspect.
Howisleadershipevolving?
Inthepast,leadershipwascalled“management,”withanemphasisonprovidingtechnicalexpertiseanddirection.Thecontextwasthetraditionalindustrialeconomycommand-and-controlorganization,whereleadersfocusedexclusivelyonmaximizingvalueforshareholders.Intheseorganizations,leadershadthreeroles:planners(whodevelopstrategy,thentranslatethatstrategyintoconcretesteps),directors(whoassignresponsibilities),orcontrollers(whoensurepeopledowhatthey’vebeenassignedandplansareadheredto).
Whatarethelimitsoftraditionalmanagementstyles?
Traditionalmanagementwasrevolutionaryinitsdayandenormouslyeffectiveinbuildinglarge-scaleglobalenterprisesthathavemateriallyimprovedlivesoverthepast200years.However,withtheadventofthe21stcentury,thisapproachisreachingitslimits.
Foronething,thisapproachdoesn’tguaranteehappyorloyalmanagersorworkers.Indeed,alargeportionofAmericanworkers—56percent—claimtheirbossismildlyorhighlytoxic,while75percentsaydealingwiththeirmanageristhemoststressfulpartoftheirworkday.
For21st-centuryorganizationsoperatingintoday’scomplexbusinessenvironment,afundamentallynewandmoreeffectiveapproachtoleadershipisemerging.Leaderstodayarebeginningtofocusonbuildingagile,human-centered,anddigitallyenabledorganizationsabletothriveintoday’s
Whatisleadership?3
unprecedentedenvironmentandmeettheneedsofabroaderrangeofstakeholders(customers,employees,suppliers,andcommunities,inadditiontoinvestors).
Whatistheemergingnew
approachtoleadership?
Thisnewapproachtoleadershipissometimesdescribedas“servantleadership.”Whiletherehasbeensomecriticismofthenomenclature,theideaitselfissimple:ratherthanbeingamanagerdirectingandcontrollingpeople,amoreeffectiveapproachisforleaderstobeinserviceofthepeopletheylead.Thefocusisonhowleaderscanmakethelivesoftheirteammemberseasier—physically,cognitively,andemotionally.Researchsuggeststhismentalitycanenhancebothteamperformanceandsatisfaction.
Inthisnewapproach,leaderspracticeempathy,compassion,vulnerability,gratitude,self-awareness,andself-care.Theyprovideappreciationandsupport,creatingpsychologicalsafetysotheiremployeesareabletocollaborate,innovate,andraiseissuesasappropriate.Thisincludescelebratingachievingthesmallstepsonthewaytoreachingbiggoalsandenhancingpeople’swell-beingthroughbetterhumanconnections.Theseconditionshavebeenshowntoallowforateam’sbestperformance.
Morebroadly,developingthisnewapproachtoleadershipcanbeexpressedasmakingfivekeyshiftsthatinclude,buildon,andextendbeyondtraditionalapproaches:
1.beyondexecutivetovisionary,shapingaclearpurposethatresonateswithandgeneratesholisticimpactforallstakeholders
2.beyondplannertoarchitect,reimaginingindustriesandinnovatingbusinesssystemsthatareabletocreatenewlevelsofvalue
3.beyonddirectortocatalyst,engagingpeopletocollaborateinopen,empowerednetworks
4.beyondcontrollertocoach,enablingtheorganizationtoconstantlyevolvethroughrapid
learning,andenablingcolleaguestobuildnewmindsets,knowledge,andskills
5.beyondbosstohuman,showingupasone’swhole,authenticself
Together,theseshiftscanhelpaleaderexpandtheirrepertoireandcreateanewlevelofvalueforanorganization’sstakeholders.Thelastshiftisthemostimportant,asitisbasedondevelopinganewlevelofconsciousnessandawarenessofourinnerstate.Leaderswholookinwardandtakeajourneyofgenuineself-discoverymakeprofoundshiftsinthemselvesandtheirlives;thismeanstheyarebetterabletobenefittheirorganization.Thatinvolvesdeveloping“profileawareness”(acombinationofaperson’shabitsofthought,emotions,hopes,andbehaviorindifferentcircumstances)and“stateawareness”(therecognitionofwhat’sdrivingapersontotakeaction).Combiningindividual,inward-lookingworkwithoutward-facingactionscanhelpcreatelastingchange.
Leadersmustlearntomakethesefiveshiftsatthreelevels:transformingandevolvingpersonalmindsetsandbehaviors;transformingteamstoworkinnewways;andtransformingthebroaderorganizationbybuildingnewlevelsofagility,human-centeredness,andvaluecreationintotheentireenterprise’sdesignandculture.
