Leadership trends

The Fourth Industrial Revolution demanded that CEOs take responsibility for the massive transformation of their businesses and for the astonishing impact that this transformation will have on the wider society and all the stakeholders. Success requires CEOs to develop the right leadership capabilities, workforce skills, and corporate cultures to support digital transformation and become agile to face the many uncertainties. A revolution in skills and a transformation of organizations is highly needed to sustain one’s presence in the marketplace.

According to blessingwhite.com, those who take into account individual values and personal differences while creating an environment of shared responsibility create a place where individuals enjoy work more and become more productive. Hence, the leadership trends that support transformation in the market and the economy are the following:

  • Coach and be ready to be coached: employees rely on the support of their companies to take on business challenges. Empowering employees makes them more innovative and intrapreneurial in addition to increasing their sense of belonging to the company. Empowerment should be preceded by delegation of authority.

Coaching should be purposeful and focused to enhance productivity. Being ready to be coached is rooted in the concept of being a lifelong learner to keep pace with the new trends of one’s profession. Leaders who seek and are open to feedback will be better positioned to gain the commitment and enthusiasm of the employees they lead.

  • Realize it is a millennial and Generation Z world: millennials make up 50% of the workforce. According to the data obtained from the LinkedIn survey, the number one reason millennials change jobs is to advance their career, followed by compensation and the desire for more challenging work and roles that are a better fit for their skills and interests. Research shows that millennials want to be challenged and are willing to work hard. They are positive, creative, optimistic and forward-looking. At the same time, they come with some pretty strong ideas about work/life balance, company values, and career expectations.

They are also a generation for whom a remote work environment and wearable technology are the norm. Leaders have to adopt a collaborative mindset to get the commitment of millennials and Generation Z cohorts. This generation is personally driven to seek education and professional development to increase employment opportunities in a world economy hit by many crises.

  • Create and leverage on a diverse work environment: Inclusive leadership must become part of the DNA of an organization. This kind of leadership surpasses tolerance and acceptance of others’ differences; it is about creating an inclusive workplace where employees representing all dimensions of diversity can thrive. Catalyst’s research identifies four core skills of inclusive leaders known as “EACH Mindset”.

EACH stands for:

a. Empowerment

b. Accountability

c. Courage

d. Humility Organizations like Catalyst have been able to demonstrate that there is an increased return on equity for businesses with more women and minorities in their executive levels. In addition, the research also shows that the more included employees feel, the more innovative and productive they are.

  • Vertical development, ownership development, and collective development: Vertical development refers to the advancement in a person’s thinking capacities. The outcome of vertical stage development is the ability to think in more complex, systemic, strategic, and interdependent ways. This comes in contrary to horizontal development, which is the development of new skills, abilities, and behaviors.

Horizontal development is most useful when a problem is clearly defined and there are known techniques for solving it. Due to the uncertainties controlling the business environment, vertical development has gained more momentum.

Ownership development: People develop fastest when they feel responsible for their progress and are involved in decision making and planning regardless of their position in the hierarchical structure of the company.

Collective Leadership: According to Simmons & Weinrich “[g]aining everyone’s participation is essential to a team’s success. Without an individual’s participation, the unique skills, talents, experience, and knowledge he/she brings to the team will be wasted.”

Ownership development: People develop fastest when they feel responsible for their progress and are involved in decision making and planning regardless of their position in the hierarchical structure of the company.

Collective Leadership: According to Simmons & Weinrich “[g]aining everyone’s participation is essential to a team’s success. Without an individual’s participation, the unique skills, talents, experience, and knowledge he/she brings to the team will be wasted.”

Factors Contributing to Better Collective Leadership

  • Open flows of information
  • More flexible and flatter hierarchies
  • Distributed resources
  • Distributed decision-making
  • Less centralization and control

Distributed leadership:

Distributed leadership can be considered to include shared, democratic, dispersed, and other related forms of leadership. It is a leadership style where leaders can emerge and exercise the power of knowledge wherever they are in the organizational chart. There are three premises of distributed leadership:

  1. Leadership is an emergent property of a group or network of interacting individuals
  2. There is an openness to the boundaries of leadership
  3. Varieties of expertise are distributed across the different levels of the organizational chart. Leaders might emerge based on the need of their expertise and how such expertise might be of impact

With the change in the pace of work, the impact of ever-changing technology, shifting demographics, increased environmental ambiguity, complexity, and uncertainty, being a leader is more challenging than ever before. Good leaders understand these trends and equip themselves with the skills required to embrace them. Effective leaders are characterized by being visionaries, a trait that leads to seizing opportunities and developing products and services to satisfy needs and wants not attended to by competitors. Leaders contribute to the competitive advantage sought by their corporations.

