The leadership shift – from Individuals to institutions
A survey conducted by The World Economic Forum has made startling revelations concerning the declining public faith worldwide in the integrity and efficacy of leadership. Over 86% of respondents to the Survey on the Global Agenda were unanimous in their belief that the world is facing a leadership crisis today. Around 90% of the Chinese people found corruption to be the main culprit while 78% of Brazilians and 83% of Indians reckoned dishonest leadership as a serious issue.
In fact, the very notion of leadership has undergone a sea change in recent times, both in substance and significance. Clearly, in today’s trans-national business drive, innovation and unprecedented global connect of people across the world; leadership is no longer the undisputed prerogative of a chosen few calling the shots from their proverbial cabins. This species was once the darling of the media, with generous cover stories throwing lavish praise on debonair and dashing chieftains shaping the future of theirrespective organisations – invariably a fine blend of fact and fiction.
Leadership across organisations is today getting more democratic than ever before. Many companies now firmly believe in creating a green-house to nurture and nourish organisation-wide leadership, devoid of hierarchical boundaries and power distances. More importantly, their proven success has exposed the myth of a Midas touch CEO, if not exploded it.
This is the start of a new era of institutional leadership, a strategic phenomenon that grows from within and is firmly wedded in collaboration and co-creation. And its democratic nature is not simply about mere delegation of responsibility—it’s about a deeply rooted leadership ‘process’ that runs across all levels of the organisation led by need, not diktat.
More than just a potent platform to enhance the quality of leadership, institutional leadership is today seen as a transformational tool to keep pace with the evolving paradigms and emergent challenges of business that invariably call for collective expertise and insights, best known to reside at executive positions with proximity to the grassroots. Institutional leadership also takes away the notorious volatility of individualised leadership, viz the colossal risk of erroneous judgement and hasty conclusion rooted in personal biases and vanities.
Unfortunately institutional leadership has not got its fair share of media attention for the lack of glitz and glamour, otherwise the epitome of personalised leadership that thrives on celebrity-centricendorsement. This glamour may be the creation of media but it resonates well with all stakeholders including investors who, given a choice, would willingly pick up stake in an enterprise led by a celebrity CEO well known for his or her uncanny ways rather than a ‘rooted’ firm with several nameless and faceless leaders, busy marshalling resources on the field of action with little time or inclination for basking in the glory of lavish media coverage.
Yet the need of institutional leadership is getting more acute by the day, given the several blunders that are causing unceremonious exits of many a CEO across verticals. Going forward, no firm would like to risk the operational risk emanating from the overt dependence on a single head, with all his or her vulnerabilities and eccentricities. In fact, the said leader would also love the cushion of institutional support for his or her decisions, more so in the event of failures.
So what is the biggest benefit of institutional leadership? Firms wedded to institutional leadership would most definitely have rightful ownership and accountability appropriately vested across levels. This endowment of authority would be based on capability, not position and hence would happen by design, not default. Such organisations would automatically get better at succession planning, with potential leaders naturally springing from within, not forcibly planted from above.
This is of course not to belittle the role of charismatic leaders who would continue to command well-deserved respect for their individual performances, but not necessarily as the architects of change. In fact, institutional leadership might not work in an organisation devoid of a well-defined vision, mission and values, and hence may lack executive leaders with the requisite experience and actionable insights to provide strategic direction.
In such startups or novice organisations, personalised leadership may still be the best bet but going forward, its significance would no longer be mythical like before and more importantly would merit validation from the organisational think tank and wholesome initiatives like 360-degree feedback.
(Nitin Potdar is partner at J. Sagar Associates. Views are his.)
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