Leadership In a Flat World
By George Hathaway

Leadership in a flat world is more than just a transition to the 21st century. It is not a minor modification of what we learned in 1999. It is different. That is the message that Tom Friedman is sending, loud and clear, in his recent book, The World is Flat (1). It is not business as usual, and the flat world is going to require that we do things differently in order to succeed. Here we will examine what created the flat world, and discuss what it means, not just for leaders, but for those who are tasked with developing those leaders.

THE FLAT WORLD HAS RESULTED FROM THE CONVERGENCE OF THREE PHENOMENA:

The creation of a global Web-enabled playing field that allows for multiple forms of communication – in real time – unconstrained by geography, distance, or language. This removes barriers to commerce and enables the entry of new competitors in many markets where companies were comparatively exclusive.

Many of these companies have legacy systems and commitments (think the big auto companies and their pension systems) that are not borne by the new entrants. They must learn to cope, to change, or they will not survive.

A set of business practices and skills that get the most out of the flat world. These business practices are already being used to a much greater extent by the younger generation in their personal lives and have yet to be adopted by “those in charge”. The flat world has little tolerance for command and control management practices, decisions arrived at without sufficient rationale, unreasonable policies and procedures that do little to enhance the work.

The younger generation want to network, share information using any number of new technologies (this week it’s mySpace), and develop a personal set of marketable skills. The flat world gives these people the ability to join any organization that will fulfill their needs. This is not likely to be a company that continues to do business according to the old rules. Traditional companies are not likely to find very many "organization men" (to go back to the ‘50s) in a world of individualists.

Three billion new people are now actively participating in the world economy. The populations of China and India are becoming part of the world’s middle class. They can travel anywhere and buy goods from anyone. They use the Internet with aplomb. They want to acquire goods that show their status. Countries like Vietnam, Egypt and Indonesia are nipping at their heels. Organizations with truly global outlooks and strategic vision can recognize and capitalize on this incredibly huge market for goods and services.

IMPLICATIONS FOR LEARNING

Leaders will have to understand and manage the cultures of their organizations. This is not a passive thing to be left to the "HR folks" or even just L&D. Rather, it means that the culture must be shaped through clearly articulating organizational values and ensuring that all leaders exemplify them. They must be active coaches. Employee development must not mean training events. In fact, cultural management must be as key a management strategy as marketing and finance. And creating a learning, collaborative culture is the way forward.

All associates will need to be steeped in systems thinking. They will need to know the implications of their actions with respect to all stakeholders. This applies to everyone, not just management and so-called “key” people. This will help to facilitate the learning organization that the leadership is establishing.
Traditional problem solving will not work any more. It is too linear and takes too long. Associates must now leap ahead rather than just determine how to maintain the status quo. This must be something that everyone can do and in which everyone participates (including management). It should be a continuous process rather than something that is done when things are broken. Learning has a significant role to play in making sure that the information and tools are there to enable that leap.

IMPLICATIONS FOR LEADERSHIP

These change everything. Some of the leadership practices used in the Western world have already become obsolete in the flat world, and there’s more to come.

The power base of leaders will change. The power of position will wane while personal power will grow. There will be increased emphasis on expertise and ability, although some “traditional” leadership skills like the ability to build relationships will continue to be key. New generation employees will be increasingly mobile and their portable skills will be saleable to the highest bidder that also provides an environment compatible to their needs. That means that simply having a title will be relatively meaningless unless the person can use his/her power of relationship to influence employees and free agents.

Organizations that have a tradition of command-and control, top-down management will need to change or they will suffer the inability to hire enough quality workers to replace those leaving the workplace.

The need for strategic thinking will increase. At the end of the 20th century, emphasis was placed on the need for senior leaders to be strategic thinkers. In the flat world, that isn’t enough. In the flat world, as the market, and even the nature of organizations is changing rapidly, everyone must think strategically.

At the same time, it will be necessary for everyone (not just the people on the front lines) to use tactical skills. Execution does matter (2). So leaders must be able to understand and manage day-to-day and week-to-week. Simultaneously, they need to be strategic enough to see the changes beyond the next change and respond to them now.

The concept of strategic thinking has implications for organizational communication. Strategy must be a dynamic thing. It can't be just a document waiting for next year's update. Strategy must be understood by every leader in the organization in order for each to act on it. Every leader in the organization must be empowered to communicate upward regarding information critical to execution. At the same time each leader must be given enough flexibility to establish his/her own strategy and be empowered to execute it. Accountability comes with this territory. The people coming into the workplace today are impatient; they want responsibility and expect it. Flat world organizations will find a way to give it to them.

People development is more critical than ever. More and more individualists are joining the workforce. These are not only the younger generation in the U.S., but also the billions of new workers from India and China. There is a paradox at work here. People at all levels of an organization need to be well-rounded in order to respond quickly to different challenges. Friedman said that they must be the equivalent of Swiss Army knives. At the same time they must retain (and grow) their core expertise because that will be their source of marketability in the flattened world. Developing a cadre of well-rounded experts is not an easy task, but any organization that doesn’t will quickly fall behind.

Leading change and dealing with change will be paramount. Leaders create change. And ideally, other organizations are being forced to respond to that change. This is what is expected in the round world. However, in the far more chaotic flat world, leaders need to be equally accepting of and responsive to change that happens to them. It is important to remember that change happens not only in the marketplace. The organization itself will be in a constant state of change. New alliances, new reporting relationships, and new relationships with customers and suppliers will attack a leader from all sides.

IT’S HERE

What makes Friedman’s message so compelling is that he’s not talking about some far-off change. The title of his book is The World is Flat – not The World Will Be Flat and the evidence is all around. Established companies, with no desire or ability to adapt to the new flat world, are being attacked now. Someone has to recognize that change is needed, and respond. The alternative is obsolescence. It’s a perfect role for a learning organization that can act as an internal advocate for new flat world ways of thinking and developing people.


Reprinted from Corporate University Journal

George Hathaway is a consultant specializing in leadership of organizations and the development of leaders in organizations. He has over 20 years of experience in the field and has recently retired as Director of Leadership Development for American International Group (AIG).

(1) Thomas L. Friedman. The World Is Flat: A Brief History of the Twenty-first Century, 2005, Farrar, Straus and Giroux.
(2) Larry Bossidy, Ram Charan, Charles Burck. Execution: The Discipline of Getting Things Done, 2002, Crown Business.