The environment and context of leadership have changed, becoming more multifaceted, unstable, and unpredictable. Because of these changing trends, a leader’s skills are more demanding in the sense of having more complex, adaptive thinking abilities and being vertically developed. With the new form of economy and the advent of information technology, more individuals now have the chance to show and exercise their leadership abilities to reach higher positions in the organizational chart or start their entrepreneurial ventures.

What is Social Entrepreneurship

Social entrepreneurs are individuals who deploy innovation and market forces to fill social needs rather than seeking financial rewards (although rewards are not automatically excluded).

Many forces are driving this entrepreneurial trend and feeding into it. Bringing lighting to Africa, mobile banking to Bangladesh, and low-cost healthcare to Nepal, among other examples, are social entrepreneurial initiatives.

Two questions arise here: what do such enterprises need to do to achieve growth, and how can they do it?

RippleWorks, a private foundation that supports emerging market entrepreneurs by providing them with leading Silicon Valley executives as advisors asked these questions in a recent survey of 628 social entrepreneurs from all over the world. The research, conducted with analytical support from McKinsey, and funding from Omidyar Network, included interviews with 37 investors and 10 social enterprise leaders. The entrepreneurs reported that the two most important barriers to growth are the following:

  1. Money: Almost half of the interviewees said raising funds was “very” or “extremely” challenging. Other resources are not readily available either.
  2. Finding and keeping talented people: Three-quarters of funded, early-stage companies believe that the inability to access the talent they need will have a critical impact on their businesses. The prestige, pay, and job security of big companies are difficult to resist. Even when funded, social entrepreneurs cannot compete head to head on that basis.

Other challenges faced by social entrepreneurs might be:

  • Conflicts: While the overall goal is to meet a social need, there may be conflicts in how this can be balanced against the need to generate revenues to sustain the enterprise.
  • Voluntary nature: The traditional forms of motivation and organizing, in addition to the different managerial functions, might not be applicable to social entrepreneurs since the motives for work are different.

Key Characteristics of Social Entrepreneurs:
A social entrepreneur uses the same process of entrepreneurship but does so to meet social needs and create value for society. These people have the entrepreneurial profile but target their effort at a different, socially valuable direction.

Key characteristics of this group include being:

  • Ambitious: social entrepreneurs are driven by the purpose to reverse major social issues–poverty, healthcare, equal opportunities, etc. with the underlying desire and passion to make a change.
  • Mission driven: their primary concern is generating social value rather than wealth.
  • Strategic: like business entrepreneurs, social entrepreneurs seize and act upon opportunities that others miss.
  • Resourceful: due to the limited access to resources, social entrepreneurs are exceptionally skilled at mustering and mobilizing human, financial, and political resources.
  • Results-oriented: social entrepreneurs are motivated by the desire to see things change and to produce measurable returns. These returns are related to making the world a better place by improving the quality of life, providing access to basic resources, and supporting disadvantaged people. 

Entrepreneurship and Gen Z

The new entrants into the world of entrepreneurship belong to Generation Z. The members of this generation have become eligible for employment starting 2016. The other option for Gen-Zers is to become entrepreneurial, either by choice—because they have spotted an opportunity in the market place—after which they are called opportunity entrepreneurs, or by compulsion, becoming necessity entrepreneurs, who start businesses because they cannot find work any other way. In all cases, an entrepreneur is one who creates a new business, facing risks and uncertainties for the purpose of achieving profit and growth by identifying significant opportunities and assembling the necessary resources to capitalize on them.

The history of the word “entrepreneurship” is fascinating, and scholars have indeed analyzed its meaning.

The definition used at Harvard Business School was formulated by Professor Howard Stevenson, the godfather of entrepreneurship studies there. According to Stevenson, entrepreneurship is the pursuit of opportunity beyond resources controlled. The word “pursuit” here implies a remarkable, relentless focus. Entrepreneurs often perceive a short window of opportunity. They need to show tangible progress to attract resources with their limited cash balances. Entrepreneurs have a sense of urgency, which is of less impact at well-established companies due to the abundance of resources.

