15 Oct 2001  Research & Ideas

Rethinking E-Leadership

Old-school leadership practices are back in the spotlight, according to consultant Melissa Raffoni. The boisterous dot-com style has died down, she writes in this Harvard Management Update article, and now it's time to air out the tried and true.

 

Two years ago, talking about how the Internet changed absolutely everything was the height of fashion. Today it's hard to conceal a smirk when someone mentions a term like e-leadership. Although it's fine to enjoy a good chuckle at the way the svengalis of the New Economy have received their comeuppance, don't let your skepticism get out of hand. A review of several recent books suggests that many of the principles of e-leadership still have merit, even if they could be made timelier...by the infusion of pre-Internet era wisdom.

Five tenets that were often taken to extremes during the dot-com era are especially in need of this kind of updating.

1. Forgo stewardship for entrepreneurship. A steward, writes Robert Hargrove, co-CEO of Masterful Coaching, based in Brookline, Mass., in E-Leader, is someone who conserves the existing business. An entrepreneur "causes creative destruction by transforming" the existing business or creating a new one. An effective e-leader, Hargrove continues, must shift from "being a productivity and efficiency junkie to being an opportunity seeker and innovator who quests for that new, new thing."

The notion that senior executives can't be bothered with the details of their business is crazy.
—Robert Hargrove in E-Leader

Updated advice: Leaders must constantly push the boundaries of established ways of doing business—but they must also know which established practices need to be preserved. They can't afford to choose between efficiency and innovation, between maintaining existing businesses and creating new ones, between revenue growth and increased profitability. They must strive to make progress on all these fronts—simultaneously.

2. Innovate with abandon. "We are the poster child for this" issue, concedes John Chuang, CEO of Aquent, an employment services company headquartered in Boston. In roughly half of the new initiatives Aquent has invested in over the last few years, Chuang estimates, "we have gotten too excited about a new product or service and tended to ignore our current customer." Companies should "always try new things," he emphasizes. "But we have learned to focus on and apply this innovation to our current customers."

Updated advice: Make sure that a sizable percentage of your current customer base really wants those wondrous products and services you're conjuring up.

3. Emphasize coaching and mentoring over managing the details. Talent is the most important strategic resource for future success, suggests Hargrove. You can't win the talent wars without putting leadership development at the top of your agenda. Leadership development, in turn, requires a labor-intensive commitment to instilling in people "a strategy of preeminence"—the belief that they can make a difference in their industry or in the lives of their customers. Such coaching and mentoring take time; even so, "the notion that senior executives can't be bothered with the details of their business is crazy," Hargrove declares. "Michael Eisner, for example, works on the design of rides at Disney World and has input into all of Disney's films."

Updated advice: All your coaching and mentoring will come to naught—especially during an economic slump—if you don't model the importance of sweating the details. Downturns expose the weaknesses in your internal systems, observes Chuang. Technical expertise—the ability to solve cash flow problems, interpret what customers are really saying, or set up effective performance evaluation processes—is what gets you through such times.

4. Design your culture primarily around the needs of Gen X and Gen Y employees. "E-leadership demands heroic behavior," writes Nextera consultant Susan Annunzio in eLeadership: Proven Techniques for Creating an Environment of Speed and Flexibility in the Digital Economy. "It requires abandoning past business models and challenging current assumptions and beliefs. It entails breaking many of the rules we've played by for generations." If your corporate culture is stifling your ability to compete in the contemporary marketplace, then the "enthusiasm, technological wizardry, and unfettered thinking of the younger generations" may be just the tonic your company needs, so it would make sense to adopt the incentives and rewards most likely to help you attract and retain such workers. At the same time, you can't afford to forget the boomers—the current economic uncertainty makes their wisdom and experience all the more valuable. Still, it's easy to get too caught up in this perceived intergenerational clash. As Harvard Business School professor D. Quinn Mills writes in e-Leadership: Guiding Your Business to Success in the New Economy, "Recognizing that people who need to cooperate are often separated by a gulf of potential divergent interests and potential mistrust, the best one can do is try to identify and promote a set of values to which most of the organization seems willing to conform."

Updated advice: Be attentive to how the different generations in your firm are motivated. Develop dynamic reward systems that respond to the changing needs of your workforce.

But spend most of your time fostering values that create networks of cooperation. The key elements here, says Mills, include the "willingness to help others," the "acceptance of personal responsibility for outcomes," and a "bias for action."

5. Use a brash communication style to disrupt the status quo. "The new e-world of speed and flexibility demands bold moves," declares Annunzio. "You need to offer employees undeniable proof that the Industrial Age corporate culture is gone, and that you are creating an environment for the future. The way to do that is to blatantly and offensively break with the past through loud statements of change, and then to reinforce that with new, irreverent communications."

It's difficult enough to usher in a new set of attitudes when they're consistent with the core of the culture, notes John P. Kotter, Konosuke Matsushita Professor of Leadership at Harvard Business School, in Leading Change. In such circumstances, you succeed by characterizing the new attitudes as extensions of company traditions and values. When the new attitudes are at odds with the existing culture, the challenge is even greater. As Ronald Heifetz, co-director of the Center for Public Leadership at Harvard's John F. Kennedy School of Government, points out in Leadership Without Easy Answers, it's important to regulate the level of distress or disruption that people feel. If you make them feel too much pressure, they'll be unable to perform the adaptive work you're asking them to do.

Updated advice: Be only as brash as you have to be in order to keep people focused on the new roles and behaviors you're asking them to learn. If they don't see the need for change as urgent, ratchet up the brashness. But if they seem paralyzed by all that you're asking them to do differently, temper your communications.

"The e-Leader recognizes that leadership is outdated today unless it helps people deal with the great challenges offered by technological innovations and the emergence of the new economy," Mills proclaims. Although those challenges are still out there, today they don't seem to be engulfing us quite as fast as they did two years ago—nor does it seem necessary to jettison everything we know about managing in the industrial age in order to address them.

Reprinted with permission from "E-Leadership, Take Two," Harvard Management Update, Vol.6, No. 6, June 2001.

Melissa Raffoni, president of ProfessionalSkills in Boston, is a consultant who specializes in organizational development, executive coaching, and management development. She is also a lecturer at the MIT Sloan School of Business. She can be reached at MUOpinion@hbsp.harvard.edu.

See the latest issue of Harvard Management Update.

Books Mentioned in this story:

Leading Change, by John P. Kotter.

Leadership Without Easy Answers, by Ronald Heifetz.

E-Leader: Reinventing Leadership in a Connected Economy, by Robert Hargrove.