LEADERSHIP EVOLUTION

A New Style of Leadership Is Emerging

Startup Entrepreneurs are reinventing leadership.

There’s an overwhelming body of evidence that points towards a shift in leadership as more Entrepreneurs create and define their roles while building a Startup.

The most poignant indicator of this fact is exhibited through the lack of desire for social status, personal gain or material wealth. In many cases it simply does not exist; they’re not motivating factors (with some exceptions).

It’s almost a contradiction to the Entrepreneurial purpose, contravening an unselfish existence to create.

This concept is underpinned by the Entrepreneurial ethos, congruent with eCommerce leaders. Behavioral Economics notes that loss aversion can lead to poor decisions (Schindler et al, 2017). The “Predictably Irrational” demise and subsequent collapse of Zavvi, Woolworths, Blockbusters, HMV and the Game group compound the leadership shift that’s underway, arguably linked with multichannel markets, offline to online (Ariely, 2008).

The Ecommerce industry has moved the goalposts, changed the game as it were, heaping pressure on multinational retailers while eroding their once held competitive advantage.

The lack of vision to foresee this seismic shift has proved costly for many retailers.

Other themes have emerged, like the importance of people, followership and the audience (the customer). People-centered design is at the forefront of an eCommerce leaders’ vision today, complemented by four key attributes; Locus of Control, Achievement Orientation, Emotional Intelligence, and Energy, intertwined with a Leader-member-audience-exchange (LMAX) phenomenon as opposed to LMX (Dyadic theory) alone.

The war on talent presents a challenge but likewise an opportunity, crucially linked with Competitive Advantage. Ecommerce leaders view people as the primary differentiator in pursuit of their vision. The resulting cultural change has spawned fragmented organizations, without a hierarchy, in exchange for a highly-collaborative environment.

A flat organizational structure is enhanced through technology, in which a group of self-managed teams forms powerful coalitions. This structure spawns agility, impacting a leaders’ ability to bolt-on highly effective teams on-demand, at short notice, for sprint-type projects.

There is sufficient evidence to conclude that Entrepreneurs are redefining Leadership, and doing so in their own unique way.

The New Style

There is an emergence of a new leadership style — Anticipatory leadership. A style of leadership incubated within the Ecommerce and Digital industries. The tipping point was most likely ignited by the global financial collapse, after which future leaders chose to “leave the relative security of their established early market and go out in search of a new home” (Moore, 1999).

It’s clear that Anticipatory leaders are disruptive thinkers. In Thinking fast and slow Daniel Kahneman describes two systems of thinking in all human beings (Kahneman, 2011). The first is governed by intuition whereas the second is measured by an ability to think strategically and creatively.

Anticipatory leaders have shown this highly developed skill by anticipating what may come down the line, predicting the likelihood of future events using lessons of the past as a guide.

For example, in the article below the evolution of peer-2-peer lending, crowdfunding, was discussed during an interview with a serial-Entrepreneur. The highlight being the removal of middle-men in the future. This prediction is becoming the norm.

Scenario-planning is also evident as Anticipatory leaders seek to predict, influence and even create future situations. This type of thinking takes effort and skill. In his book The Black Swan Nassim Taleb categorizes three areas for those trying to predict the future, they are:

• Known knowns
• Known unknowns
• Unknown unknowns — (Taleb, 2007)

Anticipatory leaders have developed “Slow thinking” proposed by Kahneman in order to assess scenarios that Taleb categorized. While not guaranteed, studies do show that this skill can significantly enhance one’s ability to impact future outcomes.

Recommendations

Anticipatory leadership is a new concept that I’m working on — researching. Thus far there are some recommendations that I’d like to share.

Recommendation #1

I’d highly recommended that more time is allocated within self-managed teams, where Anticipatory leaders tend to reside (Startups), to think more about future directions given the strategic importance in creating the future.

Recommendation #2

Intuition in Naturalistic Leadership is simply recognition and a function of memory. I’d recommended that Anticipatory leaders question intuition often by means of slow, strategic thinking. Kahneman (2011) uses descriptive examples to convey how intuition is perfected over time. One such example describes how a New York City fire-chief accompanied his crew on top of a burning building:

Upon noticing plumes of smoke emanating at each corner of the roof, coupled with a sudden change of roof temperature he immediately order all personal off the roof, before it collapsed, seconds later.

Anticipatory leaders exhibit an immense appetite to acquire situational knowledge that they believe will enable them to guide teams, their followers, steering the ship to avoid storms.

Overconfidence, on the other hand, is their Iceberg.

Recommendation #3

I recommended that Anticipatory leaders refine referent power in a continuous improvement fashion in order to perfect intuition over time. Developing intuition helps leaders to predict potential risky outcomes in advance.

The presence of Dissatisfaction is a highly influential factor behind the disruptive thinking of Anticipatory leaders; they are never quite content and strive to redefine tomorrow.

The impact of this, with behavioral economics in mind, is reduced significantly given that Anticipatory leaders are not bound by personal financial gains or constraints.

Anticipatory leaders value people and creativity far more than personal wealth.

Recommendation #4

Anticipatory leaders strive to harness collective creativity in a fragmented organizational structure (Remote teams) in which they work. I recommended that Anticipatory leaders adopt a digital tool to capture and nurture ideas across the Leader-member-audience-exchange (LMAX) environment — from multiple data sources — for better decision making.

Recommendation #5

I’d further recommended that more research is conducted exclusively on the impact of LMAX in the context of Anticipatory leadership.

Risk

There are potential risks with Anticipatory leadership. Planning fallacies are often committed by optimists who ignore worst-case scenarios, misguided by Confirmation Bias. Economic models ignore how people might behave in certain circumstances (Kraik, 1943).

Anticipatory leaders are by their nature highly self-driven, Entrepreneurial risk-takers with a cognitive bias towards optimism.

Without slow thinking (Kahneman, 2011) optimism can lead to overconfidence and the illusion of control. Entrepreneurial leaders are resilient which can pose risks by underestimating obstacles, ignoring competitors through irrational perseverance. Self-awareness is therefore vitally important for Anticipatory leaders, to protect themselves and those around them from such oversights.

The Future

The world will witness further evolution of Anticipatory leaders. A significant cause of this is due to the fact that opportunities are presenting faster but only open for short periods of time. Anticipatory leadership traits are a good fit.

Traditional Change Management focuses on time-bound process control, detailed cost management while controlling rebellion amongst the ranks. Anticipatory leadership, on the other hand, is agile — faster, smarter and more efficient than generations past — allowing greater leaps (change) at increasing velocity with huge potential for market disruption.

Future generations cannot and will not be bound by time constraints because time will not be a luxury they can afford.

Future working environments, cultures and organizations will embrace the time scarcity concept throughout the technological age.

So the lesson for leaders today is that they must first change and improve to align with emerging demands in the “Audience-Driven Business World” of today because the alternative is … Extinction.

References

• Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47, 263–291.
• Schindler, S., & Pfattheicher, S. (2017). The frame of the game: Loss-framing increases dishonest behavior. Journal of Experimental Social Psychology, 69, 172–177.
• Wang, M., Rieger, M. O., & Hens, T. (2017). The impact of culture on loss aversion. Journal of Behavioral Decision Making, 30(2), 270–281.
• Ariely, D. (2008). Predictably Irrational. New York: Harper Collins.

Copyright ©. Paul Myers, Jan 2020. All Rights Reserved.