The modern age is a game changer for business and promises to transform the role of leaders and the qualities demanded of them
One of the remarkable things about leadership is how little the underlying theory of it has changed for centuries. In around 580 BC, the Chinese philosopher Lao Tse wrote: ‘A leader is best when people barely know he exists. When his work is done, his aim fulfilled, they will say: we did it ourselves.’ Just over two millennia later, Napoleon Bonaparte said that ‘a leader is a dealer in hope’. And just a few years ago this, from leadership guru Warren Bennis: ‘Leadership is the capacity to translate vision into reality.’
There have always been, of course, individual styles of leadership. There have been (usually, mercifully brief) fashions – around the time of the First World War, for example, one definition of leadership read that it was ‘the ability to impress the will of the leader on those led and to induce obedience, respect, loyalty and cooperation’. In spite of this, the ability of a leader to persuade and influence, rather than command and rule, has always been present and has become even more prevalent over the past 50 years or so.
The modern age, though, is a game changer for businesses and their leaders. The combination of globalisation, rapid technological development and the emergence of data and knowledge as the ultimate currency is changing everything. Entirely new business models are emerging and organisations becoming less hierarchical. Innovation and ideas can be born anywhere – the most important point is that organisations have the ability to encourage their development and recognise the best of them.
Arguably, competent leadership is the most important skill of all in the digital age. It is important because this is a rapidly evolving, messy, risky, unpredictable time and none of us can be sure where technological development will take us. In such an environment, outstanding leaders are the most important currency there is.
The vital importance of this role can already be seen in organisations on the front line of digital disruption. Australia Post, for example, has seen its business – revenues of A$6.8 bn – ravaged by the disruptive impact of the Internet and set about a new vision to become an e-commerce company. Change of this magnitude requires a transformation of culture and behaviour in every function, particularly critical functions such as finance.
Silvio Giorgio, appointed by the group’s CFO to a new role of general manager, data science and strategy, was given the task of preparing Australia Post’s finance function. His fundamental view was that it was not possible for any finance function to support an organisation embarking on change of this scale if it did not embark on change itself. ‘If we don’t prepare our people, our finance function will not be relevant to the business and our people will not be relevant to the market,’ he explained in an interview with CA ANZ.
So what are the qualities that leaders need in the digital age? Are they so different from the qualities we have seen in leaders until now?
The list of attributes that theorists believe are essential in a good leader inevitably shift over time but a few core qualities are consistently at the top. A leader’s personality has always been and will always be predominant; meta-analysis of academic studies (see Intelligence and Leadership: A Quantitative Review and Test of Theoretical Propositions by Timothy Judge, Amy Colbert and Remus Ilies) carried out over the past 50 years has suggested that specific personality traits, including emotional stability and curiosity, are twice as important as IQ when it comes to predicting the effectiveness of a leader. Then there are the behavioural traits that help leaders to deliver results: motivational skills, team building and emotional intelligence, as well as that elusive and hard-to-define quality, charisma.
ACCA students to be tested on leadership
A new Strategic Business Leader case study is part of a range of innovations to the ACCA Qualification designed to make it more relevant than ever to employers.
The new paper will test students on challenging real-world scenarios, requiring them to blend technical, professional and ethical skills in the evaluation and presentation of their responses.
ACCA director of professional qualifications Judith Bennett says: ‘Our changes integrate deep, broad and relevant technical expertise with ethics and professional skills, giving students the forward-thinking strategic abilities and advanced skillset that modern professional accountants need to shape the future of global business.’
The paper will be available from September; registration is already open.
Other changes include the introduction of an enhanced corporate reporting exam that provides ACCA students with a holistic view of reporting, and a new Ethics and Professional Skills module introduced into the ACCA Qualification last year. There is also an increased focus on technology-based testing.
Find out more at accaglobal.com/thefuture
But in addition to these core requirements, new qualities are increasingly in demand. The Global Leadership Forecast 2018, jointly published by DDI, The Conference Board and EY, which integrates data from more than 28,000 leaders and HR professionals across the world, found that digital leadership skills are becoming critical; companies with the most digitally capable leaders financially outperform the average by 50%.
‘No matter what business function you work in,’ it states, ‘leaders today need to understand the impact of technology on their business. You don’t have to be a technical expert, but you do need to be able to predict both opportunities and potential negative effects of technology.’