Is 21st-Century Leadership Inevitable, or Just a Fad?

I'm often asked, "If we're trending toward a new style of leadership in this exciting new century, why are so many companies still run like the 1950s never ended?"

This implies the question, "If it's working for these old-fashioned companies, why do leaders need to progress or die out, as you suggest?"

Are you ready for some heresy against my own heresy? Many leaders will continue in their old ways, and some of their companies will continue to prosper. While I'd like it to be otherwise, here's why eddies of the old ways will remain, in some pockets probably forever.

Capitalism isn't all that old yet. When Adam Smith first laid it out for us in 1776, most of the world was still mired in feudalism. Those few economies that were entering what we'd consider the modern era were focused on exploitation of natural resources for trade internally and overseas.

In this first permutation of Capitalism, commodities reigned. Most work required low-skill labor. In such a scenario, the command-and-control, top-down management of the feudal system carried over very well to enterprise. And just as trade was a zero-sum game, where you made money at the expense of your customer, so too pay was zero-sum: the Capitalist prospered more by paying his workers less. Thus, workers and customers were exploited just as was nature.

That is 19th-Century management in a nutshell. A commodities economy, with workers just another commodity.

The 20th Century brought sophistication to the workplace, though. Large-scale manufacturing created an ever-growing demand for high-skill labor. Command-and-control still ruled in the new century, but leadership grew up just a bit, as it became clear that competition over the best workers required better working conditions and pay.

Please don't think I'm claiming that 20th-Century leaders benignly granted better conditions to their workers. Social backlash against the oppressive conditions of 19th-Century management, manifested in new labor laws and unionization, also drove the improvement of management practices. But the turn of the last century did see leaders imposing more enlightened styles upon themselves as a way to attract and retain top talent, as Henry Ford showed when he doubled the going rate for labor in order to combat attrition brought about by the monotony of his new assembly lines. Ford would almost certainly have failed had he not progressed to a 20th-Century leadership style.

Did all of the 19th-Century ways fade away over the course of the 20th Century? Not at all. You can still find examples of completely exploitative management practices even today. Why? Because there remain some industries, such as agriculture, where the old rules still apply.

So what about today? We've trended from a commodities-based economy to a manufacturing one to a knowledge-based economy.

Are commodities and manufacturing gone entirely? Well, if you're reading this post on a computer or smart phone, if you're doing it in clothes while sipping a latte, you know they haven't - and they never will.

But in mature economies across the globe, high-skill, high-education knowledge-based industries are in the ascendancy. And guess what? That calls for an entirely new style of leadership. One that treats workers like adults. One that is both easier, because it's collaborative, and more difficult, because giving orders and expecting workers obey may be simpler, but it is simply no longer feasible.

...But it is genuinely infeasible only where the market forces employers to wise up or go under. Or, as is also often the case, where employers choose to embrace a more enlightened leadership style because it's the right thing to do and they want to do it. (An idea you can poo-poo if you like, but I know quite a number who have adopted a 21st-Century leadership style because they do honestly prefer it.)

Will 21st-Century Leadership ever be the only leadership there is? I promise you, it won't.

But I will promise you this: within competitive high-skill industries, the most successful, prosperous companies will be those that adopt modern management practices soonest and most meaningfully.

Next time, I'll share one CEO's transformation from 20th to 21st-Century leadership and the remarkable transformation it has wrought on his company. I'll bet you're using one of his products right now, maybe without even realizing it.