The rise of leadership and the demise of management

The digital revolution sparks change, demands more leadership and less management, and enables a shift to focus on the human being.

When Helen Clark, former prime minister of New Zealand, presented a WHO-commissioned report on the Covid pandemic this week, she attributed the current global crisis and its deadly consequences to “a lack of global leadership.” The pandemic was a preventable disaster, the report concludes. It was also a disaster of management, I’d add. While we hear a lot of talk about leadership, the thing itself is actually missing.

These days, there’s a tendency to treat leadership as a synonym for management. Granted, it sounds fancy, but if companies don’t change almost every aspect of their management when they start calling it leadership, it’s simply a misnomer.

Let me explain:

  • Leadership is about change and innovation.
  • Management makes sure that things stay the same, within some boundaries of rules and processes.

Most companies beyond a certain size need both. But not every leader is a manager, and vice versa. Yet to be a great manager, one must certainly be a leader, as Julie Zhuo posits in her book The Making of a Manager.

The rise of leadership and the demise of management are part of a greater trend towards purpose, value(s) and sustainability in business. Just a few years earlier, everyone and their uncle had a vision and a mission. In hindsight, the definition and expression of vision and mission were necessary steps on the way from the old, industrial model of management to the new, post-industrial world ushered in by the digital revolution (or digital transformation, if you prefer the term).

Software has changed the picture

In the old economy, to resurrect a phrase from the late nineties, the vision and mission of a company were pretty clearly defined by its physical products or analogue services. No need to state the obvious: a carmaker was making cars, as simple as that. Software has changed the picture. While value creation shifts to the software, the car hardware is at risk of commoditisation. A carmaker could end up as OEM, like in the PC industry or the Android ecosystem, or as a premium brand like Apple, with profitable hardware products and a growing software/service business on top of that.

You need a vision and a subsequent mission to choose your own fate, and the quest for that ultimately led to the questions of purpose, value(s) and sustainability:

  • What is the purpose? Is it about physical products or (digital) services with a superior experience? Or something greater than that?
  • Where is the value? What are our values? How is this connected with consumers, their values and the value we create for them?
  • How can we create a sustainable business? What is our long-term perspective?

These are all questions of leadership, not of management. We’re exploring terra incognita, unknown territories. It’s a world defined by volatility, uncertainty, complexity, and ambiguity (VUCA).

We need leadership, not management

When we want to conquer the vast digital continent, we need leaders, not managers. (In reality, of course, we need both. Someone has to organise the troops, and it doesn’t need to be the same person leading them.) You may notice the military language here. In Germany, we are hesitant and sceptical about all things military, for very valid historical reasons. We had our dose of ill-fated leadership in the 20th century, making us distrustful of all kinds of leaders to this day, more than 75 years after the end of the Second World War.

However, the military provides us with useful metaphors to illustrate basic concepts of leadership. Simon Sinek has pointed out, in his book Leaders Eat Last, that

“exceptional organizations all have cultures in which the leaders provide cover from above and the people on the ground look out for each other.”

The reality in most organisations, though, is different. A 2017 study by Ultimate Software and The Center for Generational Kinetics came to sobering results:

“The overwhelming majority—a shocking 80%—of employees surveyed think they could do their job without managers and deem them unnecessary.”

What is leadership?

Jacob Morgan, the author of The Future Leader, attributes this to his observation that “we are teaching leaders how to lead in a world that no longer exists”. Organisations have changed, management has changed, so how does leadership need to change? Jacob Morgan gives the following definition of leadership:

“A leader is someone who can see how things can be improved and who rallies people to move toward that better vision. Leaders can work toward making their vision a reality while putting people first.”

Again and again, we arrive at the same conclusion: putting people first. We may call it user experience (UX), customer experience (CX), human experience (HX), or employee experience (EX). It’s true for marketing as well as company culture. The core stays the same: it’s about human beings. Here’s another definition, this time by John Quincy Adams:

“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.”

Leadership is about change, and this change includes leadership itself. It’s not about we’ve always done it this way.

Top challenges for leaders

So here are the main hurdles every leader will face sooner or later. Jacob Morgan groups the major challenges in two pillars: humanize and futurize.

  • humanize
    • leading diverse teams
    • attracting and retaining top talent
    • reskilling and upskilling employees
    • doing good
    • making the organization human
  • futurize
    • short-term vs. long-term thinking
    • adapting to technology
    • keeping up with the pace of change
    • moving away from the status quo

Use this as a quick checklist at your convenience. But, when you do, consider the results. What’s your company’s score with regard to these issues? Keep in mind that everything on this list is interconnected. Technology has enabled the shift to the human being and increased the pace of change, leading to the need for long-term thinking, the rise of leadership and the demise of management.


Last updated on June 17, 2021. Photo by naraa .in.ub on Unsplash