Week 3: Everything, all at once

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Leading in a polycrisis demands strategies fit for an increasingly divided world.

A global pathogen. Economic collapse. Geopolitical aggression. Climatic breakdown. The combination of adverse factors threatening the welfare of society and the viability of commerce is bleakly familiar.

Yet this was not 2023, but 2008 – the year that the concept of ‘polycrisis’ first became real. In the late 2000s, swine flu, the global financial crisis, and Putin’s attacks on Georgia combined with the breakdown of climate talks in Copenhagen to create a sense of burgeoning calamity.

The world’s challenges were no longer linear and clearly defined. Instead, multiple fronts of increasing complexity and uncertainty emerged, each layering on the others. The polycrisis of 2023 had its genesis 15 years ago. “The unfolding of this current moment starts in 2008,” historian and professor at Colombia University Adam Tooze told the World Economic Forum (WEF). “The key things for me are economics, politics, geopolitics and the natural environment blowing back at us. Those four things don’t reduce to a single factor. The polycrisis term has a real use descriptively: ‘Look, there’s a lot of stuff happening here all at once.’ And that precisely is what we’re trying to wrap our minds around.”

Today’s polycrisis – the fallout from Covid-19; the deglobalization triggered by Brexit and the worsening relations between the US and China; and the escalation of Russia’s aggression in the shape of the Ukraine War – is framed against a global climate crisis. “If you’ve been feeling confused and as though everything is impacting on you all at the same time, this is not a personal, private experience,” says Tooze. “This is a collective experience.”

Leaders face a challenge unprecedented in modern times. We are faced with steering organizations through social, environmental and economic turbulence that is no longer just volatile, uncertain, complex and ambiguous, but also convergent, interactive and proliferative. “Disparate crises interact such that the overall impact far exceeds the sum of each part,” the WEF Global Risks Report 2023 says.

Disruption, displacement and destabilization

The challenge for future leaders is encapsulated by Duke Corporate Education’s Challenges of Change paradigm. The model shows leaders amid the Crucible of Change: the confluence of Three Ds: the interrelated challenges of disruption, displacement and destabilization.

Leaders are all too familiar with disruption, which takes many forms: The ability of startups to quickly enter a market, such as banking, via digital technology, free from the responsibilities and structural burdens of legacy firms. The dismantling of conventional business practice, triggered by Covid-19, that has freed people to work from anywhere but has also made building company cultures more complex. Social tensions caused by persistent racial and gender inequalities have become commonplace, and frequently transfer from wider society to inside organizations.

Leaders are less conversant with displacement: the geoeconomic shifts that are already visible and will expand and multiply in coming years, as the world becomes increasingly divided. China was until recently the workshop of the world, the global destination for outsourced manufacturing. Yet western businesses are now hedging their bets. Relying on China for production has morphed from a routine choice to a risky one. Thus, demand and production in its billion-population rival, India, has gone up. Revenue streams and partners once favored by the West are moving elsewhere. That requires a profound cultural shift by leaders who have been used to dealing with one rising power but now need to trade with another.

Yet displacement is more than a geopolitical effect. The rapid advance of AI is displacing jobs, rapidly removing the need for routine work, and placing a premium on highly creative roles that can direct algorithms to deliver products that humans once made.

The ‘steady job’ seems increasingly like yesterday’s concept. Tomorrow’s leaders face a workforce divided between the haves and have-nots; the creative class, who direct and innovate, and regular workers, who have more routine roles and face replacement. AI will foster much greater profit margins in companies – it will send labor productivity through the roof as more gets done, faster. Moreover, for routine work, robots are cheaper than people.

People at the top will reap the rewards, while those at the bottom face underemployment, or unemployment. The destabilization of companies – and societies – is a likely consequence.

Symptom and cause

As the model illustrates, disruption, displacement and destabilization generate a negative ecosystem in which they feed and fuel one another. As digital and social disruption increases, legacy structures and business relationships weaken, and displacement ensues. The destabilization that occurs triggers further disruption as organizations strive to radically alter their business models amid epochal change. Each of the Three Ds is both symptom and cause of the others.

