Where Have All the Leaders Gone?, part 2 of 6

Leadership Role #1: Reading the World and Creating a Vision

No business is an island. Each organization exists within a rich and ever-evolving set of social, economic, political, cultural, and institutional environments. To a large degree, an organization’s success depends on how well it positions itself in the world. Therefore, one of the most important competencies of leadership is the ability to read the world. This means a leader must be well informed about emerging trends and developments in multiple areas that affect the business.

Grounded in his or her interpretation of where things appear to be headed, an effective leader creates a vision for the organization’s competitive strategy – paving the way for long-term competitive domination.

The capacity to create a powerful vision requires several distinct competencies:

[wcm_restrict]1. Observing the world within an effective framework of distinctions

The world sometimes seems to be simply an assemblage of facts, and we succumb to the illusion that with sufficient objective analysis, we can arrive at an accurate understanding of it. Experience tells us, however, that the world appears differently to different observers. We interpret the world according to the framework of distinctions within which we view it. Thus, two leaders operating with different sets of distinctions may come to widely varying interpretations of the future based on the same factual evidence.

2. Creating a coherent narrative

Making sense of the world requires more than a simple set of facts or distinctions. Understanding depends on coherence, or how things come together in our minds.
Our tendency as human beings is to create coherence in the form of stories or narratives. Business organizations also create stories about the world and use those stories to create business strategies. For example, in the ‘70s, IBM was convinced that the real profits in the personal-computer (PC) market would come from the manufacture of hardware. Bill Gates had a different story. Taking the same set of facts available to IBM, he constructed a vastly different narrative anticipating that technological advances would continuously drive down the cost of hardware. This meant the value to consumers, and therefore the profits, would come from software. Both IBM and Microsoft had the same information and data, but they created different interpretations about what these facts signified for the future of the industry. History has shown that Gates’ story – the way he made sense of what he saw – was the more powerful one, clearing the way for Microsoft to become one of the fastest-growing, most profitable companies of the century.

3. Grounding with rigor

A story about the world is a coherent interpretation based on a series of claims, and these can be more or less well grounded. For example, Gates could have found partial grounding for his claim in Moore’s Law (which says the price/performance ratio for microchips doubles roughly every two years, thereby lowering computing costs). The more rigorously grounded the claims that constitute a story, the more effective that story is likely to prove. This is where traditional business analysis tools can be useful, providing a wealth of factual assertions and ways to validate a given interpretation of current and future trends.

4. Evoking a Mood

Part of a story’s power lies in the moods it evokes in those whose lives are connected to it. An interpretation that prompts enthusiasm, ambition, and energy is likely to produce more commitment than one that triggers a degree of anxiety. The moods a story evokes are closely connected with the paths of action they open. The more these paths effectively address the concerns of participants, the more positive the moods prompted by the story.

Of all the competencies a great leader must have or develop, learning to read the world and produce a powerful interpretation of the future is perhaps the most fundamental and important because it provides a foundation for all the others.[/wcm_restrict][wcm_nonmember]

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About the Author

Chris Majer, Founder and Chief Executive Officer of The Human Potential Project, is the author of The Power to Transform: Passion, Power, and Purpose in Daily Life (Rodale), which teaches the strategies corporate, military, and sports leaders have used to positively transform themselves and their organizations in a way readers can adept to their own lives and professions. He may be reached at www.humanpotentialproject.com.