FORBES | How Technology is Transforming Traditional Concepts of Leadership

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John Wheeler was unquestionably a cornerstone in the field of 20th-century physics. Not only did he work alongside Niels Bohr in Denmark to shape the theory of nuclear reactions, but he also introduced the term "black hole" to describe regions of space from which nothing, including light, can escape due to overwhelming gravitational forces. In addition, Wheeler served as a mentor to a host of prominent physicists, among them Richard Feynman.

You might be wondering what this scientific narrative has to do with the world of business. The connection is more direct than you might think. To swiftly bring you into the context of this conversation, let's engage in a simple thought experiment.

What if we were to heed Wheeler's advice and "break the glass and get out," immersing ourselves in the environments where our consumers live and work? By viewing our messages or products from this outside perspective, we could achieve a clearer understanding of how they resonate with the average member of our target audience.

In the American vernacular, there's a saying: "What would you do in my shoes?" Essentially, this translates to, "What would you do if you were me?" In this context, we're discussing the "place" or perspective of the average member of our target audience. What insights could we gain if we were to step into their shoes?

The first revelation would likely be the critical importance of the observer's own viewpoint in determining whether our message resonates or falls flat.

Drawing a parallel with quantum physics, it's understood that the observer can affect the outcome of measurements. Similarly, in the business realm, a consumer's assessment and understanding of a product's value are shaped by their own perspective and worldview.

Going back to the 5th century BC, philosophers from an ancient Greek school made a groundbreaking observation: The laws governing culture are fundamentally different from the laws of nature. Unlike natural laws, which are universally constant, societal norms, customs, and laws can vary greatly between different communities.

This raised the question of how to compare various rules and customs to discern which are more effective. It wasn't long before it became evident that such choices depend heavily on the prevailing worldview within a given society, shaped by its collective beliefs and attitudes toward life.

Thus, the distinct customs, traditions, mores, and laws that characterize a society are shaped entirely by the guiding logic of its members. In simpler terms, the variations in human behavior across different societies stem from different underlying logics.

This concept is wholly applicable to the realm of organizations. Whether organizations differ from or resemble each other is fundamentally determined by the logic that steers their activities. This guiding logic subsequently has a major influence on the outcomes those activities yield.

We've already established the significant role a consumer's worldview plays in their evaluation of the value of messages and products. The challenge lies in ensuring that our message aligns with their perception in the manner we intend. Achieving this alignment is often easier said than done.

Returning to the Central Issue of Interpretation: How Does Our Target Audience Perceive the Meaning of Our Messages?

Without resolving this fundamental question, we lack the cornerstone for a comprehensive business development strategy; it serves as the bedrock for all subsequent initiatives in this domain.

Determining the meaning that consumers attach to our messages and products is the essential question that must be answered.

Typically, when discussing the value of messages or products, people seldom compare the meaning they personally ascribe to them with the meaning others might attach to the same items. The crux of the issue is that different individuals often interpret these messages and products in varied ways.

We need to adopt a more holistic perspective. Just as water is inherently wet—a quality that can't be understood by analyzing its constituent elements of oxygen and hydrogen separately—the complexities of business can't be fully grasped by examining its components like hiring, sales, PR, marketing, and production in isolation.

Every element is interconnected, and an entrepreneur's capacity to effectively manage their business is significantly hampered if they focus solely on problematic areas without considering the larger context. Many of the most critical errors made by entrepreneurs occur precisely because they overlook these broader factors.

Understanding the environment in which your consumer interactions take place allows you to make more accurate predictions about the future.

Take, for instance, the setting for a romantic dinner with your spouse or partner. You'd likely opt for a quiet, cozy restaurant with subdued lighting. If you're anything like me, you wouldn't dream of inviting your loved one to a romantic outing at a factory, construction site, or cemetery. Selecting the appropriate context for communication helps imbue your words and actions with the intended meaning. In many instances, the context can significantly influence the content of your message.

For instance, if you notice that a police patrol has pulled over a speedster who passed you minutes earlier, you can readily anticipate much of their ensuing conversation.

Why do peace talks often fail on the battlefield? The very setting of a battlefield is geared toward conflict and destruction, not peaceful negotiation. In ancient Rome, the mortality rate for those engaged in battle exceeded 90%. This high rate of casualty led to the emergence of civilian mediators, who organized negotiations far from the front lines to foster reconciliation between warring factions.

