Why You Need to Create Your Own Leadership Factory

Leading a global organisation today is more challenging than ever before. The Covid-19 pandemic and rising geopolitical tensions have ramped up uncertainties and disruptions. These include the emergence of disruptive technologies such as generative AI, global warming and a workforce seeking more autonomy and flexibility.

Consequently, leaders face a multitude of challenges. A new report from McKinsey & Company, the management consulting firm, examines the traits and practices required for effective leadership in the 21st century.

First, there is a compounding and interconnected effect across all these disruptions — and less and less time for leaders to react to them. Whereas a decade ago, CEOs typically focused on four or five critical issues, today that number has doubled. CEOs and top teams now grapple with eight to ten critical issues simultaneously.

6 key leadership traits 

McKinsey has identified six key leadership traits necessary for success in today’s uncertain environment:

Positive energy and personal balance

Leaders must understand what motivates them to maintain the energy required for learning and leading. This is particularly crucial when the workforce seeks more connection and authenticity from their leaders.

Servant leadership

The most effective leaders focus on making their team and organisation successful, rather than their prioritising personal achievements. This approach aligns with recent survey findings indicating that 70% of employees derive their sense of purpose from work.

Continual learning

The report stresses the need for leaders to embrace continual learning and to maintain a humble mindset, citing Microsoft’s CEO Satya Nadella, as an example. Nadella advocates for transparency and a “learn-it-all” attitude, which has been instrumental in the technology company’s cultural transformation.

Grit and resilience

Resilience is seen as a crucial trait for leaders facing disruption. According to McKinsey, companies with decisive leaders who commit to their decisions are 4.2 times more likely to be organisationally healthy than their peers.

Sense of humour

The McKinsey report also highlights the importance of levity in leadership. Research shows that leaders with a sense of humour are 27% more motivating than others. Teams led by such individuals are twice as creative when solving challenges.

Stewardship

Stewardship is the final trait emphasised in the report. Effective leaders view themselves as temporary custodians of their organisations, focusing on long-term sustainability and relevance.

Best leadership practice

Organisations must shift their leadership approaches to address the evolving needs of the 21st-century business landscape. These include:

• Engaging rigorously and relentlessly with all key stakeholders
• Enrolling and re-enrolling the team
• Building an operating model and cadence that prioritises speed
• Emphasising a culture of trust

What is the leadership factory?

McKinsey’s report addresses the critical need for organisations to develop leadership in house. It suggests that the most effective leadership training occurs on the job, through mentorship, role modelling and real-world interactions.

The consultancy harks back to the concept of a “leadership factory” originally coined by former McKinsey global managing partner Ron Daniel in the 1980s. Colleagues invest their time in other colleagues, learn in situ, provide regular feedback, and share personal and collective insights, with the result of producing great leaders.

As an example of the way to lead, the report cites retired US Navy Admiral Eric Olson, who led US Special Operations Command, overseeing a group of warriors not known for wearing their emotions on their sleeves. Olson went on a nine-month listening tour of the soldiers and found some emotional “fraying around the edges”. The feedback prompted Olson and his team to change some policies, prioritise resources and create more support (such as from nutritionists, physical therapists, and psychologists). They aimed to improve the cohesion, effectiveness and morale of Navy SEALs and their families — because health and readiness all start at home. 

The report concludes by urging CEOs to view themselves as their own chief talent officers. It states: “They will need to help identify and stay close to the high-potential leaders in their organisations, making personal connections with managers several levels below.”

As McKinsey says, “The only certainty for today’s global leader is that things will remain uncertain.” 

It is incumbent on leaders to collaborate with their teams and stakeholders to find their own successors.

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