Changing Times Place New Demands On Business Leaders

Centre Daily Times
Albert Vicere
(Dr. Vicere is professor of Strategic Leadership in Penn State's Smeal College of Business, and author of the forthcoming book chapter, "Leadership in the Networked Economy.")
1-6-02

Over my twenty-three years as a professor, I have had the great fortune to work with scores of business organizations and to spend time with their leaders. There is no question that the most effective leaders realize that the essence of their job is to get results and at the same time to build commitment to the organization's culture and values. But there also is little doubt that today's leaders must carry out those responsibilities in an incredibly complex environment.

Business leaders today are not only are charged with ensuring the performance of their organization and building on its cultural legacy, they also are charged with helping the organization to transition to a new economic order.

What has been called the "new" economy has little to do with the rapid growth and equally rapid demise of dot.com sector. Rather, it involves major philosophical and infrastructure shifts that are challenging traditional approaches to management and leadership. As opposed to "new," a better descriptor of the changing business environment may be the "networked economy," and two major inflection points have driven its emergence: globalization and the information technology explosion.

Globalization has brought us flatter, faster-paced organizations with global reach. Information technology has enabled us to work in partnerships linked by powerful information networks. Together these forces are triggering the reconfiguration and restructuring of virtually every major industry worldwide. And they are redefining the essence of leadership. Based on discussions with dozens of leaders, as well as first-hand observation of their leadership challenges, I have identified four key roles for effective leadership in the networked economy.

First, there's Boundaryless Thinke r. Leaders in the networked economy need to think beyond current orthodoxies and to help their organization to do the same. That means they can't be bogged down in traditional ways of thinking. They must be open to new ideas. They must help their organization and the people within it to know themselves-their strengths, competencies, and limitations. And they must help those same people to recognize both the value of new ideas and the strengths and capabilities of potential partners, both internal and external to the firm, who can be sources of unique synergies and differentiated competitive advantage.

Second is Network Builder . Leaders who think in a boundaryless manner are more likely to have a relationship mind-set, one focused on helping the people around them to share ideas, information, knowledge, and capabilities. Organizational effectiveness in the networked economy is rooted in relationships and networking. Complementary partners must be identified and linked together in focused pursuit of mutual success. That a degree of comfort with the new information-based infrastructure is essential to this mindset goes beyond question.

Third, is Diplomat . To develop and maintain the effectiveness of networks, today's leaders must have the capacity to bring constituencies together, the ability to help them work together and the insight to help them see that by working together they can achieve more than they ever could on their own.

Lastly, there is Interpreter . To complement their skills of diplomacy, leaders must have the ability to interpret the nature of business opportunities to the network, the insight to help partners understand each other, and the ability to coach, facilitate, and provide feedback to an organization that is no longer a collection of lines and boxes, but a living, growing, expanding ecosystem.

The networked economy requires that companies redefine requirements for leadership effectiveness, refine practices and policies for leadership development, and hold leaders accountable for real leadership in the networked economy.

In many ways, these observations and recommendations are responses to obvious changes that have been taking place in the workplace over the past decade. Why, then, do so many organizations seem to be struggling to accommodate them? Perhaps too few organizations have engaged their leaders in discussions that help then better assess and understand the transition to the networked economy and its implications for leadership and organizational effectiveness. Moreover, perhaps too few companies have taken the time to both redefine the essence of effective leadership in the networked economy and to hold leaders at all levels accountable for developing the mindsets and capabilities essential for success in a changing world.

Navigating the economic sea change that surrounds us requires that every organization and every leader to take a good hard look at how effectively it is addressing the evolving demands of leadership for the networked economy.

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REPORTERS & EDITORS: For more information, please contact Wyatt DuBois in the Smeal College of Business Media Relations Office at 814-863-3798 or wed112@psu.edu .

Penn State's Smeal College of Business offers highly ranked undergraduate, MBA, executive MBA, Ph.D., and executive education opportunities to more than 5,500 students at all levels. Featuring academic departments of accounting, finance, marketing, insurance and real estate, management, and supply chain and information systems, the college is also home to major research centers such as the Center for Supply Chain Research, the Institute for the Study of Business Markets, the eBusiness Research Center, the Farrell Center for Corporate Innovation and Entrepreneurship, the Center for Global Business Studies, and the Center for the Management of Technological and Organizational Change.

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