Ignoring the specific characteristics of the setting—whether physical or conceptual—where the interaction between entrepreneurs, products, and consumers occurs risks a fragmented understanding of the broader picture. It's akin to a worm perceiving only a tiny portion of the world and drawing sweeping conclusions from that limited perspective.

This fragmented approach often results in each participant speaking their own "language of value," depending on their unique perspective. There's even a joke among business consultants that each consultant must "treat his clients' specific illnesses."

It's important to note that any perceived value is context-dependent, shaped by external conditions and influences. Some might argue for the existence of an "absolute value"—one that holds true in every situation, irrespective of external factors. However, such an "absolute value" doesn't exist in reality. We always have to tailor the value of any message or product to its specific context.

For example, the value of drinking water skyrockets in a desert environment but is significantly less in an urban setting. Similarly, a cure for a particular disease becomes invaluable in the context of an outbreak, but holds little interest when the disease is not present.

The truth of these statements is self-evident; and do not require validation. Planting a Christmas tree on Earth versus Mars involves different challenges, even if the tree itself remains the same in both scenarios.

To encapsulate my years of observations about various problems manifesting in the business world, I've devised the following metaphor:

Imagine you have a large aquarium containing a goldfish that is in every way extraordinary. Within this environment, the fish has the freedom to determine its path, velocity, and depth.

At first glance, you might consider the fish entirely autonomous. After all, it makes its own choices: selecting the water temperature, choosing its diet, deciding which other fish to befriend or confront, even determining the type of algae to plant and the oxygen levels to maintain. But the reality is more complex.

The aquarium in which the fish resides is itself part of a larger system that envelops it from all sides, influencing the tank's direction. The fish, however, remains blissfully unaware of this broader context. It's entirely focused on its immediate environment and has little concern for, or even awareness of, external factors it neither comprehends nor controls.

The fish remains oblivious to the significant influence that external conditions can have on its fate. For instance, if the surrounding environment becomes frigid, the warm water in the aquarium will quickly chill, ultimately freezing the fish within it.

Imagine one day, our goldfish decides to bask in the sunlight streaming through the side of the aquarium that faces the window. It swims eagerly toward the warmth, only to experience a sudden shock. Someone has decided to move the aquarium to a darker corner of the room. The fish finds itself confounded, swimming toward an ever-diminishing stream of sunlight, amidst unfamiliar surroundings and turbulent water.

In this analogy, the aquarium symbolizes the sphere of business where our entrepreneur, represented by the goldfish, operates. The boundaries of this "habitat" were set when the entrepreneur first started the venture.

Though the goldfish feels like a queen within the confines of the aquarium, it rarely considers the existence of the world beyond. Its connection to the outside environment is minimal, leaving it almost entirely unaware of external forces that could impact its life. This blissful ignorance suits the fish just fine, until it doesn't.

The renowned CEO of General Electric, Jack Welch, once said, "If the rate of change on the outside exceeds the rate of change on the inside, the end is near." Our goldfish's primary issue lies in its inability to observe, analyze, and adapt to external changes.

Peter Drucker encapsulates the predicament of many entrepreneurs with his insight: "There is nothing so useless as doing efficiently that which should not be done at all."

In today's world, technological advancement often serves as the external force that shifts the direction of the aquarium, disrupting the aspirations of its inhabitants. As technology becomes an increasingly critical driver of progress, traditional notions of leadership are also undergoing transformative changes.

The emerging model, referred to as "Leadership Tech," synthesizes time-tested principles of traditional leadership with the agility and customer-centricity vital in our modern digital landscape.

Transitioning from Conventional to Innovative Leadership

Traditional leadership models, which rely on authority, management, and control, have been the norm in the business world for a long time. In this model, the leader is seen as the person who sets the course and manages team members to reach predefined objectives. However, this approach is becoming increasingly outdated in our digitally connected era. Leadership TechTech introduces a fresh paradigm that prioritizes selecting the right direction for growth, comprehending the business context, and forging lasting customer relationships. This modern approach values flexibility, adaptability, and swift responsiveness to change.

