First Up -- The Most Important Leadership Quality

Coping with change has been prized in executive offices, but an IBM report finds a new leadership characteristic is even more valuable.

"Management is doing things right; leadership is doing the right things," said business guru Peter F. Drucker. As our article this month, "Identifying Your Future Leaders," points out, one of the right things that manufacturing leaders do is to serve as mentors and teachers for their employees and eventual successors. Forward-thinking companies know that grooming the next generation of leaders is a vital part of ensuring business success today and in the future.

These future leaders either now entering the job market or moving up the ranks will face a complex and demanding business environment. In fact, a recent study from IBM of more than 1,500 CEOs, general managers and senior public-sector leaders identified complexity as the primary challenge facing them and their organizations. While 79% of CEOs expect to face significant complexity, only 49% said they feel prepared for the challenge, according to the study, "Capitalizing on Complexity."

Some of the reasons they are grappling with complexity are well-documented. Globalization is causing an anticipated shift of "economic power to rapidly developing markets" and leading to expectations of "bigger government and heavier regulation." Technology also is contributing to complexity, the study noted, "creating a world that is massively interconnected, with broad-based convergence of systems of all kinds, both man-made systems like supply chains or cities; and natural systems like weather patterns or natural disasters."

Faced with this new economic climate, CEOs said the most important leadership quality required is creativity. CEOs told IBM that leaders "must be ready to upset the status quo even if it is successful. They must be comfortable with and committed to ongoing experimentation."

If the path ahead is murky at times, successful leaders will simply have to operate with less-than-perfect clarity. "CEOs told us that the new mandate is immediacy. It is no longer sufficient to think, manage or delegate based on traditional time horizons or strategic planning cycles," the report finds. "Both new threats and emerging opportunities require an ability to see around corners, predict outcomes where possible, act despite some uncertainty and then start all over again."

With continuous change the "norm," the report states, the most successful companies will need to "seed creativity across their organizations" and adopt a different style of leadership. In fact, the CEOs of organizations that have done the best in this fast-changing world (IBM calls them "Standouts") clearly prefer to use persuasion and influence rather than a command-and-control style of leadership. A CEO of a Swiss company remarked, "The world does not function top-down as in the Army. Today's leader needs to exercise collaborative influence and demonstrate strong team leadership."

Even as the Internet fosters an explosion of new avenues for reaching customers, customer loyalty is a growing concern. No surprise then that 88% of the CEOs surveyed said "getting closer to the customer" was the most important dimension to realize their strategy in the next five years. The report recommends that companies work together with customers to create new products and services. "Maintain a running dialogue that includes face-to-face and social networking interaction," it states. "Involve your customers before and beyond the sale, including care and service."

While the pursuit of cost efficiencies is not going away, this report is just one more example of the growing recognition that companies can't save their way to prosperity. They must innovate from the top down and the bottom up. And finding and nurturing the creative leaders who are up to the challenge will be a critical task for manufacturers everywhere.

Steve Minter
Editor-in-Chief
[email protected]

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