AnexamplefromtheCOVID-19eraoffersausefulillustrationofthisnewapproachtoleadership.Inpursuitofavaccinebreakthrough,atthestartofthepandemicModernaCEOStéphaneBancelincreasedthefrequencyofexecutivemeetingsfromonceamonthtotwiceaweek.Thecompanyimplementedadecentralizedmodelenablingteamstoworkindependentlyanddeliverontheboldgoalofproviding100milliondosesofvaccinesin12months.“Thepacewasunprecedented,”Bancelsaid.
4Whatisleadership?
Whatistheimpactofthisnewapproachtoleadership?
Thisnewapproachtoleadershipisfarmoreeffective.Whilethedynamicsarecomplex,countlessstudiesshowempiricallinksamongeffectiveleadership,employeesatisfaction,customerloyalty,andprofitability.
Howcanleadersempoweremployees?Empoweringemployees,surprisinglyenough,mightmeantakingamorehands-onleadershipapproach.Organizationswhoseleaderssuccessfullyempowerothersthroughcoachingarenearlyfourtimesmorelikelytomakeswift,gooddecisionsandoutperformothercompanies.Butthistypeofcoachingisn’talwaysnaturalforthosewithamorecontrollingorautocraticstyle.
Herearefivetipstogetstartedifyou’realeaderlookingtoempowerothers:
—Provideclearrules,forexample,byproviding
guardrailsforwhatsuccesslookslikeandcommunicatingwhomakeswhichdecisions.Clarityandboundarystructureslikeroleremitsandresponsibilitieshelptocontainanyanxietyassociatedwithworkandhelpteamsstayfocusedontheirprimarytasks.
—Establishclearroles,say,byassigningone
persontheauthoritytomakecertaindecisions.
—Avoidbeingacomplicitmanager—forinstance,if
you’vedelegatedadecisiontoateam,don’tstepinandsolvetheproblemforthem.
—Addresscultureandskills,forinstance,by
helpingemployeeslearnhowtohavedifficultconversations.
—Beginsolicitingpersonalfeedbackfromothers,
atalllevelsofyourorganization,onhowyouareexperiencedasaleader.
Howcanleaderscommunicateeffectively?Good,clearcommunicationisaleadershiphallmark.Fundamentaltoolsofeffectivecommunicationinclude:
—definingandpointingtolong-termgoals—listeningtoandunderstandingstakeholders—creatingopeningsfordialogue
—communicatingproactively
Andintimesofuncertainty,thesethingsareimportantforcrisiscommunicators:
—givepeoplewhattheyneed,whentheyneedit—communicateclearly,simply,andfrequently—choosecandorovercharisma
—revitalizeaspiritofresilience
—distillmeaningfromchaos
—supportpeople,teams,andorganizationsto
buildthecapabilityforself-sufficiency
Isleadershipdifferentin
ahybridworkplace?
Aleader’srolemaylookslightlydifferentinremoteorhybridworkplacesettings.Ratherthanwalkingaroundaphysicalsite,theseleadersmightinsteadmodelwhathybridlookslike,ororchestrateworkbasedontasks,interactions,orpurpose.Beingcommunicativeandradiatingpositivitycangoalongway.Leadersneedtofindotherwaystobepresentandaccessible,forexample,viavirtualdrop-insessions,regularcompanypodcasts,orvirtualtownhalls.Leadersinthesesettingsmayalsoneedtofindnewwaystogetauthenticfeedback.Thesetacticscanincludepulsesurveysorlearningtoaskthoughtfulfollow-upquestionsthatrevealusefulmanagementinsights.
Additionalconsiderations,suchasmakingsurethatin-personworkandtogethernesshasapurpose,areimportant.Keepinganeyeoninclusivityinhybridworkisalsocrucial.Listeningtowhatemployeeswant,withaneyetotheirlivedexperience,willbevitaltoleadersinthesesettings.Andafocusonoutput,outcomes,results,andimpact—ratherthan
Whatisleadership?5
arbitrarynormsabouttimespentinoffices—maybeanecessaryadaptationinthehybridera.
HowshouldCEOslead
inthisnewworld?
Justasforleadershipmorebroadly,today’senvironmentrequiresCEOstoleadverydifferently.Recentresearchindicatesthatone-thirdtoone-halfofnewCEOsfailwithin18months.