The Significance of Technology

In today's world, technology is not just revolutionizing business operations; it's also transforming how we engage with consumers, make decisions, and plan strategically. Leadership Tech acknowledges this transformation and actively utilizes technology to create more resilient and forward-thinking business models.

Leading Through Insight, Not Just Control

A defining characteristic of Leadership Tech is its focus on gaining a nuanced understanding of the environment in which the business operates. In a rapidly evolving landscape, comprehending both the current context and potential future trends is essential for effective leadership.

Customer-Centric Leadership

Rather than focusing solely on internal processes and resource management, Leadership Tech shifts the spotlight outward, primarily toward customer interactions. This enables the creation of products that resonate deeply with customers, offering them high-perceived value.

Anticipating the Future

Leadership Tech is not merely reactive to current trends but aims to foresee future developments. This foresight comes from a comprehensive understanding of the field in which the business operates. For instance, if we understand the laws of gravity, we can predict the fate of a coffee cup that gets knocked off a table. This proactive approach allows leaders to stay one step ahead of competitors and plan long-term strategies effectively.

A Systems Approach

Leadership Tech stresses the importance of viewing the business as a complex system where all elements are interrelated, rather than focusing on individual components in isolation.

One of my favorite systems thinkers, Draper Kauffman, provides an illuminating analogy:

"Splitting a cow in half doesn't yield two smaller cows. You might end up with a lot of hamburgers, but you lose the essential 'cow-ness'—the living system capable of turning grass into milk. This is what we mean when we say a system functions as a 'whole.' Its behavior relies on its entire structure, not just on the sum of its individual parts' behaviors." (Note: Kauffman, 1980, p. 2)

It's crucial to understand that systems are characterized by their interconnections and their overall functionality. Removing one part can often render the entire system inoperative—like taking the wheels off a car or an essential organ from a body.

One of the best examples illustrating this systemic interconnectedness is nature, comprising numerous individual components that collaborate to form the dynamic whole of our planet.

Kauffman emphasizes that systems must be dynamic to function. When a system is turned off, it becomes a dormant heap. This is also true for human-made systems, such as a cellphone. Without power, it turns into a useless pile of metal. However, when plugged into a complex communication network, it regains its intended functionality.

By understanding and leveraging these systemic relationships, Leadership Tech offers a more holistic, adaptive, and future-focused approach to managing businesses.

Systems comprise interconnected parts that, when combined, form a complex whole. Just like a jigsaw puzzle, individual pieces may not make immediate sense, but when assembled, they create a coherent picture.

Consumer value is holistic; it can't be reduced to the sum of its components. A watch tells time, but no single part achieves that function. Similarly, no isolated component of an airplane can fly.

Leadership Tech addresses uncertainty, which is inherent in various situations. It's not about mathematically calculating probabilities; it's about deeply understanding the context in which a business operates. Such uncertainty often arises for entrepreneurs who may not fully grasp the holistic message their target audience perceives from their products and communications.

The impact of context on any enterprise is enormous. For instance, you can't dodge a punch from a master boxer; if you encounter one, you'll likely get knocked down. Context has an equally powerful impact on business.

A case in point is a study on employee compensation programs related to training. At first glance, compensation should motivate employees to grow, increasing their competence and reducing turnover. However, the reality is more nuanced. The primary influence on employee retention was the existence of another program—career management. If present, this program helped reduce turnover; if absent, compensation for training paradoxically increased turnover.

This example illustrates that certain assumptions may hold true for some organizations but not for others. The question, "Do tuition reimbursement programs help manage turnover?" requires the answer, "It depends," highlighting the context-dependent nature of such initiatives.

In summary, Leadership Tech marks a transition from reactive to proactive leadership. It emphasizes understanding technology and focuses on maximizing customer engagement.

It's crucial to note that these analogies are not suggesting that Leadership Tech borrows from quantum physics. Rather, they underline the general principles of systems thinking and the probabilistic approach to studying complex systems.

Jaroslavs Kaplans
Author of the book "Business Incognita: How to Push the Boundaries of Entrepreneurial Thinking." Expert in the field of sustainable development of organizations and discovering new sources of growth. Developer of contextual market research methodology. Member of the International Association of Strategic and Competitive Intelligence Professionals (SCIP), USA.