It’s hard to escape the feeling that we live in changing times. Societies, industries and organizations are evolving at an unprecedented rate.
Of course, changing times mean a shifting business environment. It’s difficult to grasp how to adapt.
At Hay Group, we analyzed what’s driving change, what the future might look like and how business leaders will need to respond.
Our three-year research program pinpointed the six global megatrends behind such deep-seated change.
Megatrends are long-term, transformational processes with global reach, broad scope and dramatic impact.
The first megatrend, Globalization 2.0, is the shift in economic power from West to East. It is creating a new global middle class, fragmenting markets and intensifying competition.
The second is the environmental crisis, a destructive combination of climate change and the growing shortage of natural resources. This is likely to push sustainability to the top of the corporate agenda.
Individualism and value pluralism are a consequence of the freedom of choice that comes with growing affluence. This erodes customer and employee loyalty and turns workplace motivation on its head.
Next, digitalization is blurring the boundaries between private and professional life, as work and the workplace increasingly go remote.
Demographic change is aging the world’s population, reshaping the global workforce and intensifying the war for talent.
Finally, technological convergence is merging with nanotechnology, biotechnology, information technologies and cognitive science applications. These are potent innovations that promise to transform everyday life.
Each megatrend will generate challenges for organizations. Combined, their influence is compounded, with powerful consequences for business leaders and human resources.
Stakeholders multiply. Leaders will need to deliver clear, consistent messages to an increasingly diverse set of audiences with very different demands.
Power transfers. The megatrends will shift power from leaders to stakeholders, just when leaders require greater authority to steer firms through change.
Work transforms. Leaders will need to manage highly individualized, geographically dispersed, remote and “always-on” teams.
Costs explode. Scarcity of talent and natural resources, as well as the use of advanced technology, will inflate costs.
Business ethicizes. Consumers will vote with their wallets for ethical and environmental standards and sustainable offerings.
A business landscape transformed by these developments will require a different kind of leadership.
The leaders of the future will be tasked with generating loyalty among increasingly diverse, independent and remote teams, many of whom they lack direct authority over. They will need to relinquish personal power in favor of collaboration.
Ultimately, these developments demand a new breed of leaders: “altrocentric” leaders. These are individuals whose primary focus is not themselves but others. They are confident, yet know how to take ego out of the picture.
Altrocentric leaders possess high levels of empathy, maturity, integrity, openness and self-awareness, with strong ethical standards. They also are skilled strategic thinkers who can make sense of a changing world for those around them.
Increased complexity calls for tighter control. Yet in an individualized and digital world, workers will demand greater freedom regarding their work and lifestyle. Altrocentric leaders will know how to square this circle. They will know how to create bounded autonomy — autonomy defined by a clear direction and set within firm limits — and to create a sense of meaning.
These skills can be built early by receiving 360-degree and psychometric feedback for self-awareness, building listening and communication skills that allow leaders to access a variety of views, and learning how to do a strategy decode that will make the strategy real for your people.
The imperative for businesses today is to identify and develop the leaders of tomorrow. Those that fail will be left behind.
Yvonne Sell and Georg Vielmetter are directors of global management consulting firm Hay Group’s Leadership and Talent practice. They are also co-authors of “Leadership 2030: The Six Megatrends You Need to Understand to Lead Your Company Into the Future.” They can be reached at firstname.lastname@example.org.