Whathelpstopperformersthrivetoday?Tofindout,McKinseyledaresearchefforttoidentifytheCEOswhoachievedbreakawaysuccess.Weexamined20years’worthofdataon7,800CEOs—from3,500publiccompaniesacross70countriesand24industries.TheresultistheMcKinseybookCEOExcellence:TheSixMindsetsThatDistinguishtheBestLeadersfromtheRest(Scribner,March2022).
GettingperspectiveonleadershipfromCEOsthemselvesisenlightening—andillustratesthenuancedwaysinwhichthenewapproachtoleadershipdescribedabovecanbeimplementedinpractice.HereareafewquotesdrawnfromMcKinsey’sinterviewswiththesetop-levelleaders:
—“Ithinkthefundamentalroleofaleaderisto
lookforwaystoshapethedecadesahead,notjustreacttothepresent,andtohelpothersacceptthediscomfortofdisruptionstothestatusquo.”—IndraNooyi,formerchairmanandCEOofPepsiCo
—“ThesinglemostimportantthingIhave
todoasCEOisensurethatourbrandcontinuestoberelevant.”
—ChrisKempczinski,CEOofMcDonald’s
—“Leadersofotherenterprisesoftendefine
themselvesascaptainsoftheship,butIthinkI’mmoretheship’sarchitectordesigner.That’sdifferentfromacaptain’srole,inwhichtherouteisoftenfixedandthedestinationdefined.”—ZhangRuimin,CEOofHaier
—“Ithinkmyleadershipstyle[canbecalled]
‘collaborativecommand.’Youbringdifferentopinionsintotheroom,youallowforareally
greatdebate,butyouunderstandthat,attheendoftheday,adecisionhastobemadequickly.”—AdenaFriedman,CEOofNasdaq
—“Weneedanurgentrefoundationofbusiness
andcapitalismaroundpurposeandhumanity.Tofindnewwaysforallofustoleadsothatwecancreateabetterfuture,amoresustainablefuture.”—HubertJoly,formerchairmanandCEOofBestBuy
Whatisleadershipdevelopment?
Leadersaren’tborn;theylearntoleadovertime.Neuroplasticityreferstothepowerofthebraintoformnewpathwaysandconnectionsthroughexposuretonovel,unfamiliarexperiences.Thisallowsadultstoadapt,grow,andlearnnewpracticesthroughoutourlifetimes.
Whenitcomestoleadershipwithinorganizations,thisisoftenreferredtoasleadershipdevelopment.Programs,books,andcoursesonleadershipdevelopmentabound,butresultsvary.
Leadershipdevelopmenteffortsfailforavarietyofreasons.Someoverlookcontext;inthosecases,askingasimplequestion(somethinglike“What,precisely,isthisprogramfor?”)canhelp.Othersseparatereflectionsonleadershipfromrealwork,ortheyshortchangetheroleofadjustingleaders’mindsets,feelings,assumptions,andbeliefs,ortheyfailtomeasureresults.
Sowhat’sneededforsuccessfulleadershipdevelopment?Generally,developingleadersisaboutcreatingcontextswherethereissufficientpsychologicalsafetyincombinationwithenoughnoveltyandunfamiliaritytocultivatenewleadershippracticesinresponsetostimuli.Leadershipprogramsthatsuccessfullycultivateleadersarealsobuiltaround“placescapes”—thesearenovelexperiences,likeexploringwildernesstrails,practicingperformingarts,orwritingpoetry.
Whencraftingaleadershipdevelopmentprogram,therearesixingredientstoincorporatethatleadtotrueorganizationalimpact:
6Whatisleadership?
Findmorecontentlikethisonthe
McKinseyInsightsApp
Scan•Download•Personalize
—Setupforsuccess:
•Focusyourleadershiptransformationondrivingstrategicobjectivesandinitiatives.
•Committhepeopleandresourcesneeded.
—Beclearaboutfocus:
•Engageacriticalmassofleaderstoreachatippingpointforsustainedimpact.
•Zeroinontheleadershipshiftsthatdrivethegreatestvalue.
—Executewell:
•Architectexperientialjourneystomaximizeshiftsinmindsets,capabilities,andpractices.
•Measureforholisticimpact.
Awell-designedandexecutedleadershipdevelopmentprogramcanhelporganizationsbuildleaders’capabilitiesbroadly,atscale.Andtheseprogramscanbebuiltaroundcoaching,mentoring,andhavingpeopletrytosolvechallengingproblems—learningskillsbyapplyingtheminrealtimetorealwork.
Whatarem
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