In recent years, I have used the new year to reflect on the events of the previous year. I will try something different this year and look ahead instead. In this post, I will discuss five megatrends currently shaping the workplace and why I think Agile leadership can help us cope with them.
Trend 1: Demographic Change
The world’s population is expanding, but as people are getting older the workforce is shrinking. This will lead to skill shortages, especially in the Western world, where the population is generally older than that of the rest of the world. The war for talent will continue and companies will have to invent employment models that can attract the needed talent from a more diverse pool of potential talent, including migrants, millennials, very experienced employees, women, and others with ‘caring’ responsibilities.
Trend 2: Rise of the Individual
According to KPMG, advances in global education, health, and technology is empowering individuals like never before, leading to increased demands for transparency and participation. With education comes wealth and with wealth comes choice. As we have already seen in large parts of the Western world, people are discovering new lifestyle and career options and are starting to make more value and ethics-motivated decisions.
Trend 3: Enabling Technology
Technology is changing the world at an incredible pace. Ninety percent of the world’s digital data was created within the last two years, 75% of the global population now has access to a mobile phone, and advances in cloud computing now allows for any entrepreneur to buy and quickly scale computing power to match a much larger competitor, without making a big up-front investment in hardware. The ability to quickly scale has contributed to the explosive success of companies like Uber and Airbnb. With increases in online services enabling employees to work anywhere, anytime, and on any device, traditional hierarchies and workspaces are challenged and companies must be able to accommodate increasingly diverse groups of workers.
Trend 4: Social Media
With more than 1.5 billion active users every month, Facebook is a global media giant shifting the balance of power from organizations towards users. Companies not living up to the morals and values of users are held accountable online like never before. Social media is also eroding the boundaries between personal and professional life. The younger generations, who are digital natives, embrace the new possibilities and thinks less of holding companies, including their employers, accountable online. The management consulting company McKinsey has estimated that social collaboration can increase the productivity among knowledge workers by 20-25% and companies and leaders that embrace the new possibilities first will get an edge.
Trend 5: Disruptive Innovations
Disruption is maybe the most hyped word in Danish business media right now. The term is, unfortunately, somewhat misused to describe almost any new idea, but more and more industries are changing faster than ever before. To ensure we have the same understanding, I will use the Wikipedia definition:
A disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leaders and alliances.
Early examples of disruptions are the advances in home computing, almost killing the sales of typewriters, or the Ford model T introduction, which eroded the market for Horse Coaches. Emerging disruptions include Fintech, which refers to new and innovative applications, processes, products, or business models in the financial services industry. The old institutions still dominate the financial sector, but are under increased pressure from companies like Lending Club (platform for peer to peer lending), ZhongAn (tailored insurance), Kreditech (digital banking), and many others.
In a faster and faster moving world, where demographics are changing, individuals are becoming more self-aware, new technologies are creating new opportunities, advances in social media are increasing global collaboration, and transparency and game changing business models are rocking the foundation of existing industries, leaders are tasked with bigger challenges than ever before.
The traditional top-down rallying shout out to the organization will no longer work. Competitive salaries, promotions, and fancy titles will no longer be enough to motivate the workforce. Leaders will have to be much more in sync with the needs and dreams of employees. Leaders will need to understand, motivate, and lead an increasingly diverse workforce. Creating an environment that aligns the purpose and goals of the organization with individuals’ need for self-expression and self-realization will be key.
In the new climate of increased transparency, leaders must be authentic and display high standards of integrity and sincerity and not be afraid to be vulnerable. The rate of change makes it impossible for leaders to be the primary domain experts and they will have to switch their focus from managing results to designing environments that create results. Creating plans and tasking people with work and focusing on milestones, deliverables, and deadlines will no longer work. Instead of telling people what to do, leaders must focus their attention on helping employees see the purpose and direction of the organization and then empower and enable them to leverage their skills to complete the work they believe moves the organization in the right direction.
Agile frameworks, like Scrum, provide well-tested practices for improving delivery speed, quality, customer satisfaction, and the ability to rapidly respond to market changes. What the frameworks generally lack are the answers to what skills and practices at the leadership and organizational level are needed to create the supporting organizational environment. Introducing the structures, roles, and practices of the Agile frameworks alone will definitely make organizations better equipped to deal with challenges of the megatrends of 2016, but to truly embrace the changes these trends will bring, we need to upgrade more than our delivery mechanism. We need to develop ourselves as leaders to support the creation of an environment that taps into the wisdom and purpose of the organization and its stakeholders and rely less on the decision-making ability of a single person.
As always, I would love to hear your thoughts using the comments and please do not hesitate to contact me, if you are interested in discussing how you can increase the leadership agility of your organization.
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