Strategies for success

At Duke CE, we envisage three core leadership strategies for leading in this new paradigm. Core to leading successful people and organizations are:

1. Instilling a change mindset
2. Fostering collective purpose
3. Mastering generative leadership

Instilling a change mindset

A change mindset is often advocated. It is less often demonstrated. This is partly because embracing constant change, uncertainty and ambiguity is counter to established business practice – which seeks instead to foster a sense of control. Yet a change mindset is critical for succeeding as a leader in the new paradigm. It requires leaders to:

Envisage multiple futures. Rather than perceiving decisions as single inflection points which lead to a binary outcome of success or failure, leaders must learn to envisage and perceive many viable futures perpetually. Confronted with stacks of data and time pressures, leaders cannot afford to solely look at the immediate consequences of their actions. They must refocus on the unintended consequences to their decisions. This requires leaders to open up their leadership aperture to ask themselves not “what is possible?” but “what could be possible?”

Embrace continuous change. Change is not an identifiable ‘fork in the road’ but a constant state. The only constant is today – the most stable day for the rest of your life. Change is the new normal. A change mindset requires leaders to harness the opportunities presented by a state of chronic flux, rather than perceiving change as an acute threat to be mitigated or managed. When making a choice, ask: “What would I do now if I wasn’t afraid?”

Consult the past. History can be a useful tutor. Interrogate your past decision-making based on knowing then what you know now. What changed? Would you have approved major investments in 2007 if you knew the global financial crisis was around the corner? Would you have signed off on a new office lease in 2019 had you known Covid-19 would force homeworking for the following two years? It is easier to embrace uncertainty and rapid change when you prove to yourself that they are both inevitable and unpredictable.

Fostering collective purpose

The evidence is strong. Companies where purpose drives strategy and decision-making innovate better and are more effective at transformation, according to the EY Beacon Institute. Through fostering a sense of purpose, leaders can:

Boost employee engagement. Better engaged employees are more likely to respond well to change. “Most change projects use financial goals, such as a 10% return on investment,” leadership thinker Antonio Nieto-Rodriguez writes. “Yet these goals don’t inspire people to commit passionately to the change initiative.” Tomorrow’s leaders appeal to higher goals. Think about how your projects can boost the environment, society or customer wellbeing. Then communicate those benefits to your teams. Nieto-Rodriguez cites the example of Sony co-founder Akio Morita. Back when Japan was perceived as emulator, not innovator, Morita said Sony’s purpose was to make the country renowned for the high quality of its products. It was a patriotic aim its employees could get behind.

Find the ‘why’. Effective leaders ask: “Why are we doing this?” When potential change projects are tendered, interrogate the value of them to the company and customer. Imagine a retailer wanting to radically upgrade its website, a long and labor-intensive operation. By asking “why?”, the reason morphs from “to add augmented reality to our website”, to “creating an enriched service for our customers that will deliver greater sales to the company, and more bonuses to our employees”.

Detail the benefits. If your change project has benefits above and beyond an incremental increase in your bottom line, communicate them. This sounds obvious – yet it is all too common for those leading important projects to be modest and/or unclear about the advantages their projects will deliver. Publish a clear roster of benefits that all stakeholders can digest easily.

Mastering generative leadership

Generative leaders lead around their organizations, not just within them. Their goals are commercial and humanitarian, environmental and social. They are centered on human relationships. Generative AI dominates boardroom conversations, yet the technology’s limits are becoming clear. It generates solutions based on the data and decisions of the past, optimizing for the world ‘as is.’ Generative leaders however focus on the world to be built – what is novel can be generated only through creativity and curiosity. To that end, generative leaders:

Align commercial and ESG benefits. Tomorrow’s leaders understand the positive correlation between ESG advantage and commercial advantage, and can communicate that to their teams, customers and other stakeholders. “Many leaders labor under the false impression that there must be a trade-off between doing good for society and the planet, and delivering returns to shareholders,” finds the Boston Consulting Group. “But studies consistently show a strong positive correlation between companies’ commitment to environmental, societal and governance concerns.”

Attract the best talent. To develop a change-ready organization, you need change-ready people. Generative leaders – who lead with a pro-ESG mindset – are more likely to attract and retain talent. For example, an IBM survey found that 71% of actual and potential employees considered companies with a strong environmental record more attractive employers.

Create powerful unbounded teams. Siloed working and ‘business as usual’ will be ineffective in tomorrow’s rapidly shifting world. Generative leaders develop powerful, talented ‘flying squads’ that can innovate at speed across departmental boundaries. By embedding rapid decision-making and accelerated innovation through breaking conventional corporate divisions, generative leaders prepare their organizations for ‘business as unusual’.

What’s next?

