As we are buffeted by constant waves of digitisation, disruption and change, effective leadership has never been more important. This applies irrespective of whether the organisation is a corporate, a public sector body, a small-medium business or a digital start-up. The rules of the leadership game have changed, and those who adapt most effectively are far more likely to be successful. This article will first look at how to flex your leadership approach in order to lead effectively through complexity, and then at some evidence-based techniques to better manage yourself and your reactions to circumstances as they unfold.
I was at lunch in Israel recently with Uri Levine, the founder of Waze, who sold his mapping business to Google in 2017 for US$1.15 billion. Uri now backs other start-ups.
“I look for two things before I’ll invest. First, they need to be solving a large-scale, genuinely difficult problem. Second, they need to have brilliant leadership and the right team to solve that problem. If they have those two things, we can talk. Everything else details.”
Leading Through Complexity
So, what does effective leadership look like in a digital age? It requires people to be able to lead through high levels of complexity and ambiguity. The rise of digital disruption and the constantly increasing pace of change means that leaders often face complex challenges, whereby links between cause and effect exist, but can only ever be determined in retrospect.
Typical examples of challenges like these include:
- A bank trying to work out which of the hundreds – if not thousands – of Fintech and AI start-ups they should partner with, and how to do so.
- A start-up trying to decide which blockchain platform to build on.
- A marketing department trying to work out their most effective digital marketing strategy.
None of these questions can be answered with absolute certainty in advance. The correct leadership approach to take in these situations is to conduct a series of small, safe-to-fail experiments to determine the most promising next step forward. For example, a bank might decide to run a series of Proof-of-Concept trials of four or five Fintech software providers in a particular area of their business, such as Risk. Each of these experiments needs to have a clear set of pre-defined criteria that will determine whether that experiment is successful or not. Eric Vries calls this ‘validated learning’ in his modern classic The Lean Start-up, which is required reading for anyone looking to build a start-up or drive innovation within an established business. As validated learning builds up over time, the most promising path forward starts to emerge, and the organisation can then make larger investments.
For example, Intuit runs 8,000 experiments every tax season, each one of which is testing an assumption about what customers want and what they are prepared to pay for it. The learnings from these experiments are used to make Intuit’s software even more customer-focused and valuable.
Leaders today face unprecedented levels of volatility, uncertainty, change and ambiguity, and in many cases, find themselves facing events over which they have limited – or no – control. However, while we can’t always control what goes on outside us, we always have a choice in terms of how we react to the situations we face. Developing a capacity to self-regulate and make effective choices in terms of how we respond to challenging situations is one of the most crucial skills a leader can develop.
Changing our internal narrative
One of the most effective ways to do this is to notice and change our internal narrative. Almost everyone has a voice in their head that chimes in with negative thoughts from time to time – often when we face challenging situations: “I can’t do this.” “I have no confidence.” “I’m a failure.”, etc. This internal commentary is not ‘true’ in any objective sense of the word. The ‘voice in our head’ is an unhelpful manifestation of our imagination, and while the ability to see possibilities beyond our present circumstances has been one of the most powerful evolutionary advantages humans have developed, it has its downsides. ‘Automatic negative thoughts’ are a prime example of this. So, what should we do when that negative voice in our head starts to get too loud?
The natural reaction to negative thoughts is to ignore them and to try and push them back down into our subconscious. This is not a helpful way of dealing with them, as they never truly go away, and if anything, this actually increases their hold on us. A far more effective strategy is to consciously start to notice these thoughts when you’re having them. Don’t judge. Don’t scold yourself. Just notice. Say to yourself: “OK, I’m having one of those negative thoughts right now.” This process starts to objectify these negative thoughts and reminds us that they are not ‘facts’ or ‘us’: they’re simply stories we’re telling ourselves. This on its own will start to weaken the hold that those negative thoughts have on us. Building on this, you can decide on an alternative narrative you want to tell yourself when you notice negative thoughts. This can be as simple as deciding to tell yourself that you are good enough and that you can succeed. Over time, the negative voice in your head will become like a drunk uncle at a Christmas party: harmless, tolerated and mildly amusing.
In today’s VUCA world, effective leaders are able to adapt their leadership style depending on the nature of the situation they face. In many cases, this will involve defining and then conducting a series of safe-to-fail experiments with clear, pre-defined criteria for success or failure, and then allowing the results to inform future investments and activity so that you use validated learning to figure out the way forward. At the same time, effective leaders put energy and focus into better managing their own reactions to circumstances as they unfold, so that they are able to be ‘the best versions of themselves’ as consistently as possible, including noticing and managing automatic negative thoughts. This combination of effectively navigating our way through an uncertain external world, while also managing our internal reactions to that uncertainty is a powerful leadership in the digital age.