The true leadership challenge in a complex and uncertain world

Relying on information technology and structures for keeping day-to-day efforts aligned with long-term goals and growth is no longer enough, writes Joakim Ahlström, author of How to Succeed with Continuous Improvement.

The pace of change in our surrounding world is increasing. IT projects are getting more complex. Still, management approach is pretty much the same. To secure success and long-term survival you need to develop an organisation with the ability to collectively adapt and continuously improve as one synchronised entity. Relying on information technology and structures for keeping day to day efforts aligned with long-term goals and growth is no longer enough.

Acting as one requires thinking as one. In strong organisational cultures people instinctively react properly to change. We find proof of this at IKEA, The Walt Disney Company, known for hiring individuals who exhibit behaviors that align with the company’s values, and Toyota, whose agility helped them reclaim the title of the world’s largest automaker only seven months after being struck by two almost simultaneous blows - an earthquake that disrupted production in Japan and the embarrassing recalls that damaged the company reputation. Few manage to copy the desired traits of these companies. Some years ago a large survey by Industry Week showed that only two percent of companies launching improvement initiatives inspired by Toyota achieved expected results.

Nothing affects culture more than how a leader responds to a crisis.

The reason? We copy what we see (systems, structures and tools) and miss the point. What we don’t see when we study these successful companies is the culture developed by leaders in the organisation. This is what you need to do to take on the leadership challenge in complex and uncertain world:

Understand what culture really is and accept that you are the number one vehicle for culture. Culture is expressed by actions but our actions are results of our thinking. Thoughts are always expressed as talk – in your own head or as the words that comes out of your mouth. Changing culture is to change your collective thinking and you do that by changing what people in your organisation spontaneously talk about. When you become head of an organisation you step into the anecdote zone. Take advantage of it!

Create stories that bring you values to life. When Ingvar Kamprad, founder of IKEA and one of the richest men in the world, visits his stores he goes there by public transportation and the free-of-charge IKEA-bus together with his employees and customers. Walking through a store he once lay down flat on the floor to read a price tag that was badly placed and pointed out it was a bit hard to see what he would have to pay for that particular item. When another store had renovated the store entrance he told them it was too fancy and that they had to redo it. Cost consciousness, always adopting the customers’ perspective and representing and serving “the many people” are values that will remain parts of the IKEA culture long after Invar is gone.

Drive out the fears that deteriorate decisions and actions. Nothing affects culture more than how a leader responds to a crisis. Fear makes people focus on looking good rather than doing what’s right and where that’s the case you see cautiousness, inactivity and weak results. When Toyota CEO, Akio Toyoda, told Congress he took "full responsibility" for the safety defects in the company's cars the message to his colleagues was clear. At Toyota you are expected to be open with your problems and take responsibility for solving the ones you find as fast as possible. That cultural trait is the basis for eliminating waste from all processes in the company and that’s what gave Toyota the agility to recover as fast as they did.

The cultural aspect of aligning daily efforts with long-term survival and growth is what will separate the wheat from the chaff. It’s time to take on the true leadership challenge of the future.

Joakim Ahlström is Sweden’s leading authority on creating a continuous improvement culture and the author of How to Succeed with Continuous Improvement: A Primer for Becoming the Best in the World.

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