Leadership in our VUCA world of two years ago was already a huge challenge. But the COVID-19 pandemic has brought unprecedented levels of disruption and forced some organisations to completely reinvent their ways of working.
We spoke to strategic leadership expert Dr. David Dinwoodie, to explore the impact recent disruption has had on leaders and what qualities individuals will require to succeed as organisations adjust to new ways of working.
Has leadership changed over the past few years or not?
“In my opinion, the events of the past few years have created a tangible, lasting shift in leadership. Of course, organisations were already facing an incredibly disruptive environment before COVID came along. But we really have been living it intensely over the past 18 months.
As a result of this unprecedented change, we’re asking leaders to think and act differently. We need leaders to elevate their mindset and look at things in a much broader, strategic sense, whilst not losing track of day-to-day tactical tasks.
It’s become almost schizophrenic.
We’re asking leaders to think about the long term and execute the short term. To make sure that the business model works, but also disrupt the model at the same time. We want leaders to be firm in their management styles but also be empathetic. Everything we ask of leaders has become intensified and accentuated.”
How can leaders deal with all those conflicting demands?
“Several competencies are crucial to managing this schizophrenia – the ability to think strategically not just tactically and keep the mindset at a horizon level; the ability to act strategically, helping other people to line up with the strategic vision and act in the right ways; and the ability to influence others in a way that lines up with that strategic vision and objectives.
These strategic leaders bring together business strategy and leadership.
They craft a successful business strategy and have the leadership skills to empower teams to deliver it. Over the years, as part of my research, I identified several superior organisations that outperformed others in their industry. These companies all had a winning business strategy, which they implemented hand in hand with an enabling people strategy. They created a compelling vision and aligned people with that vision to generate motivation and commitment.”
What are the qualities of a good strategic leader?
“If you look at good strategic leaders, they have often been through very trying and difficult challenges. They have learnt from their experience. Anyone can learn how to become a great leader, but you need to get out of your comfort zone, to figure out how to get things done. My advice to leaders is to:
- Seek out difficult situations. Challenge yourself to see how you will respond.
- Make sense of the situation.
- Internalise it. Analyse – what help do you need and what can you do to resolve the situation?
- Take action. Only by doing something will you find out if it works or not.
Going through these ‘heat experiences’ can help develop resilience. Resilience means not ruminating about things that aren’t important; being mindful of what is important in life, in work, and how you dedicate the energy to things that matter. Resilient leaders stay focused and don’t let other things disrupt them. Staying strong and stable, particularly in unknown situations, is all part of being a strategic leader.”
How can people develop their strategic leadership skills?
“There are many ways people can develop their leadership skills, from classroom-based teaching to listening to podcasts and more. In my book, ‘Becoming a Strategic Leader: Your Role in Your Organization’s Enduring Success’, my co-authors and I present a model that helps leaders bridge the strategy-performance gap, with three key elements:
- Crafting an innovative, differentiated, successful winning business strategy, by discovering and prioritising strategic drivers, which determine sustainability and competitiveness.
- Getting people on board with the business strategy through our leadership strategy, having the right people, interacting in the right ways, so they can execute the strategy, building a culture of interdependence and collaboration across the organisation.
- Fostering the individual and organisational learning that is needed to sustain performance.
It’s important to learn about the theory of leadership, but it’s vital to get real-life experience too. That’s where I think simulations are unique. They bridge the gap between understanding the theory and practicality of leadership, decision-making, finance, risk and all the key aspects of running a business, by giving participants the chance to try out different ways of doing things. They allow people to test different business strategies, to see what might happen.
We don’t put trained pilots straight into 747s, or fighter jets, and expect them to perform straightaway.
First, they will learn the theory of how to fly the aircraft. Then, they will practice in a simulator for hours, interacting with the aeroplane, the co-pilot, air traffic controllers. They will rehearse dealing with problems such as engine failures or loss of communication. Only once they have learnt to master the equipment and the people will we let them put those skills into use in the real world.
Simulations allow people to go through that process in business.
They create a safe playing field to test hypotheses, make decisions and receive fairly accurate feedback on likely business results. An opportunity to practice underlying business acumen and business principles. But most importantly, to learn from that experience in order to make real-world decisions. Now that I understand my company better and the core competencies we need to develop to make us successful, what are the key strategic drivers that we are going to invest in?