Leaders who can master all three strategies will be equipped, not simply to survive disruption, displacement and destabilization, but to thrive despite them. They can forge a path for themselves, their people – and other organizations and governments – to follow. The future is unknown. It need not be unsuccessful.

"Leadership is a burden.” Those were the words of Mike, the owner of a $6 billion construction company, when he was asked to share one thing about leadership that might surprise new leaders, as part of the kick-off session for a leadership development programme I was facilitating. He explained to the group:

“I wake up every day thinking, ‘How will I keep the opportunities flowing for everyone?’ Without opportunities, people can’t pay their mortgage, make car payments, put their kids through college, etc. I want everybody to have a good life, and that’s a responsibility and a burden.”

Leadership is hard for all leaders, not just those leading multi-billion dollar companies. Why? The drive for results is incessant and your reputation is always on the line. No matter how well you do with this project, or with that customer, you’re expected to do more and better next time. Your bosses are counting on you to not let them down. Your direct reports are counting on you to provide them with rewarding and meaningful work. All of this can take the joy out of leading.

What’s a leader to do?

Over the last 30 years, I have worked with thousands of leaders as they navigated the challenges of being in a leadership role, in organizations as diverse as Nasa, eBay, Spanx, UBS Bank, Southern Company, and the US Department of Veterans Affairs. Drawing on the lessons learned with those leaders, I believe there are four important steps that can help put some joy back into your work as a leader.

Cultivate composure

The world can frequently appear insane, but leaders have a responsibility not to get caught up in the tumult. Start by easing into your day with five minutes of quiet reflection. Set up a few purposeful intentions by asking yourself some key questions: how might the current challenges you’re facing be an opportunity for you to further develop as a leader? How can you best serve the people you are leading today? At the very least, consider applying the advice of Benjamin Franklin to start each day by asking “What good do I want to do in the world today?” Then end each day by reviewing your impact: “What good have I done in the world today?”

Defuse stress

As your workday progresses and intensifies, periodically check in with yourself to make sure you’re not getting overly stressed. Dr Henry L Thompson, the author of The Stress Effect and an expert on leading in extreme situations, advises monitoring seven areas: awareness, rest, support, exercise, nutrition, attitude, and continuous learning (notice the easy-to-remember acronym, ‘Arsenal’). When you’re feeling stressed, consider which area might need some of your attention. How is stress affecting you today? Are you getting enough sleep and downtime? Do you have at least one person you can confide in at work? Are you taking care of your physical wellbeing? How is your diet? How is your mood today? What are you doing to stay mentally challenged? Defusing stress and reclaiming joy have everything to do with taking good care of yourself.

One hot-headed leader I’ve worked with had received scathing feedback about how his short fuse caused everyone to tiptoe fearfully around him. His mismanaged stress was undermining his career. Through coaching, it became clear that he basically didn’t practise any self-care. He began extending his lunch break to go for a run, burning off the stress that built up during the morning. Though he felt guilty taking a 90-minute lunch, the extra ‘me time’ paid dividends in terms of lower stress, personal productivity and greater enjoyment.

Get positive

As a leader, people will dump a lot of problems in your lap, expecting you to solve them. When you’re dealing with problem after problem, your day becomes problematic. You feel weighed down. One young chief executive I work with noticed that all the problems people were dumping on him were making him abrasive. He made one simple shift. Now, when people come to his office, he asks, “What’s the best thing going on in your world?” It often catches people off guard, but it gets them talking about the good stuff before moving on to the hard stuff. The chief executive feels less exhausted at the end of each day, and the problem-solving has become more enjoyable.

Be courageous

It’s not always big challenges that take the joy out of leading. Sometimes it comes from getting in a rut of having too few challenges. Sara Blakely, the founder of Spanx, says that when she feels fearful about trying something new she asks herself a question: “Sara, if you weren’t afraid, would you do it?” If the answer is “Yes,” she takes a deep breath – and does it! Enjoyment is often the result of trying something you’ve never done before. Asking yourself, “Where am I playing it too safe as a leader?” can point you in the direction of the next courageous move worth taking.

Yes, leadership can sometimes feel like a burden. If the role of leader were easy, more people would sign up for it. But you likely became a leader because somebody believed you’d be able to make things happen, despite the inevitable challenges. They believed in you, and you’d do well to believe in yourself too. With these simple steps it is possible to lighten the load. That will be good for you – and for everyone you influence.