The Big Picture

If you were to rewrite the seven habits of highly effective leaders today what would you say? As social business becomes more important, and social media more pervasive, leaders need to adapt. In fact leaders need to learn fast about what motivates large ecosystems of free agents to rally to them, not to their competitors.

There’s a new level of transparency around a leader’s actions. They are visible and known, they have reputations that depend on the vast community of independent peers whose incomes rely on their judgment and actions.

Their businesses are very likely to be dependent on people they will never meet, such as those in API communities or in supplier and partner ecosystems.

They have large peer networks that they need to persuade and encourage. They are vulnerable to adverse opinion expressed online by strangers or pressure groups.

In the past they had employees to impress and instruct. Even now, for example in fast moving consumer goods, supermarkets act fast and loose with suppliers. I can’t see that happening with a developer ecosystem.

Leaders face an environment that is wholly different from that of ten years ago. In short leaders need to develop new effective habits.

There has been some fascinating discussion (on Forbes.com about the bad habits of leaders, started by Erick Jackson with a notable contribution from Chunka Mui. That debate focuses on what CEOs have done wrong in the past.

I think the key to the debate lies in this new environment rather than in looking back.

Sure, there are still executives who see themselves in the old swashbuckling mode or like to think of management as equivalent to flying at 30,000 feet.

Acceptable or good habits a decade back might not work now.

Truly great modern leaders know they depend on an ecosystem and multiple peer groups; they need the peer groups’ trust; they need their peers to invest in the company vision perhaps by building apps or by developing complementary platforms (for example, think of all those people who have bought into PayPal’s X Commerce initiative).

They know their every move is being watched (at least all the moves they make public).

Those conditions call for new leadership skills and in our recent book The Elastic Enterprise Nick Vitalari and I have spelled out what we believe are the top six.

The six new habits of highly effective leaders are:

#1. Invention – All of the leaders we studied are inventors to some degree. They generate ideas or they strongly direct an invention process that is more than just innovation.

Steve Jobs was a great example of that but so too are people like John Donahue at eBay who has set about reinventing the company. Today’s leaders invent rather than innovate.

Leaders need to have the scientist’s and technologist’s habit of tinkering with systems and knowing something new can come of it. They have to be driven by novelty.

# 2. Reframing – The new leader has an ability to “reframe”. That is new leaders habitually create new perspectives on the challenges the enterprise faces.   They have the capacity to reframe the vision, mission or values of the enterprise. Most important they can bring people along with them; they enable everyone in their orbit to reframe.

Take Jobs and Apple – a computer company becoming a phone company and a music vendor. These radical adjacency moves normally cause a company to stall. The obvious reason is because they play against the existing corporate culture.Leaders with the right communications habits can make them seem a natural out growth of company culture. They can reframe the corporate culture substantially to take on new opportunities. But they not only have to convince employees – analysts, partners, developer ecosystems. They need persuading too, effortlessly.

Leaders need a consummate ability to see things differently and to keep people around them open to mind-changing ways of thinking.

#3. Attraction and orchestration – A leader in an elastic enterprise has to attract and orchestrate a huge range of assets outside the firm through its business ecosystems. The biggest change in economics in two centuries is taking place around us. Companies scale through their ecosystem rather through investing in owned resources.

Leaders must have the powers of persuasion to attract those resources.

And they need the status to orchestrate activity among peer groups in their resource pool.

They need to cultivate a habit of welcoming the little guy, and indeed all comers, even though they enjoy success themselves.

And the best way to attract free agents seems to be through a movement. Leaders need to lead something more than their own company. It looks effective when it is a movement that stretches across peer groups and moves people to join in.

Leaders need the habit of speaking to a bigger picture, one that draws out human aspirations and changes behaviour.

#4. Influence – While the tools of the elastic enterprise enable leaders to orchestrate huge ecosystems, they also need to influence, cajole, encourage and incentivize the members of those ecosystems. Influence is an appropriate medium for leading in an ecosystem full of independent businesses. Influence can expand without limit whereas other forms of power are limited by control systems that people want to escape.

In ecosystems influence is won in highly public spaces like the online world.

But this “influence” is not about a social media strategy. Look at Reed Hasting’s demise last year to get a sense of how quickly even an adept CEO can be roasted in public, if he or she loses the capacity to influence a debate.

Leaders need to master the ecosystem’s information architecture, part own it and definitely influence it comprehensively. That means cultivating a habit of appearing both sage and flexible, being vocal and attentive.

#5. Drawing the lines – Leaders typically need to define new barriers are their companies ferret out opportunity in converged markets. They are doing radical things, and they are showing a new degree of openness. Knowing when to draw the line, though, is the difference between success and failure.

They need to draw these line between consultaton and instruction, not just for themselves but also on behalf of an ecosystem that is following them, in the expectation of success.

Sapience lies in knowing where to draw the line between what an open community wants and shouts for and what might work best for the peer community and the cornerstone company. Jobs did it with Flash for mobile.

Leaders need to cultivate a strong sense of boundary setting and not be too susceptible to, for example, the open management fad, while also being accountable to peers. These are subtle differences to grasp.

# 6. De-risking – The emerging economy requires a new approach to risk, not least because greet companies are now executing radical adjacency moves, at will.

This economy is global, hyper-competitive and replete with opportunity that leaders are seizing with radical adjacency moves – that is by making moves into market where they have no core competency.

The new leader knows how to prepare for those opportunities by creating a very high standard of strategic options portfolio management. The strategic options portfolio is a constant search for new options, new alternatives, and new markets, which plays out through M&A, big data, real time know-how, which in turn means leaders have to be very good at the new knowledge environment.

Leaders need to develop a habit of knowledgeability and they need to inculcate it into their peers, and while being able to give strong direction they also need to multiply the options available to them. They need the habit of learning everyday.

That’s it – six new, necessary and highly effective habits.