At the same time, simulations can help individuals develop people acumen, understanding interpersonal interactions and the behaviours of leadership teams. Senior leaders can put into practice making business decisions, to check if the strategy works and investigate the people dynamics to see if the team is working effectively to execute it. If yes, what strengths does the team need to build on? If not, what can the team do differently to ensure they lead both strategically and successfully?”
Are organisations asking leaders to take more risks than ever before?
“Yes and no. There’s this polarity between stability and change, risk and assurance. As managers, we have to deal with all those elements and do them both well. We have to take risks as well as give security. That’s the science and the art of management, having the business acumen skills but also knowing how to manage people.
Over the last 5 years, the risk element has become both more important and more ambiguous. We don’t even know what to focus on in terms of risk. A decade ago, a business could have done a nice external analysis to identify risks. But now we can’t even see what’s coming.
Did hotels even have Airbnb on their radar?
That’s why simulations are great as they are all about making assumptions and testing them. Leaders can make decisions based on a stable business model, but also see what would happen if everything was disrupted. The more immediate and the more dangerous the risk factor, the more important it is to practice, in order to build agility.
A manager once said to me, ‘Let me tell you about risk. There are three Rs to managing risk – resource, risk and return. The resource I’ll give you, the return, I decide how much return I am expecting from you and the risk is all yours. Just deal with it.’ The more we can allow leaders to play with risk and learn from it the better.”
You have been working with simulations for over 20 years. How have they changed during that time?
“The first simulations I worked with were paper or Excel-based. I remember the faculty having to print a lot of paper for participants to sift through. Now simulations are much more visual, and the graphics themselves have improved so much. They are more intuitive and easy to use, which means that participants can quickly grasp how the simulations work and get straight into the learning.
Historically, simulations were much more functional, focussed on finance, sales etc. Now they are much broader in their perspective – more strategic and interpersonal skills-related, enabling participants to learn not just functional skills like understanding profit and loss, but also personal skills like influence.
The fact that simulations can also now be done live, virtually, with people all over the world, means that participants are interacting in a much more realistic global environment.
Typically, I find that the ‘a-ha’ moment for participants comes when they realise that it is not so much about winning or losing the simulation. It is not about the profitability or the market share that they are creating. It is about how they are working together as a team. They don’t come into a simulation thinking that it’s about interpersonal or competence development – they think it’s about the finance or business strategy. They don’t realise they can’t achieve the strategy if they don’t work well together.
The lightbulb moment typically happens in the reflection sessions where we facilitate a ‘time out’ during the simulation to ask some powerful questions. To pause and reflect on how the simulation is going. We challenge people to challenge themselves about what’s working well and what they could do differently, This generates conversations about their team dynamics and how they can unlock greater performance.”
What is the next big challenge that strategic leaders need to be ready to face?
“The impact of AI is going to be really interesting. How do we bring humanity into the use of artificial intelligence in business and create algorithms that take into account ethical and human aspects? But in the shorter term, culture will be a key focus as we move on from COVID-19.
Organisational purpose seems to be much more important for younger employees than it has been for previous generations.
Leaders will need to focus on purpose in order to engage and retain these talents of the future.
Employees have found their voice around lifestyle too. They have been forced into making lifestyle changes through COVID and many don’t want or need to go back to old ways of working. But we still need human connection. I have been surprised by how much leadership development training we have been able to do extremely successfully online. But I also recognise the value of sandwiching that virtual learning with some short face-to-face sessions to get to know each other better. As companies become complex and embrace more hybrid ways of working, organisations need to focus on building a culture of interdependent collaboration, wherever their employees are.”
David Dinwoodie runs a consulting business in strategic leadership and collaborates with organizations including Center for Creative Leadership, EADA Business School and In 4 Impact. He is also co-author of the book ‘Becoming a Strategic Leader: Your Role in Your Organization’s Enduring Success’ and a research associate on the Leadership Across Differences project. As an associate of Ososim, David facilitates our simulations with clients as well as collaborating on research projects.
At Ososim, our digital simulations help participants put theory into practice, developing new skills in a safe environment, whether face-to-face or online.
Working in over 85 countries with major global companies, as well as government institutions, leading business schools and non-profit organisations, our digital learning experiences enable individuals, teams and companies to perform at their best.
To find out more about our virtual business simulations please contact us on +44 (0)1223 421 034 or email firstname.lastname@example.org.