 “Opportunity” is the key word in all the definitions of entrepreneurs and entrepreneurship. Opportunity, according to Harvard Business Review, implies an offering that is novel in one or more of four ways.

An opportunity may entail:

  • Pioneering a truly innovative product
  • Devising a new business model
  • Creating a better or cheaper version of an existing product
  • Targeting new sets of customers with an existing product

What is Triggering Entrepreneurship?

  1. Industry is becoming more information-intensive and less labor and capital-intensive, which removes the traditional barriers for start-ups.
  2. The nature of the prevailing industries has changed after the economic crisis that facilitated the entrance of new entrepreneurs into the market. In the days before the economy fell into recession, the construction industry was unrivalled. However, this sector kept on falling while the recession gripped many regions in the world. 
  3. The cultural diversity of entrepreneurs: Virtually anyone can become an entrepreneur. The pool of entrepreneurs include young people, women, and minorities who used to face the glass ceiling, immigrants, part-timers, home-based businesses, copreneurs, corporate castoffs, and corporate dropouts, among others.
  4. Entrepreneurs are now being perceived as heroes. Business founders like Mark Zuckerberg, Bill Gates, Steve Jobs, Jeff Bezos, and Phil Knight have achieved more stardom and popularity than renowned Hollywood stars.
  5. Colleges and universities that offer entrepreneurial education have become very widespread and many curricula have been designed to cater for this type of education.

The Benefits and Drawbacks of Entrepreneurship

Despite the great appeal of the word “entrepreneurship” and the desire of many people to ride this wave, anyone planning to enter the world of entrepreneurship should be aware of its potential drawbacks

The opportunity to create your own destiny Uncertainty of income
The opportunity to make a difference by contributing to society and being recognized for your efforts Risk of losing your entire investment
The opportunity to reach your full potentialLong hours and hard work
The opportunity to gain impressive profitsLower quality of life and high level of stress until business gets established
The opportunity to do what you love and have fun at it

Risks Faced by Entrepreneurs

Risks Faced by Entrepreneurs

  1. Demand risk relate to prospective customers’ willingness to adopt the solution envisioned by the entrepreneur
  2. Technology risk is high when engineering or scientific breakthroughs are required to bring a solution to fruition
  3. Execution risk relates to the entrepreneur’s ability to attract employees and partners who can implement the venture’s plans
  4. Financing risk relates to whether external capital will be available on reasonable terms

Processes and Stages of Developing a New Venture

The typical stages of developing a new venture include:

  1. Assessing the opportunity for new a venture—generating, evaluating, and refining the business concept
  2. Developing the business plan and deciding the structure of the venture
  3. Acquiring the resources and funding the necessary resources for implementation, including expert support and potential partnerships
  4. Growing and harvesting the venture by figuring out how to create and extract value from the business

Developing the Business Plan

No standard business plan exists, but there are certain components that have to be available to make the business plan representative of the start-up and its potential. The business plan usually starts with an executive summary and includes sections related to the product, technology, development, production, marketing, human resources, and financial estimates, in addition to timetables and funding requirements. A typical formal business plan, according to Kaplan Warren, will include:

  • Details of the product or service
  • Assessment of the market opportunity
  • Identification of target customers
  • Barriers to entry and competitor analysis
  • Experience, expertise, and commitment of the management team
  • Strategy for pricing, distribution, and sales
  • Identification and planning of key risks
  • Cash-flow calculation, including break-even points and sensitivity
  • Financial and other resource requirements of the business

The New Product/Service Development Process

While the aim of the feasibility study and business plan is to test the practicality of a proposed project and create a roadmap, developing a product or service requires considering several factors across the four-step process:

  1. Concept generation: identifying opportunities for new products and services
  2. Project assessment and selection: screening and choosing projects that satisfy certain criteria
  3. Product development: translating the selected concepts into a physical product
  4. Product commercialization: testing, launching, and marketing the new product

In my next blog post, I will be sharing with you everything that you need to know about social entrepreneurship, appreneurship and intrapreneurship. The blog post will also feature some live examples and interviews so stay tuned! Until then, don’t forget to let me know your feedback and questions in the comment section below.